Fidelity RIP

[Hopeful]

I was recently playing with the Fidelity RIP calculator, and trying to understand the score that it generates. My score was 113 with retiring next year. Obviously the higher the score the better, but does this number correspond to a percent success rate?

The output also gave these figures for assets at the end of the plan in todays dollars:

Significantly below average returns: 2.6 mil
Below average returns: 5.7 mil
Average returns: 15 mil

If I am reading these numbers correctly we should be giving serious consideration to retiring now since we have no heirs. What are peoples thoughts on the Fidelity RIP tool? Too optimistic?

Thanks

 

[wmc1000]

We have found that the Fidelity RIP calculator to provide good info when we enter our detailed expenses and assets. The significantly below average results are the ones we look at for our comfort level.

2 years into retirement and feel very comfortable with our plan.

 

[MRG]

I was recently playing with the Fidelity RIP calculator, and trying to understand the score that it generates. My score was 113 with retiring next year. Obviously the higher the score the better, but does this number correspond to a percent success rate?

The output also gave these figures for assets at the end of the plan in todays dollars:

Significantly below average returns: 2.6 mil
Below average returns: 5.7 mil
Average returns: 15 mil

If I am reading these numbers correctly we should be giving serious consideration to retiring now since we have no heirs. What are peoples thoughts on the Fidelity RIP tool? Too optimistic?

Thanks

RIP was the most conservative calculator I found.

 

[Nightcap]

As always, GIGO, but if your expenses are accurate and if you’ve correctly anticipated your retirement expenses, you should be good to go. Congratulations!

 

[Dtail]

I was recently playing with the Fidelity RIP calculator, and trying to understand the score that it generates. My score was 113 with retiring next year. Obviously the higher the score the better, but does this number correspond to a percent success rate?

The output also gave these figures for assets at the end of the plan in todays dollars:

Significantly below average returns: 2.6 mil
Below average returns: 5.7 mil
Average returns: 15 mil

If I am reading these numbers correctly we should be giving serious consideration to retiring now since we have no heirs. What are peoples thoughts on the Fidelity RIP tool? Too optimistic?

Thanks

To my understanding, a score of 113 means that you can cover 113% of your expenses.
You should just reference the "Significantly below" category, as that gives a score which is considered to be 90% confidence.
A 90% confidence level would probably be the minimum level that most folks would accept for Firecalc.

+1 with MRG. Fidelity is one of the most conservative calculators.
It uses a Monte Carlo simulator which is good to use in conjunction with historical sequential simulators like Firecalc.

 

[COcheesehead]

To my understanding, a score of 113 means that you can cover 113% of your expenses.
You should just reference the "Significantly below" category, as that gives a score which is considered to be 90% confidence.
A 90% confidence level would probably be the minimum level that most folks would accept for Firecalc.

+1 with MRG. Fidelity is one of the most conservative calculators.
It uses a Monte Carlo simulator which is good to use in conjunction with historical sequential simulators like Firecalc.

This ^^^^^is correct. The score is your percentage of expenses covered. I work my budget in the calculator to give me a score of 135. I figure that gives me an almost 33% buffer even under the worst case scenarios.

 

[ShokWaveRider]

So if I get 150+ does that mean we can spend more? It actually says we can withdraw 2.5x what we do.

It does not give me an annual total of what we have left at the end or what is it year by year is that normal? I do not have a Fidelity account so I am doing it as an outsider.

 

[Dtail]

So if I get 150+ does that mean we can spend more? It actually says we can withdraw 2.5x what we do.

It does not give me an annual total of what we have left at the end or what is it year by year is that normal? I do not have a Fidelity account so I am doing it as an outsider.

Not sure what is the true mathematical difference between 150 and 150+.
I have a Fidelity account and it does provide the year by year income and spending, plus it provides a balance remaining at the end of each year.
The results default to "Chart" to show the results. Did you click on the "Table" choice which provides all the granular numbers?

 

[GalaxyBoy]

I based my decision to ER on using multiple retirement calculators (RIP, FIRECalc, Schwab, TRowePrice, i-orp, etc.) and having them give me consistent results, as in "yes, you're OK," not necessarily the exact same numerical answer. Don't forget it's all just an estimate and there is very little difference between 90% and 100%. Eventually, you just have to decide you're ready and jump!

 

[Hopeful]

To my understanding, a score of 113 means that you can cover 113% of your expenses.
You should just reference the "Significantly below" category, as that gives a score which is considered to be 90% confidence.
A 90% confidence level would probably be the minimum level that most folks would accept for Firecalc.

+1 with MRG. Fidelity is one of the most conservative calculators.
It uses a Monte Carlo simulator which is good to use in conjunction with historical sequential simulators like Firecalc.

Thanks for that explanation. That makes sense.

 

[explanade]

I tried it last week and they force you to pick some model instead of taking your data as is and making projections based on that.

I couldn’t figure out how to have it use your actual AA, even though I went to the trouble of adding my other accounts.

It wants to take my small holdings in Fidelity and make changes to one of their models, even though it’s so small relative to my holdings at VG, it wouldn’t even move the needle.

I just gave up. It generated some kind of report and I tried to download it but that didn’t work.

I guess I’ll just look at the last run I did in 2014, when I didn’t even put in all the holdings or put in a lower value.

 

[tdv2]

+1 on RIP being on the conservative side compared to other calculators. As has already been said, score relates to percentage above or below what you entered on the expense side.....a score of 100 would exactly cover entered expenses i.e. 100%. I recommend you fill in the detailed expense worksheet and use the check box for essential vs. non essential expenses. This give you a sense where you can cut back if necessary. Personally, I have tracked every expense for over 5 years so I am fairly comfortable with that side of the equation.

