Fidelity Retirement Analysis Tool

[DireWolf]

I find the RPM spreadsheet to give sensible results. It takes effort to populate the data fields and to understand how it does what it does. That's part of the learning process for one's own financial plan. Learning that pays off, literally.

porfoliovisualizer "Financial Goals" tool seems underappreciated. I use it and it is excellent in its flexibility and user friendliness. It gives results similar to RPM and my own home brew spreadsheet. I recommend people give it a try.

How do these spreadsheet tools handle modeling returns? Are they using historical returns, Monte Carlo, etc.?

 

[Sand101]

I have used it. It is grossly conservative. If the Fidelity tool gives you a thumbs up, you are good to go.

I find FireCalc to be massively optimistic and not terribly useful. Fidelity is much more realistic and matches some good tools like Pralana. It also matches the tool I've built reasonably well, so it has a level of validation on my end.

 

[REWahoo]

I find FireCalc to be massively optimistic and not terribly useful.

FIRECalc is neither optimistic nor pessimistic as it uses actual history to show past performance, making no prediction of the future. From "How it Works":

If you tell FIRECalc how much you have, and how much you'll be taking out each year, FIRECalc will show you how such a combination would have fared for the duration of your retirement, in every year for which we have market data.

 

[tb001]

FIRECalc is neither optimistic nor pessimistic as it uses actual history to show past performance, making no prediction of the future. From "How it Works":

This is precisely why I like the firecalc tool so much. No you don’t have the ‘what it’ scenarios, but knowing our portfolio would have survived the Great Depression and stagflation is honestly enough for me. Even these events would require such societal recalibrations that I can’t imagine not making changes to spend along the way.

 

[Scuba]

Are folks finding that there expenses are more or less during their retirement years? As I look over my expenses now (not retired yet), there is a lot of opportunity to cut some expenses.

We are spending less on our ongoing annual spending, largely because COVID curtailed a lot of travel and entertainment. However we have really blown some dough on moving and remodeling.

 

[retired1]

I felt the same way first time. I played with it especially in areas where you enter age, social security amount, etc. I felt comfortable after changing the view into Table format and see the detailed breakdown. But again it's just a tool looking into future so can't rely on it 100%.

 

[daylatedollarshort]

Are folks finding that there expenses are more or less during their retirement years? As I look over my expenses now (not retired yet), there is a lot of opportunity to cut some expenses.

Our lifestyle is much better, our expenses are less. Once retired we probably found hundreds of ways that either improved, or at least didn't lower our lifestyle, but cut expenses or made a little extra money. They all really added up to tens of thousands a year less in spending for us.

Like we cut our energy use in half just by making a lot of little small changes like all LED lights inside and solar outside, refinanced the mortgage at a lower rate, dropped the landline, no longer needed life or disability insurance, joined several seat filler memberships for discounted and free live event tickets and many more small changes like that.

Initially we thought we'd cash out the house and downsize or move to a lower cost of living area, but instead we stayed in a high cost of living area and still spend much less than planned.

 

[qwerty3656]

seat filler memberships for discounted and free live event tickets

I've never heard of this - I googled it and the SeatStir website came up. Is that what you are talking about?

 

[daylatedollarshort]

I've never heard of this - I googled it and the SeatStir website came up. Is that what you are talking about?

I never heard of that one but some are local and the programs we've been in have changed over the years, but there always seem to be a few around every year. Vet Tix has a lot right now if you were a veteran. We're still avoiding crowds so not going but they had tickets for the Jonas Brothers, Weezer, Bush, and Trevor Noah this summer, plus a lot of major league sports games.

I usually spend $500 - $1K a year on seat filler memberships and annual passes for parks, museums, zoos, gardens, winery passports and theater associations and then a lot of what we do during the month is free. A U.C. Berkeley Garden membership for $150 a year is good for many of the major tourist attractions in the Bay area because of their reciprocal programs. Our area also has free / discount Lyft and public transportation passes for seniors, so we can go to places like Golden Gate Park for the day and not have to spend much to get there and get free entry to most of the attractions.

 

[Koolau]

Are folks finding that there expenses are more or less during their retirement years? As I look over my expenses now (not retired yet), there is a lot of opportunity to cut some expenses.

