FIRECalc

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jarts98

Recycles dryer sheets
Joined
Jul 5, 2012
Messages
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Good day. Many here are familiar with FIRECalc and I enjoy running various scenarios of my (hopefully) nearing retirement. I'm curious, though, of potential issues I'm glossing over as I stare gleefully at a 100% success rate.

Suppose a set of assumptions show a 100% success rate in FIRECalc. What could still be an issue in your mind (that could derail your retirement financial success) - especially for early retiree's (late 40's in my case)?

A few things come to mind:

1. Health / Health insurance - Would my (or my spouse's) health fail leading to a huge out of pocket expenses? What will health insurance premiums be in the future? Certainly higher than in the past, which is what FIRECalc is based on.
2. Market returns outside of historical results - Suppose the market SEVERELY tanked and stayed down for a LONG period of time. Would your now reduced assets produce enough income?
3. Disease, famine, epidemics, civil war, etc. - No way to predict these so I suppose we just ignore the risks.....right?

Are there other potential issues that might undermine a 100% success rate?

Thanks.

jarts98
 
4. Investing too conservatively to begin with.
5. Getting scared by a market downturn and selling stocks at the bottom.
6. You live a long, long, long time.
 
Zimbabwe style hyperinflation.
 
Macroeconomic shift of power away from the US, government insolvency, austerity and reduced consumerism domestically.
 
steelyman said:
Zombies! ;)
Click to expand...
In the case of zombie uprising we do have options


180px-Zombiesurvivalguide.jpg




But you are correct that many will fall
 
jarts98 said:
Good day. Many here are familiar with FIRECalc and I enjoy running various scenarios of my (hopefully) nearing retirement. I'm curious, though, of potential issues I'm glossing over as I stare gleefully at a 100% success rate.

Suppose a set of assumptions show a 100% success rate in FIRECalc. What could still be an issue in your mind (that could derail your retirement financial success) - especially for early retiree's (late 40's in my case)?
...
Click to expand...
Suppose some of those successful lines go down to maybe 20% of your starting retirement funds (after inflation) and then flatten or maybe go up a bit. Would you have been able to spend in those rotten return years or would you have drastically reduced your spending and even pulled back from your targeted AA?

There is a place to put down the minimum acceptable portfolio value at all times. It is on the "investigate" tab at the bottom.

When I run FIRECalc I put a value in there that will be something I can live with in a real life market meltdown. It might be 50% of my starting portfolio value. Still would be scary hitting that mark.
 
Wait a minute! You mean that FIRECALC doesn't take all those things into consideration?

:facepalm:
 
marko said:
Wait a minute! You mean that FIRECALC doesn't take all those things into consideration?
Click to expand...
You have to go to the "What could possibly go wrong?" tab and click on the appropriate disaster. Note that FIRECalc will only allow you to choose one since history shows one will be more than sufficient. :)
 
REWahoo said:
You have to go to the "What could possibly go wrong?" tab and click on the appropriate disaster. Note that FIRECalc will only allow you to choose one since history shows one will be more than sufficient. :)
Click to expand...

Now you tell me! After I did that and clicked on "Zombies", I find that I never should have RE'd!!
 
Since health care is the biggest single expenditure in my planned retirement budget my biggest worry is that estimate. Also, my firecalc estimate includes some social security income which is another area of uncertainty.
 
Lsbcal said:
Don't you think Jarts98 deserves some serious answers along with the humor?
Click to expand...
Certainly, and as Mead said, she gave him one as did racy in post #2, plus others.

Truth is, trying to figure out "what else could go wrong" is an exercise in futility - the list is limitless and the future is unknowable.
 
Last edited:
One spouse dying is a commonly missed scenario that can easily wipe out your 100% success rate. Your expenses will not suddenly be reduced by one half. Your taxes will move to the higher single rates. You may have reduced or lost pension income. You may have reduced or lost SS benefits. The financially savy spouse may be the one that goes first, perhaps leaving a spouse that is not willing to execute things like rebalancing, Roth conversions, and tax complexities.

Another growing concern is your own financial capability as you age. My dad was the financial wiz but had Alzheimer's through his late 60's. Mom was pretty much financially clueless, but was set up with annuities so that she didn't need to worry about her portfolio. Not exactly optimum by FIRECalc, but something you need to consider.
 
REWahoo said:
Truth is, trying to figure out "what else could go wrong" is an exercise in futility - the list is limitless and the future is unknowable.
Click to expand...

I agree (and apologize for my earlier attempt at humor).

But if you hope that FIRECALC or any other crystal ball can give you 100% certainty, then you're playing the wrong game.

Most times, life is about doing your homework as best as you can and then just jumping. Stuff will happen...or not.

The only thing a spreadsheet really does is make sure the math is right.
 
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