Author Topic: What retirement calculator made you FIRE?  (Read 7105 times)

MoneyStacher

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What retirement calculator made you FIRE?
« on: January 27, 2017, 06:50:40 PM »
I've been using firecalc for a while, but recently tried cfiresim and I have to say I like the options on cfiresim like putting in a minimum and a maximum annual payout. I can tweak it so that my % goes to 100. How much faith should I put in it? I like it better than the 4% rule.

Any other calculators I should try? What options should I try on them?

Metric Mouse

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Re: What retirement calculator made you FIRE?
« Reply #1 on: January 27, 2017, 07:37:17 PM »
I've been using firecalc for a while, but recently tried cfiresim and I have to say I like the options on cfiresim like putting in a minimum and a maximum annual payout. I can tweak it so that my % goes to 100. How much faith should I put in it? I like it better than the 4% rule.

Any other calculators I should try? What options should I try on them?

You should only put as much faith in it as you have faith that markets in the past are representative of markets going forward.
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davisgang90

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Re: What retirement calculator made you FIRE?
« Reply #2 on: January 28, 2017, 05:30:18 AM »
Not FIRE yet (next year) but this calculator worked well for my situation (govt pension).

https://financialmentor.com/calculator/best-retirement-calculator
Check out my blog.  Early retirement from a military perspective.

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spokey doke

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Re: What retirement calculator made you FIRE?
« Reply #3 on: January 28, 2017, 08:27:33 AM »
cfiresim has been my main tool...and I generally work to see what it takes to NOT get 100% success (and I like all the ways it allows you to do that), but it keeps insisting that I'm OK...still seems too good to be true
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Re: What retirement calculator made you FIRE?
« Reply #4 on: January 28, 2017, 08:34:49 AM »

I used daily automated runs of both cfiresim and firecalc based on current balances/expenses.  I did several runs with each with varying scenarios and graphed the output to track it over time.

Cfiresim changed their web page a while back to be all javascript, making automated scrapes pretty much impossible for me.  For a while there was a usable backup of the previous web page... but that, too went away recently, so I no longer use cfiresim since it won't mesh with my automation.  (I'm FIRE now... so any runs now are mostly back checking and are not as important as they once were.)
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MoneyStacher

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Re: What retirement calculator made you FIRE?
« Reply #5 on: January 28, 2017, 06:53:51 PM »
cfiresim has been my main tool...and I generally work to see what it takes to NOT get 100% success (and I like all the ways it allows you to do that), but it keeps insisting that I'm OK...still seems too good to be true
Yeah, too good to be true is something that hits home with me. Can we really do this? Rely on our accounts not forever?

rob/d

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Re: What retirement calculator made you FIRE?
« Reply #6 on: January 29, 2017, 01:01:10 AM »
I like this one from dinkytown .
It's more of a quick guess tool but it works well enough.

http://www.dinkytown.net/java/RetirementPlan4.html

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #7 on: January 29, 2017, 02:56:58 AM »
I've been using firecalc for a while, but recently tried cfiresim and I have to say I like the options on cfiresim like putting in a minimum and a maximum annual payout. I can tweak it so that my % goes to 100. How much faith should I put in it? I like it better than the 4% rule.

Any other calculators I should try? What options should I try on them?

You should only put as much faith in it as you have faith that markets in the past are representative of markets going forward.

it is actually the faith in the "worst scenario's " of the past . it is the worst case scenario's these calculators are based on not markets  . in fact some worst case had very good markets over 30 years . but it is inflation and the sequence of those returns that crushed retirees .

so far we have not seen worse outcomes for retirees since 1966 . that is one of the benchmarks the calculators stress test against  .

« Last Edit: January 29, 2017, 04:01:59 AM by mathjak107 »

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #8 on: January 29, 2017, 03:03:27 AM »
I like this one from dinkytown .
It's more of a quick guess tool but it works well enough.

http://www.dinkytown.net/java/RetirementPlan4.html

this one uses average returns which do not work when spending down . the exact same average return like this figures can run out of money 15 years earlier or later just based on the order the gains and losses come in . this kind of calculator never has a losing year while spending down . every year assumes the same average return .

a terrible way to guesstimate things in the real world where every year is different and sometimes with extended losing years .

you want to plan around the worst case's . not the average . it is no different than building a house to weather a storm .  if i was building a home  here in nyc i would construct to at least withstand sandy . then at least i am starting out with the best possible odds on my side . .

that is what real retirement claculators do . they stress test you against withstanding the likes of the person who retired in 1907,1929,1937 1965/1966 .

what they don't do is take an average return and apply it to every year with no down years in the mix .  as i said above  some worst case outcomes  had very good markets over 30 years . but it is inflation and the sequence of those returns that crushed retirees .

the danger of using a calculator like the one above is that it is hardly ever the average returns that have killed off a failing time period .   what killed every single worst case scenario has been this :

the portfolio's failed to return at least a 2% real return average over the first 15 years of a 30 year period .

