FIRECalc results lowest and highest portfolio balance

[Pistachenootje]

In the FIRECalc results the lowest portfolio amount at the and of my retirement is the same amount as I entered as Portfolio under 'Start Here'. I assume I am doing something wrong?

I entered the following figures.
Start Here
Spending: 36000
Portfolio: 300000
Full Years: 55


Other Income/ Spending
Pension Income 14928 starting in 2059 inflation adjusted
Pension Income 13200 starting in 2055 not inflation adjusted

Not Retired?
What year will you retire: 2037
How much will you add to your portfolio until then, per year: 21600

All the other pages I did not touch.

I get the result:

Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.

Because you indicated a future retirement date (2037), the withdrawals won't start until that year. Your contributions will continue until then. The tested period is 15 years of preretirement plus 40 years of retirement, or 55 years.

FIRECalc looked at the 97 possible 55 year periods in the available data, starting with a portfolio of $300,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 97 cycles. The lowest and highest portfolio balance at the end of your retirement was $300,000 to $11,639,754, with an average at the end of $4,988,817. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 55 years. FIRECalc found that 0 cycles failed, for a success rate of 100.0%.

 

[braumeister]

I think you made an error in your data input, so please double check and do it again. When I ran it with your numbers, the result was

Here is how your portfolio would have fared in each of the 97 cycles. The lowest and highest portfolio balance at the end of your retirement was $-1,946,203 to $8,039,514, with an average at the end of $1,569,542.

 

[Midpack]

I don’t think you had a data entry error. Because your spending is reasonable (for your plan) and you’re adding to your portfolio for another 15 years before spending anything, it’s not surprising your starting portfolio amount is also the lowest portfolio balance. If you increase your spending to even $40K, you’ll get very different outcomes (below).

Unusual scenario retiring about 20 years before two pensions kick in, but that’s an aside.

Here is how your portfolio would have fared in each of the 97 cycles. The lowest and highest portfolio balance at the end of your retirement was $-73,981 to $10,850,415, with an average at the end of $4,028,860. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

 

[latexman]

It's a bug in the program we've known about for a while - https://www.early-retirement.org/forums/f36/lowest-portfolio-balance-100-success-82540.html

 

[Midpack]

It's a bug in the program we've known about for a while - https://www.early-retirement.org/forums/f36/lowest-portfolio-balance-100-success-82540.html

Enter the OPs numbers exactly and see what you get. Both threads explain how lowest portfolio and starting portfolio could be the same, the OPs example is not a bug IMO, maybe a poor choice of phrasing in "The lowest and highest portfolio balance [-]at the end of your retirement[/-]..."

 

[latexman]

Strange, none of the FireCalc tabs bring up their webpage for me. Even after I log in. I cleared history, cache, etc. and still the FireCalc tabs do not work. I'll try again later.

 

[Pistachenootje]

Because your spending is reasonable (for your plan) and you’re adding to your portfolio for another 15 years before spending anything, it’s not surprising your starting portfolio amount is also the lowest portfolio balance. .

I am a bit confused. You are mentioning the starting portfolio amount but I thought FIRECalc was proving the lowest portfolio balance at the end of the retirement (so after the 55 years).
At least the text indicates that:"The lowest and highest portfolio balance at the end of your retirement was $300,000 to $12,686,632, with an average at the end of $5,925,474"

I believe it should almost be impossible that after 55 years the lowest portfolio amount is the same portfolio amount I started with.

Unusual scenario retiring about 20 years before two pensions kick in, but that’s an aside.

In my country (Netherlands) this scenario for the FIRE community here is not very unusual. I am now 35 and would like to have the possibility to stop working when I am 50. The AOW (government pension) starts paying out at the age of 68 when using the current 'indication', but as this age is being recalculated every 5 years based the 'average life expectancy' it is more likely to be 72 (to be on the save side). The employer pension is starting at the age of 68.

Meaning I will need to cover the period of 18 years before I receive my employer pension and probably 22 years before I receive my government pension.

 

[Gumby]

That's because it's not the lowest portfolio value at the end of your plan, it's the lowest portfolio value ever. In your case, it's your beginning value. In other cases it could dip somewhere in the middle. In others, it could be at the end. If you want to run the program with a fixed lowest value (say you want to leave a bequest), then use the "Investigate" tab, last option.

And before you ask, no I didn't write the description in FIRECalc, and no, I can't change it. But I do know how it works.

 

[Midpack]

I am a bit confused. You are mentioning the starting portfolio amount but I thought FIRECalc was proving the lowest portfolio balance at the end of the retirement (so after the 55 years).
At least the text indicates that:"The lowest and highest portfolio balance at the end of your retirement was $300,000 to $12,686,632, with an average at the end of $5,925,474"

I believe it should almost be impossible that after 55 years the lowest portfolio amount is the same portfolio amount I started with.

