Firecalc meaning

[rmcelwee]

So with 100% and money left over. What does it really mean?

It doesn't mean anything. If the stock market lost 20% per year for the next 5 years you would probably tighten up the belt and not spend as much. Where is that in Firecalc? It is fun to play with the numbers, I do it once a year, but it has ZERO to do with the future. For me, I'm playing with solar power, freeze drying, and building a bullet proof fortress right now. Still fun to play with but very well could have ZERO to do with the future.

 

[Koolau]

It doesn't mean anything. If the stock market lost 20% per year for the next 5 years you would probably tighten up the belt and not spend as much. Where is that in Firecalc? It is fun to play with the numbers, I do it once a year, but it has ZERO to do with the future. For me, I'm playing with solar power, freeze drying, and building a bullet proof fortress right now. Still fun to play with but very well could have ZERO to do with the future.

Your pursuits could be a whole thread topic if you are inclined to share.

My take on the whole FIRECalc "thing" is that I used it for planning. IOW when it said I had enough, I had a relatively good feeling that I was actually Financially Independent. I never withdrew according to what it suggested I could withdraw.

As you point out, FIRECalc doesn't predict the future (like what will happen to the stock market or your health, etc.)

 

[rmcelwee]

Your pursuits could be a whole thread topic if you are inclined to share.

I've taught myself to pick locks, smelt lead for bullets, reloading, melt aluminum cans for casting using 3D printed forms, etc. If any of that ever became useful (SHTF type thing) I'd probably be the first to go. It is still fun stuff. Maybe I'll make a thread one day.

 

[Rianne]

It doesn't mean anything. If the stock market lost 20% per year for the next 5 years you would probably tighten up the belt and not spend as much. Where is that in Firecalc? It is fun to play with the numbers, I do it once a year, but it has ZERO to do with the future. For me, I'm playing with solar power, freeze drying, and building a bullet proof fortress right now. Still fun to play with but very well could have ZERO to do with the future.

And a giant crater could hit the earth or Yellowstone could blow. If Yellowstone erupted the entire Midwest to the far East coast would be toast. The term "highly unlikely" somehow keeps millions of Americans buying lottery tickets. And someone always wins.

What Would a Yellowstone Eruption Mean for North America?

Welcome to Yellowstone, a natural wonderland that's home to stunning vistas, vibrant plant and animal life ... and a massive and potentially devastating supervolcano.

science.howstuffworks.com

 

[Koolau]

I've taught myself to pick locks, smelt lead for bullets, reloading, melt aluminum cans for casting using 3D printed forms, etc. If any of that ever became useful (SHTF type thing) I'd probably be the first to go. It is still fun stuff. Maybe I'll make a thread one day.

It actually sounds very interesting. I'd follow the thread.

 

[viking111]

Exactly. Congratulations on your well-funded retirement!

Thank you.

 

[viking111]

I suppose he/she could look at it as expense reduction, as long as he/she didn't also put their SS numbers in as income as well, and it would still be in the ballpark either way.

I don't reduce expenses on firecalc. I just add on the income in the SS section.

 

[viking111]

So my math experts correct my statistics if it is wrong.
If you have a 20% chance of making it to 100 years old and a 5% (95% probability of success) chance or running out of money, that means your actual risk is 0.01 OR 1%.

 

[SecondCor521]

So my math experts correct my statistics if it is wrong.
If you have a 20% chance of making it to 100 years old and a 5% (95% probability of success) chance or running out of money, that means your actual risk is 0.01 OR 1%.

Yep. Approximately.

I came up with the idea about 20 years ago, and @intercst, one of the FIRE pioneers, wrote an article about it shortly afterwards:

https://retireearlyhomepage.com/swrlife.html

His math is a bit more complete than yours, but you have the right idea. It's something that is often ignored that adds safety factor.

 

[engineernerd]

So my math experts correct my statistics if it is wrong.
If you have a 20% chance of making it to 100 years old and a 5% (95% probability of success) chance or running out of money, that means your actual risk is 0.01 OR 1%.

Yes, exactly. To everyone on this forum who doesn't already know, just google "probability of a and b."

The obvious caveat is that the future has not signed a contract to be the same as the past. I personally think that's a huge caveat right now. My feeling is we are far less likely to make it to to age 100 than we think.

 

[viking111]

Yep. Approximately.

I came up with the idea about 20 years ago, and @intercst, one of the FIRE pioneers, wrote an article about it shortly afterwards:

https://retireearlyhomepage.com/swrlife.html

His math is a bit more complete than yours, but you have the right idea. It's something that is often ignored that adds safety factor.

Thank you. I think it is important to think about. It helps reduce the unknown for me. For example: Firecalc and similar calculators are not fortune tellers and can't tell us the future. However, taking into consideration the failure rate and that probability of longevity into the equation, it can tell us more about the future. Even if the markets were to do worse than the past, if we multiply that failure rate to our longevity probability, it bring in a true perspective of success rate.

 

[viking111]

Yes, exactly. To everyone on this forum who doesn't already know, just google "probability of a and b."

The obvious caveat is that the future has not signed a contract to be the same as the past. I personally think that's a huge caveat right now. My feeling is we are far less likely to make it to to age 100 than we think.

Agreed. Also, you are not really broke at a 100 if you get that far. As long as there is SS and your home you live in, you are not broke. You have some leverage. If someone makes it to 90+ years old, I doubt they are spending nearly as much as they did at early retirement ages.

 

[Gumby]

This calculator (which has been posted here previously) takes a crack at your question. Rich, Broke or Dead? Post-Retirement FIRE Calculator: Visualizing Early Retirement Success and Longevity Risk - Engaging Data

 

[Dtail]

Agreed. Also, you are not really broke at a 100 if you get that far. As long as there is SS and your home you live in, you are not broke. You have some leverage. If someone makes it to 90+ years old, I doubt they are spending nearly as much as they did at early retirement ages.

Yes on the math as previously posted. Plus your SIRE income which includes SS, can include home equity, pension, etc. Plus the amount of your discretionary expenses which can be ratcheted down in your 90's if it hasn't been already.