everyone pretty much had decent 30 year market average returns . but the fact was inflation and the sequences of the gains and losses killed the retirement .

even the worst group ever , the 1966 retire was part of the greatest bull market in history . very good average return . but there just was not enough money left by the time the bull market arrived  to grow , so they failed and did it with  an average return over 30 years of  10.23% .

but what killed them was the first 15 years saw :
1966-stocks minus .13%--bonds 1.08%--rebalanced .64%-- inflation 5.38%


« Last Edit: January 29, 2017, 03:23:11 AM by mathjak107 »

arebelspy

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Re: What retirement calculator made you FIRE?
« Reply #9 on: January 29, 2017, 03:46:27 AM »
cFIREsim was always my favorite in terms of modeling, but holding mostly real estate, none of the calculators do much for me.

So none of them "made me FIRE" as asked in the title--we pulled the plug earlier than were planning based on our models/projections--but they sure were fun to play with in the years leading up to FIRE!  :)

I've been using firecalc for a while, but recently tried cfiresim and I have to say I like the options on cfiresim like putting in a minimum and a maximum annual payout. I can tweak it so that my % goes to 100. How much faith should I put in it? I like it better than the 4% rule.

Any other calculators I should try? What options should I try on them?

You should only put as much faith in it as you have faith that markets in the past are representative of markets going forward.

Well said.

mathjak's tweak is good, too.  Maybe combining them to something like "You should put as much faith in it as you have faith that the worst markets of the future will be no worse than the worst markets of the past."

And then add the usual tweak about flexibilty--reducing spending or making more.

"You should put as much faith in it as you have faith that the worst markets of the future will be no worse than the worst markets of the past, or the faith you have in your ability to reduce spending or earn income in the case that the market is worse than the worst case scenario history."
« Last Edit: January 29, 2017, 03:50:31 AM by arebelspy »
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #10 on: January 29, 2017, 03:59:05 AM »
discretionary  spending is ALWAYS  a big factor as to how you should allocate .

the more discretionary spending you have the more you can adjust spending .


i agree with bernstein , if everything is a need and you have no wants do not invest in equity's since you have no where to cut back . in a down market that is extended you can find yourself in worst shape .

if you use equity's you need flexibility in the budget just in case you are the poster child for poor sequencing .

arebelspy

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Re: What retirement calculator made you FIRE?
« Reply #11 on: January 29, 2017, 04:01:44 AM »
i
agree with bernstein , if everything is a need and you have no wants do not invest in equity's since you have no where to cut back . in a down market that is extended you can find yourself in worst shape .

Can't agree with that.

It implies the only flexibility is in lowering spending.

What if everything is a need, and I have no where to cut back, but I'm willing to make more money?

What if my WR is super low, say, 1%, so that even if everything is a need, I'm fine?

In many cases equities can be fine, even if everything is a need, and you're unwilling to cut back.

There are other ways to be flexible besides cutting spending.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #12 on: January 29, 2017, 04:12:02 AM »
the problem is making more money really imply's working while the concept of  retirement imply's we are not .

yeah , we stretch the term to include working part time today  which many retiree's do but the basic concept of retirement is figured around not really working .

i think of my buddy who retired early from nyc ems . he took his pension or should i say part pension . now he needs a part time job . so while he had his stress's at ems he now has  these lower end crappy part time jobs with crappy hours ,  low pay , few benefits,  and crappy  days to work wherever he goes  . to make things worse , while he was off the radar at ems after so many years , now he works under these grunt supervisors who have him under a microscope .

so he now has new stress's and new misery and for all purposes is "working "



« Last Edit: January 29, 2017, 04:15:06 AM by mathjak107 »

arebelspy

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Re: What retirement calculator made you FIRE?
« Reply #13 on: January 29, 2017, 04:18:20 AM »
yeah , we stretch the term to include working part time today  which many retiree's do but the basic concept of retirement is figured around not really working .

And?

I fail to see why that matters.

If the market is bad, and you need to be flexible, who cares if you "work" for a short period?

Say I'm spending 30k/yr, and need to cut spending by 15k--a 50%(!) drop in spending, pretty huge at that level--for two years in a row.

I'd rather work for 3-4 months and earn 30k (an extra 15k per year) and spend like normal for two years than take a 50% pay cut for two years.  Two years of 50% living, or 3-4 months earning?  I'll take the latter.

If someone else would rather cut expenses, cool, they can do that too.  In either case, who cares what the concept of retirement is "figured" around?

