Thanks guys

[SoutheastSam]

I have to say I was close to taking the leap.

but you guys mentioned I would probably come up a bit short.

I think so now also. doing alot of calculating and such and I think I need about 3 more years of saving. Saving big!!!

when I plug in those numbers I hope to achieve my success rate jumps into the 95 plus range. I can deal with 95 plus and take the chance.

plus I get 3 more years of seeing what this horrible economy will do.

I appreciate the advice. wife almost said 'I told ya so' but ''just kept her trap shut'' she got me on that one

[Live And Learn]

95% success is fantastic and its only 3 short years away !

(PS - I'm assuming your wife was a driver in getting you to join the forum - smart lady )

[heeyy_joe]

While you say "horrible economy" I say BULL MARKET. If the bulls continue to run, you may get there in less than three years.

[BigE]

This will also give you more time to plan, work on budget, and investigate selling the land you own. Best of luck Southeast!

[SoutheastSam]

Quote:

Originally Posted by heeyy_joe While you say "horrible economy" I say BULL MARKET. If the bulls continue to run, you may get there in less than three years.

very true. I will do my best to make it all happen and get the best results with what I have.



thanks all
even 3 yrs isn't bad. could be worse and be one who has to work when 70 life sure can be a crapshoot sometimes for people

[obgyn65]

To the OP: I would not make the jump with a 5% failure rate. I guess I am more conservative.

[Gumby]

Quote:

Originally Posted by obgyn65 To the OP: I would not make the jump with a 5% failure rate. I guess I am more conservative.

I doubt that Firecalc is accurate to within 5% for success rate.

[ERD50]

Quote:

Originally Posted by Gumby I doubt that Firecalc is accurate to within 5% for success rate.

Unless there is a problem with the historical data or the algorithms (possible), it should be just as accurate as it reports.

Do you have reason to believe the data or algorithms have errors of that magnitude?

-ERD50

[photoguy]

Quote:

Originally Posted by ERD50 Unless there is a problem with the historical data or the algorithms (possible), it should be just as accurate as it reports. Do you have reason to believe the data or algorithms have errors of that magnitude? -ERD50

I think he means if you were to use the Firecalc number as the probability of future success the confidence bounds would be wider than +/- 5%.

When you use the firecalc number as a descriptive statistic for what happened in the past, then there's no uncertainty.

[ERD50]

Quote:

Originally Posted by obgyn65 To the OP: I would not make the jump with a 5% failure rate. I guess I am more conservative.

From another thread:

Quote:

Originally Posted by obgyn65 To answer the OP's question, I am planning for a 47 year horizon and my SWR is about 3%.

So does this mean you have increased your AA to around 50% equities? I must have missed that - the last I recall your purchase of Wellington (or Wellesley?) was ~ 1%~2%?

A 47 year horizon and 3% WR only gives a 39.4% success rate with 1% equities:

FIRECalc: inputs for 3%, 47 years, 1% EQ AA

It takes ~ 50% AA to achieve a historical 100% success for 47 years (use the investigate tab on that link).



What am I missing?

-ERD50

[obgyn65]

European pensions, deferred annuities, and the use of SPIAs planned at a much later age which in my case increase the success rate.

Quote:

Originally Posted by ERD50 What am I missing? -ERD50

[Gumby]

Quote:

Originally Posted by photoguy I think he means if you were to use the Firecalc number as the probability of future success the confidence bounds would be wider than +/- 5%. When you use the firecalc number as a descriptive statistic for what happened in the past, then there's no uncertainty.

This is precisely what I meant. You have expressed it far better than I did.

[ERD50]

Quote:

Originally Posted by obgyn65 European pensions, deferred annuities, and the use of SPIAs planned at a much later age which in my case increase the success rate.

Then the 3% WR seems misleading. A pension could decrease your WR, adding safety. But it doesn't make a 3% WR last any longer than a 3% WR without a pension.

I have not tried plugging annuities into FIRECALC, but offhand I wouldn't think they would do much to increase success. You pay now (decreasing your portfolio) to get something later - it's trade-off with pros/cons. Pros would be the advantage of averaging your mortality risk with a large group, cons would be the ins co has to charge for this and you might lose out on long term market gains if it was in a balanced AA.

Annuities can help assure some floor income in old age, but I'm not sure they would provide 100% success for a 3% WR in a fixed income portfolio for 47 years.

It might be interesting enough for me to start a new thread - maybe we could plug some typical annuity numbers into FIRECALC?

-ERD50

[obgyn65]

ok with me.

Quote:

Originally Posted by ERD50 It might be interesting enough for me to start a new thread - maybe we could plug some typical annuity numbers into FIRECALC? -ERD50