Faith in online calculators Fidelity/Firecalc?

[anothercog]

According to FireCalc, I'm at 100% adding in a little extra spending in the early years but decreasing spending after 70. Fidelity retirement score gives me a 105.

Maybe its competitiveness in me that I strive for a top score and am not sure I'm comfortable with a 105 when the top score is 150+.

What are you thoughts with these retirement ready calculators. Would you be comfortable with a 105?

 

[GravitySucks]

I’d be happy with a 105 especially if there is a good amount of discretionary spending in there.

 

[Twilo123]

i posted a bunch of planners and calcs over here. i try to run through a few of them to see if they are all in the ballpark. some are stronger in some areas than others but can use a bunch together as a baseline.
Planners & Calc List

 

[Car-Guy]

I've used my own custom spreadsheet for a very long time now and it's worked for me. I'll stick with it.

 

[LateToFIRE]

... i try to run through a few of them to see if they are all in the ballpark. some are stronger in some areas than others but can use a bunch together as a baseline.

This is also my approach. I've pretty much run every planner model I could get my hands on, including my own homegrown cash flow model. Once I was showing green in all of them, I felt reasonably comfortable I was prepared for a permanent non-work situation. BTW, Fidelity has stopped giving me a score in their retirement planner - maybe I'm using a newer version. I'm only getting a calc of assets at end of plan as a guide.

 

[Al18]

FYI Fidelity Retirement Planner stops giving you a score after you retire. I’ve run the Fidelity Planner about once a year for 5 years prior to retirement and have continued to run it yearly after retirement. It like to see the progress and effect of my Roth IRA conversions.

Oh - it’s very accurate and the number closely match the Average (50%) scenario.

 

[anothercog]

With Fidelity I’m assuming ill stay one more year since it won’t let me use my current age to retire. I’m 54 now. I can suck it up at least another 6 months.

 

[Al18]

The assumptions for the Fidelity Retirement Planner are spelled out in the fine print. The plan always starts the year after you retire, and assumes an 8% drop the first year of retirement.

 

[RetiredHappy]

I use my own spreadsheet as well as Fidelity Retirement Planner. Fidelity Retirement Planner lets me get as detailed as I want, use real-time portfolio information and save my data. I just find that FIRECalc difficult to use. As long as Fidelity Retirement Planner says you are good to go with Significantly Below Average market, you should be able to retire asap.

 

[Dtail]

According to FireCalc, I'm at 100% adding in a little extra spending in the early years but decreasing spending after 70. Fidelity retirement score gives me a 105.

Maybe its competitiveness in me that I strive for a top score and am not sure I'm comfortable with a 105 when the top score is 150+.

What are you thoughts with these retirement ready calculators. Would you be comfortable with a 105?

105 is still a very good overall score plus the 100% in Firecalc. You are better in Firecalc than all the worst scenario starting years of retirement. I would not be too concerned about it.

 

[Dtail]

With Fidelity I’m assuming ill stay one more year since it won’t let me use my current age to retire. I’m 54 now. I can suck it up at least another 6 months.

For Fidelity, you must always use a future retirement year than the current one in order to obtain a retirement score. I run it multiple times a year and always push my retirement year out 1 year than my current age, even though I have been retired for 7 years.

 

[Midpack]

No calculator can guarantee anything - too many variables with no sure answers. It’s clearly stated in FIRECALC (below) and I am sure Fidelity has a bulletproof disclaimer as well. It’s up to you what success rate you will be comfortable with, based on your risk tolerance, income sources, assumptions and expectations.

What does the answer tell me?
If you get a "100% success rate" with what you have and what you plan to spend, this means that you would have been able to maintain your standard of living and not run out of money, despite the worst that we've ever seen, including the Great Depression. A lesser success rate helps you assess the risk of retiring with what you have and what you plan to spend.

How can I be sure these results will work in the future?
FIRECalc's standard model uses the overall US stock market performance. Most 401k and similar retirement plans offer investment choices ("index funds") that are closely tied to the overall market performance, and the others generally tell you how they compare.

If the next few decades are even worse for the stock market than the worst that has ever been seen, including the Great Depression, then all bets are off.

 

[marko]

IMO, all of these calculators are "go/no go" gauges". Once you get a "go" the devil is in details no calculator can cover.

 

[Koolau]

I still recall finding out about FIRECalc. I had struggled with several calculators that depended upon ME to input things like "estimated inflation rate" and "estimated rate of return." I never had a clue what to input and I could change the results dramatically with just a key stroke or two. What good are calculators like that?

When I read how FIRECalc was developed, it just clicked. With the understanding that all calculators are limited (and FIRECalc is no exception) I just found it to be very useful and robust. I had enough confidence in it to conclude that I was FI and I could retire at any time.

I have never tried Fidelity's calculator so I don't know what 105 vs 150 means. From other responses here, I assume it is acceptable.

Regarding Marko's point that the calculators don't tell you how to "proceed" once they tell you that you are "okay." FIRECalc does give guidelines for how much you can spend and how to account for inflation. It's specific but not very detailed. How could it be anything else? Hey, we were "smart" enough to become financially independent. I think we can figure out how to spend our money. Of course, YMMV.

