good firecalc %

[Dtail]

Discovery of Firecalc, Fidelity and a few other retirement calculators allowed me to feel comfortable in retiring at 57.
I did shoot for a score of 100 in Fidelity at the Significantly Below Average module, plus 100% in Firecalc.
However I do use a true expense budget with no artificial fluff in the numbers, plus using SS with no haircut, so 100% was important to me, as am partially dependent on the portfolio throughout retirement.

 

[Koolau]

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.

No criticism implied but I wonder what value there is in a more or less "constant" update to figures once you are retired (or even before.) If something were to change in my financial life, I would consider rerunning FIRECalc. Otherwise, I just sort of watch the world go by, safe in the knowledge that my stash is good unless there is a black swan event. YMMV of course.

 

[youbet]

Just remember firecalc uses historical returns; nobody knows what will happen in the future.

There is no so-called "retirement calculator" that gets around the problem of not knowing what will happen in the future. It's not just a FireCalc issue.

To some extent or another, all the calculators suffer from the "measure with a micrometer and cut with an axe" syndrome. However you test your plan, be aware that there will be high levels of variability in the possible outcomes of each set of inputs and there isn't much you can do about it. Our world isn't a "steady as she goes" kind of place!

Excessive input detail and assumed hyper-accuracy of inputs just isn't justified or needed. Living life being resourceful and flexible is.

 

[Koolau]

There is no so-called "retirement calculator" that gets around the problem of not knowing what will happen in the future. It's not just a FireCalc issue.

To some extent or another, all the calculators suffer from the "measure with a micrometer and cut with an axe" syndrome. However you test your plan, be aware that there will be high levels of variability in the possible outcomes of each set of inputs and there isn't much you can do about it.

Totally agree. There are so many black swans waiting in the wings. Crazy rare events from asteroid strikes to another pandemic - or just a currency crisis could change everything. Creating some back ups to our financial plans makes sense no matter whether we're at FIRECalc 80% or 100%. YMMV

 

[Delawaredave5]

Not sure there's much difference between 100% vs 95% vs 90% probabilities.

What concerns me more is "what does the past know about the future" ?

Firecalc is a US equities model - maybe that's appropriate since we're concerned about covering US pension expenses.

Blows my mind that US is 5% of worlds population yet over 50% of stock market capitalization. Suppose that distortion is result of the "American century"

As innovative and unique USA is, gotta be some mean reversion coming. If so, does that affect, improve, reduce Firecalc SWR predictions ?

https://www.statista.com/statistics/710680/global-stock-markets-by-country/

 

[RetiredHappy]

No criticism implied but I wonder what value there is in a more or less "constant" update to figures once you are retired (or even before.) If something were to change in my financial life, I would consider rerunning FIRECalc. Otherwise, I just sort of watch the world go by, safe in the knowledge that my stash is good unless there is a black swan event. YMMV of course.

I go back and tweak Fidelity tool when I realize that my actual spending is not what I had input into the tool. The goal is to get more accurate expenditure into the tool. We are definitely at 100% success regardless of whether I go back and update the numbers or not. Just like I update my own Excel spreadsheet at least 4 to 5 times a week, I enjoy working with numbers. It is more of a hobby for me than a concern.

 

[tb001]

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 find this confusing. Are you using the manual spend feature of firecalc?

The only upsides I see to the fidelity calculator are the ability to run a Monte Carlo simulation and the way it uses different inflation rates on specific items (eg healthcare).

I found the fidelity planner very useful for flagging expense areas I might have missed, but for us, any expense tweaking comes from my spreadsheets and actual spending. I much prefer a historical perspective on success rates vs a black box approach. In firecalc, I know exactly where our failure points would be historically if we overspend.

 

[RetiredHappy]

I find this confusing. Are you using the manual spend feature of firecalc?

The only upsides I see to the fidelity calculator are the ability to run a Monte Carlo simulation and the way it uses different inflation rates on specific items (eg healthcare).

I found the fidelity planner very useful for flagging expense areas I might have missed, but for us, any expense tweaking comes from my spreadsheets and actual spending. I much prefer a historical perspective on success rates vs a black box approach. In firecalc, I know exactly where our failure points would be historically if we overspend.

Yes, I use "Other income/spending" in FIRECalc. There is start date and no end date. There are only 3 lines. FIRECalc does not meet my needs. With Fidelity, I have probably input at least 50 different types of spending, starting and ending with various dates, lifespan for both of us / spending periods, term annuities start and end dates. Every few years one-time new car payment and so on and so forth.

 

[corn18]

Yes, I use "Other income/spending" in FIRECalc. There is start date and no end date. There are only 3 lines. FIRECalc does not meet my needs. With Fidelity, I have probably input at least 50 different types of spending, starting and ending with various dates, lifespan for both of us / spending periods, term annuities start and end dates. Every few years one-time new car payment and so on and so forth.

