The 10% failure rate can be modified by cutting back on spending if there are bad years in the market... Trinity study and other spending models tend to be rigid, and not follow real world reactions to down markets.
I think it was Unclemick who said it pays to be agile and flexible in retirement to adjust to the circumstances... If you rigidly maintain the inflation increased withdrawal rate after a series of down years... you risk being part of that 10% failure.
Firecalc doesn't claim to predict the future... but it backtests the plan. Most folks here put in a margin of safety... either discounting an income stream (SS for example), over estimating spending, or setting aside some money outside of firecalc... No one can predict the future market returns... not even firecalc... but firecalc considers the worst of the actual past performances.
2/3 current gross covers my expenses 2x over. It's one reason I've been able to get to FI faster in the last few years because my expenses are low compared to my gross income. I don't need 2/3 gross to live on. Nice to have, yes, but not necessary to reach FI.
The 10% failure rate can be modified by cutting back on spending if there are bad years in the market... Trinity study and other spending models tend to be rigid, and not follow real world reactions to down markets.
I think it was Unclemick who said it pays to be agile and flexible in retirement to adjust to the circumstances... If you rigidly maintain the inflation increased withdrawal rate after a series of down years... you risk being part of that 10% failure.
Firecalc doesn't claim to predict the future... but it backtests the plan. Most folks here put in a margin of safety... either discounting an income stream (SS for example), over estimating spending, or setting aside some money outside of firecalc... No one can predict the future market returns... not even firecalc... but firecalc considers the worst of the actual past performances.
<SNIP>
I would rather work longer in my cushy job and increase my pension and savings so that I have enough that being flexible and cutting back is unnecessary in retirement if my portfolio underperforms, than retire earlier and worry about the market and money.
Yes but unfortunately (?!) more of us are living longer.
Your risk profile is basically whatI would call flexibility of discretionary funds. While I could, if I had to, base my FIRE on actual expenses, I choose to leave a lot of conservative discretionary as part of the equation. If all goes just average, I should be wonderIng after a few years of retirement why I am spending so much less than planned, but still doing everything I wanted. I had always assumed I would work until 65, so leaving at 61.3 is RE for me. At 61.3 Firecalc gives me 100% success using all three withdrawal profiles. . Of course the resolution of Firecalc is only a year so I use my year I turn 61.
I would rather work longer in my cushy job and increase my pension and savings so that I have enough that being flexible and cutting back is unnecessary in retirement if my portfolio underperforms, than retire earlier and worry about the market and money.
Enough is defined by the following equation...
Additional expected wealth gained from labor = or < expected remaining time on earth X current value placed on your own time