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Old 05-22-2020, 01:57 PM   #21
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What are your thoughts about Pralana, which is another comprehensive use of data tool, if you looked at it?
Nope, sorry. I am not a big user of these things. I think I tried FireCalc once and after my first pass through ES planner I have not felt the need to use it again.
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Old 05-22-2020, 05:01 PM   #22
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IIRC the FireCalc home page is pretty clear about that. From reading many posts here though, I would say that the big downside is that people think and act like it can predict the future. That's not unique to FireCalc,though. Any of the ubiquitous retirement planners have pretty much the same problem.

Taleb's turkey clearly illustrates the pitfalls of this type of tool, which is basically inductive reasoning: https://www.businessinsider.com/nass...turkey-2014-11
Fine but Taleb's turkey is not analogous to Firecalc. An accurate analogy would be a graphic showing the lives of ALL turkeys, not a single bird.

That the future is not knowable is of course true. That is the case no matter what data you look at. But that does not render historical data useless.

And there is no strategy that can overcome the pessimism of black swan naysayers. Theoretically ANY strategy to secure your financial security is forever vulnerable to black swan events.

It is a bit like personal life expectancy: a great diet, regular exercise, and excellent genes will not insulate you from early death from an astroid strike, a stray bullet from a neighbor's gun, or being killed by flying road debris on the way to church. Yet most folks recognize and accept such risks while still doing the controllable things linked to health and longevity. And this is highly rational behavior.

I think it is the white swan events (known possible outcomes) most people should focus on. It seems FIRECALC does a pretty good job there.
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Old 05-22-2020, 05:11 PM   #23
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... Theoretically ANY strategy to secure your financial security is forever vulnerable to black swan events. ...
FTFY.

That fact is not a reason to hide in a hole somewhere, but it is a reason to be wary and always ready to adapt to changing circumstances. My point was that the various calculators lure folks into forgetting that.
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Old 05-22-2020, 06:22 PM   #24
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Theoretically ANY strategy to secure your financial security is forever vulnerable to black swan events.
In risk management, it's a well-known and accepted concept, that you can manage most risk cost-effectively, but the last fraction of 1 percent or so is really expensive, if not impossible to manage.

But let's say you're Jeff Bezos. You live off $200K per year. You diversify investments across the world, including stocks, bonds, individual stocks, real estate, gold, cryptocurrencies, guns, and warehouses of food. You buy homes in all of the 'safe' countries, with bomb shelters. You have multiple jets available to whisk you away to safety in event of the plague, or WW III. You're not completely safe, but about as close as possible, financially, and physically. Given the unpredictability of when/where/what Black Swan events might occur in one's lifetime, it's impossible to plan for everything. But diversified investments including domestic and foreign equities and bonds will cover most of the distance, IMHO.
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Old 05-23-2020, 06:51 PM   #25
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I've been using FIRECalc for a long time and recently introduced it to a friend who is probably no smarter (or dumber) than me. He refuses to believe that it's a good tool for retirement forecasting and it's driving me nuts.

Is there really an opinion out there that FIRECalc is not all its cracked up to be?
I was retired over ten years, the first time I ever heard of FIRECalc.

My military pension is so much, I live within my means.

What can FIRECalc tell me that I don't already know?
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Old 05-23-2020, 06:52 PM   #26
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Firecalc isn't very helpful if one has about a third of one's net worth in self managed rental property. How do you assign a value to properties owned for 20-30 years? I use the tax man's "True Cash Value", but how does it relate to a real sale price? What kind of rents will come in and how will they change over time? What's inflation going to be? That seems like a real wild card. I envy (slightly) those who have substantial social security and pension checks and all their assets neatly tucked into a couple stock and bond funds paying regular dividends. Seems like it would make for really clean financial forecasts. That's not me. Firecalc is just a loosey goosey guestimate for me - and that's my argument against it - but still use it to learn I'll die with between -$380,243 and +$22,473,618, depending on whether I croak it in 8 or 30 years.
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Old 05-23-2020, 07:19 PM   #27
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One potential criticism of FIRECalc that we have sometimes heard here is that you must gross up your spending to account for taxes. Given that everyone has different levels of taxable and non-taxable assets to draw from, I don't see how the program could accommodate that. It is not difficult to make some assumptions about your effective tax rate and make that adjustment once you know you have to, but I could see where some people may be unwilling or unable to make the calculation.
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Old 05-23-2020, 08:37 PM   #28
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I was retired over ten years, the first time I ever heard of FIRECalc.

