W2R
Moderator Emeritus
Read what kaudrey said again, carefully and not skipping any of it:I have to disagree. FIRECalc really doesn't work that way at all.
If you use the default 95% success, that means that 5% of the time it went to zero at or before the end. So what are you saying? Use a lower % success? That just means more historic paths would have failed, it isn't 'assuring' you end at zero.
There is nothing in there about lowering the % success at all. Leave it at 100% if you wish. She is talking about the "floor" value of how much of your portfolio needs to be left at the end. That is one of the FIRECalc settings.Firecalc and other retirement calculators also usually allow you to put in a "floor" of how much you want to leave at the end, so if you put "$0", your WR will be higher than if you put in some other number.
In FIRECalc, 0 is the default value to leave, so to see a higher WR you would've had to have previously set this value higher. I really doubt the OP did this. I don't think this is an answer the OP can really use.
Oh OK. I normally set the lowest amount allowed for my portfolio so that its dollar value is fairly high, to leave my daughter something (and 100% probability because I am a total chicken, ERD50). But I notice that when I set the lowest amount allowed for my portfolio to equal $0, I could spend even more.
FireCalc is based on historical data, and of course there is no guarantee of anything in any of these models. As George E.P. Box famously said, "essentially, all models are wrong, but some are useful." FIRECalc can be very useful. A configurable model like FIRECalc is set up for people to put in the particular values they wish to use, and I can't imagine why anybody would not do that for their various model runs.
Of course, setting the retirement length so short that you run out of money completely by age 85 is (in my opinion) pretty dumb unless you have a guarantee that you will be dead by that time. I usually set it for around 100, give or take five years. Sure, there is a risk that I will still be alive at 100, but that's a risk that I am willing to take. There are risks and assumptions associated with annuities as well.
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