One man's experience (well, couple): We are easily spending twice what we spent when w*rking. I don't know if you call that delayed gratification or just our plan. We did "over save" primarily due to me staying longer than planned - I was actually enjoying what I was doing - until I didn't.

We moved from an average COL area to a High COL area. We maintain 2 places to live. We support several favorite charities. Still, we LBOM, never buy new if we can buy used, travel "cattle car" instead of 1st class, etc.

Again, it was all in the plan, so not unexpected. I always suggest putting together your plan and try to live it for a while while still empl*yed if you can. We did NOT do this, but our numbers suggested we were golden with the plan. Subsequent living supported our theory. YMMV

 

[Scuba]

Our lifestyle is much better, our expenses are less. Once retired we probably found hundreds of ways that either improved, or at least didn't lower our lifestyle, but cut expenses or made a little extra money. They all really added up to tens of thousands a year less in spending for us.

Like we cut our energy use in half just by making a lot of little small changes like all LED lights inside and solar outside, refinanced the mortgage at a lower rate, dropped the landline, no longer needed life or disability insurance, joined several seat filler memberships for discounted and free live event tickets and many more small changes like that.

Initially we thought we'd cash out the house and downsize or move to a lower cost of living area, but instead we stayed in a high cost of living area and still spend much less than planned.

You are the undisputed queen of living large for less! Very impressive.

 

[NXR7]

I used Fidelity's My Guidance or whatever they call it today for years to plan our retirement. Two years into retirement it still looks accurate.

I do not care about detailed expenses at all. Zero. I know how much after-tax cash we need to cover everything and to enjoy life and that is what I put in for my "essential expenses". I put a big fat zero into any discretionary expense entry.

 

[RobLJ]

You can also view the average and slightly below-average market results, which are useful. Basically, it is quite conservative at the significantly below market returns, similar to the posters here using 3% WR or below. I used both it and FireCalc (and Quicken's Lifetime Planner); all of them were good.

My Fidelity Wealth Management Advisor introduced the Fidelity Retirement Analysis tool to me during a retirement planning session last week. Based on the numbers inputted (income & expenses, etc.), at the end of the plan, I still have money left over using the significantly below average market. I even estimated my discretionary expenses (inputted in the Detailed Expenses section) on the high side.

The Fidelity advisor gave me the thumbs up that I can retire today. I'm very cautious and want to be sure about the decision to retire.

For those that have used the tool, how accurate is it? Can you trust the analysis that is given by the tool?

Thanks

 

[tmm99]

Significantly below has always been my benchmark. I've noticed that the savings total drops significantly in the first two years with their tool.

 

[Dtail]

Significantly below has always been my benchmark. I've noticed that the savings total drop significantly in the first two years with their tool.

I believe in general they take a 10-15% haircut the first year.

 

[RetiredHappy]

I just love how much details the Fidelity tool allows you to enter. It also helps me think about where I may want to cut expenses in the future. Our biggest "discretionary" expenses are vacation/travels, dining out/hosting and country club membership. I know I will convert the country club membership to a sports and social membership when my husband can no longer golf. Travel will also reduce as we get older. I don't think we will reduce dining out and hosting dinners. Still, that is alot of cutting back as we get older. Our biggest essential spending is our home, high HOA and upkeep but we need to pay them because we want to live where we are. Having said that, we will still have plenty left in the current modeling based on "significantly below average" returns.

 

[Dtail]

You can also view the average and slightly below-average market results, which are useful. Basically, it is quite conservative at the significantly below market returns, similar to the posters here using 3% WR or below. I used both it and FireCalc (and Quicken's Lifetime Planner); all of them were good.

The nomenclature on the slightly below average and average modules is a little misleading.
The effective success rate on these models are 70% and 50% respectively.

In general, the vast majority of folks who use retirement calculators such as Firecalc would not accept the above success percentages as an indicator that they are able to retire.

 

[jayanu]

https://www.fidelity.com/retirement-planning/overview

The real Fidelity planner is called eMoney and only some advisors can do a good job of it. It calculates income taxes also. Allows you to change many variables. My wife insisted not to have more than a 2.5% growth number and we still came out fine with zero discretionary. Everything for us - annual gifts of ~40K to kids, $20K for travel, $20K for charity, etc, all were treated as nondiscretionary.

eMoney is conservative but more realistic.

