Looking Back ... Were the projections right?

[Steelart99]

So, for those of you that have ER'd. If you look back, can you say "Firecalc was right!!!" ... or are the many regrets? What other retirement estimators have given the "best" projections? Firecalc is telling me I can be "okay" in the next year or two, but I have the usual fears.

 

[REWahoo]

One can never be 100% sure what FIRECalc tells them about the past will work in the future. And no one will know with certainty if their plan works until they are dead - unless it fails before you do.

But in response to one your questions, absolutely no regrets. I'm 8+ years into retirement and FIRECalc was right - at least so far.

I posted this graph a few months back showing my personal experience (black line) vs. the three example retirees shown on the first page of FIRECalc. Note I retired in 2005 and had the honor of experiencing the 2008/2009 'market unpleasantness' shortly after giving up a fat monthly paycheck.

Had I succumbed to the daily dose of fear and loathing broadcast by the financial media at the time, that black line would look much different. My point: a critical factor in having FIRECalc projections be 'right' (not running out of money) is how you manage both your spending and your portfolio once you retire.

 

[Koolau]

The way you phrase the question makes it difficult for me to answer, but here goes. I used Firecalc as a "go-no-go" (decision point) calculation. It said I was in great shape, so when the time came that I wanted out, I had little hesitation. What I did NOT do was plan on taking the exact withdrawal rate I had used to "plan" for retirement. IOW, I used Firecalc to plan. I use my gut to actually live my retirement (keeping in mind the general rules that Firecalc came up with). So, for instance, if FIrecalc said I could take 3.85% (adjusted for inflation) I never worried about taking 4.5% one year (with heavy expenses) nor did I ever slavishly extract exactly 3.85% from my stash. I've played it by ear (gut) and my stash is bigger than it was when I retired 8 years ago. I hope this helps, but I maintain (and some will disagree) that FIrecalc is MORE about planning for retirement than it is about actually withdrawing a specific amount once retired. Flexibility is key. If you are "on the edge" (Firecalc says you can withdraw $3,000mo and you need 2,995/mo) I suggest you use your best judgement to decide if now is a good time to retire. For me, it would not be. Still, if you could actually "live" on $2400 instead, you are probably in great shape - with the caveat that Firecalc does not predict the future. It only reflects the past. SO..... YMMV

 

[MichaelB]

We're doing fine after 12 years. I have to estimate FIRECalc for my retire decision because I wasn't aware of it and our records for back then are a bit spotty, but it had us a bit over 80%. After two recessions and 12 years of roller coaster stock market volatility, we're in the 90's.

Had I succumbed to the daily dose of fear and loathing broadcast by the financial media at the time, that black line would look much different. My point: a critical factor in having FIRECalc projections be 'right' (not running out of money) is how you manage both your spending and your portfolio once you retire.

You will be hard pressed to find wiser words than these, here or elsewhere.

 

[W2R]

So, for those of you that have ER'd. If you look back, can you say "Firecalc was right!!!" ... or are the many regrets? What other retirement estimators have given the "best" projections? Firecalc is telling me I can be "okay" in the next year or two, but I have the usual fears.

This is my fourth year of retirement. I regret nothing whatsoever.

FIRECalc is very good, but for me it was just a tool and one of many that I used in figuring out if I was financially ready to retire. I could never just close my eyes and take that leap based on only one online retirement calculator, no matter how good. It's my life, and I am responsible for it and for taking care of myself. So, I looked at all the calculators I could find, read articles, constantly crunched numbers in my spreadsheet, and did everything else I could think of.

BTW I am very cautious (a "worrywart" from birth!) and never considered spending as much as FIRECalc said I could spend. I guess I spend about half as much.

The retirement estimate that gave the "best" projections was my own spreadsheet and number crunching, although understandably my nestegg has grown a lot more than I projected. On the other hand, the market has been doing quite well lately.

 

[pb4uski]

+1 I'm only 18 months in and because the investment results over the last 18 months have been so exceptional, my nestegg is ~17% higher than what I projected it would be at this point when I retired. We had a high success rate when we retired and it is obviously much higher now due to more assets and a slightly shorter time horizon (to age 100).

 

[rbmrtn]

So, for those of you that have ER'd. If you look back, can you say "Firecalc was right!!!" ... or are the many regrets? What other retirement estimators have given the "best" projections? Firecalc is telling me I can be "okay" in the next year or two, but I have the usual fears.

