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different retirement calculator
Old 05-10-2008, 09:48 AM   #1
Confused about dryer sheets
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Join Date: May 2008
Location: Tel Aviv
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different retirement calculator


I have developed a spreadsheet that takes your (net after SS etc.) monthly expense, total yielding assets, age and life expectancy and return a Yield (%) that you have to achieve on your yielding assets in order to make it to your life expectancy age. Most calculators I have seen assume a historic ROR based on some assets allocation model and (and so does FIREcalc).
Anybody seen a calculator that provides ROR as an answer?
Do U consider it a helpful piece of information?
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Old 05-10-2008, 12:25 PM   #2
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There are many ways to skin that cat, and yours is as good as any other. I definitely want to enter my rate of return and I know what rates of return I want my spreadsheet to assume (based on my AA and Rick Ferri's projected real returns for the next 30 years).

My spreadsheet takes as inputs: current age, retirement age, end of plan age (when I go poof), inflation, rate of return, current taxable assets, current deferred assets, pension value, my SS and my wife's SS with starting ages, SS reduction (I use 50% of what my statement projects) and all the additional savings while I'm working (taxable, IRA's, 401k, etc.). It also takes a table of 'special expenses' (adjusted for inflation) and the tax tables (adjusted by inflation +1%). I use conservative/pessimistic assumptions throughout. It knows to account for RMD and it then 'solves' for a starting after tax annual expenses (including special expenses) and inflates each year by the assumed inflation. If all goes according to plan I will die broke at 97. But again, many ways to approach this and there is no plan with a high probability of being correct 30-40 years out anyway, I know I'll need to be prepared to adjust for contingencies...
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 40% bonds / 10% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 05-10-2008, 02:07 PM   #3
Confused about dryer sheets
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Join Date: May 2008
Location: Tel Aviv
Posts: 8
Thanks for the detailed answer. It seems you have closed all the windows and locked all the doors but are aware that ms. uncertainty may find a way to snick in anyway. With my model I don't have to assume long term ROR. If the number (currently 4.5% gross) is achievable I sleep well. If not I either adjust my expenses or take more risk this year. If I blow it I adjust next year.
BTW FIREcalc gave me a 67% chance achieving my plan for the next 30 years (my horizon-88) but if I look at the Vanguard probability of living a selected number of years than 88 has a 26% chance for me. So, all in all I have only 8% of reaching 88 w/o a penny to my name (.26x.33) . I will take the risk. No need to adjust spending yet.
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