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10-23-2020, 11:48 AM
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#101
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Thinks s/he gets paid by the post
Join Date: Aug 2015
Posts: 1,890
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Quote:
Originally Posted by music-and-ski
Is it 90% at fixed spending, or at Bernicke's Reality Retirement Plan spending reductions? If you are looking fixed spending scenarios, try some Bernicke spending formulas. In Bernicke, don't be afraid to bump up your initial spending in the early years e.g. to cover renovations, new cars, travel that you're unlikely to keep up when you are age 75+
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Everything is fixed except the blow that dough amount. BTD is $25k from 55-70 and then goes to $12.5k until age 80. It is $0 @ 80. At age 70, my COLA pension and SS covers 100% of my base expenses. So any money left over @ age 70 in my retirement accounts is 100% BTD or for my heirs/charity. Basically, my plan is to slide into age 70 with about $500k left in the retirement accounts.
__________________
Consistently sets low goals and fails to achieve them.
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10-23-2020, 01:36 PM
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#102
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,794
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I can barely run my own life, so I won't try to run anyone else's. Looking at your 'new' proposed spending, I'm sure you can still cut even deeper if you are ever financially stressed. Personally, I would do that rather than return to w*rk. I call it a "backup" plan when thinking about possibly cutting expenses. So far (in 15 years) we have not needed to do that. In fact, we have been fortunate to expand our spending - primarily charity and gifts to kids - rather dramatically. I never actually ran FIRECalc all those years ago. My decision was more of a back-of-the-envelope thing. Figured I was ready to go at 51 but waited to 58. YMMV
Best of luck!
__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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11-27-2020, 11:47 AM
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#103
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Recycles dryer sheets
Join Date: Sep 2020
Posts: 93
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11-27-2020, 12:03 PM
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#104
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Full time employment: Posting here.
Join Date: Nov 2019
Location: Jersey City
Posts: 518
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Quote:
Originally Posted by corn18
Would you retire @ 90% Ps?
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I've run a few simulations using different kind of software and while the results varied I noticed that they all measured the "probability of success" by assuming that my goal was to die withe the same amount of money I started with. Which is as far from what I want as it gets - my goal is to die with nothing (I have no heirs).
While all these simulators allow for setting age of death and the projected expenses, none (as far as I know) give an option of setting the desired ending net worth and calculate yearly spending. You can tinker with settings to get the numbers to line up but at that point the probability of success would drop to 50% or so. So in my opinion it's a pretty useless number.
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11-27-2020, 12:36 PM
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#105
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Thinks s/he gets paid by the post
Join Date: Aug 2018
Posts: 1,003
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Quote:
Originally Posted by tenant13
While all these simulators allow for setting age of death and the projected expenses, none (as far as I know) give an option of setting the desired ending net worth and calculate yearly spending.
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You may want to try this one. It allows choosing your final asset value.
https://earlyretirementnow.com/2018/...eries-part-28/
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11-27-2020, 01:09 PM
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#106
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Thinks s/he gets paid by the post
Join Date: Jan 2020
Location: Milwaukee
Posts: 3,976
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Quote:
Originally Posted by tenant13
I've run a few simulations using different kind of software and while the results varied I noticed that they all measured the "probability of success" by assuming that my goal was to die withe the same amount of money I started with. Which is as far from what I want as it gets - my goal is to die with nothing (I have no heirs).
While all these simulators allow for setting age of death and the projected expenses, none (as far as I know) give an option of setting the desired ending net worth and calculate yearly spending. You can tinker with settings to get the numbers to line up but at that point the probability of success would drop to 50% or so. So in my opinion it's a pretty useless number.
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I have never seen a simulator that assumes no drawdown of principal. Which ones are like that?
Just as two examples of others that do not behave that way: The default on Firecalc is that you will spend your savings down to zero. However, it allows you to set a higher amount to reserve on the "Investigate" tab. I-orp allows you to specify a "plan surplus," but if you do not specify one, it assumes you want to spend it all.
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11-27-2020, 02:29 PM
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#107
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Full time employment: Posting here.
