FireCalc Success Rate?

[mickeyd]

Since all estimates of this kind rely on math and our real-life events and financial returns rely on historical data relative to our own accounts, this entire process is no more than a guess. We should never assume that any financial projection will actually mirror our own results.


A good guess is worth calculating.

 

[FREE866]

Love all these comments. I'm still hesitant to say I'm "retired" , but my last day of work was January 6th. FIRECALC has me at a 97.1% success rate and if market goes down 20% tomorrow it goes to 94.1% so I feel pretty comfortable, but I didn't input crazy expenses so I don't feel like I have a huge buffer. Here is what concerns me---******** has me at 91% success rate , but it goes to 75% with a 20% market drop.

Edit:Schwab has me at 94% success rate and 82% success rate if market drops 20%

 

[W2R]

I sometimes use 95% in FIRECalc, sometimes 100%. I don't think I ever seriously looked at percentages of 90% or below. My risk tolerance is pretty low.

 

[USGrant1962]

One consideration here is what fraction of your retirement income stream is annuitized? If you have substantial SS, pension(s), and annuities you are in better shape variance-wise than someone drawing 100% off of a portfolio - so you could more comfortably go with a lower success rate. You would have a floor of income giving you a little more leeway on your portfolio draw. But do keep inflation in mind.

In my case I only have SS* so I target 100%, primarily to have a cushion for the next bear market. If that bear pushes me into the 90-something percent band I'm good with it. Like others, I'm a little leery of the current stock and bond market valuations.

*P.S., I know the arguments for annuities but can't see locking in today's low rates for decades; maybe later.