PT Income in Retirement and how to correctly model in Firecalc

[ventoux]

When using Firecalc if we’re still working part-time jobs in retirement, we reduce our annual spending on the “manual entry of spending page” by the amount of income we earn off those PT jobs. Correct? Pretty sure I’m right on this but confirmation, insight appreciated.

 

[Exchme]

Sure, but also deduct SS and income taxes. I'm a bit puzzled though. I picture Firecalc as more of a high level, "Can I Retire Yet?" tool. Once retired, I wanted something much more granular for a planning tool that would take into account taxes, cash flow needs, ACA, Roth Conversions, etc.

 

[ventoux]

Sure, but also deduct SS and income taxes. I'm a bit puzzled though. I picture Firecalc as more of a high level, "Can I Retire Yet?" tool. Once retired, I wanted something much more granular for a planning tool that would take into account taxes, cash flow needs, ACA, Roth Conversions, etc.

Yes. I might be trying to get more out of it than I should but it has the manual spending page so I have used it to detail out some expense changes over next 8 years.

In the end though I'm looking for the high level answer of what does our success ratio look like. Granted, it's guide as to how the portfolio would have responded to 30-year cycles in the past. Thanks.

 

[SecondCor521]

I keep the spending amount the same and then enter a separate line item on the second tab ("Other Income/spending"). While not a pension, I put my side gig income on the Pension income line towards the bottom of that page.

I've been FIREd about 9 years now. I use FIREcalc as a "Can I stay retired?" tool and a "Should I spend more?" tool.

 

[USGrant1962]

If you expect the PT jobs to be essentially indefinite your approach is fine.

More realistically there is some horizon where you probably plan to totally stop working (or should plan due to aging). As SecondCor said, you can put your PT income on page 2 as pension income starting now. Then, if you think PT work will end in X years, put the same number in as "off chart spending" in X years away to cancel it out.

 

[marko]

Sure, but also deduct SS and income taxes. I'm a bit puzzled though. I picture Firecalc as more of a high level, "Can I Retire Yet?" tool. Once retired, I wanted something much more granular for a planning tool that would take into account taxes, cash flow needs, ACA, Roth Conversions, etc.

Agreed. But even with the 'granularity' from other tools, there's always something you hadn't planned on.

IMO, there's just too many unseen/unknown variables over the future 10-20 years to find a plan and stick with it down to the dollar. You can get approximations and work from them, but the best you can do is 'windage' and hope for the best and adjust for the worst.

 

[ventoux]

I keep the spending amount the same and then enter a separate line item on the second tab ("Other Income/spending"). While not a pension, I put my side gig income on the Pension income line towards the bottom of that page.

I've been FIREd about 9 years now. I use FIREcalc as a "Can I stay retired?" tool and a "Should I spend more?" tool

Okay. We still have a mortgage which is utilizing two of those off chart / pension rows and the third role i utilize for an expected Soc Sec haircut.

 

[USGrant1962]

Okay. We still have a mortgage which is utilizing two of those off chart / pension rows and the third role i utilize for an expected Soc Sec haircut.

Well, I actually thought about my prior answer and it doesn't need to use two rows and neither should your mortgage. If you enter your current spending from retirement sources, rather than future fully retired spending (you are semi-retired), you simply need to add a single "off chart spending" increase when your PT job(s) go away. Similarly, a single "off chart spending reduction" should cover termination of your mortgage.

For the SS haircut I always adjust my SS payment for that. We're doing the high-earner age 70 thing. What I actually do is put DW's SS in starting now (Jan will be her first payment) but for my larger SS I put in my payment minus hers. So FIRECalc sees a total of just my larger payment. That approximates two cases - the haircut and the survivor amount. It is a little conservative, but small conservatisms are good in long-term planning.

Oh, and I like the title of your thread - see my signature block below...

 

[ventoux]

Well, I actually thought about my prior answer and it doesn't need to use two rows and neither should your mortgage. If you enter your current spending from retirement sources, rather than future fully retired spending (you are semi-retired), you simply need to add a single "off chart spending" increase when your PT job(s) go away. Similarly, a single "off chart spending reduction" should cover termination of your mortgage.

For the SS haircut I always adjust my SS payment for that. We're doing the high-earner age 70 thing. What I actually do is put DW's SS in starting now (Jan will be her first payment) but for my larger SS I put in my payment minus hers. So FIRECalc sees a total of just my larger payment. That approximates two cases - the haircut and the survivor amount. It is a little conservative, but small conservatisms are good in long-term planning.

Oh, and I like the title of your thread - see my signature block below...

Yes, I've noticed that George Box quote on your signature block before

I'll take another run at this tomorrow, I think I understand what your saying but may have to ask for further detail on this approach. It does sound cleaner than what I'm doing currently.