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Firecalc, is it possible
Old 09-01-2020, 08:03 AM   #1
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Firecalc, is it possible

Just ran our numbers, 2M cash starting now at age 60 and adding SS at 65 for both me and my DW. Draw 120,000 per year with 8% return average for 30 yrs. Say we will have between 8M to 16M . Am I doing something wrong?

We have Commerical property worth 1.5M and 2 homes and a rental worth 600,000 plus. I did not put into FireCalc.

How is this possible?

Thanks
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Old 09-01-2020, 08:11 AM   #2
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Not withdrawing anything, your $2M at 8% annual return (unrealistic IMO) over 30 years would grow to about $20M.
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Old 09-01-2020, 08:16 AM   #3
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No, I put in a draw of 120,000 per year starting immediately.
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Old 09-01-2020, 08:17 AM   #4
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Not withdrawing anything, your $2M at 8% annual return (unrealistic IMO) over 30 years would grow to about $20M.
What would be realistic %
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Old 09-01-2020, 08:21 AM   #5
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^ I would not use anything over 4% to be realistic.
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Old 09-01-2020, 08:33 AM   #6
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OP - I would suggest using one of the two portfolio options where you put in your asset mix instead of using a predetermined rate of return. The purpose of Firecalc is to model against historical returns and historical volatility as it is the latter that is the bigger risk in retirement.
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Old 09-01-2020, 09:04 AM   #7
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OP - I would suggest using one of the two portfolio options where you put in your asset mix instead of using a predetermined rate of return. The purpose of Firecalc is to model against historical returns and historical volatility as it is the latter that is the bigger risk in retirement.
I did that also , just hard to believe that amount . Thanks
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Old 09-01-2020, 10:58 AM   #8
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Originally Posted by Monterey298sc View Post
Just ran our numbers, 2M cash starting now at age 60 and adding SS at 65 for both me and my DW. Draw 120,000 per year with 8% return average for 30 yrs. Say we will have between 8M to 16M . Am I doing something wrong?

We have Commerical property worth 1.5M and 2 homes and a rental worth 600,000 plus. I did not put into FireCalc.

How is this possible?

Thanks
Not that you need to share, but without knowing what you entered for SS, we can't know. I entered similar numbers without SS and got nothing like your result "For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 57 cycles failed, for a success rate of 52.5%." $120/yr with a $2M portfolio is a 6% WR, but that's without SS. I am guessing there's an entry error somewhere, but no way we can know what it might be...
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Old 09-01-2020, 02:37 PM   #9
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hahaha I know FIRECALC has a very high end balance for me too, but it is based on history so the numbers are the numbers!
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Old 09-01-2020, 04:00 PM   #10
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If you have 2m in cash, what are you planning to invest it in in order to achieve a net 8% result?
What will be your AA?
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Old 09-01-2020, 05:30 PM   #11
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If you have 2m in cash, what are you planning to invest it in in order to achieve a net 8% result?
What will be your AA?
Invested , I mean not real estate.
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Old 09-01-2020, 09:11 PM   #12
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I did that also , just hard to believe that amount . Thanks
Look at the entire spread of results. Even though many are good outcomes, there are quite a few less than ideal lines.
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Old 09-02-2020, 02:05 AM   #13
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Look at the entire spread of results. Even though many are good outcomes, there are quite a few less than ideal lines.
If I read the OP right, he/she is saying $8M is worst case, $16M is best case. Without knowing what was entered there’s no way to evaluate, but the FIRECALC result sounds unlikely to me based on the inputs given.
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Old 09-02-2020, 07:02 AM   #14
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... Am I doing something wrong?

How is this possible?

Thanks
Monterey298sc, yes, you are doing something wrong. But no one here can help you, because you aren't giving enough specific information for anyone here to understand what it is you are (or are not) doing.

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Originally Posted by Monterey298sc View Post
Just ran our numbers, 2M cash starting now at age 60 and adding SS at 65 for both me and my DW. Draw 120,000 per year with 8% return average for 30 yrs. ...
So that sounds like you are specifying the return instead of using the default (and in the opinion of many, the most useful) mode of historical analysis. Don't do that. There is no "realistic" entry, investments do not return the same rate year after year. The historical analysis is far more realistic, it reflects actual volatility, actual inflation, etc- it is based on actual reality! Use the default of historical analysis.

