lawman3966
Recycles dryer sheets
- Joined
- Jan 8, 2008
- Messages
- 84
I entered my data into Firecalc for my lump sum assets, my future SS income, and a retirement time period (about 28 years), and got an inflation-adjusted annual spending level of about $67K.
As an experiment, I wanted to see what spending level I'd have later, if I lived frugally for the first five years of the retirement period. I used a spending level of about 18K for five years, and adjusted the other data accordingly (five fewer years of retirement, suitably adjusted lump sum).
My initial mental calculation was that I was saving about $245K by spending $18K instead of $67K each year, for five years ($49K X 5 years) and that this $245K would be divided over the remaining 23 year period for a benefit of about $10K a year, for the 23-year period. However, to my surprise, the actual improvement in per-year spending was only $5K a year, according to F-calc.
I'm sure my initial seat-of-the-pants estimate is missing something, but I don't know what. It could be the reduced benefit of long-term stock gains in the 23-year F-calc calculation.
If anyone sees a flaw in the above reasoning, please let me know.
As an experiment, I wanted to see what spending level I'd have later, if I lived frugally for the first five years of the retirement period. I used a spending level of about 18K for five years, and adjusted the other data accordingly (five fewer years of retirement, suitably adjusted lump sum).
My initial mental calculation was that I was saving about $245K by spending $18K instead of $67K each year, for five years ($49K X 5 years) and that this $245K would be divided over the remaining 23 year period for a benefit of about $10K a year, for the 23-year period. However, to my surprise, the actual improvement in per-year spending was only $5K a year, according to F-calc.
I'm sure my initial seat-of-the-pants estimate is missing something, but I don't know what. It could be the reduced benefit of long-term stock gains in the 23-year F-calc calculation.
If anyone sees a flaw in the above reasoning, please let me know.