My military pension is so much, I live within my means.

What can FIRECalc tell me that I don't already know?
Probably not much in your case, unless you'd like to up your spending and determine the % success rate in doing so, or how much you can increase your spending.
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Old 05-23-2020, 08:54 PM   #29
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Probably not much in your case, unless you'd like to up your spending and determine the % success rate in doing so, or how much you can increase your spending.
My pension gives us about $19,000 a year. Of that for the last four years we have been investing about $5,000 a year, into some rental real estate.

So far this real estate has not given us any profit, the rental income just manages to pay for property taxes and insurance.

If we had not decided to obligate ourselves to doing this property, we could have had more money to spend on yourselves. But that is not who we are.

We got the Certificate-of-Occupancy, on our rentals last month, and now we are gradually getting more tenants.

The business plan for this property calls for about $50,000/year profit after all expenses.
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Old 05-23-2020, 10:54 PM   #30
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I've been using FIRECalc for a long time and recently introduced it to a friend who is probably no smarter (or dumber) than me. He refuses to believe that it's a good tool for retirement forecasting and it's driving me nuts.

Is there really an opinion out there that FIRECalc is not all its cracked up to be?
I started out with FIRECalc when I first found this forum, and still use it occasionally today as a "second opinion". The main reason I stopped using it was because I had to reenter all my information each time I wanted to run some calculations. I believe there is a way around that now, but I still find the number of inputs a bit limiting at times. I also find FIRECalc to be a bit more optimistic than other calculators I have used. I would rather err on the side of pessimism and have things turn out better than my estimates, than the other way around.

These days I prefer "Flexible Retirement Planner".
https://www.flexibleretirementplanner.com/wp/download/

I like that it saves all of my entries so I can experiment often as situations change. I also like that I can enter a variety of inputs (such as Social Security at different ages) and be able to select different inputs to see how different timings would affect our overall outcome. It's also nice to be able to look at the detailed spending list and not just rely on a general percentage of success.
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Old 05-24-2020, 12:13 PM   #31
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One potential criticism of FIRECalc that we have sometimes heard here is that you must gross up your spending to account for taxes.

I'm not sure I understand what you mean. Can you explain this?
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Old 05-24-2020, 12:21 PM   #32
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I'm not sure I understand what you mean. Can you explain this?
Example:
Spending without taxes = 100k
Taxes = 10k

The spending number you input into Firecalc is 110k.

New users of retirement calculators sometimes expect the calculators to calculate the taxes.
Some calculators like the one in Fidelity does have that option.
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Old 05-24-2020, 12:26 PM   #33
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I think it means your actual spending + whatever taxes you guesstimate. We spend approximately $60K/year. But it might be $71K+ because we pay current year plus forward taxes for next year due to home business. So I put $75K spending as a gross up to cover any tax expense.


Ha, Dtail, I think we hit enter at the same time.
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Old 05-24-2020, 12:31 PM   #34
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The high range of money it could be, after x number of years, seem high but then what do I know.
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Old 05-24-2020, 12:36 PM   #35
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These days I prefer "Flexible Retirement Planner".
https://www.flexibleretirementplanner.com/wp/download/

Are you associated with that software?
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Old 05-24-2020, 12:41 PM   #36
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I started out with FIRECalc when I first found this forum, and still use it occasionally today as a "second opinion". The main reason I stopped using it was because I had to reenter all my information each time I wanted to run some calculations.
There is a link to save the URL for what you input. Copy the link or bookmark it and it will take you right back to what you previously entered. On the results page, in the upper top right corner is a hyperlink to save this data "Link to save this set of data." Save it in a draft and you can always go back and relook at it. If you change the data, save a new link.
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Old 05-24-2020, 01:47 PM   #37
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I'm not sure I understand what you mean. Can you explain this?
Assume you want to spend $120k per year and you are taking the money out of your traditional IRA, which is taxable income. In order to have 120k left after taxes, you need to "gross up". To do that, you can do the following: (assume Married Filing Jointly)

