How much do you trust online retirement calculators?

[medved]

I need a calculator that can tell me how long I am going to live and how much money my wife is going to want to spend, every year, for the rest of my life. But I don't think it exists. Oh, well; I guess we will just buy what we want, hope for the best, and see how it goes.

 

[motley]

I know some people have cars with $9k of repairs per year. BMW, cough, cough

At the risk of sidetracking, wow that's crazy, and surprising...BMWs have a good rep of being reliable.

 

[jollystomper]

I look at using multiple calculators and other sources to see how close the results are. I would never completely trust a single source by itself. When I contemplated retirement I used FireCalc, FRIP, the reports from the financial advisor paid for my Megacorp, and Financial Engines. My decision was based on their general consensus.

As mentioned above it is a good exercise just to understand what data and information one needs to think about for the aspects of retirement income and expense planning.

 

[Lorenzo]

How common is it to rely on calculations that assume Social Security is zero? I suppose it might depend on how far one is from being eligible to claim SS. When I was 30, I was in the camp that doubted whether the SS program as we know it would exist when I reached retirement age. But I'm 61 now. Is there any reason for me to consider excluding SS as an input from these calculators?

I get a result of a 77% success rate when I run FIREcalc with an assumption of SS being zero. I guess my savings are modest compared to some here. But when I include SS, I get a result of 100% regardless of what year I try claiming--even deferring to age 70. Why should I not rely on SS in my calculation?

 

[Koolau]

But only for 30 years.

Many folks around here are probably planning on longer retirements.

Agreed. I'm talking about the "finger in the wind" estimate, not a precise calculation. Someone sitting in a cube wondering if they might be able to retire can run the 4% rule on the back of an envelope and either feel a bit better ("hey, I can live on 4% of my savings") or ("I gotta get with the program and save more so I can get outta here ASAP.")

By the way, MOST stories I've seen suggest the 4% rule is TOO conservative. Most people can get away with a higher withdrawal rate - especially if they are willing to cut back during the "down turns." YMMV

 

[jollystomper]

How common is it to rely on calculations that assume Social Security is zero? I suppose it might depend on how far one is from being eligible to claim SS. When I was 30, I was in the camp that doubted whether the SS program as we know it would exist when I reached retirement age. But I'm 61 now. Is there any reason for me to consider excluding SS as an input from these calculators?

I get a result of a 77% success rate when I run FIREcalc with an assumption of SS being zero. I guess my savings are modest compared to some here. But when I include SS, I get a result of 100% regardless of what year I try claiming--even deferring to age 70. Why should I not rely on SS in my calculation?

Just my opinion SS will not go to zero. But since there is a projected reduction of about 23% around 2033 or 2034 (doing this from memory, folks feel free to correct me), if the current situations continues. It would be wise to factor that in to see what your projected numbers look like.

Some articles claim that baby boomers (1946-1964 births) would not see a cut, as changes would certainly happen before then to prevent an impact. But I am not a betting person .

 

[Lorenzo]

Some articles claim that baby boomers (1946-1964 births) would not see a cut, as changes would certainly happen before then to prevent an impact. But I am not a betting person .

Seems to me this entire retirement game is about betting. It's all probabilities. Unfortunately, legislative changes are more random than probabilistic.

 

[audreyh1]

At the risk of sidetracking, wow that's crazy, and surprising...BMWs have a good rep of being reliable.

Not so much in recent history.

We seriously considered getting a BMW around 2015 but didn’t even get around to test driving one. BMW had a nice long warranty period, included many important to us features, some in decent add on packages. Right after this they shortened the warranty period and moved many key features to higher end well-padded packages (lots of things we didn’t want). They also started requiring subscriptions for things like CarPlay. Also I started reading about extensive maintenance and high bills. Dropped off our list.

 

[Koolau]

Just my opinion SS will not go to zero. But since there is a projected reduction of about 23% around 2033 or 2034 (doing this from memory, folks feel free to correct me), if the current situations continues. It would be wise to factor that in to see what your projected numbers look like.

Some articles claim that baby boomers (1946-1964 births) would not see a cut, as changes would certainly happen before then to prevent an impact. But I am not a betting person .

