Fidelity Retirement Analysis Tool

[COcheesehead]

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

If I can out race the “average return”, I am OK with that.

 

[flyingaway]

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?

Maybe you should average for the last two years.

 

[imbatman]

I have found this tool very helpful for my planning/ second set of eyes to my more manual approach and always use the "significantly below average" market setting. When we enter our retirement expenses, I assume this excludes all federal and local taxes, since there is a separate section to enter your criteria on those, correct? So the tool will calculate my rates based on my projected income and account for that expense? I have budgeted for property taxes in the regular "essential expenses".

 

[COcheesehead]

I have found this tool very helpful for my planning/ second set of eyes to my more manual approach and always use the "significantly below average" market setting. When we enter our retirement expenses, I assume this excludes all federal and local taxes, since there is a separate section to enter your criteria on those, correct? So the tool will calculate my rates based on my projected income and account for that expense? I have budgeted for property taxes in the regular "essential expenses".

You are correct.

 

[Dtail]

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?

I use it often enough. I find the Significantly Below Average module usually runs around 3% more conservative than Firecalc.
I also like using it to complement the Firecalc historical sequencing module.

 

[G-Man]

I use it often enough. I find the Significantly Below Average module usually runs around 3% more conservative than Firecalc.
I also like using it to complement the Firecalc historical sequencing module.

I use it to complement other retirement planning tools as well.

 

[explanade]

I'm well above the beginning balance for January as well as the ending balance for this year.

But the inputs I put in are probably bad.

Also it assumes a static Social Security income, which I haven't taken yet. Pretty sure it will start at a much higher level than shown in the Detailed Income Analysis.

I guess I should re-do the analysis, update a lot of the numbers.

Part of it is that I've not withdrawn anything, just been spending dividend income, though that may change with some conversions of my 401k assets to ROTH.

 

[COcheesehead]

I'm well above the beginning balance for January as well as the ending balance for this year.

But the inputs I put in are probably bad.

Also it assumes a static Social Security income, which I haven't taken yet. Pretty sure it will start at a much higher level than shown in the Detailed Income Analysis.

I guess I should re-do the analysis, update a lot of the numbers.

Part of it is that I've not withdrawn anything, just been spending dividend income, though that may change with some conversions of my 401k assets to ROTH.

You can update your social security and it’s start date under the social security tab.

 

[bizlady]

How do you adjust expenses if your partner passes? I see where pensions or SS go away, but how to you adjust expenses?

 

[G-Man]

How do you adjust expenses if your partner passes? I see where pensions or SS go away, but how to you adjust expenses?

Detailed Expenses under the Retirement Expenses tab. You click the "Edit Details" link at the bottom.

 

[COcheesehead]

How do you adjust expenses if your partner passes? I see where pensions or SS go away, but how to you adjust expenses?

You can define time periods for expenses under custom expenses.

 

[G-Man]

Can someone confirm with the Fidelity Retirement Planning tool that the "Assets at End of Plan" is your liquid/invested assets only. Meaning that your guaranteed income like pension and social security is not included. In addition, your home is not included as well.

So, if the "Assets at End of Plan" amount was 0, you still have your guaranteed income and home.

Can someone please verify.

 

[COcheesehead]

Can someone confirm with the Fidelity Retirement Planning tool that the "Assets at End of Plan" is your liquid/invested assets only. Meaning that your guaranteed income like pension and social security is not included. In addition, your home is not included as well.

So, if the "Assets at End of Plan" amount was 0, you still have your guaranteed income and home.

Can someone please verify.

The assets at end of plan are based on whatever is included in the accounts and contributions tab, social security tab, plus whatever you input. So if you added the sale of your home or land or whatever, they will use that for the analysis. If your pension is included, they will use that. Its based on your inputs.
End of plan is your guess of death date. So it assumes income streams stop.
Social security is not COLA, but you can update the value in the social security tab so you can manually update yearly if you desire.

 

[GravitySucks]

How do you adjust expenses if your partner passes? I see where pensions or SS go away, but how to you adjust expenses?

Not sure how you would use that unless you know when your spouse will pass.
From earlier conversations in this forum and others I was in I seem to recall most people’s expenses fell around 25% at the loss of a spouse. That was about what happened with mine not counting her final 3 years of elevated medical expenses.

 

[monte1022]

One thing that really irks me about their tool is how it treats my wife's old 401k. In their planner, her old 401k (which is still at Fidelity), calculates as a pretax plan when most of it is Roth. This changes our residual balance by -500k. I've been unchecking the Full view import and manually adding tIRA and Roth IRA options then breaking the balance into those components. One would think that all things Fidelity would categorize correctly.

