Fidelity Retirement Analysis Tool

[RetiredHappy]

The tricky part is the taxes. It is assumed that the calculator will add the taxes automatically and the expenses that you input are after-tax expenses. This has been confirmed here also.

However, if you look at the table, the numbers that you withdraw each year from the portfolio are the ones that you inputted, i.e., after-tax numbers. I would expect that you withdraw expenses plus taxes each year from your portfolio.

I don't believe this to be true. It does treat Retirement money, ie tax deferred, and taxable money separately. When you look at total expenses on the table, taxes have been added in.

 

[monte1022]

The tricky part is the taxes. It is assumed that the calculator will add the taxes automatically and the expenses that you input are after-tax expenses. This has been confirmed here also.

However, if you look at the table, the numbers that you withdraw each year from the portfolio are the ones that you inputted, i.e., after-tax numbers. I would expect that you withdraw expenses plus taxes each year from your portfolio.

I agree with this point, however, my Fidelity rep assures me that taxes are accounted for in the calculations. I am not shy about my numbers so here goes....


Portfolio: 3.2m saving 10k/mo until 12/31/22 (1.7m pretax/900k Roth/600k taxable)

AA: 50/50
Planning horizon: 40yrs
My SS: 46k@70, DW: 20.5k@67 (approx 15yr from now)

Fidelity score: 150+
Expenses: 8k/mo

The score appears to be a percent of expenses funded. In my case, Fidelity says that I can spend 144k/yr x 40yr NET.

I am ok either way. 144k net or gross works for me, but I still wonder....

 

[Koolau]

I agree with this point, however, my Fidelity rep assures me that taxes are accounted for in the calculations. I am not shy about my numbers so here goes....


Portfolio: 3.2m saving 10k/mo until 12/31/22 (1.7m pretax/900k Roth/600k taxable)

AA: 50/50
Planning horizon: 40yrs
My SS: 46k@70, DW: 20.5k@67 (approx 15yr from now)

Fidelity score: 150+
Expenses: 8k/mo

The score appears to be a percent of expenses funded. In my case, Fidelity says that I can spend 144k/yr x 40yr NET.

I am ok either way. 144k net or gross works for me, but I still wonder....

Sounds like you are good to go. Still, I recall that feeling of... well, what if? 16 years later, I spend way more than I thought and my port is still growing. It's all good. Sometimes you have to just say "What the heck!" and do it.

 

[Dtail]

I agree with this point, however, my Fidelity rep assures me that taxes are accounted for in the calculations. I am not shy about my numbers so here goes....


Portfolio: 3.2m saving 10k/mo until 12/31/22 (1.7m pretax/900k Roth/600k taxable)

AA: 50/50
Planning horizon: 40yrs
My SS: 46k@70, DW: 20.5k@67 (approx 15yr from now)

Fidelity score: 150+
Expenses: 8k/mo

The score appears to be a percent of expenses funded. In my case, Fidelity says that I can spend 144k/yr x 40yr NET.

I am ok either way. 144k net or gross works for me, but I still wonder....

Bolded by me - Agree
So for example if one has spending of 50k and their score is 140, then their maximum spending is 70k.

 

[RetiredHappy]

I had used this tool before we retired but I don't remember what the reports said. Now that we are retired and moved our investments back to Fidelity, I am using the tool again. The tool does not offer a score for someone who is already retired. It tells me how much we have left at the end of our lives.

 

[flyingaway]

I had used this tool before we retired but I don't remember what the reports said. Now that we are retired and moved our investments back to Fidelity, I am using the tool again. The tool does not offer a score for someone who is already retired. It tells me how much we have left at the end of our lives.

You could pretend that you were not retired, I.e., put your retirement year as 2022, and put your salary as $1 to get a score. That's what I did.

 

[38Chevy454]

You can trick the Fidelity tool to give you a score if you put a retirement date that is in future. Just put a date like 12 months out, even if you use $1 as the income.


edit: funny that flyaway and i posted at the same time and the same answer!

 

[RetiredHappy]

Thanks. I will play with the tool later today.

We have an appointment this afternoon to see our Fidelity advisor and we are looking forward to having her input on how to approach disentanglement of our investments which have 70+ holdings of different sorts (previously Merrill Lynch's managed portfolio) to just a few ETFs. Taxable accounts are going to be more challenging with unrealized capital gains. Wish us luck!

 

[38Chevy454]

Thanks. I will play with the tool later today.

We have an appointment this afternoon to see our Fidelity advisor and we are looking forward to having her input on how to approach disentanglement of our investments which have 70+ holdings of different sorts (previously Merrill Lynch's managed portfolio) to just a few ETFs. Taxable accounts are going to be more challenging with unrealized capital gains. Wish us luck!

Simplifying is good. It makes it a lot easier to get a quick idea how you are doing and to be able to make adjustments.