I don't know that firecalc can tell you that, it doesn't really make predictions about the future. What it is showing you is that with a certain mix of assets, based on past performance this is how it would done over various segments of time and maintain your desired withdraw rate. So basically you are using it to model your situation to survive the worst situations of known history, but it would not have predicted the 2008 meltdown.

 

[Steelart99]

Whew ... always all the caveats ...
Yeah I understand that FireCalc is for "planning"; so I guess my question is really along the lines of the answers I've been getting, i.e., having used the general "guidance" of Firecalc, was the decision to retire working out now.

As others here, I'm a worry wart and tend to make my own planning charts, graphs and projections. That said, I don't always trust my own "calculations", nor am I sure that I've covered all the bases. So, I'd still like to hear if there are any other retirement calculators that seem to be the "best" ones for projecting forward. Yeah ... I've done the searches, found the calculators, but don't really find the "opinions" of others associated with them. I've liked the concept of FireCalc the best so far.

 

[jclarksnakes]

I retired 47 months ago at age 56. My only regret is that I did not retire much earlier. DW enjoyed her job and is also more cautious than I am so she only recently retired. Firecalc said we were fine to retire years ago and using it and several other retirement calculators made my decision to retire an easy one. It is certainly too soon to tell for sure but it looks like Firecalc and those other calculators predictions will prove to be right.

 

[ERD50]

So, for those of you that have ER'd. If you look back, can you say "Firecalc was right!!!" ... or are the many regrets? What other retirement estimators have given the "best" projections? Firecalc is telling me I can be "okay" in the next year or two, but I have the usual fears.

Great comments so far - I'll just add that if you go for a 100% success rate in FC for as long as you expect to live, it tells you that would succeed even if you retired at the very worst times to retire.

And the very worst times to retire, historically, are right at market peaks. Peaks are followed by declines. So, if you aren't retiring right at a market peak, you are getting a little added buffer in there. But even if you do, you would have been safe in those past scenarios.

Our future's unclear, but if it is no worse that the worst of the past, we should be OK.

-ERD50

 

[GrayHare]

Isn't it too soon to know? How long has Firecalc been around? Even if its results were far off, a firee's problems would likely not begin showing until many years had elapsed.

 

[REWahoo]

Isn't it too soon to know? How long has Firecalc been around? Even if its results were far off, a firee's problems would likely not begin showing until many years had elapsed.

FIRECalc went online in June of 2002: http://www.early-retirement.org/forums/f32/the-history-of-early-retirement-org-53657.html

 

[Bikerdude]

I retired before FireCalc (2000) however, I used this, https://en.wikipedia.org/wiki/Trinity_study to determine how well I might fare. so far, so good. As others have said you need to be flexible.

 

[shasta]

My start date was 8/6 and already I'm down around 20k in value hangin tough

 

[Steelart99]

OUCH ... brutal start!

 

[imoldernu]

Retired in 1989, a little before FIRECALC, but spent more hours than I'd like to admit in working out many dozen large green spreadsheets with various scenarios.
I think it was a different point in time, as our actual plan was not really based on "investments" per se, as our very conservative plan was income from Money Market Funds, Saving Bonds, and buying/selling houses during the value run up.
It was only recently that I found the folders of planning, and found that we are within $10,000 to the good from where we planned to be at this age. It wasn't at all like the detailed planning, as it was based on a ROR of about 6% and inflation of 3%... and specifics about buying cars and houses and travel and like that... but it worked out quite well, and leaves us with a 95% success rate in FIRECALC for about 5 more years than we originally planned.

I'm sure we could have done better in investing, but DW and I agreed that money was not going to be as important as safety, and so we LBYM and sleep well at night.

I don't think this approach would work in today's environment.

 

[Bikerdude]

OUCH ... brutal start!

Heck, I started March of 2000. This is a piece of cake .....so far.

 

[shasta]

Yeah its only a small small % drop.

I personally wouldn't even considering rating my experience till next years rebalance.

 

[justthink]

i joined the club 10 weeks ago and have no regrets. have been down 60,000 and up 12,000 but know long term i will be fine. i absolutely LOVE monday mornings.

 

[heyyou]

Been retired for 8 years. So far, retirement has been the happiest, most carefree years of my life.

