I'm Hereeeeee

[retirerob]

Hi all. Just joined ER to learn from you all. I'm 62 and the R word keeps coming up a lot; especially since my retired friends keep asking me when I'm cashing in my chips.

Been playing around with various calculators lately: T Row Rrice, Diversified, FireCalc, and Quicken Lifetime Planner. All of them say I can retire now. But I have some rookie questions. Be gentle if I ask questions asked before:

1) I seem to like the Quicken model best. It's more detailed in the data it requests. Others seem very vague - although after reading some posts here it seems like FireCalc is the favorite. Does anyone know of another one that asks the questions as Quicken does?

2) I understand that retirement caculators used either historical averages or this Monte Carlo thing and FireCalc uses actual market history. Anyone out there know what Quicken Lifetime Planner is based on?

 

[pb4uski]

I agree that the Quicken Lifetime Planner is very comprehensive and intuitive planner. It helped me think through everything and get my information together in a comprehensive way. However, QLP is what is called a deterministic planner. I'm not aware of any stochastic planners that are as easy to use or as intuitive as QLP.

QLP is limited since it is based on the input that your provide - so garbage in, garbage out. The two key assumptions are the investment return and the inflation rate. FWIW, I use what I consider to be conservative assumptions for these 5.5% and 3.0% (so a "real" return of 2.5%).

The 5.5% is from actual the historical return of a 60 stock/40 bond portfolio for 1926-2011 of 8.6%, reduced by 3.1% to be conservative and in case there really is a "new normal".

I then use Vanguard's Monte Carlo Planner, Firecalc and other stochastic tools to "stress test" the QLP deterministic plan using the same assumptions.

 

[retirerob]

I too played it very conservative in QFP:

- Inflation = 4%
- House appreciation = 2%
- Rate of return of investments = 0%
- Employer matched 401k = NO
- Expenses during retirement = to today while still working

One question - what should I used for Healtcare cost before Medicare (62, non smoker, on a 1-10 healthy scale - 8)

Thanks for the info. I'll try the Vanguard Planner and FireCalc also.

 

[Huston55]

Try Fidelity Retirement Income Planner. It has extensive ability to detail expenses, lots of 'what if' capability, and uses a MC function. I believe you can use a free version on line even if you don't have a Fido account. With a Fido account, it stores your data so you don't have to repeat entry.

 

[pb4uski]

I too played it very conservative in QFP:

- Inflation = 4%
- House appreciation = 2%
- Rate of return of investments = 0%
- Employer matched 401k = NO
- Expenses during retirement = to today while still working

One question - what should I used for Healtcare cost before Medicare (62, non smoker, on a 1-10 healthy scale - 8)

Thanks for the info. I'll try the Vanguard Planner and FireCalc also.

If QLP says you can retire using those conservative assumptions, you're all set. FWIW, I don't use any appreciation on the house - but I'm not planning on selling - ever.

On pre-Medicare health care, I got quotes for health insurance from a number of websites and used my COBRA premiums for budgeting purposes. As it turned out, my health insurance was significantly less than what I thought it would be. Beginning in 2014, I would use the US Berkeley calculator. National Health Care Calculator

 

[Live And Learn]

Try Fidelity Retirement Income Planner. It has extensive ability to detail expenses, lots of 'what if' capability, and uses a MC function. I believe you can use a free version on line even if you don't have a Fido account. With a Fido account, it stores your data so you don't have to repeat entry.

+1 on the Fidelity Retirement Income Planner. It uses Monte Carlo simulations and allows detailed year by year planning

Welcome to the forum!