Boldin Analysis

[Tuirc]

I'm about to pull the trigger on retirement. In some ways I already have in that I've told my employer and given them a date (Apr. 17). We've spent the last little while sharpening our knowledge about what our spending is and over the weekend, getting that into our Boldin planning software to ensure expenses have all been uncovered. We took the opportunity to identify subscriptions that haven't been unsubscribed and should be, spending that was higher than we want it to be in the past (completely ungoverned) and set new targets for retirement spending on those points. When we finished the monthly/annual expenses, we identified and input the next 10 years of "one time" expenses including rebuying nearly all our household appliances (pre-owned house who knows how long this stuff will last).

At the end of this exercise, we checked everything over and made sure we were happy with the new targets, happy with the accuracy of the numbers (DW had recorded all our spending for the last year into a spreadsheet I created reviewing all our sources of spending), and made sure we hadn't missed anything. Boldin chimed in and said, "Gee, we think you should review this because it says you'd only be spending at a rate of 1.75%, and you could be spending at some higher rate. You should check your plan for sustainability." The thing is, even if we spent at the same ungoverned "drunken sailor" rate we had been last year, it would only amount to 2%.

So, my question is, do we know if Boldin is full of it. Poor predictor of how much you can spend. Or, are we just so used to living under our means that we need to lighten up and live a little? Just trying to gauge where the "error" is here because that's a pretty large deviation (I assume it thinks we should be around a 4% withdrawal rate or something).

 

[Koolau]

Keep in mind that most of the people here are considerably under the 4% withdrawal rate. Some of us over-saved. I think that's more the case than that we "under spend" but YMMV.

 

[braumeister]

What does FIRECalc tell you?

 

[thefist]

Maybe move your retirement date up to FEB 17

If you have used firecalc or read any of the withdrawal rate research, then you would realize that 4-5% is still a comfortable withdrawal rate. And remember, withdrawal rate is generally specified as a safe max, meaning that this is a worst case number. In Bill Bengen’s new book, 4.7% is the new rate. If you have fixed income coming from SS or pensions, then it could be higher. The guaranteed income provides a reliable floor.

Looks like it’s time to BTD!

 

[Tuirc]

Maybe move your retirement date up to FEB 17

If you have used firecalc or read any of the withdrawal rate research, then you would realize that 4-5% is still a comfortable withdrawal rate. And remember, withdrawal rate is generally specified as a safe max, meaning that this is a worst case number. In Bill Bengen’s new book, 4.7% is the new rate. If you have fixed income coming from SS or pensions, then it could be higher. The guaranteed income provides a reliable floor.

Looks like it’s time to BTD!

Yeah, really! I'm only waiting for payout of bonus and equity for last year. That happens end of Feb. and March. Then, retirement parties and I'm outta here. (We're 61 & 60 BTW. No SS yet and a long way off for me).

Yep, familiar with worst case and all that. We wanted to look at it from the other end: Let's look at what we do when we're just having fun and spending pretty much whatever we want to. Then go back and look at it and ask, "How much do we have to trim to be responsible adults?" The answer came back, "Spend twice as much and then some."

 

[Tuirc]

What does FIRECalc tell you?

I'll check and report back. it's been a few years since I did FIREcalc. It was good news then though. I do have more solid numbers about stuff now though so it's worthwhile doing again.

 

[Tuirc]

What does FIRECalc tell you?

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 8 cycles failed, for a success rate of 93.6%.

 

[Koolau]

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 8 cycles failed, for a success rate of 93.6%.

Most retirees wouldn't experience those particular failures because they don't blindly follow the withdrawal % that "pops" out of the calculations when the retirement stash is falling. So when financial results are down - we reduce discretionary spending.

Many people are comfortable with less than 100% results in FIRECalc because they know they can be flexible in their spending.

 

[Tuirc]

Most retirees wouldn't experience those particular failures because they don't blindly follow the withdrawal % that "pops" out of the calculations when the retirement stash is falling. So when financial results are down - we reduce discretionary spending.

Many people are comfortable with less than 100% results in FIRECalc because they know they can be flexible in their spending.

Yep, I'm not bothered in the least. I have a plan in place to smooth out the road in case there are bumps.

 

[Dtail]

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 8 cycles failed, for a success rate of 93.6%.

If you are effectively spending at around 2% rate, then Firecalc would not have any failures. Perhaps I am missing something.

 

[Koolau]

If you are effectively spending at around 2% rate, then Firecalc would not have any failures. Perhaps I am missing something.

Maybe if your financial plan was to keep your stash under the mattress.

 

[Flyfish1]

Congrats ! Sounds like you are doing all the right things to prepare for retirement.

 

[Tuirc]

If you are effectively spending at around 2% rate, then Firecalc would not have any failures. Perhaps I am missing something.

Maybe Firecalc is missing something vs. Boldin. There's more detail like a $300k future windfall coming up? Or, like I said, Boldin could be full of it. Maybe their analysis of my situation is wrong. Or, maybe they are starting with Net Worth instead of investible assets? That would seem silly. But, I can't see the internals so, don't know.

 

[Dtail]

Maybe Firecalc is missing something vs. Boldin. There's more detail like a $300k future windfall coming up? Or, like I said, Boldin could be full of it. Maybe their analysis of my situation is wrong. Or, maybe they are starting with Net Worth instead of investible assets? That would seem silly. But, I can't see the internals so, don't know.

If you wish to share all your inputs on Firecalc, it would not be too hard to figure out if there is any error input.
If you don't wish to share this info, that is okay too of course.

 

[Al18]

Your plan sounds very good. I would pencil in 10%-20% extra for unplanned expenses such as tree removal after a bad storm, major car repair/replacement, etc.