This is why I incorporated Firecalc into my spreadsheet. I have way too many moving parts for Firecalc to handle easily. I also incorporated a Monte Carlo sim and VPW. And a full tax treatment. Now I can easily see the impact of many variables on each model without having to enter a bunch of data on multiple sites.

The graph below is the output of all of that. This particular graph is me looking at spending like crazy. I always have the worst case for firecalc plotted. I also always plot the line I used to decide to retire (dotted green). And the current line for our actual plan (smaller green line). Then I just play around with inputs to see how that impacts our plan.

 

[tb001]

Yes, I use "Other income/spending" in FIRECalc. There is start date and no end date. There are only 3 lines. FIRECalc does not meet my needs. With Fidelity, I have probably input at least 50 different types of spending, starting and ending with various dates, lifespan for both of us / spending periods, term annuities start and end dates. Every few years one-time new car payment and so on and so forth.

The other income/spend is different than the manual spending feature. The latter requires a donation to firecalc but has much more flexibility. Our spend is likely to be extremely dynamic, as we have young children and the accompanying lifestyle changes. I have a spreadsheet that tracks and predicts our spend and simply enter the total in the manual spend field. Having the sheet be a separate entity allows me to more easily adapt it and use it as a budget. The other upside is I am in control of projecting my own taxes, which are dramatically different from Fidelity's standardized predictions. I think both tools have their strengths, but I like the manual spend feature of firecalc much better than the process you have to go through for fidelity.

 

[marko]

No criticism implied but I wonder what value there is in a more or less "constant" update to figures once you are retired (or even before.) If something were to change in my financial life, I would consider rerunning FIRECalc.

+1 Also, NONE of the RE Calculators are able to predict down to the penny (or even $10K) plus or minus. They do predict of course, but will likely be wrong.

They're all 'windage' predictors IMO and if you're cutting it so close that daily changes to your portfolio make a difference, maybe you need to rethink the whole idea.

Plus, once you are fully RE'd and things change, you're unlikely to go out and find a new job at age 78 or so. You just can't say "Today I have enough money to last until I'm 92" and then the next day "I'm good until I'm 105".

Sixteen years ago when I RE'd, FireCalc gave me a great degree of comfort but was far more pessimistic in where I'd be financially today.

 

[kgtest]

90 to 100% would be fine for me. My grandma retired on just a social security check and she turned out just fine.

I will be better off than her so I wouldn't stress or fret 90% success vs 100%. Its all largely successful. If it was in the 70 to 80 percentile I would probably be worried.

 

[Dtail]

I go back and tweak Fidelity tool when I realize that my actual spending is not what I had input into the tool. The goal is to get more accurate expenditure into the tool. We are definitely at 100% success regardless of whether I go back and update the numbers or not. Just like I update my own Excel spreadsheet at least 4 to 5 times a week, I enjoy working with numbers. It is more of a hobby for me than a concern.

Same here. Love playing with the numbers.

 

[youbet]

+1 Also, NONE of the RE Calculators are able to predict down to the penny (or even $10K) plus or minus. They do predict of course, but will likely be wrong.

Actually FireCalc does not predict. The author goes out of his way to emphasize that.

 

[youbet]

Sixteen years ago when I RE'd, FireCalc gave me a great degree of comfort but was far more pessimistic in where I'd be financially today.

That's interesting and it seems that things can vary. I also retired 16 years ago and my current FIRE portfolio level is within the bounds FireCalc showed for 16 years into a 30 year retirement.

Are you looking at some single value or the range of values (the output of each run) for the 16th year?

 

[MichaelB]

Sixteen years ago when I RE'd, FireCalc gave me a great degree of comfort but was far more pessimistic in where I'd be financially today.

Does this mean your situation is outside of the range that FIRECalc projected when you ran it, or does this mean you’re within the range of possible outcomes, but one of the more positive possibilities?

I know in my case I have enjoyed above average returns, so despite my bad investing and reckless spending we’re in good shape. One other factor that contributes to the 100% I see today is I am considerably closer to the end date.

 

[calmloki]

90 to 100% would be fine for me. My grandma retired on just a social security check and she turned out just fine.

I will be better off than her so I wouldn't stress or fret 90% success vs 100%. Its all largely successful. If it was in the 70 to 80 percentile I would probably be worried.

I knew somebody that retired with a 75% success rate and they died!


I knew somebody who retired with a solid 100% success rate predicted.



They died too.

 

[dtbach]

I'd take 90 to 95%. Turns out I can easily get to 100% depending on how many cruises or diving trips I want to take each year.

 

[marko]

Actually FireCalc does not predict. The author goes out of his way to emphasize that.

Sure. What I was referring to was that FireCalc says "you will end up with $x or -$z with an average of $y.

Does this mean your situation is outside of the range that FIRECalc projected when you ran it, or does this mean you’re within the range of possible outcomes, but one of the more positive possibilities?
.