 

[motley]

tbh I don't put much stock in Firecalc as its ranges are so incredibly broad and it's not clear enough how/why they came up it. Fidelity's I think appears to be a good ballpark guesstimate, no more, no less.

 

[Koolau]

tbh I don't put much stock in Firecalc as its ranges are so incredibly broad and it's not clear enough how/why they came up it. Fidelity's I think appears to be a good ballpark guesstimate, no more, no less.

I like the research that went into FIRECalc. The data dates back far enough I hope for few surprises going forward. Of course, there are no guarantees (other than the proverbial death and taxes.) I do think FIRECalc tends toward the conservative, but I'm okay with that. I never slavishly followed the guidelines and I took a LOT extra the first few years but YMMV.

Do you have a favorite calculator that you have more faith in?

 

[Dtail]

tbh I don't put much stock in Firecalc as its ranges are so incredibly broad and it's not clear enough how/why they came up it. Fidelity's I think appears to be a good ballpark guesstimate, no more, no less.

The ranges can be very broad, because the outcomes of starting a 30 year retirement in 1966 vs. 1982 are quite broad.

 

[Dtail]

I like the research that went into FIRECalc. The data dates back far enough I hope for few surprises going forward. Of course, there are no guarantees (other than the proverbial death and taxes.) I do think FIRECalc tends toward the conservative, but I'm okay with that. I never slavishly followed the guidelines and I took a LOT extra the first few years but YMMV.

Do you have a favorite calculator that you have more faith in?

Firecalc results are effectively based on the 4% guideline and thus are conservative. If one takes away the 5 worst times to start a 30 year retirement, the effective SWR would be closer to 6.5%.

 

[Dtail]

IMO, all of these calculators are "go/no go" gauges". Once you get a "go" the devil is in details no calculator can cover.

If one uses the retirement calculators in a reretire concept new every year, it effectively gives one the go/no go concept throughout retirement.
Of course, one is retired already, so then the no go result becomes a warning over a potential change in lifestyle spending.

 

[Badger]

No calculator can guarantee anything - too many variables with no sure answers. It’s clearly stated in FIRECALC (below) and I am sure Fidelity has a bulletproof disclaimer as well. It’s up to you what success rate you will be comfortable with, based on your risk tolerance, income sources, assumptions and expectations.

+1
This is what too many people don't consider when determining their success rate regardless of which calculators they rely.
For years before retiring I used a few different calculators a few times a year from investment companies like Fidelity, Vanguard, etc. including Firecalc. I was concerned about the unknowns that could deplete our years of saving/investing. Since I enjoyed my career I invested until my success rate according to Firecalc was at 100% with 0 cycles failed and at the worst case I would have as much as I started out with if I reached 95 yrs.
YMMV

 

[marko]

As an aside, the one thing I worry about is calculators looking back in time many, many decades.

It's not so much "past performance cannot guarantee etc.....", it's that the financial world--and world in general--has changed so much, I can't see how you can use that data.

The stock market today is an entirely different planet than is was in 1940, 1960 or even 1980. How reliable can using such as background? Or maybe I don't understand how it is using data from 1935?

I don't have an alternative and I find tools like Firecalc incredibly useful, but I often wonder how we can rely upon " ... the results of every starting point, since 1871..." as they say.

Just a musing, not a critique.

 

[jazz4cash]

Popular topic

How much do you trust online retirement calculators?

Traditionally I haven't put much stock in them, esp given I'd put the same information in and get different answers, but I think (I think) they have improved and at least can give one a ballpark idea. Thoughts??

www.early-retirement.org

 

[GravitySucks]

As an aside, the one thing I worry about is calculators looking back in time many, many decades.

It's not so much "past performance cannot guarantee etc.....", it's that the financial world--and world in general--has changed so much, I can't see how you can use that data.

The stock market today is an entirely different planet than is was in 1940, 1960 or even 1980. How reliable can using such as background? Or maybe I don't understand how it is using data from 1935?

I don't have an alternative and I find tools like Firecalc incredibly useful, but I often wonder how we can rely upon " ... the results of every starting point, since 1871..." as they say.

Just a musing, not a critique.

Agreed.
I think my Great Grandads AA was 60% land , 30% swine, 10% crops. Maybe some moonshine in the mix.

 

[jollystomper]

I trust the calculators to be "in the ballpark", not necessarily to be of pinpoint precision. It is always up to the individual to decide, along with other input, if it is a ballpark they are comfortable in. I did not rely only on the calculators for my retirement decision. They can be a good guide, but ultimately one has to choose how comfortable they are.

They are very good for "what if" scenarios, I have done some "worst case" analysis runs, and the results were not as bad as I thought they might be, which was encouraging from a retirement planning standpoint.

 

[athena53]

I've used my own custom spreadsheet for a very long time now and it's worked for me. I'll stick with it.

I started with a primitive spreadsheet about 20 years ago- built in some static assumptions about rate of return, inflation, projected additions to funds each year. What you discover immediately is that what matters are not your inflation and rate of return assumptions, but the delta between the two.

I don't run that one anymore; my brokerage (UBS) has a fancy Monte Carlo one that I haven't redone for a couple of years. Back then they said I had a 99% chance of NOT outliving my savings. Investments are now higher and I'm a couple of years older so I don't think that conclusion would change.