 

[Tuirc]

If you wish to share all your inputs on Firecalc, it would not be too hard to figure out if there is any error input.
If you don't wish to share this info, that is okay too of course. My fault. That initial read was only on the put in your spend, pile and years. After filling in the rest of the screens:

My fault, the initial read was only on putting in the spend, pile, and years numbers. I missed the other screens. After entering that info:

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 0 cycles failed, for a success rate of 100.0%. The numbers and ranges in the Monte Carlo were similar to what Boldin produced overall. (Comforting).

 

[Dtail]

My fault, the initial read was only on putting in the spend, pile, and years numbers. I missed the other screens. After entering that info:

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 0 cycles failed, for a success rate of 100.0%. The numbers and ranges in the Monte Carlo were similar to what Boldin produced overall. (Comforting).

There you go. SS puts you over the top. lol

 

[Exchme]

From a strategic standpoint, the "Can I Retire Yet", at your low spending the answer is clearly yes.

Tools like Boldin are for tactical decisions like how to get ACA subsidies or when might you have a cash flow pinch or the value of Roth Conversions. Boldin is a bit of a black box and less powerful for those analyses than a tool like Pralana, where you have control over a lot more parameters and it shows you exactly what calculations it did.

I suspect the Boldin warning was just bad writing or triggering of some standard alerts about spending. After all, alerting you that you could spend much more and alerting you that your spending is not sustainable in the same sentence is silly.

 

[Tuirc]

Your plan sounds very good. I would pencil in 10%-20% extra for unplanned expenses such as tree removal after a bad storm, major car repair/replacement, etc.

I do have a roof replacement in a couple years and 8 or 10 other high dollar one time expenses. For better or worse (probably for better) I already had to get rid of the trees and grind the stumps when I bought the place 3 years ago. Infected. The only remaining tree of note belongs to the city. Just replaced the car 5 months ago, so....touching wood that we'll have a little reprieve on that one. I am still paying a mortgage which is the major blight on the plan. Should be paid off in 7 years though.

 

[Tuirc]

From a strategic standpoint, the "Can I Retire Yet", at your low spending the answer is clearly yes.

Tools like Boldin are for tactical decisions like how to get ACA subsidies or when might you have a cash flow pinch or the value of Roth Conversions. Boldin is a bit of a black box and less powerful for those analyses than a tool like Pralana, where you have control over a lot more parameters and it shows you exactly what calculations it did.

I suspect the Boldin warning was just bad writing or triggering of some standard alerts about spending. After all, alerting you that you could spend much more and alerting you that your spending is not sustainable in the same sentence is silly.

I think the "not sustainable" was meant from a -- "You may be trying to squeak by on too little and you'll find out you can't maintain that kind of frugality." If I'm trying to give them the benefit of the doubt. Otherwise, you're right.

 

[Exchme]

I think the "not sustainable" was meant from a -- "You may be trying to squeak by on too little and you'll find out you can't maintain that kind of frugality." If I'm trying to give them the benefit of the doubt.

Could be what they meant, but a strange way to phrase it for sure.

I think many, maybe most, folks here just spend what they want to but find that they don't value spending for the sake of spending. Often the nest egg keeps growing.

There are some things you should be looking into, like health insurance once retired. Many need ACA, you will want to evaluate that vs. COBRA for the remainder of the year and evaluate seeking ACA premium credits in years with low income vs. doing Roth Conversions to help your taxes later in life. Perhaps you want to jack up your 401k contributions for the next couple of months to squirrel away as much as possible in tax protected accounts.

In any case, Congratulations on making it to the finish line of work! Your finances sound like they are in great shape.

 

[Taco]

My fault, the initial read was only on putting in the spend, pile, and years numbers. I missed the other screens.

You might also explore the Firecalc's Investigate tab. It shows how much you *could* spend, and still be considered safe.

If the "could spend" amount is a bit more than double your planned spend, that would be somewhat in line with Boldin's saying you'll have a 1.75% withdraw rate.

 

[Franklin]

I use Boldin and have compared it to many of the calculators suggested here. Frankly ive even run the results past a few fee only firms. Have not experienced what you suggest here so maybe there is something input incorrectly. Paid them $250 to verify all my input as well. (t was worth the time). Now that we have it all entered correctly it is super easy to make changes regarding spending to whatever you like. Give them a call and ask. For one scenario I use actual expenses, in another double them, and another we put in gifts to kids etc. We can add up to 12 scenarios.

 

[Tuirc]

Totally agree. Setting up the 1:1 is part of the plan. Also meeting with Schwab to validate since I have some status with them.

 

[Tuirc]

Could be what they meant, but a strange way to phrase it for sure.

I think many, maybe most, folks here just spend what they want to but find that they don't value spending for the sake of spending. Often the nest egg keeps growing.

There are some things you should be looking into, like health insurance once retired. Many need ACA, you will want to evaluate that vs. COBRA for the remainder of the year and evaluate seeking ACA premium credits in years with low income vs. doing Roth Conversions to help your taxes later in life. Perhaps you want to jack up your 401k contributions for the next couple of months to squirrel away as much as possible in tax protected accounts.

In any case, Congratulations on making it to the finish line of work! Your finances sound like they are in great shape.

I think by April, I’ll have made over $150k, roughly, so I don’t think ACA subsidies will be in the cards for me. I have a mortgage for the next 7 years, The servicing of which, combined with the payment of normal expenses, will probably put me over in our state especially now. Additionally, I’ll probably pursue Roth conversations instead. Given the amount of pretax I have, I’ll need to do a lot of conversions to blunt the RMDs.