1. In 2020, the 10% bracket applies to income up to $19,750. That is $1975 in taxes.

2. In 2020, the 12% bracket applies to income from $19,750 to $80,250. So that's another $7260 in taxes.

3. Now the slightly tricky part - you need to figure out how much to take in the 22% bracket. You're going to need at least $39,750 to get from $80,250 to your desired spending of $120,000. And you're going to need to take another $9235 to pay the taxes in the 10% and 15% brackets. Which means you'll be drawing at least $48,985 subject to 22% taxation. Already, your draw is up to $129,235

4. Now, you'll need to figure out the taxable amount to take in order to end up at $129,235. To do that, first take the standard deduction of $24,800, giving you $104,435. Subtract out the start of the 22% bracket ($80,250) to give you $24,185. Gross that up for taxes using the following equation: gross amount = net amount/(1- tax rate) = 24185/(1-0.22)=$31,006

5. Now, add the standard deduction back in, so $31,006 + $24,800 = $55,806. Add the beginning of the 22% bracket ($80,250) to get $136,056. That is the spending you need to put into FIRECalc.

6. As a check, let's do your taxes. AGI = 136,056. Taxable income = 136,056 - 24,800 = 111,256. Tax in 22% bracket = (111,256 - 80.250) X 0.22 = $6821. Plus tax in 12% bracket ($7260). Plus tax in 10% bracket ($1975). So total tax equals 6821+7260+1975 = 16,056. So if you take $136,056 out of your taxable IRA, you'll have $120,000 left to spend after taxes. Your effective tax rate is 11.9%

7. You'll also need to figure your state income taxes (if any) and add that amount to your spending as well.
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Old 05-24-2020, 02:11 PM   #38
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I've tried and run a boatload of retirement calculators.

Like anything - you need to understand the inputs. With firecalc you need your "all in" spending - inclusive of healthcare, taxes, and other items people tend to ignore. And some people miss the multiple tabs - which allow you to input SS, pensions, other income sources or one time spend or income events. Also allows you to set your asset allocation - something that people often forget to do. If you're running firecalc at it's defaults - but your nest egg is all in cash... you've got a disconnect.

So firecalc does take some work to get accurate outputs of how your plan would have worked in past markets.

I found running several different calculators helped me refine different aspects of my retirement plan. Fidelity lets you drill down into different budget categories and inflate them at different rates (but you need to jump past the defaults, which is work). Quicken lifetime planner lets you allocate some big expenses outside of firecalc (college, kids weddings), which was useful... But it's deterministic (flat growth and inflation... not real world). I-orp lets you look at how withdrawing from different sources can save you tax money over time. Each calculator helped me think about different aspects of retirement. Now I use firecalc for my check up runs. (Been retired almost 6 years.)
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Old 05-24-2020, 11:18 PM   #39
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Are you associated with that software?
Nope, I have no connection with the software other than using it frequently. I've tried a bunch of different calculators and it's just the one that works well for me. Most of the online calculators (i.e. AARP and the like) are ridiculously simplistic to the point of being worthless. Firecalc is nice, but it's kind of awkward to use and there's no obvious way to save your inputs for later experimenting.

I've never used the online version of Flexible Retirement Planner, so I don't know how it compares to the Windows download version. I'm generally not a fan of any kind of online app, which unfortunately seems to be the trend these days.

Some of the other calculators are way too complex for my needs (i.e. Pralana). I-Orp gets recommended a lot, but I don't like the way it makes you enter numbers in thousands (entering 5 to indicate 5000). I'm too simple to understand that kind of complexity.

Of the calculators I've tried FRP seems to be a bit more pessimistic than the others (for the same figures it gives a lower success rate). I like to err on the side of caution, so that's a plus for me.

I wish I could remember who first recommended FRP when I joined this forum, otherwise I would never have known about it.
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Old 05-25-2020, 12:21 AM   #40
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I've been using FIRECalc for a long time and recently introduced it to a friend who is probably no smarter (or dumber) than me. He refuses to believe that it's a good tool for retirement forecasting and it's driving me nuts.


Is there really an opinion out there that FIRECalc is not all its cracked up to be?


Don't want to start a riot here. I like it lot. Just wanted to know if there are downsides to using it.
Well, what does your friend use?
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