good firecalc %

[MichaelB]

I don't think anyone would expect that the next 30 years' ups and downs will be the same ones as we experienced in the last 30 years. This is why none of these calculators can credibly claim to be predictive. FireCalc does not.

From a career in science and engineering, my view is that attempting to assign a precise probability and then use it as if it were predictive is a classic garbage-in, gospel-out scenario. 100% is probably the same as 90% and maybe even the same as 80%. @MichaelB's experience illustrates. If I were to write one of these planners it would probably have three possible outputs: "Doesn't Look Good," "Pretty Marginal, be ready to adapt to immediate circumstances," and "Looks Pretty Good, but luck is always at the table." Really, for @MichaelB 85% is working out to be more like 100%, probably buoyed by the recent good market. For the next retiree, 100% may turn out to be more like 85% if the market gives them a bad dose of SORR.

Clint Eastwood/Dirty Harry's famous line pertains to retirement planning: "...you've got to ask yourself one question: 'Do I feel lucky?' Well, do you, punk?"

No one is suggesting FIRECalc is predictive. We all already know it’s not. It only shows how one's assumptions would have stood the test of time. My example shows that so far, I’ve hit a favorable period. My results are within the range of possible outcomes.

George Box said it best, “all models are wrong but some are useful”. If used as intended, FIRECalc can be useful.

 

[kongmen]

Thanks for all the replies.

 

[Midpack]

I’ve seen people pull here the trigger at 75% and others who need 200% to sleep at night (a nest egg 2X the 100% amount). But it also depends on much of your income is “secure” such as pensions, Soc Sec, annuities or other versus individuals with no secure income, living off investments entirely. You might want a higher success rate with less secure income.

And success rate doesn’t mean much if you pad your spending or longevity vs cutting them close…

 

[SecondCor521]

Huh? 1,200 years? That's not what I think a 97% success rate over 40 years implies in FIRECalc. If FC gave me a 97% success rate, I would take it to mean that there is roughly a 3% chance of portfolio failure over any given 40 year period going forward (assuming the future is like the past). And FIRECalc does take into account black swan events and other catastrophes, since it uses actual historical data from the world we've lived in over the past 100+ years. I don't get what "1,200 years" is supposed to mean in this context.

Yeah, I was about to write essentially the same. That sentence that Bernstein wrote and is quoted above makes absolutely zero sense to me. I think Bernstein, smart though he may be, made a mistake there; possibly because he thinks the absence of catastrophic events is too optimistic.

Personally I take a different view. The fact that we nearly blew the whole world up in 1962 but did not doesn't indicate anything to me about the probability that we will blow ourselves up at some point. That's a bit like extrapolating from the number of 7.0 earthquakes to determine the number of 7.5 earthquakes. The extrapolation could be reasonable or not depending - extrapolating linearly when the Richter scale is exponential is wrong, for example.

As for OP's question, I declared FIRE when I was at 95% success in FIREcalc. I quit about a year or two later when my job BS bucket filled up. By that time I was already at 100% in FIREcalc and in all the other calculators I could find.

 

[SecondCor521]

100% personally, though there is little difference if you shoot for the default of 95%.

Not that much difference in terms of success percentage, but a fairly large amount of difference in terms of the pile you have to amass to get from 95% to 100%. It turns out those few failures are pretty expensive to eliminate from your FIREcalc results. They also tend to be grouped in the 1960's.

For both those reasons (the price of "insuring" against the failures and the fact that they tended to be grouped), I chose to declare victory at 95%. The market has been kind enough to me to push me well over 100%, and my failure to realize that NPI (non-portfolio income) was a thing means that I'm doubly way over 100% now.

 

[PatrickA5]

We all like to see 100%.

Some even like to see 100%, not including SS, planning to age 100...

My guess is most people that run Firecalc planning to 95 will be fine with a lower than 100% because most likely they will be dead before then. But, there's always that chance, I guess, that everything will go wrong investment wise AND we end up living much longer than normal.

I've found that even relatively minor decreases in annual expenses had a pretty large increase in success rates. I think most of us could easily cut back if needed.

 

[corn18]

I decided to retire when we hit 90%. Engineered my layoff and got a very generous severance. So retired at 100%. Remember, you are managing the tiny orange slice in this chart:

You can work a long time eliminating all risk. Or hit the I believe button and get busy living.

 

[Koolau]

I decided to retire when we hit 90%. Engineered my layoff and got a very generous severance. So retired at 100%. Remember, you are managing the tiny orange slice in this chart:

You can work a long time eliminating all risk. Or hit the I believe button and get busy living.

That's a good graphic to put it into perspective. Someplace in most of our plans, we should be able to juggle something to keep us out of the red (broke) part of the curve. Maybe cut out a couple of nights out/month or dump one of the couple's cell plans. Back-ups should be part of every plan IMHO though YMMV.