I did a lot of consolidating of various old 401k/403b accounts, for me and DW. It sure makes it easier to have it all in one place.

 

[JT90505]

I used to enter expenses in the detail Fidelity allows.

Currently I just enter a lump sum of actual expenses (pre-covid + inflation allowance). Major expenses (cars, home maintenance, etc.) are estimated for the next 30 years (with pinpoint accuracy, mind you) and the average $/year is included in the lump sum.

It is much easier. Given the huge number of variables (known and unknown) that *will* affect our futures, I came to the conclusion that entering data at the atomic level provided little if any value.

 

[Out-to-Lunch]

You could pretend that you were not retired, I.e., put your retirement year as 2022, and put your salary as $1 to get a score. That's what I did.

You can trick the Fidelity tool to give you a score if you put a retirement date that is in future. Just put a date like 12 months out, even if you use $1 as the income.


edit: funny that flyaway and i posted at the same time and the same answer!

I think I just learned that you CANNOT do this if your Fidelity account contains your 401(k)/403(b), and it knows you are no longer an active employee and/or are already withdrawing under the Rule of 55!

But the "how much will my estate be worth when I am dead" funtion that @RetiredHappy spoke of is still useful.

 

[Dtail]

I used to enter expenses in the detail Fidelity allows.

Currently I just enter a lump sum of actual expenses (pre-covid + inflation allowance). Major expenses (cars, home maintenance, etc.) are estimated for the next 30 years (with pinpoint accuracy, mind you) and the average $/year is included in the lump sum.

It is much easier. Given the huge number of variables (known and unknown) that *will* affect our futures, I came to the conclusion that entering data at the atomic level provided little if any value.

I use the detailed expense module but can see your point.
One example on using the detailed expenses can be if one has an expense with a delayed start date or an ending date before death.

 

[Koolau]

Thanks. I will play with the tool later today.

We have an appointment this afternoon to see our Fidelity advisor and we are looking forward to having her input on how to approach disentanglement of our investments which have 70+ holdings of different sorts (previously Merrill Lynch's managed portfolio) to just a few ETFs. Taxable accounts are going to be more challenging with unrealized capital gains. Wish us luck!

You might ask your advisor if you can transfer "in kind" to avoid potential tax issues. YMMV

 

[JT90505]

I use the detailed expense module but can see your point.
One example on using the detailed expenses can be if one has an expense with a delayed start date or an ending date before death.

I think I fell into the trap of assuming everyone shared my situation. (I hate when I do that, thank you for pointing it out!)

Although I do have major expenses with start and end dates, in the scheme of things the dollars are in the noise and I am comfortable spreading them. I agree there are situations where spreading the dollars does not make sense.

 

[RetiredHappy]

You might ask your advisor if you can transfer "in kind" to avoid potential tax issues. YMMV

We discussed capital gains on the taxable portfolio and there is no way around it. I did an internet search and did not find reference of this for stock investments.

BTW, the meeting was excellent. She set aside 1.5 hours for us and did not even need the full duration to cover everything which we wanted to go through. We shared with her our proposed AA and logic behind it and she was in agreement. For instance, I have all my IRA in deferred income annuities which will start paying us next year and I am treating that amount as Fixed Income. As such I want to be super aggressive with my portfolio, going with 90% equities. We ran by her the various ETFs and she shared with us on her thoughts on bonds. She also showed us some features of the Fidelity website which we were not aware of. We are very happy with Fidelity.

 

[RetiriusMinimus]

This has been a useful thread. New to this site, but have used Fido planner for 5 years. I’m still workin but will hang shoes up in 2. God willing. There’s a lot of tweaking one can do in the expense side..a lot. I like it as it helped me organize expenses. I tried FIRECalc too. Will have to try the other tools mentioned for a complete picture.

 

[jayanu]

I interested in the Fidelity eMoney tool. Do you have examples of the reports generated by the tool? Is the tool only accessible by Fidelity advisor or can a Fidelity client access the tool?

The client can access the input of the data but the simulations are done by a trained and specialized advisor. She/he can do Zoom session o show the results, vary anything that you want to vary and for each variation, a detailed report is prepared and out in your electronic vaults that you can access to read/print. I have looked at my 3-year-old report for comparisons also. Having all results in one place in the cloud is good for me.

Ask your Fidelity advisor for eMoney specialist or call my specialist Rob Sim
(732) 842-6700 ext 58573 • Work
1-800-753-0602 • Work

BTW: If you do not follow Ed Sloot IRA guru then I would suggest getting Slott's daily short Q&A newsletter. The recent posting was very interesting as to how different states deal with IRAs and divorces!
https://www.irahelp.com/slottreport...=Feed:+theslottreport/jgTs+(The+Slott+Report)

 

[CDRE]

You could pretend that you were not retired, I.e., put your retirement year as 2022, and put your salary as $1 to get a score. That's what I did.

