Multiple projection tools all say "Yes!"

[COcheesehead]

Devil's in the details.

 

[Dtail]

Still looking for and correcting errors in the various projections.

I re-ran the Great Western this morning, found some things that didn't make sense, corrected their origins, and the overall results are still favorable (as well as being more believable).

Age 85 is their default life expectancy but I found the edit assumptions fields and corrected that to age 95. The tool was double counting my 401(k) assets because it loads them automatically and I had included them in my manually entered investment assets value as well. I entered my wife's paltry pension amount as an annual total whereas the tool requests a monthly amount. Her pension's annual total is low enough that the automatic 'sense checker' didn't catch it, but I found and corrected it.

Now on to the i-orp projection tool with its insane Maximum Annual Withdrawal value.


In regards to the $10K spending level question; using our current annual spending amount/budget, less the payments we will be receiving from our annuities, less the payment amounts from SSA, less my wife's very small pension, our annual required withdrawal from our other assets/savings could indeed be only $10K. But let me track this down first to fully understand the question.

It sounded like you were effectively stating that your total spending was ~10k, but I guess you meant your NET withdrawals.

 

[COcheesehead]

It sounded like you were effectively stating that your total spending was ~10k, but I guess you meant your NET withdrawals.

Lucy, you gots some splaining to do!

 

[MI-Roger]

FireCalc: 100
Fidelity RIP: 132
i-orp: Assets will last until age 92 (not 95) with maximum spending at 1.25 (not 6) times our current spending level.
Great Western Life tool: Assets continue to grow through final calculated age of 95 (corrected from default of 85).

After decades of scrimping, saving, planning, denying ourselves too many splurges, etc., it is still shocking to see we will enjoy so significant of a buffer in retirement.

Oh yeah, we have LTC policies too so that life-style altering potential cost is pretty much avoided.

OK, I found the massive error in i-orp. I entered the balance of our savings account in dollars, not thousands of dollars. Oops! I had corrected all the other entries to the proper units of measure but missed that one.

I still have trouble grasping part of i-orp's logic. The maximum annual expenditure in the first year is less than our non-investment income, i.e. Annuity payments, plus SSA payments, plus wife's pension, all sum to a value greater than the maximum spending amount. None of these will diminish over time, PLUS we have considerable untouched savings that will continue to grow.

Compensation for I-orp's assumed bleak 25% reduction in SSA effective in 2035 perhaps?

i-orp is not as optimistic as I had hoped, although we are still good with this projection too.

Fidelity is 132% whereas i-orp is 125%. I suppose that is an insignificant difference between two methods for a 30+ year projection.

 

[Dtail]

OK, I found the massive error in i-orp. I entered the balance of our savings account in dollars, not thousands of dollars. Oops! I had corrected all the other entries to the proper units of measure but missed that one.

I still have trouble grasping part of i-orp's logic. The maximum annual expenditure in the first year is less than our non-investment income, i.e. Annuity payments, plus SSA payments, plus wife's pension, all sum to a value greater than the maximum spending amount. None of these will diminish over time, PLUS we have considerable untouched savings that will continue to grow.

Compensation for I-orp's assumed bleak 25% reduction in SSA effective in 2035 perhaps?

i-orp is not as optimistic as I had hoped, although we are still good with this projection too.

Fidelity is 132% whereas i-orp is 125%. I suppose that is an insignificant difference between two methods for a 30+ year projection.

You have the choice of keeping your SS amounts at 100% in i-orp.

 

[JohnTeetootoo]

what's yours?

I was not the one who started the thread. You did and I asked.

 

[COcheesehead]

This thread is a lesson in measure twice, cut once...and don’t tell anyone until you checked what you cut.

 

[MI-Roger]

This thread is a lesson in measure twice, cut once...and don’t tell anyone until you checked what you cut.

Agreed.

Triple verify all your numbers. Analyze your results - even if they look as you expected - and especially if they look blatantly incorrect. Run multiple projection tools, chances are you won't make the same mistake on all tools and all correct results should be close.

Posting with incorrect numbers? Meh.... as long as you recognize that something is wrong maybe someone here can suggest where you made a mistake.

 

[pb4uski]

One of the good things about using multiple tools.... if most give you a green light and one doesn't then you may have an input error.

 

[Chuckanut]

Agreed.

Triple verify all your numbers. Analyze your results - even if they look as you expected - and especially if they look blatantly incorrect. Run multiple projection tools, chances are you won't make the same mistake on all tools and all correct results should be close.

+1

I ran several tools including FireCalc and and a Monte Carlo simulator. I have to admit I was amazed when they all agreed I could retire. Only medical insurance stood in my way and I found a fix for that.

But, I did triple check my numbers as I could' t believe it. One error has me spending almost 50% more than my highest earning year. Alas, the same error also killed me off in the mid 70's.

 

[pdxgal]

+1

I have to admit I was amazed when they all agreed I could retire. Only medical insurance stood in my way and I found a fix for that.

If you don't mind my asking, what was your "fix" for medical insurance? I'm in the same boat, everything looks good but for medical.

 

[MI-Roger]

If you don't mind my asking, what was your "fix" for medical insurance? I'm in the same boat, everything looks good but for medical.

In our case it is purchasing the post retirement health insurance plan through my wife's employer. Her pay is low, her pension is only 30% of that, but she has a great health insurance plan.

Our back-up plan is the post-retirement health insurance plan we can purchase through my first employer (to them I am a retiree not a former employee since I retired from them rather than resigned).

Although we can purchase health insurance through my current employer, we don't. I don't think they even offer post-retirement health insurance to retirees, only a very small VEBA allowance until retirees reach age 65.