 

[marko]

Just an observation but I'm really surprised at large number of 100%ers.

With 40 posts, the OP is obviously a new member and I'd hate to see him/her decide to NOT RE if a 95% (or even 80%) result came in.

Many have noted that FC is not 'gospel' but to me, an 80-85% is 'good to go' territory.

 

[Koolau]

Just an observation but I'm really surprised at large number of 100%ers.

With 40 posts, the OP is obviously a new member and I'd hate to see him/her decide to NOT RE if a 95% (or even 80%) result came in.

Many have noted that FC is not 'gospel' but to me, an 80-85% is 'good to go' territory.

Honestly, I used a bunch of other calculators before I FIRE'd. AFTER I ER'd, I calculated with FIRECalc and got 100%. Wild guess is that a lot of us didn't so much try for 100% as found ourselves AT 100% when we decided to FIRE. Just a SWAG so YMMV.

 

[braumeister]

I had been retired for 8 or 9 years before I ever heard about any retirement calculators. Just used basic calculations and decided I was OK. One of the first real calculators I found was FIRECalc, which led me here. Couldn't help but keep hanging around, since you all are such a wonderful resource for so many things.

 

[Vincenzo Corleone]

100%

I'll add - 100% without counting an expected pension, without counting social security, and without counting a likely inheritance. And knowing there are no guarantees.

 

[wmc1000]

Firecalc is a litmus test using historical data and as stated is no guarantee of success, but it is a worthwhile piece of data. I was comfortable with 95% but my score was 100%

I also took my current spending, escalated it for inflation and ran out how long it would last at 0% return (Yes I know it can be negative) and it lasted until 89.

I then played with reducing some discretionary spending that doesnt really effect my quality of life and was able to extend it to 97

That was all without having to sell my house which I could be in a nice place for half the value of my house and live off the other half for another 7 years (Plus pension and SS) if I had to

I used the historical test of Firecalc and some forward evaluations to decide I was ready.

All these together are a guess as there is no prediction that accurately has forward inflation and forward ROI. I could just as easily lose a chunk of my money and that is a risk. Or I could have to help my kids after a disaster.

My view is these tools and methods help you see you are not in a high risk position like a firecalc score of 50% would be high risk to me

This is the way I run it also. 15% inflation, 0% return, 25% SS haircut.

We would hit ZERO invested assets in about 25 years without selling the house and by that time we would be in our middle 90's so we sleep very well at night!

 

[GravitySucks]

My first iteration gave me an 80% or so success. I told my manager I was ready to go.

Now, years later, I think failure needs to be defined by the retiree. If things go south and I have to buy a off lease Kia Soul instead of a new Camry every 5 years is it a fail? If I don't go on a cruise at age 83 and 86 is it a fail? Even at the 80% success level most of those fail lines were passed a 20% chance I'm still alive date.

 

[FLSUnFIRE]

My threshold is to not run out of money.
My objective is to run out of things to buy BTD!



My fear is SORR since the bull has been raging since the 2008 crash (a few stumbles but overall it's been on fire) and inflation is rocketing to the highest it's been since I was a kid and didn't know what inflation was!

 

[exnavynuke]

95% or better is my goal. My FIRE plans include lots of "wiggle room" though.
For instance, my planned spending levels are equivalent to my current expenses despite knowing that I'll have paid off my car right before my currently planned FIRE point and that I'll pay off my house about 3-4 years into FIRE, meaning that about 50% of my mandatory spending (which is about 60% of my total spending) are things I can either add into spending above and beyond what I do now (more travel, increased charitable contributions etc.), or just use to reduce spending in the event of a bad SOR early into FIRE.

 

[SecondCor521]

I decided to retire when we hit 90%. Engineered my layoff and got a very generous severance. So retired at 100%. Remember, you are managing the tiny orange slice in this chart:

You can work a long time eliminating all risk. Or hit the I believe button and get busy living.

My orange/red sliver is nonexistent with my inputs. Even if it were there, I think the elephant in the room is the large gray ramp in the lower right. I have made a concerted effort to try to manage that curve.

Obviously there are unknowns there and probably not something we can completely eliminate for most of us in our lifetimes, but I have been working on healthy habits to improve things, like going to the gym frequently, going on walks, getting a good night's sleep, eating well, hydrating, addressing any health issues with my doctor, getting vaccinated and colonoscopy-screened and shingles etc., avoiding stress, and engaging my mind.

It sort of hit me when I was about 50 and ran the above tool and realized I had a 0.001% chance of being broke but a 20% chance of being dead at age 70.

 

[corn18]

I had been retired for 8 or 9 years before I ever heard about any retirement calculators. Just used basic calculations and decided I was OK. One of the first real calculators I found was FIRECalc, which led me here. Couldn't help but keep hanging around, since you all are such a wonderful resource for so many things.