You can trick the Fidelity tool to give you a score if you put a retirement date that is in future. Just put a date like 12 months out, even if you use $1 as the income.


edit: funny that flyaway and i posted at the same time and the same answer!

I think I just learned that you CANNOT do this if your Fidelity account contains your 401(k)/403(b), and it knows you are no longer an active employee and/or are already withdrawing under the Rule of 55!

But the "how much will my estate be worth when I am dead" funtion that @RetiredHappy spoke of is still useful.

I was able to trick the tool and get the "Score" to appear by extending my retirement age to the future, even though Fido has the 401(k) and current withdrawals meet the Rule of 55.

 

[Kabowest]

I interested in the Fidelity eMoney tool. Do you have examples of the reports generated by the tool? Is the tool only accessible by Fidelity advisor or can a Fidelity client access the tool?

If you select Full View from the Accounts and Trades menu when logged into Fidelity, it uses emoney on the backend.

 

[The Cosmic Avenger]

This has been a useful thread. New to this site, but have used Fido planner for 5 years. I’m still workin but will hang shoes up in 2. God willing. There’s a lot of tweaking one can do in the expense side..a lot. I like it as it helped me organize expenses. I tried FIRECalc too. Will have to try the other tools mentioned for a complete picture.

Welcome! Having seen your other thread on this, we hit 150, too, because I first assumed we would retire on a strict budget. Then I started figuring out how to add ACA insurance expenses from retirement to age 65, and added budget items for dining out and traveling, and now our score is "only" 130. But that doesn't really include lumpy expenses, like big home improvement projects, appliance upgrades, etc.

As for Fido's assumptions, I'm sure you noticed that the default is "Significantly below average market conditions". I'm pretty comfortable with that, as I do want to plan for the worst (and hope for the best)! But in FIRECalc, note that on the Spending Models tab there is an option for "Percentage of remaining portfolio", which allows you to cut back on your spending during a downturn. Many of us plan on keeping enough bonds or cash for at least 2-3 years of expenses for just such an occasion, but we would probably also cut back on discretionary spending, especially early in retirement.

 

[Lazyfabs]

in full view we have 529's and a goal set up for each child college expenses.

has anyone inputed college expensed into the tool itself?

does one need to add college expenses in the tool or does it assume no college expenses will be incurred when it comes to coming up w/ the 'number'?

thanks

 

[G-Man]

in full view we have 529's and a goal set up for each child college expenses.

has anyone inputed college expensed into the tool itself?

does one need to add college expenses in the tool or does it assume no college expenses will be incurred when it comes to coming up w/ the 'number'?

thanks

I'm not sure how to input my expenses and income sources in the Fullview tool. It does recognize my 401K and pension that is managed by Fidelity.

 

[Dtail]

Welcome! Having seen your other thread on this, we hit 150, too, because I first assumed we would retire on a strict budget. Then I started figuring out how to add ACA insurance expenses from retirement to age 65, and added budget items for dining out and traveling, and now our score is "only" 130. But that doesn't really include lumpy expenses, like big home improvement projects, appliance upgrades, etc.

As for Fido's assumptions, I'm sure you noticed that the default is "Significantly below average market conditions". I'm pretty comfortable with that, as I do want to plan for the worst (and hope for the best)! But in FIRECalc, note that on the Spending Models tab there is an option for "Percentage of remaining portfolio", which allows you to cut back on your spending during a downturn. Many of us plan on keeping enough bonds or cash for at least 2-3 years of expenses for just such an occasion, but we would probably also cut back on discretionary spending, especially early in retirement.

130 is still a great score, but should probably include some lumpy expenses.

As mentioned previously, the "Significantly below average market" module is a bit of a misnomer, as it provides effectively a 90% success rate, which is probably similar to a 95% success rate in Firecalc due to in theory Monte Carlo simulations will produce a more conservative result, but not just because of the module mentioned above.

If you think about the Firecalc module, the 95% success rate is producing 6 failures in history and thus is taking into account conditions which are significantly below average.
The difference with the 2 programs is that Fidelity can/will take results from for example year 2000, followed by year 1929, followed by year 1966.
This scenario has never happened to this level historically and thus a Monte Carlo module will end up with more conservative results than an Firecalc historical module, even though Firecalc does take into account the worst investment years, but in a historical sequencing module, not a random sampling searching for the worst years.

 

[Dinker01]

I am still trying to understand whether “expenses” in the results table includes or excludes taxes. The methodology documentation provided by Fidelity doesn’t address it explicitly (or I couldn’t find it).

 

[schenbew]

Dinker01,

On page 17 of the FRP document you can save or printout, it addresses how FRP handles taxes:

* - The analysis used an estimated effective tax rate for the federal and state level based on the projected gross taxable income for a given year. To calculate your effective tax rate estimate, we took into account the filing status and state of residence you provided. If no state was provided, the analysis assumed a state
effective tax rate of 5%.