FIRECalc Results vs. Otar Retirement Calculator

[gindie]

Has anybody made the same comparison? I used Jim Otar's free trial version, that uses the same data as the paid-for version.

I entered the same values for saved amount, retirement date, SS amount/age, and spending amount.

Both use the historical US market data instead of Monte Carlo or other assumptions about market behavior.

FIRECalc always comes up much more optimistic.

Parameters:

Current age: 54
Retirement date: 2019 (Age 60)
Estimated death: 95
Current saved amount: 1.5M
To be added each year until retirement: 35K
SS amount/age: 21.5K starting in 2026 (Age 67)
Desired spending (pre-tax): 100K

FIRECalc says 95% success for 100K spending
Otar says 64% success for 100K spending (must reduce desired amount to $72,000 to get to 95%)

Any ideas why they are so different?


Separate question, but related to how I derived the SS numbers above...On the annual SS estimates that they used to mail, but now you can get online, when it gives an amount for what to expect at 62, full retirement age, and 70, are those numbers in today's dollars, or predicted dollars at those ages based on current inflation rates? I can find nothing in that document that explains that.

Thanks.

[gindie]

Quote:

Originally Posted by gindie Separate question, but related to how I derived the SS numbers above...On the annual SS estimates that they used to mail, but now you can get online, when it gives an amount for what to expect at 62, full retirement age, and 70, are those numbers in today's dollars, or predicted dollars at those ages based on current inflation rates? I can find nothing in that document that explains that.

Answered my own question at the SSA web site. Numbers in those estimates statements are in today's dollars.

That actually makes my situation look better, because I was discounting all my SS inputs to the calculators by a 3% inflation rate to obtain today's dollars.

[clifp]

Social security numbers are given in today dollars. They will be automatically adjust for inflation so no need to change anything, check inflation adjusted in FIRECalc in the pension section.

Now I plugged in your numbers into FIRECalc and the success rate was only 76.5% for a 40 year retirement with 6 years before you retire, a bit more optimistic than Otar (and this is generally true) but a far cry from 95%


The one think I was sure off was how much you'd save every year from now until 2019. Anyway I'd double check your entries.

[gindie]

Thanks, clifp.

I left out one important input in my original post. I entered a $35K contribution for the 6 years prior to retirement. I'll try to edit my original post.

Thanks again.