Rob Sims is our eMoney person - very expert and can help you look for various scenarios on the fly and show you the results and mail you. You must have a Fidelity account even if it is zero dollars. He can not do an eMoney simulation IF you already have an advisor. All scenarios are stored in a vault to be accessed when you need it.

RobSim.team@fidelity.com, (732) 842-6700 ext 58573 .

 

[RetiredHappy]

The real Fidelity planner is called eMoney and only some advisors can do a good job of it. It calculates income taxes also. Allows you to change many variables. My wife insisted not to have more than a 2.5% growth number and we still came out fine with zero discretionary. Everything for us - annual gifts of ~40K to kids, $20K for travel, $20K for charity, etc, all were treated as nondiscretionary.

eMoney is conservative but more realistic.

Rob Sims is our eMoney person - very expert and can help you look for various scenarios on the fly and show you the results and mail you. You must have a Fidelity account even if it is zero dollars. He can not do an eMoney simulation IF you already have an advisor. All scenarios are stored in a vault to be accessed when you need it.

RobSim.team@fidelity.com, (732) 842-6700 ext 58573 .

I believe eMoney is an independent third party software and not proprietary to Fidelity.

 

[CRLLS]

I never heard of eMoney before. So some Googling was done. It would appear that eMoney is a wholly owned subsidiary of Fidelity since 2015. They claim to be operated independently of Fidelity. Some years back, Fidelity changed their website. I am assuming it is a "special" version of eMoney's services they provide to other clients. I could be wrong. YMMV, slightly higher West of the Rockies, etc.

 

[jayanu]

I never heard of eMoney before. So some Googling was done. It would appear that eMoney is a wholly owned subsidiary of Fidelity since 2015. They claim to be operated independently of Fidelity. Some years back, Fidelity changed their website. I am assuming it is a "special" version of eMoney's services they provide to other clients. I could be wrong. YMMV, slightly higher West of the Rockies, etc.

Fidelity bought them out.

 

[CRLLS]

Fidelity bought them out.

Yes. In 2015 for $250M. Supposedly, they operate independent from Fidelity. Of course they would if they sell their services to other investment houses.

 

[G-Man]

The real Fidelity planner is called eMoney and only some advisors can do a good job of it. It calculates income taxes also. Allows you to change many variables. My wife insisted not to have more than a 2.5% growth number and we still came out fine with zero discretionary. Everything for us - annual gifts of ~40K to kids, $20K for travel, $20K for charity, etc, all were treated as nondiscretionary.

eMoney is conservative but more realistic.

Rob Sims is our eMoney person - very expert and can help you look for various scenarios on the fly and show you the results and mail you. You must have a Fidelity account even if it is zero dollars. He can not do an eMoney simulation IF you already have an advisor. All scenarios are stored in a vault to be accessed when you need it.

RobSim.team@fidelity.com, (732) 842-6700 ext 58573 .

I interested in the Fidelity eMoney tool. Do you have examples of the reports generated by the tool? Is the tool only accessible by Fidelity advisor or can a Fidelity client access the tool?

 

[ncbill]

I'll stick with Fidelity's free retirement planner...like the "significantly below" option, plus the detail you can input if you want.

 

[GravitySucks]

Are folks finding that there expenses are more or less during their retirement years? As I look over my expenses now (not retired yet), there is a lot of opportunity to cut some expenses.

I did a Lean FIRE so my spending was much lower. Mr. Markets been nice so I've bumped up my spending but Covid dropped it back again. Im happier spending less and being unemployable than working and spending more.

I love all the feedback on the Fidelity tool. Keep the responses coming.

I'm a fan of RPM. Easy to use and forced me to break expenses out in categories.
As others said, it's pessimistic as Monte Carlo methods don't factor in normal behavior. However the tools worse case matched my simple spreadsheet worse case of two double digit down years followed by 5 side ways years.

Some small gotchas:
It may say the plan fails. If it has a 30% chance of failing at a point when I have a less than 10% chance of being alive I'm counting it as a 3% chance of failure. I think I can change my behavior to account for that.

Essential expenses can be partly discretionary expenses. That car can last longer than expected. My every 5 year car is on year 8.

I never think to input residual values. I'm looking at an RV and a high end one caused a problem, But if I add 30% of the price back in 8 years from now the plan works.