Explain use of "off chart" spending

[Bongleur]

The verbiage is completely incomprehensible to me. I don't understand the distinction between Pension vs Off chart. If it is additional income, its a positive number, starting in the year entered. If it is additional spending, a negative number. Don't understand any difference between "portfolio withdrawal" and "ordinary lifestyle." "will not be shown in the annual spending chart that will be shown in the results." -- What spending chart?

 

[Bongleur]

And why doesn't this software recognize my use of the RETURN key to leave a blank space between paragraphs? Its CR-LF.

 

[Bongleur]

And I never turned on use of emoji symbols.

 

[Mdlerth]

There is also a How It Works help file

There are seven tabs near the top of the display. "Spending Models" is the fourth tab, right between "Not Retired" and "Your Portfolio".

The default expectation in FIRECalc is that you'll spend the same amount, adjusted for inflation, every year during your retirement. The "spending chart" only appears if you choose a spending model other than the constant spend assumption.

 

[SecondCor521]

The verbiage is completely incomprehensible to me. I don't understand the distinction between Pension vs Off chart. If it is additional income, its a positive number, starting in the year entered. If it is additional spending, a negative number. Don't understand any difference between "portfolio withdrawal" and "ordinary lifestyle." "will not be shown in the annual spending chart that will be shown in the results." -- What spending chart?

It's a way to fine tune FIREcalc if you know your spending is going to significantly and permanently change in the future.

For example, let's say that I spend $40,000 per year today. Included in that $40,000 is $1,000 a month in child support for my 8 year old, and that child support ends when the child turns 18.

If I put in $40,000 a year as spending, then FIREcalc will overestimate how much I need to have, because it assumes I need to spend that amount for the rest of my life.

But I probably shouldn't ignore the $120,000 in pending child support payments over the next 10 years either.

So I put in $40,000 a year as spending, and then enter an "off chart spending reduction" of $12,000 per year starting 10 years from now. Since child support doesn't change with inflation, I uncheck the inflation box.

Now FIREcalc can do the runs with 10 years of $40K and the rest of the time period (30 years or whatever I choose on the first tab) at $28,000.

...

Basically any time you will have a significant and immediate increase or decrease in spending that you're willing to count on, you can use this feature.

Other examples might include paying off your mortgage, or the start of a pension, or the decision to start skydiving at age 80, or whatever.

 

[Bongleur]

But the bottom line is that MORE spending should be entered as a negative number, and LESS SPENDING (or MORE INCOME) entered as a positive number. ....................... Correct or not? ....................... And I don't see any difference between labeling the above as PENSION vs OTHER.

 

[Dtail]

But the bottom line is that MORE spending should be entered as a negative number, and LESS SPENDING (or MORE INCOME) entered as a positive number. ....................... Correct or not? ....................... And I don't see any difference between labeling the above as PENSION vs OTHER.

Not so.
Whether you enter a "Pension" number or an "Off Chart" number, the number should be entered as a positive number.
The "Pension" number will be treated as income or effectively a reduction of expenses and the "Off Chart" number will be treated as an expense number.

 

[Retired Expat]

Firecalc is interesting and robust but not all that intuitive. Try The Ultimate Retitrement Calculator from the financialmentor website. I thought it handled future changes quite well..

https://financialmentor.com/calculator/best-retirement-calculator

 

[Red Badger]

OP, cry me a river. It's a tool - not a surgical suite.

 

[HI Bill]

Firecalc is interesting and robust but not all that intuitive. Try The Ultimate Retitrement Calculator from the financialmentor website. I thought it handled future changes quite well..

https://financialmentor.com/calculator/best-retirement-calculator

I will repeat myself on this thread in case someone missed it. The calculator above is based on linear, fixed sequence of returns, assuming the same return every year, and the same inflation rate every year. It DOES NOT account for sequence of returns risk, which are very real, except, perhaps, in the past 10 years. I would not rely on this calculator, and consider it dangerously misleading at best. Use at your own risk (of running out of $).

 

[IrishMoss]

Try The Ultimate Retitrement Calculator from the financialmentor website. I thought it handled future changes quite well..

https://financialmentor.com/calculator/best-retirement-calculator

I've tried the above retirement calculator on 2 different occasions and it is not nearly as useful or robust as Firecalc.

- For one thing the "best retirement calculator" forces the user to specify a retirement date of at least 1 year from input age. If you already retired or are retiring in the same year, you're SOL. It's always future-oriented.

- Further, the calculator doesn't do any "worst case scenarios" based on actual past data, unlike Firecalc. It just spits out an amount needed to retire (which of course is at least 1 yr out) and then estimates how much the user will have when they actually retire.

- The tool doesn't have multiple ways of running a model. It uses a single percentage estimate of return for the portfolio, along with an estimated inflation rate and doesn't allow the user to break out bonds vs equities.

- The tool doesn't allow the user to see what their yearly spend will be at a certain starting portfolio amount and taking into consideration the other variables, unlike Firecalc. This is a major feature I use all the time in Firecalc.


That's just off the top of my head.

Firecalc is superior 10x over (IMO).

 

[NW-Bound]

And I never turned on use of emoji symbols.

I assume that you are asking about the emoji below in your original post.

The verbiage is completely incomprehensible to me. I don't understand the distinction between Pension vs Off chart. If it is additional income, its a positive number, starting in the year entered. If it is additional spending, a negative number.

The forum software inserts the above emoji whenever it sees a sequence of 3 consecutive question marks. I don't know if that is the standard encoding for the frustrated face, but that is what used here.

 

[Gumby]

The verbiage is completely incomprehensible to me. I don't understand the distinction between Pension vs Off chart. If it is additional income, its a positive number, starting in the year entered. If it is additional spending, a negative number. Don't understand any difference between "portfolio withdrawal" and "ordinary lifestyle." "will not be shown in the annual spending chart that will be shown in the results." -- What spending chart?

SecondCor521 and Dtail have provide an excellent explanation. My suggestion is to try plugging different numbers into those boxes and see what happens to your result. Then you'll really understand how the program works.

 

[Katsmeow]

Another situation where have something shown as off chart is when you have a regular expenditure that is not inflation adjusted. An example is a regular mortgage. My 30 year mortgage is not inflation adjusted. But if I include payment of the mortgage in the regular Firecalc spending that expenditure will be inflation adjusted over the years. Therefore, I put in the mortgage payments as off chart spending that is not inflation adjusted. Then I deducted the amount of the mortgage payments from my annual spending. That gives a more accurate result in my opinion. Social Security, for example, is adjusted by inflation. But the mortgage payments are not. Over time, the mortgage payment becomes a smaller and smaller percentage of my income.

 

[nap470]

I use "Off Chart" spending for college dollars. Put a start date, the amount and an end date. I also use it for a one time wedding expense although that's overkill. Income example could be an inheritance or some other income source outside Social Security.

 

[Bongleur]

test - this thing working?

 

[REWahoo]

test - this thing working?

Apparently not for you.