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RIP - first year savings balance reduction
Old 07-18-2016, 02:30 PM   #1
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RIP - first year savings balance reduction

I've been working with RIP and their retirement reports for a while now. One thing I have noticed in the "Detailed Income Analysis" section of the report is the large, unaccounted for, balance reduction after the first year. It's about 15% of the "beginning savings" amount with no detailed explanation of why and how much. The other columns in the table offer no reconciliating numbers.

I seem to remember before they changed the tool in 2015 there was an brief note "we have experienced that in the 1st year of retirement, retirees make a large withdrawal." That footnote has since vanished but the deduction remains, or have I missed their explanation.

Does Fidelity's assumption of a large withdrawal ring true with others? Wouldn't it be helpful to see the analysis without the effects of this unexplained deduction? Or be given a more detailed explanation of their methodology?

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Old 07-18-2016, 02:39 PM   #2
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worst case scenario seems to figure you getting hit by `15% right out of the gate . this being my first year retired , when we were down i was like how did they know ? ha ha ha

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Old 07-18-2016, 03:33 PM   #3
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Yes i see this also , I believe Rip includes multi year down turn at the start, a real stress test.

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Old 07-18-2016, 04:11 PM   #4
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Can you "fix" it by increasing assets by 17.6% [117.65*(1-15%)=100]?
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Old 07-18-2016, 05:06 PM   #5
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I just checked my RIP numbers and looked at the Detailed Income Analysis. ending balance is about 1% less than simple beginning balance - expenses = ending balance. It appears that in an under performing market FIDO assumes a slightly negative return on investments in the first year.
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