When I first ran FireCalc it offered a "spending level" of $X; my spending level today (for fun, still based on a 35 year horizon...same as I did 16 years ago) is notably higher than that due to a considerably higher portfolio balance. Plus I overspent the recommended amount significantly and still do.

Now, my interpretation of my options (now and back then) maybe have been skewed due to any number of things so my post way above might be misinterpreted, inconclusive or outright wrong!

Long time readers here know that my posts can often be unclear and my thinking even more so.

 

[youbet]

I knew somebody that retired with a 75% success rate and they died!


I knew somebody who retired with a solid 100% success rate predicted.



They died too.

I know a guy who smoked a pack of Lucky Strikes everyday and died. He stepped on a landmine in 'Nam.........

 

[youbet]

Sure. What I was referring to was that FireCalc says "you will end up with $x or -$z with an average of $y.

Not exactly......

FireCalc says The lowest and highest portfolio balance at the end of your retirement was $X to $Y, with an average at the end of $Z That's a little different. It's saying you inputted some numbers and assumptions and it back-tested those numbers using investment return and inflation data for a series of years. FireCalc creates a distribution using the annual ending numbers for each beginning year and tells you what X-bar, the low and the high are. That's all. No predictions. Just a test of your inputs vs. historical investment return and inflation data.

If you lived the past 16 years as you told FireCalc you would, I'm better your current portfolio level is within the low to high range FireCalc calculated using the historical data. Nothing has happened so far that historical data wouldn't account for.

If you're like many of us here, you focus on the low value when testing your plan. When we do that, we shouldn't be surprised when, after a number of years, our actual is higher. We also shouldn't be surprised that the outcomes vary so widely. You wind up broke or flush with money or somewhere between and there isn't a hell of a lot you can do about it.

Long time readers here know that my posts can often be unclear and my thinking even more so.

And we appreciate that!

 

[Retch The Grate]

If you're like many of us here, you focus on the low value when testing your plan. When we do that, we shouldn't be surprised when, after a number of years, our actual is higher. We also shouldn't be surprised that the outcomes vary so widely. You wind up broke or flush with money or somewhere between and there isn't a hell of a lot you can do about it.

That's why I'm planning to withdraw at 3%, resetting to a new amount whenever I hit a new high. Should remain as close to safe as I can, while capturing as much of the portfolio growth as possible into potential spending to enjoy. Going to do my best to reduce the super flush with money outcome and instead get to enjoy it, while still satisfying my paranoia about wanting FireCalc to give me 100% success.

 

[Koolau]

I go back and tweak Fidelity tool when I realize that my actual spending is not what I had input into the tool. The goal is to get more accurate expenditure into the tool. We are definitely at 100% success regardless of whether I go back and update the numbers or not. Just like I update my own Excel spreadsheet at least 4 to 5 times a week, I enjoy working with numbers. It is more of a hobby for me than a concern.

I get that. Before I was FI, I actually got into the habit of checking my numbers EVERY day (at w*rk). Once I crossed that magic threshold to FI (primarily when my pension/health-insurance-supplement vested at Megacorp) I found less interest in checking the numbers. Right around the time I FIREd I had another flurry of OCD-like calculating and projecting. Once FIREd I just sort of lost interest in the details. I'll check my NW a couple of times a year (or if I see a big change) and check my WDR a few times a year - just because. After 16 years, I think I'm good, black swans being the one caveat.

Enjoy your hobby. It is good to reinforce your blessings. Every time I do check my status, I give thanks that I've been so blessed. YMMV

 

[corn18]

I will add that while 80% sounds ok, it is quite sobering to see it on a spending plan. That red dotted line is the worst case for this scenario per historical returns. The overall plan is 80%.

 

[dheb]

In FIREcalc my plan comes up at 100%. I like knowing that as long as economic conditions in the future aren't worse than anything we've ever seen before, I should be OK. That's part of what prompted me to plan retiring later this year in my mid-50s; instead of working 5 or 6 years more. (My thinking was 'I already have enough to spend more annually than I'm currently spending, past my life expectancy, so why would I work longer just so I can die with more money in the bank?')

I also gave myself a bit of FIREcalc wiggle room. I could spend $1000/month more than I've budgeted and I'm still at 100%. I assume I might live to 102 (and if so, I should still have money left) -- but I'll probably die before the age of 102. And I didn't factor in additional income from a part-time job, etc.

I realize that I've set up a budget where, on average, my inflation-adjusted savings are likely to increase over time. If all goes fairly smoothly in the early years of my retirement, I'll reassess my overall picture and decide whether it makes sense to increase my spending or to draw some money off for toys or fun. If my plan is running anything close to the average or above average FIREcalc scenarios, there's going to be extra room in my budget. I'd rather use some of that to live as well as I can than to spend more conservatively than necessary and die with a bigger bank account.