My gut tells me that (given the political ramifications) someone will heroically save SS before a big hit takes place. Even if the 23% happens, that would not sink most pre-retirees plans for ER. If so, OMY might be a solution to the SS hit. YMMV

 

[audreyh1]

How common is it to rely on calculations that assume Social Security is zero? I suppose it might depend on how far one is from being eligible to claim SS. When I was 30, I was in the camp that doubted whether the SS program as we know it would exist when I reached retirement age. But I'm 61 now. Is there any reason for me to consider excluding SS as an input from these calculators?

I get a result of a 77% success rate when I run FIREcalc with an assumption of SS being zero. I guess my savings are modest compared to some here. But when I include SS, I get a result of 100% regardless of what year I try claiming--even deferring to age 70. Why should I not rely on SS in my calculation?

No, not for you at 61 IMO.

I think if you are closer in SS eligible age it makes sense to include it. If you are decades away using a low number might be better. I used 0% because I retired 3 decades before I expected to receive SS and like you the whole situation looked so murky back then. If you retire quite early it’s a good idea to be very pessimistic about future income streams.

 

[Joseph]

I agree. I have used multiple calculators. Personally, for me at an elementary level, it's about cashflows (cash inflows and cash outflows). Meaning what is my projected spending in retirement (outflows) and what guaranteed income sources (inflows) I have coming in. Then I determine what that gap is and whether I have enough retirement portfolio assets to fund the gap for x number of years based on a conversative rate of return on my portfolio assets. Also, I am using a 2.5% inflation rate on my expenses (outflows). The RightCapital retirement planning software has a great Cashflow module that makes this very easy to visualize.

 

[Joseph]

I have tweaked Fidelity inflation rate by using more medical expenses (4.9% inflation rate) and less discretionary expenses
(2.5%). Gives me a more conservative ( for me) 3.2% inflation rate. I also omit around 7% of our portfolio since market is at a peak. Hopefully pleasantly surprised down the road.

 

[Joseph]

How common is it to rely on calculations that assume Social Security is zero? I suppose it might depend on how far one is from being eligible to claim SS. When I was 30, I was in the camp that doubted whether the SS program as we know it would exist when I reached retirement age. But I'm 61 now. Is there any reason for me to consider excluding SS as an input from these calculators?

I get a result of a 77% success rate when I run FIREcalc with an assumption of SS being zero. I guess my savings are modest compared to some here. But when I include SS, I get a result of 100% regardless of what year I try claiming--even deferring to age 70. Why should I not rely on SS in my calculation?

 

[Joseph]

SS being zero is crazy conservative. It’s gonna be there, maybe only 80% and maybe means tested. Hopefully that means testing isn’t under 100k income when retired. Because while somewhat comfortable, sure eliminates a big chunk of vacation fund.

 

[Joseph]

Just my opinion SS will not go to zero. But since there is a projected reduction of about 23% around 2033 or 2034 (doing this from memory, folks feel free to correct me), if the current situations continues. It would be wise to factor that in to see what your projected numbers look like.

Some articles claim that baby boomers (1946-1964 births) would not see a cut, as changes would certainly happen before then to prevent an impact. But I am not a betting person .

It makes sense anyone over around 50 shouldn’t see a cut. Not much time to plan. They may see higher taxes to close the gap though. Gotta assume that 85% taxable is gonna be 100%. Low hanging fruit for the actuaries

 

[JoeWras]

At the risk of sidetracking, wow that's crazy, and surprising...BMWs have a good rep of being reliable.

I apologize about the side track. Until a few weeks ago, I was spending too much time on reddit, especially in r/justrolledintotheshop and r/askamechanic. (I've since turned it off since politics have run wild on every subreddit -- bots at work.) In general, as described by these subs, BMWs are very good for say 5 years, 60k miles. Just trade it at that point. After that, they tend to have very difficult problems that cost multiple thousands to fix. Problems like "Replace entire wiring harness" which is about a $2k repair. However, it isn't just BMW. A bunch of mechanics countered with their pictures of Jeeps entirely taken apart to replace wiring harnesses in the first 10k miles. There's a reason that Stellantis vehicles now are overflowing on dealer lots.

But I'm digressing. Back to the topic. I think it is important to track vehicle cost in the scheme of things. Having years of data is really helpful. And having cars that don't require major repairs is a big help. It is also kind of amazing to see the two of us spent $43k in fuel over 24 years. Wow!