Join Date: Nov 2019
Location: Jersey City
Posts: 518
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Quote:
Originally Posted by Out-to-Lunch
I have never seen a simulator that assumes no drawdown of principal.
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Drawndown of the principal is user controlled in those simulators (and I freely admit that I only tried 3 before shrugging them off). If you set your expenses at amounts exceeding projected growth you may design a scenario where your portfolio is depleted before or on the date you die and your "probability of success" nose dives. I may be wrong here but my assumption is that the simulators define "success" as dying on a pile of cash and the larger it is, the higher the probability. In my book that would be an utter failure: I wouldn't get to enjoy my money to the fullest.
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11-27-2020, 03:04 PM
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#108
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Administrator
Join Date: Apr 2006
Posts: 22,971
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That's not at all how FIRECalc works. A failure is defined as a cycle where your portfolio hits zero at any point in the life of your planned retirement, including at the end. The fewer failures, the greater the probability of success. If you have no failures, you get 100%. Greater success probability is not defined by greater ending balance, but simply by how many times you drop below zero at any time in the cycle.
You can choose a minimum portfolio balance, say $500k, and the program will then define failure as any cycle where the balance drops below that choice. That will, without fail, result in more failures and a lower probability of success.
Try for yourself. Use the default numbers in the first tab of $30k per year spending, with a $750k portfolio and a 30 year retirement. Then, without changing anything else, go to the "Investigate" tab and, where it says "Leave some money in the portfolio for my estate" change the number in the box and submit. Do it several times, increasing by, say, $200k each time, and watch what happens to the results.
__________________
Living an analog life in the Digital Age.
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11-27-2020, 03:11 PM
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#109
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,227
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Quote:
Originally Posted by tenant13
Drawndown of the principal is user controlled in those simulators (and I freely admit that I only tried 3 before shrugging them off). If you set your expenses at amounts exceeding projected growth you may design a scenario where your portfolio is depleted before or on the date you die and your "probability of success" nose dives. I may be wrong here but my assumption is that the simulators define "success" as dying on a pile of cash and the larger it is, the higher the probability. In my book that would be an utter failure: I wouldn't get to enjoy my money to the fullest.
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Not how Firecalc or Fidelity works.
I see that Gumby chimed in already with Firecalc.
__________________
TGIM
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11-28-2020, 09:01 AM
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#110
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
Posts: 3,501
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90% was more than adequate for me.
I remember running a simulation that gave me a 10% chance of running out of cash at an age that I have a 10% chance of reaching. That gave me a 1% chance of running out of money while still alive. If it was a 10% chance of being broke at an age that 50% of expected lifespan than maybe I would go back to work.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
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11-28-2020, 09:55 AM
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#111
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Thinks s/he gets paid by the post
Join Date: Jan 2020
Location: Milwaukee
Posts: 3,976
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Quote:
Originally Posted by GravitySucks
90% was more than adequate for me.
I remember running a simulation that gave me a 10% chance of running out of cash at an age that I have a 10% chance of reaching. That gave me a 1% chance of running out of money while still alive. If it was a 10% chance of being broke at an age that 50% of expected lifespan than maybe I would go back to work.
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Good point! Here is a calculator for that sort of thing that was posted earlier upthread.
Quote:
Originally Posted by bada bing
I think you are beyond fine to pull the trigger. There is a contingent here that gets way too fixated on 100%+++.
The main reason I would say you're fine is what a worst case portfolio failure means for your situation. It means you are reduced to a great pension, SS and tricare. You'll never be in danger of cat food cuisine. The worst that can happen is you have to drive an older car and moderate a fat clothing and gift budget in your late 70's. There is a big spread on how devastating a firecalc portfolio failure is. You appear to be well over on the "not that devastating" side of the bellcurve.
I'd leave and start spending according to plan without concern - and I just did with a similar firecalc situation and package offer. I don't particularly fear a 10% chance of having nothing but my SS, pension and retiree medical at age 75 and beyond. There is a 20% chance a male will be dead before then.
https://engaging-data.com/will-money-last-retire-early/
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11-29-2020, 12:24 AM
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#112
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
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Quote:
Originally Posted by Koolau
I don't think DW AND I have spent that much on clothes in our lives - total.