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Quote:
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OP - I would suggest using one of the two portfolio options where you put in your asset mix instead of using a predetermined rate of return. The purpose of Firecalc is to model against historical returns and historical volatility as it is the latter that is the bigger risk in retirement.
I did that also , just hard to believe that amount . Thanks
What exactly did you do? What amount is "hard to believe"? If you are saying you got the same results with a fixed 8% return as using the historical analysis, there is clearly something wrong with your entries.

If you want help, you need to provide specifics. The best is to actually link to the data (upper right on the results page). If you don't want to do that, give as much specifics as you can. Start with the defaults and explain what you changed.

-ERD50
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Old 09-02-2020, 08:42 AM   #15
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Look at the entire spread of results. Even though many are good outcomes, there are quite a few less than ideal lines.
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Originally Posted by Midpack View Post
If I read the OP right, he/she is saying $8M is worst case, $16M is best case. Without knowing what was entered there’s no way to evaluate, but the FIRECALC result sounds unlikely to me based on the inputs given.
I'm pointing out to OP that spinning the monte carlo wheel of fortune at Firecalc is something, in that you get a large number of results, some more likely than others. But you don't necessarily get any of the results.
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Old 09-02-2020, 08:59 AM   #16
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Originally Posted by Monterey298sc View Post
Just ran our numbers, 2M cash starting now at age 60 and adding SS at 65 for both me and my DW. Draw 120,000 per year with 8% return average for 30 yrs. Say we will have between 8M to 16M . Am I doing something wrong?

We have Commerical property worth 1.5M and 2 homes and a rental worth 600,000 plus. I did not put into FireCalc.
I ran your numbers through Firecalc. 120,000 spending, 2,000,000 portfolio, 30 year retirement starting now. I didn't include SS, pensions, or additional contributions since you didn't specify any amounts. I also used the default spending model and portfolio returns.

I got a 52% success rate varying from -6.6 million to +7.7 million. That's quite a range of possibilities, but I wouldn't be comfortable with a 52% success rate.
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Old 09-02-2020, 09:20 AM   #17
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Quote:
Originally Posted by Monterey298sc View Post
Just ran our numbers, 2M cash starting now at age 60 and adding SS at 65 for both me and my DW. Draw 120,000 per year with 8% return average for 30 yrs. Say we will have between 8M to 16M . Am I doing something wrong?

We have Commerical property worth 1.5M and 2 homes and a rental worth 600,000 plus. I did not put into FireCalc.

How is this possible?

Thanks
I would love to know what you are investing in that returns an average of 8% for 30 years. Are you willing to let your cat out of the bag? I won't tell.



Cheers!
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Old 09-02-2020, 09:40 AM   #18
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I ran your numbers through Firecalc. 120,000 spending, 2,000,000 portfolio, 30 year retirement starting now. I didn't include SS, pensions, or additional contributions since you didn't specify any amounts. I also used the default spending model and portfolio returns.

I got a 52% success rate varying from -6.6 million to +7.7 million. That's quite a range of possibilities, but I wouldn't be comfortable with a 52% success rate.
Without Soc Sec, that result is probably meaningless, especially given the numbers the OP has reported. I'm fairly certain he/she has made a mistake or left out something substantial.
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Old 09-02-2020, 09:41 AM   #19
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I'm pointing out to OP that spinning the monte carlo wheel of fortune at Firecalc is something, in that you get a large number of results, some more likely than others. But you don't necessarily get any of the results.
I understand that - but a bottom threshold of $8M on a starting portfolio of $2M sounds about as safe as it gets. And I missed where to OP used Monte Carlo.
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Target AA: 50% equity funds / 30% bond funds / 20% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 09-02-2020, 11:05 AM   #20
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I understand that - but a bottom threshold of $8M on a starting portfolio of $2M sounds about as safe as it gets. And I missed where to OP used Monte Carlo.
Yep, OP is really short on providing meaningful info. I think we can assume he used Monte Carlo option for FIRECalc, as he mentions a range of outputs. If you just plug in the fixed rate of return and inflation ( he didn't mention what he used for inflation), you get a single value.

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