Hi. New member here posting a question about my FIRECalc results. I'm running multiple tests with nothing changed but the years of retirement and I'm getting results opposite what I expect with respect to success rate.
My scenario:
Spending - $250k
Portfolio - $3.6M
Years - 45, 40, 35, 30
I have other entries for 2 SS payouts, a pension that does NOT adjust for inflation, a few ins (inheritance, 1 year contributions) and a few outs (weddings), but all remain constant for each run. I run a future retirement year of 2020 in each scenario. Constant spending model with AA of roughly 60/40.
Here are my results:
45 years: 3 failures, 91.2% success rate.
40 years: 3 failures, 92.3% success rate.
35 years: 6 failures, 86.4% success rate.
30 years: 9 failures, 81.6% success rate.
Why is that? I would expect there to be more failures the longer I want my money to last, all other things equal. Especially given my spend rate.
Is this because there are fewer cycles of historical data that will last 45 and 40 years? That, or that the WR is lower when SS kicks in (modeled at 70). I don't know what the portfolio balance will be at that time, but it represents about a 3.5% WR (from the original portfolio), so that doesn't seem like it either.
Thoughts?
My scenario:
Spending - $250k
Portfolio - $3.6M
Years - 45, 40, 35, 30
I have other entries for 2 SS payouts, a pension that does NOT adjust for inflation, a few ins (inheritance, 1 year contributions) and a few outs (weddings), but all remain constant for each run. I run a future retirement year of 2020 in each scenario. Constant spending model with AA of roughly 60/40.
Here are my results:
45 years: 3 failures, 91.2% success rate.
40 years: 3 failures, 92.3% success rate.
35 years: 6 failures, 86.4% success rate.
30 years: 9 failures, 81.6% success rate.
Why is that? I would expect there to be more failures the longer I want my money to last, all other things equal. Especially given my spend rate.
Is this because there are fewer cycles of historical data that will last 45 and 40 years? That, or that the WR is lower when SS kicks in (modeled at 70). I don't know what the portfolio balance will be at that time, but it represents about a 3.5% WR (from the original portfolio), so that doesn't seem like it either.
Thoughts?