 

[nwsteve]

+1 on RIP being on the conservative side compared to other calculators. As has already been said, score relates to percentage above or below what you entered on the expense side.....a score of 100 would exactly cover entered expenses i.e. 100%. I recommend you fill in the detailed expense worksheet and use the check box for essential vs. non essential expenses. This give you a sense where you can cut back if necessary. Personally, I have tracked every expense for over 5 years so I am fairly comfortable with that side of the equation.

+1 Another refinement I have found helpful is to use the "edit detail" function for each expense category to capture changes spending related to life style changes. You can add as many time periods as you need to capture structural changes in your spending. For example, we plan to move to a CCRC in the next few years and our entire spending structure shifts to reflect the elimination of most spending for home. A good part is replaced by the monthly maintenance fees but still a shift. Likewise, we have budgeted a healthy travel budget as non essential but still significant until we are 75 and tailing off until 85 when it stops.
The table view of annual cash flow helps you to better appreciate how such structural changes will impact your ending balance as well as status of your balance for each year.

 

[kimcdougc]

I found Fidelity's calculator to be more detailed than other calculators when gathering information for retirement. I like that you can make changes. Although it only uses the most conservative returns. (Which when planning for retirement is good.)

 

[Dtail]

I found Fidelity's calculator to be more detailed than other calculators when gathering information for retirement. I like that you can make changes. Although it only uses the most conservative returns. (Which when planning for retirement is good.)

I believe that it is so conservative due to the so called tail risk involved with Monte Carlo simulations in that the worst potential results are aggregated.
Thus these results are worse than a historical calculator, as there are no reversions to mean, which is more in line with true market behavior.

 

[COcheesehead]

I tried it last week and they force you to pick some model instead of taking your data as is and making projections based on that.

I couldn’t figure out how to have it use your actual AA, even though I went to the trouble of adding my other accounts.

It wants to take my small holdings in Fidelity and make changes to one of their models, even though it’s so small relative to my holdings at VG, it wouldn’t even move the needle.

I just gave up. It generated some kind of report and I tried to download it but that didn’t work.

I guess I’ll just look at the last run I did in 2014, when I didn’t even put in all the holdings or put in a lower value.

I have third party accounts attached (a 401k at American Funds)and it will use them if it can classify the assets within them. So maybe that is the issue. Otherwise I have had no issues with getting the app to discover my actual AA.

 

[Scuba]

+1 Another refinement I have found helpful is to use the "edit detail" function for each expense category to capture changes spending related to life style changes. You can add as many time periods as you need to capture structural changes in your spending. For example, we plan to move to a CCRC in the next few years and our entire spending structure shifts to reflect the elimination of most spending for home. A good part is replaced by the monthly maintenance fees but still a shift. Likewise, we have budgeted a healthy travel budget as non essential but still significant until we are 75 and tailing off until 85 when it stops.

The table view of annual cash flow helps you to better appreciate how such structural changes will impact your ending balance as well as status of your balance for each year.

Yes, I agree, this is a very useful feature and one I couldn’t find in many other retirement projection models. I’m glad to hear it’s a conservative model. We too checked using FireCalc, Fido R.I.P., and a few other tools plus hired an FA to validate it for us, and all said we were good to go. We ER’d almost two years ago and with the market performance being what it has been since our retirement, our Fidelity FA is telling us we can significantly increase our spending.

 

[COcheesehead]

Technically, not that it is that important, but the tool is called FRS, Fidelity Retirement Score, not RIP. It used to be called RPM, Retirement Preparedness Measure.

 

[WestUniversity]

I believe the score corresponds to percent coverage of monthly expenses, i.e. a score of say 100 means you can cover 100% of your monthly expenses. A score of say 125 then means you can cover 125% of your monthly expenses. So in other words 100% of your monthly expenses with 25% excess...

 

[COcheesehead]

I believe the score corresponds to percent coverage of monthly expenses, i.e. a score of say 100 means you can cover 100% of your monthly expenses. A score of say 125 then means you can cover 125% of your monthly expenses. So in other words 100% of your monthly expenses with 25% excess...

Cough, cough...see post #5.

 

[WestUniversity]

Cough, cough...see post #5.

Thanks. Missed that one...

 

[Perryinva]

Where is the score located? I have accounts at Fidelity and use the retirement calculator and also find it pretty thorough, but I don’t see any score. It does give the lowest estimated income of the ones I’ve used.

 

[Dtail]

Where is the score located? I have accounts at Fidelity and use the retirement calculator and also find it pretty thorough, but I don’t see any score. It does give the lowest estimated income of the ones I’ve used.

The score should be on your main page of your Fidelity summary, perhaps on the right side.
Being that this is not obvious to you, perhaps call your Fidelity rep as to why you don't see it.
Usually from the first page, you click on the update.
Not sure how you could use the calculator without seeing the score.
Once in awhile, I get an income result instead of an overall score with assets remaining. I just run it again and it goes back to my overall score, etc.
Perhaps that is your reference.

 

[COcheesehead]

Where is the score located? I have accounts at Fidelity and use the retirement calculator and also find it pretty thorough, but I don’t see any score. It does give the lowest estimated income of the ones I’ve used.

Fido has a few. The one discussed here is the FRS Fidelity Retirement Score in the planning and guidance center. It should also be on main all accounts summary page on the website.

 

[nwsteve]

if u checked u are already retired, u will not see a score as I understand it