Fidelity Retirement Analysis

[craigbro63]

Has anyone used the Fidelity Retirement Planner long enough to have a good idea if their calculation of "Assets at End of Plan" is accurate, or how far off they may be if it is not accurate?
Even the "Significantly Below Average" calculation makes me wonder a bit.

 

[RetireBy90]

Has anyone used the Fidelity Retirement Planner long enough to have a good idea if their calculation of "Assets at End of Plan" is accurate, or how far off they may be if it is not accurate?
Even the "Significantly Below Average" calculation makes me wonder a bit.

I used it myself about 8 years out, then Fido assigned an advisor who used it when we had a couple sit down meetings to ensure we were ready. I haven’t used other tools, so not able to provide a review compared to other tools. If I member you can adjust inflation and return on investments. This means you can do better than canned numbers, but you also have to bear responsibility if you put in numbers that don’t match the future. I think I used 3% for inflation and 6% for portfolio return.

 

[COcheesehead]

Its a number calculated based on past returns - a Monte Carlo analysis. Its supposed to be a guide. No tool or person can forecast the future. Plug your numbers into Firecalc and see what you get there. Mine are similar though not the same.

 

[Kabowest]

Its a number calculated based on past returns - a Monte Carlo analysis. Its supposed to be a guide. No tool or person can forecast the future. Plug your numbers into Firecalc and see what you get there. Mine are similar though not the same.

I recently plugged my numbers into both the Fidelity Retirement Planner and Firecalc and they came out very close to each other. I have found the Fidelity Retirement Planner a bit cumbersome to use but feel it provides an accurate estimate.

 

[COcheesehead]

I recently plugged my numbers into both the Fidelity Retirement Planner and Firecalc and they came out very close to each other. I have found the Fidelity Retirement Planner a bit cumbersome to use but feel it provides an accurate estimate.

The real benefit of the Fidelity planner is the ability to build a detailed retirement budget and make changes as needed. Firecalc requires more of a lump sum which is easy, but probably not as useful.

 

[Dtail]

I use both on a regular basis and am happy with each one. Nice to have one based on historical sequences and one based on Monte Carlo simulations.
As @COcheesehead mentioned, the detailed budget used for Fidelity is very helpful for detailed changes and updates.
Not sure if the Fidelity calculator has been around long enough to validate a 30 year type retirement scenario.

 

[craigbro63]

Firecalc and Fidelity planner are my two main tools as well. It seems like Firecalc's squiggly lines for Assets at End of Plan are sort of in line with the Fidelity Average market returns selection. I was just curious if anyone had any hard data over time of the Fidelity results.

 

[tb001]

It seems like anyone with real data on fidelity is going to be pretty biased given the market returns over the recent years. Not sure how long the planner has been around.

 

[craigbro63]

I agree that Fidelity is a lot more work putting in the details but I feel a more comfortable with the analysis. Firecalc is a great comparison though

 

[Dtail]

I agree that Fidelity is a lot more work putting in the details but I feel a more comfortable with the analysis. Firecalc is a great comparison though

"I-Orp" is another retirement calculator which is fairly popular for members on this site.

 

[The Cosmic Avenger]

The real benefit of the Fidelity planner is the ability to build a detailed retirement budget and make changes as needed. Firecalc requires more of a lump sum which is easy, but probably not as useful.

That's exactly what I was thinking. I had a 132 on Fido, so I upped Travel and Entertainment by $1.5K per month, and I still got a 112. And that's at the standard "Significantly below average market", so I feel pretty good about being able to enjoy our retirement. It was also helpful to price out an ACA plan and put a realistic cost for health care into our expenses.

 

[bingybear]

Has anyone used the Fidelity Retirement Planner long enough to have a good idea if their calculation of "Assets at End of Plan" is accurate, or how far off they may be if it is not accurate?
Even the "Significantly Below Average" calculation makes me wonder a bit.

Look at any of these calculators for happy markets and unhappy markets. The numbers vary greatly. Fido use to use 95% success for their calculators. This means you would have more left over at the end in most cases.

You can't use the numbers as solid guaranteed numbers especially since you don't know that market you will retire into.

 

[COcheesehead]

That's exactly what I was thinking. I had a 132 on Fido, so I upped Travel and Entertainment by $1.5K per month, and I still got a 112. And that's at the standard "Significantly below average market", so I feel pretty good about being able to enjoy our retirement. It was also helpful to price out an ACA plan and put a realistic cost for health care into our expenses.

I think the same as you. I want to have an approximate 30% buffer, so I rework my budget from time to time to give me a 130-133 score. My future yearly income continues to rise in the planner.

 

[Dtail]

Look at any of these calculators for happy markets and unhappy markets. The numbers vary greatly. Fido use to use 95% success for their calculators. This means you would have more left over at the end in most cases.

