Fidelity Retirement Analysis Tool

[bizlady]

If I select "Future Dollars", the "Assets at End of Plan" is about 3 times that of the "Today's Dollars" Assets at End of Plan .

Compliments of inflation... look at your year over year spending with that table and you will see how the income and expense increases--

That larger amount is essentially worth the "today amount". Reality is you will likely redo the calculations regularly based on your reality for spending and portfolio

 

[G-Man]

Has anyone used the "Personal Capital" online tool and compared their results with the Fidelity tool?

I just inputted my information in "Personal Capital" and the results are similar to what I'm getting in the Fidelity Retirement tool.

Would like to hear from others?

 

[G-Man]

Another Fidelity Retirement Analysis tool question.

What does the tool do with the RMD dollars each year? It looks if you have an income gap each year, it will withdraw from savings and not use the RMD dollars to paid for expenses.

In addition, the "Total Estimated Income" column does not include the RMD dollars per year.

So is the RMD dollars treated as "Excess Income/Surplus" that is not accounted for in the Fidelity tool? So, the estimated taxes in the "Total expenses" column does not include the RMD dollars.

I'm confused. Need some help.

 

[G-Man]

Another Fidelity Retirement Analysis tool question.

What does the tool do with the RMD dollars each year? It looks if you have an income gap each year, it will withdraw from savings and not use the RMD dollars to paid for expenses.

In addition, the "Total Estimated Income" column does not include the RMD dollars per year.

So is the RMD dollars treated as "Excess Income/Surplus" that is not accounted for in the Fidelity tool? So, the estimated taxes in the "Total expenses" column does not include the RMD dollars.

I'm confused. Need some help.

Ok.. I looked at the Fidelity Retirement tool documentation. Here is the language in the documentation. Can someone please explain.


• After RMD amounts are withdrawn from retirement accounts
(excluding pension plans), the Tool assumes these savings are
redeposited in a hypothetical taxable account and are available to
meet retirement goal expenses. You should consult your tax or
financial advisor for assistance with your specific circumstances.
For plans recordkept at Fidelity, the Tool does not automatically
consider any pre-1987 balances.

 

[G-Man]

Ok.. I looked at the Fidelity Retirement tool documentation. Here is the language in the documentation. Can someone please explain.


• After RMD amounts are withdrawn from retirement accounts
(excluding pension plans), the Tool assumes these savings are
redeposited in a hypothetical taxable account and are available to
meet retirement goal expenses. You should consult your tax or
financial advisor for assistance with your specific circumstances.
For plans recordkept at Fidelity, the Tool does not automatically
consider any pre-1987 balances.

It looks like this Thread may have answered my question. For me, it looks like the RMD dollars are "Excess Income or a Surplus" per year. Wow. Over the years, this RMD dollars adds up. Some essentially, the "Assets at End of Plan" does not include the RMD dollars over the years. Wow. That is a huge amount that I did not account for. Wow again.

https://www.early-retirement.org/forums/f28/fidelity-retirement-analysis-and-rmd-114014.html

 

[daylatedollarshort]

I made my own retirement spreadsheet calculator using inflation and real interest rates as parameters in place of the Fidelity projections. My results and Fidelity planner's results still came out pretty close, at least under normal and below market conditions. I never planned on -4% real interest rates, so I'm hoping that isn't a long term issue.

 

[COcheesehead]

It looks like this Thread may have answered my question. For me, it looks like the RMD dollars are "Excess Income or a Surplus" per year. Wow. Over the years, this RMD dollars adds up. Some essentially, the "Assets at End of Plan" does not include the RMD dollars over the years. Wow. That is a huge amount that I did not account for. Wow again.

https://www.early-retirement.org/forums/f28/fidelity-retirement-analysis-and-rmd-114014.html

I may misunderstand your interpretation, but the RMDs are not additional income, but just a movement from your deferred to taxable account and are included in your end of plan dollars.

 

[G-Man]

I may misunderstand your interpretation, but the RMDs are not additional income, but just a movement from your deferred to taxable account and are included in your end of plan dollars.

Ok. What column is the RMD dollars added back in? Is it added to the "Ending Savings" balance each year?

 

[G-Man]

I may misunderstand your interpretation, but the RMDs are not additional income, but just a movement from your deferred to taxable account and are included in your end of plan dollars.

Man. I misunderstood this. My plan still looks good with the misinterpretation. Just thought I would be in an even better situation.

 

[COcheesehead]

Ok. What column is the RMD dollars added back in? Is it added to the "Ending Savings" balance each year?

It’s pretty simple. You have an expense amount that is deducted from your account. Fidelity shows that expense coming from a total of RMDs, account growth and social security or any other income you input.

 

[G-Man]

It’s pretty simple. You have an expense amount that is deducted from your account. Fidelity shows that expense coming from a total of RMDs, account growth and social security or any other income you input.

I have an overage and RMD is not needed to cover my expenses each year. So where does the RMD dollars go? Does it same in the asset pool or should I be tracking the RMD dollars (overage) outside the Fidelity tool?

So if I add the "Total Estimated Income" + "Withdrawals From Savings" columns, it covers my Total expenses per year. The RMD dollars are overage. What does Fidelity do with that overage?

