Portfolio Changes Tab

[PolicyProf]

Hi everyone,

I plan to retire in 2026, but my wife will retire in 2032. I would like to "add a lump sum" to our portfolio in 2032, which would be the amount in her retirement. The value of our current portfolio is the amount I have in my own account today (I will be replacing my income with my portfolio until she retires, then we will live on our combined retirement assets to replace both incomes). I know her value today, I know what she adds each year, and I can use a growth rate between now and then. Should the number I use in "add a lump sum" be what she has today or the number I arrive at after her 8 years of contributions plus growth?

Thanks in advance. -R

 

[pb4uski]

A little of both. The tab indicates "Enter in today's dollars; the actual amount will be adjusted for inflation." so I think you need to reduce the growth rate for inflation included in the growth rate. Just take the lump sum that you think will be added in n years and then divided it by (1+i)^n

 

[PolicyProf]

Okay, great. Thanks so much! Am I the only person who is trying to do the "add to portfolio" this way?

-R

 

[pb4uski]

Another option would be to include the value of her account in the Portfolio value and then add a pension starting now for her annual contributions offset by off-chart spending of the same amount when she retires. Once she is retired the pension and off-cahrt spending will cancel each other out.

 

[PolicyProf]

Thank you! This approach makes my brain hurt a little, but I end up with relatively similar numbers whether I try option #1 or option #2 (at least numbers that are within my own comfortable margin of error).

Thanks again.

 

[pb4uski]

FIRECalc frequently results in brain hurt... or just try following each of the squiggley lines.