I'm thinking ahead to when we potentially get an EV. I'm not sure how I will track electricity cost, except maybe to look at the "delta" over a 12 month period once we buy the EV.

Anyone tracking EV electrical consumption?

 

[audreyh1]

I'm thinking ahead to when we potentially get an EV. I'm not sure how I will track electricity cost, except maybe to look at the "delta" over a 12 month period once we buy the EV.

Anyone tracking EV electrical consumption?

Sure, the Tesla app does it for me. Even broken down between home charging, supercharger charging and “other” - the occasional hotel use. It uses the $0.15 per kWh I gave it. I can see all the details by day in a month, or by month in a year, etc.

Also my supercharger use (only used during long trips) comes into Quicken as EV charging expense category.

But I haven’t broken out the at home EV charging into Quicken because it’s not high compared to our regular home electricity consumption and much lower than what our big motorhome used to pull during hot summer months. Maybe $10-20 a month.

 

[pb4uski]

...Why should I not rely on SS in my calculation?

You should rely on SS... at least what the SS Trustees indicate. IMO it is ignorant to assume that SS will be zero because SS taxes on current workers will provide substantial benefits even if no changes are made.

 

[bonvoyage]

In the paid tier, I recommend the Pralana Retirement Calculator, it's similar to RPM in that calculates the details of the tax laws, but it closes some of the gaps that RPM has. Pralana handles a wide variety of accounts, income streams, expense streams, withdrawal strategies, withdrawal order, etc. It has all three types of analyses - projection, historical and Monte Carlo. A strength vs. most competitors is that it allows you to hold different allocations in different types of accounts. While it does not address estate planning, it is a "powerful planning tool". There are actually some advisors that use it. The online version has been in beta for a while and they have now opened it up for existing customers (of the spreadsheet version) and I think new customers can get in on it too. Like any tool that is going to look at the details, you have to be prepared to input the details and learn the tool.

I can also recommend Pralana. This retirement calculator used to be distributed as an Excel app but they are now in the process of reimplementing it as a web based app. It costs about $109 per year and is well worth the cost. When I ran into problems, the author of the tool was kind enough to give me guidance.

 

[Lorenzo]

Has anyone used ProjectionLab?

 

[big-papa]

You should rely on SS... at least what the SS Trustees indicate. IMO it is ignorant to assume that SS will be zero because SS taxes on current workers will provide substantial benefits even if no changes are made.

Exactly. I know of more than one high income person who thinks in terms of ignoring it. I can see planning for a haircut per the SS Trustees annual press releases of ability to fund projected benefits (this is what I do), but not ignoring it altogether.

Cheers.

 

[Montecfo]

Well I guess my little disclosure generated some interest and even a little name-calling, haha. Oh well.

Just to be clear, I currently assume SS will be there when I am ready to claim. But going way way back to when I was a young tyke dreaming of retiring early, I assumed any SS would just be gravy. I did not know how long I would work, but knew I would not have a pension. So personal saving and investing were key. And so it was not in my base planning case until say around 50, when I began to view it as longevity insurance. I still do.

I never suggested anyone make the SS=O assumption currently as that seems too conservative right now.

I also do not currently think SS will take a haircut. I think it will be saved as has happened in the past.

The larger point is if your assumptions are conservative you should have a large margin of safety and less need for retirement calculators (but a spreadsheet is helpful).

 

[Montecfo]

On BMWs I have owned many, currently have two. I have not found them to be troublesome or expensive to repair but they can be. My two are 21 and 13 years old so.plenty of time for things to go wrong.

But there is a lot more to go wrong with the newer cars, whether infotainment, twin turbo engines or what have you.

Like investments I find you have to do your research and know what you are buying.

 

[Unpaintedhuffhines]

I view the online calculators for what they are - just models with different twists. I look at a variety of them, and it always makes me feel comfortable that they always say "yep, you good."

But I also realize that they will all be wrong, we just don't know how wrong or which way. I am comforted by the fact I don't need all my money right now, just the bit that gets me through the next month/quarter/year.

 

[Ronstar]

The only online calculator I have ever used is Firecalc on this site. Once a long time ago. Quite comprehensive and the results made sense. Since then I've relied mainly on my own calculations and common sense.