Was the OP asking something about the financial aspects of retirement? Was I supposed to track something? If there is too much left in the checking account at the end of the month, we try to spend it. That's how we are managing our retirement income. Same as those work decades, we just live within our means.

During the last years of working, we practiced living on our retirement income, so there has been no change in the level of our spending.

 

[Moemg]

My start date was 8/6 and already I'm down around 20k in value hangin tough

I retired January 2008 and almost immediately lost over 30% of my stash so 20K is a walk in the park . I cut expenses and despite one stupid move I have fully recovered and then some .

 

[Steelart99]

I like the idea of living on your retirement income for a year or two. Except for the mortgage (and large extra principal payments). DW and I largely do that ... we are not extravegant people. But I really need to formalize the exact budget and get DW on board with it.

 

[arky]

I like the idea of living on your retirement income for a year or two. Except for the mortgage (and large extra principal payments). DW and I largely do that ... we are not extravegant people. But I really need to formalize the exact budget and get DW on board with it.

Keep track of all expenses for at least two years. I also retired in Jan 2008 but took only a 17 % hit the first year due to my AA. Since I had tracked expenses for about 4 years prior to retiring, I knew what to expect and therefore lived off less than a 2% WR. Things have recovered nicely, but I am still living with a less than 2% WR (and that is without a formal budget!).

 

[Steelart99]

I'd like to ER in about 1-2 years at age 55-56 at which point we should have about $650K (401k, IRA) plus $100K real estate and $220K home equity. At that age, I could take early withdraw from my 401K. At 58+, I could also start using 2 non-COLA pensions although I'd like to postpone those some to get a somewhat higher rate. My DW is 8 years younger, and also has a non-COLA pension that is at minimum of 10 years away. What is really driving us is trying to get our mortgage paid off to minimize our post-ER expenses. We pay triple principal now and have some real estate we could sell in a couple of years to put towards that goal.

So, my various FireCalc (and other program) calculations keep putting me at being marginal based on what I expect our yearly expenses to be ($55K-$60K pre-tax). I do have a hobby/side business that I'll be pursuing that might provide enough income, but that is not assured. So, I keep coming back to minimizing expenses and the respones here are encouraging that.

The marginal nature of my calcualations is why I started this thread to see how well the various programs projected "reality".

 

[Koolau]

I'd like to ER in about 1-2 years at age 55-56 at which point we should have about $650K (401k, IRA) plus $100K real estate and $220K home equity. At that age, I could take early withdraw from my 401K. At 58+, I could also start using 2 non-COLA pensions although I'd like to postpone those some to get a somewhat higher rate. My DW is 8 years younger, and also has a non-COLA pension that is at minimum of 10 years away. What is really driving us is trying to get our mortgage paid off to minimize our post-ER expenses. We pay triple principal now and have some real estate we could sell in a couple of years to put towards that goal.

So, my various FireCalc (and other program) calculations keep putting me at being marginal based on what I expect our yearly expenses to be ($55K-$60K pre-tax). I do have a hobby/side business that I'll be pursuing that might provide enough income, but that is not assured. So, I keep coming back to minimizing expenses and the respones here are encouraging that.

The marginal nature of my calcualations is why I started this thread to see how well the various programs projected "reality".

Just a couple of points (or so). Most on the forum do not count personal residence as part of their "invested assets" - that is, those assets from which we plan to draw at what ever level FIrecalc says we may (and also at what ever level we feel comfortable drawing). IF you plan to cash out your residence, it's probably okay to include the total in your "stash" number, but keep in mind that rent would need to be added to expenses. If I'm covering old ground for you, I apologize.

While Firecalc may be saying "Just about there" or "Nearly okay", if it were me (and it is NOT), I would either try to trim the budget significantly, w*rk longer, establish that "hobby business" first, or maybe some combo of these and others you might think of. Point is, you do not appear to have a lot of slack. Now, many on the forum live on less and I'm sure you could adapt. You just need to be certain that it would be okay if, at some time, you had to cut back your spending by say 20 to 40% or more for a few years (to get through a rough patch in the markets or unexpected HC expenses, etc., etc. etc..

Not actually offering advice except perhaps to think about these things (and what others may well add).

Best of luck. Sounds like you are getting close and have a fairly good handle on where you are going and how to get there. Don't forget that YMMV.