The 4% SWR is good place to start to estimate your required nest egg (simply 25X your first year retirement expenses)
For that reason, I use/like Fidelity's Retirement Income Planner (RIP) - the "full" version, not the "MyPlan" quick & dirty calculator on their web site.
The RIP planner is more detailed in its input parameters, allowing you to define expenses in a more "finite" manner. Yes, it takes more time, but once you have the input, it is always available for modification. Additionally, the inflation rate for medical expenses is "elevated" than the normal inflation rate (which can be changed) to show that as a separate "class" for increase in expenses.
Other "changable" input criteria that can be changed is modifying the existing AA to a more/less "risk", and impact of other sources of income (such as a SPIA
).
What's more important is the output report (35 pages) which shows the projected withdrawl % (along with expected RMD's), year by year.
In my plan (for example), by drawing down my rollover/ traditional IRA's (of course, Roths not expected to be used), and delaying SS till age 70 (my DW at age 62), I can tell that very little taxable RMD's will need to be taken. Assuming a portion of SS remains "tax free
", I can use that as my main souce of income in the future, and insure that my DW get's the maximum SS benefit (assuming I pass first).
Most interesting is that the report shows that even though I exceed the "magic 4%" in the early years of retirement (up to age 70), after I start drawing SS, our withdrawl drops below 4% and stays there till the end of the plan (age 95 for both of us).
I use RIP, along with VG's F.E., FIRECalc, and Quicken's planners. All I look for is "consensus" in the outcomes and all are similar (for a 35 year plan) with the exception of F.E. which does not allow you to state a plan period (it uses traditional life expectancies - you can't override it). That tends to make F.E. more "generous" in its annual withdrawl forecast.
Being only in retirement 18 months, I can't see if the "original plan" is going to work (ask me in 35 years
). Additionally, I've already adjusted my "base plan" from 18 months ago due to "life changes" that have come up in early retirement (yes, I do leave that base report as a reference, but every year, it will become more and more "outdated", as expected).
- Ron