Not sure why you want to argue about it, so my last post here. If you look at your chart result from your OP you can clearly see the lowest amount is the starting amount - you happened to choose a spending amount that demonstrates that situation with your other inputs.

It's not impossible at all, post #3 above explains why. Did you experiment with spending amounts?

For actual lowest amount at the end (versus anytime during the 55 years), spending of $37901 tips the lowest ending balance just below the starting portfolio amount. Anything below that, like $36000, and the starting amount is also the lowest for your inputs.

 

[Pistachenootje]

That's because it's not the lowest portfolio value at the end of your plan, it's the lowest portfolio value ever. In your case, it's your beginning value. In other cases it could dip somewhere in the middle. In others, it could be at the end. If you want to run the program with a fixed lowest value (say you want to leave a bequest), then use the "Investigate" tab, last option.

Ah now I understand! Thank you!. I already tried so many different ways and even with 39k spending's a year it would result in the same 300k. That Investigate tab is an interesting functionality, I wasn't aware of that.

And before you ask, no I didn't write the description in FIRECalc, and no, I can't change it. But I do know how it works.

I wouldn't dare to ask . I am already happy that there is a tool like FireCalc available, as most other FIRE calculators provide less flexibility.

 

[ERD50]

I think you made an error in your data input, so please double check and do it again. When I ran it with your numbers, the result was

Regardless of a data input error by OP, there is a bug, as latexman shows in the link.

It's a bug in the program we've known about for a while - https://www.early-retirement.org/forums/f36/lowest-portfolio-balance-100-success-82540.html

That previous link gets a little confusing, as the replies started going towards a re-write/re-interpretation of the text.

Relative to the text, the results match the text in some cases, and doesn't match in other cases. I call that a bug.


Simple Example:

Start with defaults, then enter: $1,000,000 portfolio, 30 years, $10,000 spend.

The chart clearly shows every ending balance to be above $1,000,000. Yet, the text reports (bold mine):

The lowest and highest portfolio balance at the end of your retirement was $1,000,000 to $8,424,314, with an average at the end of $4,348,388.

The lowest ending balance on the chart appears to be right at that line of $1,741,560. There is no ending balance of $1,000,000. It is a bug in the output text, no two ways about it.

Again, this only occurs when all the end balances are greater than the starting balance. In that case the program incorrectly reports the starting balance in place of the lowest ending balance.

Here's the chart, and here's a link to the data:

https://tinyurl.com/22uuz9ra

To OP: for your specific case, it would help if you would link to your data. Look to the upper right corner, under the $$$$ puzzle where it says "Link to this set of data (Right-click and either "Copy Shortcut" to paste into an email, for example, or "Add to Favorites") " Although for my browser, the right-click I use is "copy link", and then I create a shortcut at the tinyurl site (you don't need the short-cut, it's just cleaner).

-ERD50

 

[Pistachenootje]

Not sure why you want to argue about it, so my last post here. If you look at your chart result from your OP you can clearly see the lowest amount is the starting amount - you happened to choose a spending amount that demonstrates that situation with your other inputs.

It was not my intention to ague

It's not impossible at all, post #3 above explains why. Did you experiment with spending amounts?

Yes I tried a lot of different options. With a spending amount of 39K it would still result in a portfolio balance of 300k. But now I understand the phrasing FIRECalc uses is a bit unlucky.

 

[Pistachenootje]

Regardless of a data input error by OP, there is a bug, as latexman shows in the link.

That previous link gets a little confusing, as the replies started going towards a re-write/re-interpretation of the text.

Relative to the text, the results match the text in some cases, and doesn't match in other cases. I call that a bug.

Yes the discussion was not that easy to follow anymore. I agree with you that this is a bug, it is reflecting the wrong context for the FIRECalc results. I am a bit surprised that this bug which should be easy to fix is already in for 6 years?

Simple Example:

Start with defaults, then enter: $1,000,000 portfolio, 30 years, $10,000 spend.

The chart clearly shows every ending balance to be above $1,000,000. Yet, the text reports (bold mine):

The lowest ending balance on the chart appears to be right at that line of $1,741,560. There is no ending balance of $1,000,000. It is a bug in the output text, no two ways about it.

Good example!

To OP: for your specific case, it would help if you would link to your data. Look to the upper right corner, under the $$$$ puzzle where it says "Link to this set of data (Right-click and either "Copy Shortcut" to paste into an email, for example, or "Add to Favorites") " Although for my browser, the right-click I use is "copy link", and then I create a shortcut at the tinyurl site (you don't need the short-cut, it's just cleaner).

I am learning a lot of new things of FIRECalc, thank you!

https://tinyurl.com/msdeeyve -> Spending 36000
https://tinyurl.com/49ztmd35 -> Spending 39000

 

[latexman]

Regardless of a data input error by OP, there is a bug, as latexman shows in the link.-ERD50

Thanks for confirming!

