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Old 05-05-2016, 12:10 PM   #21
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On the other hand, you could always reduce your expenses and/or increase your portfolio enough so that you can live on a 2.5 - 3% withdrawal rate or less, and don't have to worry about running multiple retirement simulators to squeeze every last dollar out of your portfolio.

But then, we'd have a lot less to talk about here
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Old 05-05-2016, 12:13 PM   #22
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How critical is it to achieve 100% success before retirement based on FireCalc and similar tools? Meaning should one not even consider jumping into retirement unless the tools give you a 100% success rate? Or have folks here done it at say 85-90% as good enough?
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Old 05-05-2016, 12:27 PM   #23
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How critical is it to achieve 100% success before retirement based on FireCalc and similar tools? Meaning should one not even consider jumping into retirement unless the tools give you a 100% success rate? Or have folks here done it at say 85-90% as good enough?
Bernstein suggests anything over 80% is merely rearranging deck chairs on the Titanic...

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But history teaches us that depriving ourselves to boost our 40-year success probability much beyond 80% is a fool’s errand, since all you are doing is increasing the probability of failure for political, economic, and military reasons relative to the failure of banal financial planning.
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Old 05-05-2016, 12:31 PM   #24
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Bernstein suggests anything over 80% is merely rearranging deck chairs on the Titanic...
LOL...I think you meant under 80%? So 81% is fighting for the life boat and 100% is reaching ashore?

My conservative plan gets me at 84%, I can tweak things a bit to improve it but not to 100%.
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Old 05-05-2016, 12:32 PM   #25
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How critical is it to achieve 100% success before retirement based on FireCalc and similar tools? Meaning should one not even consider jumping into retirement unless the tools give you a 100% success rate? Or have folks here done it at say 85-90% as good enough?

It's a good question.
My bet - 85% of those on this forum like to see a range of 95-100 percent out of the tools for a 25 year period.

Of course it's just a tool. It doesn't predict the future. Six sigma events do happen, and life events change from one run of firecalc to the next.


I contend this group is the A-list of financially savvy adults across all generational age brackets ... Better than just about anywhere else online or in real life. (Bogleheads too).
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Old 05-05-2016, 12:37 PM   #26
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LOL...I think you meant under 80%?
No, I meant striving to get anything over an 80% success rate was a wasted effort - according to Bernstein.
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Old 05-05-2016, 12:43 PM   #27
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No, I meant striving to get anything over an 80% success rate was a wasted effort - according to Bernstein.
Oh ok, thanks for the clarification...positive news for me

EDIT: I got a chance to read the Bernstein article and found it to be a great read, thanks REWahoo.
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Old 05-05-2016, 01:09 PM   #28
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Bernstein suggests anything over 80% is merely rearranging deck chairs on the Titanic...
When your starting asset valuations for both stocks and bonds are in the top decile of periods included in FIRECalc's data set, it's not unreasonable to think that bottom decile returns are in store for us. If that's true one might expect that planning for a 20% failure rate as per FIRECalc might actually mean something closer to an 80% failure rate going forward.

You don't need to assume war, famine, pestilence and asteroids to plan for much lower investment returns than we've seen historically. And low investment returns are survivable, if you have enough starting capital.
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Old 05-05-2016, 01:12 PM   #29
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It's a good question.
My bet - 85% of those on this forum like to see a range of 95-100 percent out of the tools for a 25 year period.).

Does anybody remember if we've ever done a survey on what people felt was ok? Might be useful to the OP if it existed.

Just curious as my target was only 80% but I had flexibility to lower expenses if I ran into trouble.



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Old 05-05-2016, 01:15 PM   #30
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No, I meant striving to get anything over an 80% success rate was a wasted effort - according to Bernstein.
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When your starting asset valuations for both stocks and bonds are in the top decile of periods included in FIRECalc's data set, it's not unreasonable to think that bottom decile returns are in store for us. If that's true one might expect that planning for a 20% failure rate as per FIRECalc might actually mean something closer to an 80% failure rate going forward.

You don't need to assume war, famine, pestilence and asteroids to plan for much lower investment returns than we've seen historically. And low investment returns are survivable, if you have enough starting capital.
Bernstein makes an important point. The 80% failure won't happen because half the people won't live long enough. The failure rate only applies to the small % of population that actually survives the 30 year period.
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Old 05-05-2016, 02:36 PM   #31
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Quoting Bernstein out of context again, happens here often. While he indeed stated the above re: 80%, it wasn't to suggest higher probabilities of success weren't without merit/benefit. Immediately after the quote above he also said:
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Mind you, this is not a call for wild abandon. The above table constrains the retiree desiring a theoretical 97% success rate (of portfolio survival) from spending more than 3% per year of the initial real amount of his nest egg. Taking the accident propensity of the species into account would allow him to spend about 4%. But if you believe that we’re about to encounter a bad returns sequence or simply wish to leave a few baubles to your heirs, you’re right back to 3% again.

So live a little, and enjoy your money, for tomorrow we may be consumed by the ghosts of Hitler, Lenin, and Attila the Hun. And at withdrawals of 3% to 4% of your nest egg, don’t spend it all in one place.
For a 30 year retirement, 3-4% WR corresponds to 95-100% probabilities - not 80%.

While some are comfortable pulling the plug at 80% or less, others need $ well over 100% threshold to sleep at night. Both are good answers, depending on individual circumstances and expectations.
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Old 05-05-2016, 02:49 PM   #32
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Quoting Bernstein out of context again,...
Yikes! You caught me red fingered...
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Old 05-05-2016, 03:08 PM   #33
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On the other hand, you could always reduce your expenses and/or increase your portfolio enough so that you can live on a 2.5 - 3% withdrawal rate or less, and don't have to worry about running multiple retirement simulators to squeeze every last dollar out of your portfolio.

But then, we'd have a lot less to talk about here
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How critical is it to achieve 100% success before retirement based on FireCalc and similar tools? Meaning should one not even consider jumping into retirement unless the tools give you a 100% success rate? Or have folks here done it at say 85-90% as good enough?
When I include SS in FIRECalc calculation, either at 62 or 70 makes very little difference in the result, it tells me that my current spending is about 70% of the level for 100% success rate.

And I do not expect to live another 30 years either.

So, why don't I spend more?

I have enough, and crave no fancy toys. And if I spend more, my stash will likely shrink with time. I hate to see that, being so used to see my stash grow, whether a lot or a little.

Money is cool, even if it is just a number on the laptop screen.
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Old 05-05-2016, 03:17 PM   #34
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I have enough, and crave no fancy toys. And if I spend more, my stash will likely shrink with time. I hate to see that, being so used to see my stash grow, whether a lot or a little.

Money is cool, even if it is just a number on the laptop screen.
And thus the motivations that make players in the games I design happy. Folks love to see little numbers getting bigger on screen.
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Old 05-06-2016, 10:01 AM   #35
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Bernstein makes an important point. The 80% failure won't happen because half the people won't live long enough. The failure rate only applies to the small % of population that actually survives the 30 year period.
But we're early retirees here at ER.org and many of us are married. Joint survivorship is way longer than individual life expectancy.
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