 

[COcheesehead]

I have an overage and RMD is not needed to cover my expenses each year. So where does the RMD dollars go? Does it same in the asset pool or should I be tracking the RMD dollars (overage) outside the Fidelity tool?

You are over thinking it by separating out the RMD.

Think of your account as one big pile of money. You have expenses, they are deducted from the account, your big pile of money. End of story. Internally some funds, the RMDs, are moved from deferred to taxable. They are not in addition to. They just move inside the big pile of money you already have.

 

[G-Man]

You are over thinking it by separating out the RMD.

Think of your account as one big pile of money. You have expenses, they are deducted from the account, your big pile of money. End of story. Internally some funds, the RMDs, are moved from deferred to taxable. They are not in addition to. They just move inside the big pile of money you already have.

So if I add the "Total Estimated Income" + "Withdrawals From Savings" columns, it covers my Total expenses per year. The RMD dollars are overage. So, Fidelity add those dollars back into the big pile of money. Thanks

Sorry for all the questions.

 

[G-Man]

You are over thinking it by separating out the RMD.

Think of your account as one big pile of money. You have expenses, they are deducted from the account, your big pile of money. End of story. Internally some funds, the RMDs, are moved from deferred to taxable. They are not in addition to. They just move inside the big pile of money you already have.

You know this tool very well. How long have you been using the tool? Are you happy with the accuracy of the output?

 

[COcheesehead]

So if I add the "Total Estimated Income" + "Withdrawals From Savings" columns, it covers my Total expenses per year. The RMD dollars are overage. So, Fidelity add those dollars back into the big pile of money?

Sorry for all the questions.

Just look at beginning savings minus expenses equals end savings. End of story. All the other columns just show what is happening internally in the asset pool. Don’t add RMDs or any other income to that. They are not extra income.

 

[COcheesehead]

You know this tool very well. How long have you been using the tool? Are you happy with the accuracy of the output?

It’s an estimator. Nothing is 100% accurate. Nothing can predict the future.

 

[Koolau]

Just look at beginning savings minus expenses equals end savings. End of story. All the other columns just show what is happening internally in the asset pool. Don’t add RMDs or any other income to that. They are not extra income.

RMDs are taken from your qualified money (like 401(k) or traditional IRAs, etc.) So the value of those accounts goes down. You then put the RMD money in other accounts maybe, like me, in my checking account to be spent or a savings account, a taxable mutual fund, etc. The money is the same amount - it's just in a different place in your stash. Of course, come April next year, you will need to pay taxes, more than likely. As always, YMMV.

 

[sofarsogood]

How does the calculator arrive at the "Withdrawal from Savings" amount?

 

[G-Man]

How does the calculator arrive at the "Withdrawal from Savings" amount?

I believe it is "Total Expenses - Total Estimated Income" = Withdrawals from Savings

 

[sofarsogood]

I believe it is "Total Expenses - Total Estimated Income" = Withdrawals from Savings

That is partly correct until I hit RMD. With the RMD withdrawal included, doesn't that reduce the "Withdrawals from Savings"?

Thanks

 

[G-Man]

That is partly correct until I hit RMD. With the RMD withdrawal included, doesn't that reduce the "Withdrawals from Savings"?

Thanks

I have exported the "Table" data to an Excel spreadsheet. Based on what I see, the dollars in the "RMD" column is not used to reduce the "Withdrawals from Savings" amount.

Once again, what I'm seeing is the following:

"Total Expenses - Total Estimated Income" = Withdrawals from Savings

 

[COcheesehead]

I have exported the "Table" data to an Excel spreadsheet. Based on what I see, the dollars in the "RMD" column is not used to reduce the "Withdrawals from Savings" amount.

Once again, what I'm seeing is the following:

"Total Expenses - Total Estimated Income" = Withdrawals from Savings

You are correct. The other columns show the internal happenings within the asset pool and should not be used as anything other than reference.

 

[COcheesehead]

As we get close to year end, I run the tool to see what it “predicts” my 2024 starting balance will be. Right now for the significantly below average and below average it’s showing totals I highly doubt will happen - very, very low. The average returns amount also seems low by about 5%-6%. Which I guess isn’t too bad and backs up why some say the tool is conservative.
So for those of you using the tool, are you finding it tracking your situation fairly?

 

[G-Man]

As we get close to year end, I run the tool to see what it “predicts” my 2024 starting balance will be. Right now for the significantly below average and below average it’s showing totals I highly doubt will happen - very, very low. The average returns amount also seems low by about 5%-6%. Which I guess isn’t too bad and backs up why some say the tool is conservative.
So for those of you using the tool, are you finding it tracking your situation fairly?

That's good that the tool is very conversative. I feel more confident is my retirement goals.

 

[PatrickA5]

Using Average, my investments would have to go up 1.8% for the rest of the year. Possible, I guess (hope!). Under Significantly Below Average, it would need to go down around 12% in the final month and a half. Let's hope not!

I tend to look at "Below Average" on a long-term basis. Still very conservative. There's no way to mix and match as far as I know. In other words, I can't say the market will be below average the next 5 years and then average the remaining 25 years.

I don't run out of money on any of the scenarios, so I guess that's good.