It seems if the lowest ending portfolio balance < starting balance, the lowest ending portfolio balance is reported correctly, but if the lowest ending portfolio balance > starting balance, the starting balance is reported in error as the lowest ending portfolio balance.

Try:
Spending 24,000
Portfolio 1,000,000
Years 30

and

Spending 25,000
Portfolio 1,000,000
Years 30

In these examples, that's where starting balance just flips from > lowest ending portfolio balance to < lowest ending portfolio balance.

 

[Midpack]

It is a bug in the output text, no two ways about it.

The output text referring to ending balance is misstated or wrong it you prefer, I can see why the OP was questioning. Just looking at the chart results clearly shows the coding uses the lowest balance for the duration and not the ending balance as the text says.

A bug is a programming error that leads to erroneous results, a poor choice of words isn't a "bug." So I wouldn't call this a bug, but suit yourselves...

"In IT, a bug refers to an error, fault, or flaw in any computer program or a hardware system. A bug produces unexpected results or causes a system to behave unexpectedly. In short, it is any behavior or result that a program or system gets but it was not designed to do."

 

[ERD50]

The output text referring to ending balance is misstated or wrong it you prefer, I can see why the OP was questioning. Just looking at the chart results clearly shows the coding uses the lowest balance for the duration and not the ending balance as the text says.

"In IT, a bug refers to an error, fault, or flaw in any computer program or a hardware system. A bug produces unexpected results or causes a system to behave unexpectedly. In short, it is any behavior or result that a program or system gets but it was not designed to do."

A bug is a programming error that leads to erroneous results, a poor choice of words isn't a "bug." So I wouldn't call this a bug, but suit yourselves...

The results page is the output of the program. As was shown, it provides a result that matches the program generated wording in one case, and the result does not match the program generated wording in the other case.

It's all part of the program, so the unexpected result is a bug. By your definition, the following would not be a bug:

SCREEN SAYS: "Enter two numbers, I will multiply them."
YOU ENTER: 2, 2
SCREEN REPLIES: 2 times 2 is 4.

SCREEN SAYS: "Enter two numbers, I will multiply them."
YOU ENTER: 2, 4
SCREEN REPLIES: 2 times 4 is 6.

So is that not a bug? It just provided the sum, not the product. It was correct in one case, but not the other. So do I say the text is wrong, and it's not a bug? No way - to the program user, it's a bug!


Your line of thought would fit if the text was in a separate write up about the program, but it's not, it's an output of the program.

I should know, I've produced many, many program 'bugs' in my life!

-ERD50

 

[latexman]

The output text referring to ending balance is misstated or wrong it you prefer, I can see why the OP was questioning. Just looking at the chart results clearly shows the coding uses the lowest balance for the duration and not the ending balance as the text says.

A bug is a programming error that leads to erroneous results, a poor choice of words isn't a "bug." So I wouldn't call this a bug, but suit yourselves...

It seems if the lowest ending portfolio balance < starting balance, the lowest ending portfolio balance is reported correctly, but if the lowest ending portfolio balance > starting balance, the starting balance is reported in error as the lowest ending portfolio balance.

So, sometimes the text is right, and sometimes it's wrong. Sounds like an error in an IF statement to me, otherwise known as, a "bug".

 

[ERD50]

So, sometimes the text is right, and sometimes it's wrong. Sounds like an error in an IF statement to me, otherwise known as, a "bug".

Agreed.

The text never changes, so therefore the calculation is not correct in one case, making it a bug.

Or looking at it from the text POV, to correct this, the text would need to change to match the calculation. But that would require an "if statement", which would be a change to the program. If you have to change the program to fix it, it would be a bug, right?

-ERD50

 

[latexman]

Or looking at it from the text POV, to correct this, the text would need to change to match the calculation. But that would require an "if statement", which would be a change to the program. If you have to change the program to fix it, it would be a bug, right?-ERD50

Oh, absolutely.

 

[ERD50]

The output text referring to ending balance is misstated or wrong it you prefer, I can see why the OP was questioning. Just looking at the chart results clearly shows the coding uses the lowest balance for the duration and not the ending balance as the text says.

A bug is a programming error that leads to erroneous results, a poor choice of words isn't a "bug." So I wouldn't call this a bug, but suit yourselves...

I just glanced at this thread before closing the window, and I realized this statement from you is also incorrect.

Look at the example I provided in post #11 (link to data: https://tinyurl.com/22uuz9ra )

The portfolio in many cases clearly drops below the starting value of $1,000,000. So the bug is different than you describe - it uses the starting value in some cases, and the ending value in others. The only case where it reports the ending value as the lowest balance for the duration, is when the ending value is also the lowest balance for the duration.

If you want to see this even more clearly, use the same entries, but cut the time frame to 5 years and 2 years to zoom in. Then it shows the lowest point at year 2 to be $611,835. So if your statement was true, it would have reported something lower than $1,000,000. Got it?

I just thought that should be cleared up.

-ERD50