It is amazing that anyone could have retired without having 10 different simulations to help them decide. Before I went nuts with modeling them all in my spreadsheet, I just used a straight 5% average return. Didn't even know the difference between real and nominal.

I went through a period where I started to think that I could control the outcome with proper analysis. If I refined the data enough, there is no chance the outcome could fall outside my limits. I've since given up on that. I go with what my wife says: even if we lost all of our money, we would be ok with our pension. That takes a lot of pressure off.

 

[Sunset]

100%, using the most conservative assumptions I can. For example, I consider my safe withdrawal number to be what FIRECalc spits out when I've set it for 100% success rate, no future inheritance, constant spending power (no Bernicke reductions starting at age 56), and no Social Security.

+ same here.

100% with some cushion factors, because CAT food tastes bad

 

[corn18]

My orange/red sliver is nonexistent with my inputs. Even if it were there, I think the elephant in the room is the large gray ramp in the lower right. I have made a concerted effort to try to manage that curve.

Obviously there are unknowns there and probably not something we can completely eliminate for most of us in our lifetimes, but I have been working on healthy habits to improve things, like going to the gym frequently, going on walks, getting a good night's sleep, eating well, hydrating, addressing any health issues with my doctor, getting vaccinated and colonoscopy-screened and shingles etc., avoiding stress, and engaging my mind.

It sort of hit me when I was about 50 and ran the above tool and realized I had a 0.001% chance of being broke but a 20% chance of being dead at age 70.

I have been encouraging my friend to take a long, hard look at the gray part, too. I know he has plenty of money to retire. He's stuck in OMY land. He had a heart issue a couple of weeks ago and now has a stint. He says he likes his job, but I know better. It is stressful. His planning isn't as granulated as mine, but he thinks he needs to plan for no SS and a 2% WR. He might die before he gets there.

Another friend truly loves his job. Thrives on it. He is in great health. He also has plenty enough to retire, but I don't bug him about retiring right now.

 

[COcheesehead]

Not that much difference in terms of success percentage, but a fairly large amount of difference in terms of the pile you have to amass to get from 95% to 100%. It turns out those few failures are pretty expensive to eliminate from your FIREcalc results. They also tend to be grouped in the 1960's.

For both those reasons (the price of "insuring" against the failures and the fact that they tended to be grouped), I chose to declare victory at 95%. The market has been kind enough to me to push me well over 100%, and my failure to realize that NPI (non-portfolio income) was a thing means that I'm doubly way over 100% now.

The amount of your portfolio is only one input. You can vary your allocation, spending, social security timing to also get to 100%.

 

[RetiredHappy]

I don't want to dismiss FIRECalc but I much prefer Fidelity Retirement planning tool as it allows me to put in my numbers in much greater detail. I tweek my inputs in Fidelity tool until the expenses are more closely matched to current and anticipated spendings. The assets value are updated automatically based on previous day's closing positions.

 

[GalaxyBoy]

I took Bernstein’s comparison of retirement success rate to the probability of the “end of the world” due to wars, economic collapse, etc. as simply an attempt to illustrate what 97% really means. Interesting intellectual exercise in any case.

But, I do think that fretting over the difference between 95% and 100%, or maybe even 85% and 100%, is measuring with a micrometer and cutting with an axe. Retirement calculators’ methodologies simply aren’t that precise. I built my confidence on running multiple calculators that used different methodologies and when they agreed on the answer - being that they all said I should be successful - I knew it was time to jump out of that perfectly good airplane and trust my parachute.

 

[COcheesehead]

I don't want to dismiss FIRECalc but I much prefer Fidelity Retirement planning tool as it allows me to put in my numbers in much greater detail. I tweek my inputs in Fidelity tool until the expenses are more closely matched to current and anticipated spendings. The assets value are updated automatically based on previous day's closing positions.

I agree. It’s more granular than Firecalc.

 

[ejman]

Huh? 1,200 years? That's not what I think a 97% success rate over 40 years implies in FIRECalc. If FC gave me a 97% success rate, I would take it to mean that there is roughly a 3% chance of portfolio failure over any given 40 year period going forward (assuming the future is like the past). And FIRECalc does take into account black swan events and other catastrophes, since it uses actual historical data from the world we've lived in over the past 100+ years. I don't get what "1,200 years" is supposed to mean in this context.

Me neither. I've read the Bernstein calculator from hell many times and I simply don't understand what the 40years/0.03 means. What does 1200 years have to do with anything? So if a retirement calculator shows 100% success rate then 40 years/0 = I'm good for an infinite number of years? Makes no sense. I think all a history based calculator can show is that if the future replicates the past then the % success means something. Otherwise, its just an educated (or not) WAG. Nobody knows what the future holds.