Thanks for posting. $386K at the end of 10 years would be scary for me. This is why eliminating withdrawal amounts for discretionary spending during down markets is important, if only for psychological purposes (at least for me). According to no less than 5 calculators, I won't have to reduce withdrawals no matter what the market does, but I probably will anyway. A couple years of missed or reduced vacations is worth it when your PF is evaporating, IMO. I hadn't used ******** in a while, and am glad to see you can now model variable spending. Very helpful.
Poll:FIREcalc real world feedback
- Thread starter Texconsin
- Start date
Not direct, but an experience that tracks 25 years, with an original plan that projected our financial situation for 30 years, to age 83, an arbitrary 30 year time period. The plan was almost a copy of what Firecalc uses to assess financial security, if a little more complicated.
FWIW, we're getting close to the original endpoint planning date, and can now see well beyond that... well into the 90's... safely.
Our plan was developed on large spreadsheets, using assumptions that sounded reasonable to us at the time... inflation, interest rates, and the type of investments (ultra conservative) that we had already decided on. Our "portfolio" would look meagre today, but the safety of our debt free net worth, allowed for a relatively easy plan.
We included everything we could think of, in terms of foreseeable major money outlays... housing, autos, healthcare costs, trips, and a cushion for the unknown.
Each year was planned... When we would move from our campground to be a snowbird... When we would buy a car... and then the details that were known:
Taxes... which we have avoided since retirement.
Social Security at age 62
Healthcare at age 65...
Regular home purchase before age 70 to insure surviving spouse some security (medicaid) in the event of long term nursing home stay.
This, on the basis of a very low net worth, compared to todays planners. I would guess that if Firecalc were to be reverse engineered to begin 25 years ago, we might have seen a result, similar to where we are today.
In any case, despite the obvious impossibilities of reality following any plan, our financial situation is almost exactly what our spreadsheets predicted. Putting current numbers into firecalc today, shows a 100% success.
Our current spending level has been level for several years. With a relatively low annual expense, the Social Security income is quite important. I see some members here on ER, who choose not to include this in their planning. Unless one is very happy continuing employment to accumulate a greater nest egg, those extra years might be better spent enjoying freedom. Our current SS (for two) is $25+K/yr.
Probably not germaine to the OP subject, but a real life experience... a look back, rather than a look ahead.
FWIW, we're getting close to the original endpoint planning date, and can now see well beyond that... well into the 90's... safely.
Our plan was developed on large spreadsheets, using assumptions that sounded reasonable to us at the time... inflation, interest rates, and the type of investments (ultra conservative) that we had already decided on. Our "portfolio" would look meagre today, but the safety of our debt free net worth, allowed for a relatively easy plan.
We included everything we could think of, in terms of foreseeable major money outlays... housing, autos, healthcare costs, trips, and a cushion for the unknown.
Each year was planned... When we would move from our campground to be a snowbird... When we would buy a car... and then the details that were known:
Taxes... which we have avoided since retirement.
Social Security at age 62
Healthcare at age 65...
Regular home purchase before age 70 to insure surviving spouse some security (medicaid) in the event of long term nursing home stay.
This, on the basis of a very low net worth, compared to todays planners. I would guess that if Firecalc were to be reverse engineered to begin 25 years ago, we might have seen a result, similar to where we are today.
In any case, despite the obvious impossibilities of reality following any plan, our financial situation is almost exactly what our spreadsheets predicted. Putting current numbers into firecalc today, shows a 100% success.
Our current spending level has been level for several years. With a relatively low annual expense, the Social Security income is quite important. I see some members here on ER, who choose not to include this in their planning. Unless one is very happy continuing employment to accumulate a greater nest egg, those extra years might be better spent enjoying freedom. Our current SS (for two) is $25+K/yr.
Probably not germaine to the OP subject, but a real life experience... a look back, rather than a look ahead.
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NW-Bound
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In the above scenario with 4%WR, going out to 25 years, in the worst case that initial $1M would have gone down to a pitiful $27K. Our retiree is pushing a shopping cart soon, if he insists on maintaining the same lifestyle all this time. At $40K a year, his $27K will last another 8 months.
The recent market drops have been followed by a quite sharp recovery, and most people think that they are tough or smart. Let's hope that we will not see the terrible periods as already happened in the past.
A $1M portfolio invested in S&P 500 on Oct 12 2007 became $455K on Mar 6, 2009 without any withdrawal. Good thing it rebounded quickly. How soon people forget!
Suppose the market lingered down there for a while. We would not have so many people talking about retirement or buying fast cars. And people already retired would not talk about just skipping vacation. I would be seriously thinking about living in an RV by the river.
Until recently, I did not include our SS in the planning. The reason was to keep that SS as reserve, and I think many posters here have the same idea. Only recently, I decided to check to see the size of my "reserve". I still do not plan to "spend" it, meaning to increase our current spending in anticipation of it. When I get there and actually get it, then I may spend more.
Young ER's in their 40s or early 50s are even further from SS eligibility, hence I understand why they want to be more cautious. It's tough having to live under a bridge till you get to 62 to get some SS. Well, it may not be that bad, but living in fear is no way to enjoy an early retirement.
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