 

[COcheesehead]

One thing that really irks me about their tool is how it treats my wife's old 401k. In their planner, her old 401k (which is still at Fidelity), calculates as a pretax plan when most of it is Roth. This changes our residual balance by -500k. I've been unchecking the Full view import and manually adding tIRA and Roth IRA options then breaking the balance into those components. One would think that all things Fidelity would categorize correctly.

Go under Accounts and Contributions. Find the 401k in the list, uncheck Assign which removes it from the analysis. Then at the top of that section go to +Add an Account and re add it assigning it to a Roth IRA and then assign that revised account to the analysis.

 

[G-Man]

The assets at end of plan are based on whatever is included in the accounts and contributions tab, social security tab, plus whatever you input. So if you added the sale of your home or land or whatever, they will use that for the analysis. If your pension is included, they will use that. Its based on your inputs.
End of plan is your guess of death date. So it assumes income streams stop.
Social security is not COLA, but you can update the value in the social security tab so you can manually update yearly if you desire.

Here is what I'm trying to understand from the tool. If you have 2 pensions and 2 strong social security benefits that kicks in at age 70 (takes care of all the expenses), you can exhaust your retirement portfolio invested assets and still have a successful retirement. In addition, you have a home that is paid off as well. Just trying to understand how the tool works.

 

[Dtail]

Here is what I'm trying to understand from the tool. If you have 2 pensions and 2 strong social security benefits that kicks in at age 70 (takes care of all the expenses), you can exhaust your retirement portfolio invested assets and still have a successful retirement. In addition, you have a home that is paid off as well. Just trying to understand how the tool works.

I think I get your gist.

So for one example, if one has 30k a year Soc Sec. starting at age 62 and 1m investment assets.
The Fidelity tool states that you will run out of money at age 85. If one can now live on 30k a year from age 86 onward, then one is good to go.
Is that your general gist?

 

[SunGuy]

I have talked with a few people who work on it, as an employee of Fidelity. They really try to maximize the features and love getting feedback on what to works towards implementing for the future.

 

[G-Man]

I think I get your gist.

So for one example, if one has 30k a year Soc Sec. starting at age 62 and 1m investment assets.
The Fidelity tool states that you will run out of money at age 85. If one can now live on 30k a year from age 86 onward, then one is good to go.
Is that your general gist?

Yes. Exactly. You may run out of liquid/investment assets, but you have your guaranteed income sources like Soc Sec. and pension that now takes care of all your expenses. That's why I'm questioning what the "Assets at End of Plan" really means.

 

[COcheesehead]

Yes. Exactly. You may run out of liquid/investment assets, but you have your guaranteed income sources like Soc Sec. and pension that now takes care of all your expenses. That's why I'm questioning what the "Assets at End of Plan" really means.

It means what you have left when the death age you input is reached.

Income streams are not assets.

If you add your pensions into the tool and have accurate social security data, the number you get for end of plan should be accurate. If it’s zero, the income table should still reflect the pensions and the social security income streams even if you have zero assets, but they won’t have a “value” for end of plan.

 

[COcheesehead]

I think I get your gist.

So for one example, if one has 30k a year Soc Sec. starting at age 62 and 1m investment assets.
The Fidelity tool states that you will run out of money at age 85. If one can now live on 30k a year from age 86 onward, then one is good to go.
Is that your general gist?

Under this example your end of plan value is zero, but the income table will reflect the $30k/year until your input end of plan age.

 

[G-Man]

It means what you have left when the death age you input is reached.

Income streams are not assets.

If you add your pensions into the tool and have accurate social security data, the number you get for end of plan should be accurate. If it’s zero, the income table should still reflect the pensions and the social security income streams even if you have zero assets, but they won’t have a “value” for end of plan.

I guess the point here is that the end of plan value can be zero and you can still have a successful retirement if your guaranteed income sources is enough to take care of your living expenses.

The severity of failure is less when you have guaranteed income.

 

[COcheesehead]

I guess the point here is that the end of plan value can be zero and you can still have a successful retirement if your guaranteed income sources is enough to take care of your living expenses.

The severity of failure is less when you have guaranteed income.

That possibility exists.

 

[CRLLS]

I guess the point here is that the end of plan value can be zero and you can still have a successful retirement if your guaranteed income sources is enough to take care of your living expenses.

The severity of failure is less when you have guaranteed income.

I believe that most (all?) calculators assume income first and then w/d from one's own retirement investments to provide one's retirement expenses. If somebody can live on income alone, be it SS, or pension, or any other source outside of their own investments, then the investments will not be tapped and go to zero unless there is a worldwide financial collapse.