You can't use the numbers as solid guaranteed numbers especially since you don't know that market you will retire into.

Minor point - Fidelity uses 90% success rate in the "Significantly Below Market" calculations.
While one can't use the numbers as guarantees, the Monte Carlo simulators have "fat tails" and thus are typically more conservative than historical sequential calculators.
However both types effectively have worst case scenarios at least from a historical perspective and thus if Firecalc provides 100% success for example with 400k-10m monies left, even if one retires into a bad market, that concept is already factored in.

 

[MRG]

JMHO but most times you forecast stuff further out the less likely anything is real.


Yes I use RIP and firecalc they seem to be the most conservative tools I've used.

 

[bingybear]

Has anyone used the Fidelity Retirement Planner long enough to have a good idea if their calculation of "Assets at End of Plan" is accurate, or how far off they may be if it is not accurate?
Even the "Significantly Below Average" calculation makes me wonder a bit.

Minor point - Fidelity uses 90% success rate in the "Significantly Below Market" calculations.
While one can't use the numbers as guarantees, the Monte Carlo simulators have "fat tails" and thus are typically more conservative than historical sequential calculators.
However both types effectively have worst case scenarios at least from a historical perspective and thus if Firecalc provides 100% success for example with 400k-10m monies left, even if one retires into a bad market, that concept is already factored in.

your example shows that you end up with 400k to 10m... The OP wanted to know how far off the numbers could be. Way off.

But that is not what these tools are meant for. They are used to help define sustainable income capabilities from ones assets. One will likely need to adjust income over time if they don't want to leave $ on the table.

 

[tmm99]

I recently plugged my numbers into both the Fidelity Retirement Planner and Firecalc and they came out very close to each other. I have found the Fidelity Retirement Planner a bit cumbersome to use but feel it provides an accurate estimate.

Fidelity Planner isn't as cumbersome if you have a lot of asset in your Fidelity account as they will calculate your asset allocation, and the account info/numbers will get updated automatically. It does get cumbersome if you want to change your annual spending by specific years, etc, which is easy with Firecalc.

 

[tmm99]

I've also noticed that FIDO RIP drops my total asset by around 10% at the get-go maybe to simulate the possibility of a drop at the early stage of my retirement (which will affect my retirement longevity more adversely than the same thing happening later on in my retirement.) and I consider that a good thing.

 

[Scuba]

I’ve used Fidelity RIP, Firecalc, I-Orp, and a custom model created by the FA we used. All had a similar conclusion.

 

[big-papa]

I’ve used Fidelity RIP, Firecalc, I-Orp, and a custom model created by the FA we used. All had a similar conclusion.

Same here. I've used them mainly to get a rough idea, but since I will be using a variant of VPW for withdrawals, it's really not apples to apples....

 

[Jerry1]

Once I retired, I pretty much stopped using any planning tool. RIP was very helpful for me to get my head around a retirement budget, but I don’t intend to go back 5, 10, 15 years from now and see if the tool was correct. It’s built on a lot of assumptions. I’m sure some will hit the mark and others will be way off. Now that the retirement has begun, its more about the actuals and adjusting each years budget in response to those actual outcomes.

 

[Dtail]

Once I retired, I pretty much stopped using any planning tool. RIP was very helpful for me to get my head around a retirement budget, but I don’t intend to go back 5, 10, 15 years from now and see if the tool was correct. It’s built on a lot of assumptions. I’m sure some will hit the mark and others will be way off. Now that the retirement has begun, its more about the actuals and adjusting each years budget in response to those actual outcomes.

Even though retired 2 years, I still like using the calculators as to see how current information plays out until estimated expiry date.
Just like playing with the numbers. lol

 

[38Chevy454]

I like the Fidelity tool, and it provides a level of comfort with my planning. I have only been retired just under 2 years, so no long term results. I will not go back and see how it did after 15-20 years, but I do plan to update as necessary going forward. But only as an advisory type function. My main control is my budgeting and reviewing investments performance and AA.

 

[craigbro63]

Thanks for the replies and information. I guess that there are a lot of factors that effect the numbers from both the personal side and the calculator side that may change the analysis over the years. Anyway, glad to see folks are satisfied with both Fidelity and Firecalc analysis' as well as other mentioned that I've also used.
Cheers!

 

[Taxman59]

Before I retired, I had access to several calculators, including RIP and FireCalc. The numbers at 10 years (about 2018) were surprisingly close to the actual #s. The Firecalc range and the Monte Carlo ranges were dead on (in the middle) and the others were only off a bit. Overall, if you are close to 100%, the calculators are pretty good (at least to 10 years). Not sure how they will be going forward (spending has increased to closer to the max under Firecalc, though I still have considerable room in the discretionary spending).