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In the Bay Area many of the high income tech people all just dress like Mr. Robot, with jeans and a hoodie. It is not hard here to spend very little on clothes, even pre-pandemic when we would go out pretty often.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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11-29-2020, 12:41 AM
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#113
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
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Quote:
Originally Posted by corn18
Just to keep you updated: We trimmed the budget down to give us 98% Ps. Here's what changed:
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Looks like a good plan. I think the not having to work and being 100% (or close to it) in your retirement funding will bring greater happiness than the extra discretionary spending would bring. It would for me anyway.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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11-29-2020, 05:36 AM
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#114
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Thinks s/he gets paid by the post
Join Date: Aug 2005
Location: Crownsville
Posts: 3,709
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Quote:
Originally Posted by GravitySucks
90% was more than adequate for me.
I remember running a simulation that gave me a 10% chance of running out of cash at an age that I have a 10% chance of reaching. That gave me a 1% chance of running out of money while still alive. If it was a 10% chance of being broke at an age that 50% of expected lifespan than maybe I would go back to work.
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Wow, that perspective is definitely an eye opener for me!
Just out of curiosity, I ran my numbers through FireCalc again. I usually have it go out to the age of 100, just in case. I had one Granddad make it to one month shy of 102, and can think of 4 other relatives who made it into their 90s.
Anyway, I tried running Firecalc out to just 90, which is another 40 years for me. One failure cycle popped up, hitting in the final year. Out of all the cycles, that came out to a 0.9% change of failure. I couldn't find any tables that give a breakdown on how long a 50 year old might live (other than a generic estimate of 81 years on average), but according to the SSA's actuarial tables, it looks like a man in general has about an 18% chance of living to 90.
So basically, I have about a 1% chance of running out of money at an age I have about an 82% chance of not making it to.
Hmm, retiring ASAP is starting to look better and better.
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11-29-2020, 06:50 AM
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#115
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,479
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Quote:
Originally Posted by Andre1969
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So basically, I have about a 1% chance of running out of money at an age I have about an 82% chance of not making it to.
Hmm, retiring ASAP is starting to look better and better.
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This calculator that shows both your portfolio and your survival is popular here: https://engaging-data.com/will-money-last-retire-early/
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged
"All models are wrong, some are useful." - George Box
“There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
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11-29-2020, 08:00 AM
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#116
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Thinks s/he gets paid by the post
Join Date: Aug 2005
Location: Crownsville
Posts: 3,709
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Quote:
Originally Posted by USGrant1962
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Yep, that one looks pretty optimistic as well. According to it, I have a zero percent chance of running out of money, until the age of 85.
Then, at 85, I have a 0.3% chance of being broke. But a 66.6% chance of being dead!
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11-29-2020, 08:41 AM
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#117
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
Posts: 3,501
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This must be the only forum where dying is considered winning.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
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11-29-2020, 09:04 AM
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#118
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,227
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Quote:
Originally Posted by GravitySucks
This must be the only forum where dying is considered winning.
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There you go.
Very good...
__________________
TGIM
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11-29-2020, 09:04 AM
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#119
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,202
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Quote:
Originally Posted by GravitySucks
This must be the only forum where dying is considered winning.
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You can really celebrate dying early if you took SS at 62!
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11-29-2020, 09:14 AM
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#120
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
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90% is fine if your essential, non-discretionary budget is covered by ongoing pensions/SS/annuities. "Failure" in the FireCalc sense, would simply mean your FIRE stash is gone and you're now down to continuing income from SS, pensions, annuities, etc. which covers your non-discretionary spending. Whatever you defined as discretionary in your budget is now off the table (vacations, dining out, etc).
If you need a WR from your FIRE stash to cover essential, non-discretionary spending, 90% seems a bit dicey to me. Failure would mean not being able to cover essential basics.
A 10% chance of not being able to continue discretionary spending later in life vs. working more years to reduce that probability sounds like a reasonable trade off, especially if you're unhappy working.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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