The bottom line to not running out of money is being flexible in making more, spending less or some combination of those (or, I suppose, working way longer than needed, up front, so your WR is stupid low).
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #14 on: January 29, 2017, 04:26:27 AM »
the danger when planning a retirement based on working when markets are down is :

you need to find a job  during the worst part of the cycle , and  you need to physically be able to work .

nothing wrong with that but my opinion is like icing on the cake keep it out of the plan .  i have been working 1 day a week since i retired because i enjoy doing technical training . in fact i had been asked to fill in for the last 2-1/2 months and help on a big project  for 4 days a week which i completed on  thursday .

but that money is not part of the "plan " it is extra money for now and it goes towards our health and long term care insurance but the retirement plan is not based on  working  by the fact i will or can do this . i may not have a job nor be able to carry this on .

cutting expenses can be a dangerous game too if you have to keep cutting to make the plan work . cutting expenses always has a bottom after which it is not the same as increasing income or savings . that is why company's are judged on profits and revenue . profits can come from cost cutting but cost cutting eventually hits a bottom .
« Last Edit: January 29, 2017, 04:31:12 AM by mathjak107 »

arebelspy

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Re: What retirement calculator made you FIRE?
« Reply #15 on: January 29, 2017, 04:31:07 AM »
the danger when planning a retirement based on working when markets are down is :

you need to find a job  during the worst part of the cycle , you need to physically be able to work .

1) You don't need to go for a conventional job that is dependent on the economy.
2) You don't need a job that requires anything more physical than not being completely invalid/in the hospital.  For most people retiring able-bodied, that's not a stretch, especially given the below.

Quote
but that money is not part of the "plan " it is extra money for now

Right.  It would be what is referred to around here as a "safety margin."

And that's the important part.  95% of the time, this won't even come to pass (needing to be flexible in any way whatsoever).  The other 5% of the time, you can have a dozen safety margins/backup plans.

You're already working extra, meaning (assuming you were at a 4% WR) your WR is extra low right now, so your stache is compounding more than normal, meaning your WR will continue to get lower, and the likelihood you have to do anything in a down market is approaching zero.

In other words, you're already doing unnecessary extra work, and preempting the need for any safety margins.  Something like that is always an option, too.

Either way, the hand-wringing isn't necessary.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #16 on: January 29, 2017, 04:33:34 AM »
my opinion is your retirement plan should work as is . if it takes counting on filling in the gaps by working at times   because you are so close to the bone , or have to count on constantly cutting  future expenses which have a bottom , then you may want to review the plan .

once you start introducing more variables in to the plan ,that are not based on worst case scenario's then you open the door for more issues and points of failure ..

remember , we tend to plan retirement around the worst case scenario's and that gives us the slack for the awe craps in life  . worst case can also mean you may not find a job to  work that pays enough to fill the gap  or be able to work  . isn't that a worst case too ?

if your plan works as is and you decide to work great , it can only make things better . but trying to base it on things that are less than worst case  in order to sustain the plan may cause you to fail or be miserable at the least .
« Last Edit: January 29, 2017, 04:44:00 AM by mathjak107 »

arebelspy

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Re: What retirement calculator made you FIRE?
« Reply #17 on: January 29, 2017, 04:43:28 AM »
my opinion is your retirement plan should work as is .

What does it mean for a retirement plan to work "as is"?

Does it need a 100% success rate?  More?  ;)

Are you saying you are against people having backup plans in the tiny percent of the time they might need to utilize it?

What does working "as is" mean?
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #18 on: January 29, 2017, 04:47:07 AM »
a plan that works is one that enables you to live your life as planned  without taking cuts you really don't want to take  or doing things you really do not want to do .

we all have different ideas and values as to what that means .

to me it means working because i can and i want to , not because i have to work in order to sustain my level of income at times . plan b in my life is one i rather not have to fall back on  and that is working because i have to ..

we could be living a better lifestyle on a bigger budget  but we won't do that .that would be putting us in the position of maybe needing that plan b .

but with me working because i want to we do spend more because that money is going to trips we would not have taken if i didn't work . but that money is not part of the plan . if it is there great we spend it , if not we don't need it and should be fine just planning around worst case scenario's .


« Last Edit: January 29, 2017, 04:54:18 AM by mathjak107 »

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #19 on: January 29, 2017, 04:59:13 AM »
the bottom line is just be careful taking a slightly underfunded plan and counting on spending cuts or working at times to bail out the plan . spending cuts have a bottom after which expense still continue to rise , and jobs or your ability to work may not be there just when you are counting on it most . in my opinion "worst case is not only planning around worst case economic conditions but it includes the worst case of not finding work or being able to work , especially as you age and spend down the portfolio  to far or  possibly not being able to make much in spending cuts .

it is up to you to plan what your own worst case's are . for some it may be including caring for aging parents  , or cuts in social security , etc .

what is a plan that works can be almost like asking how long should a rope be ? enough to do the job you are asking it to do .
« Last Edit: January 29, 2017, 05:13:53 AM by mathjak107 »

arebelspy

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Re: What retirement calculator made you FIRE?
« Reply #20 on: January 29, 2017, 05:13:29 AM »
the bottom line is just be careful taking a slightly underfunded plan

Sure.  I'd just define "slightly underfunded" as maybe a 6 to 6.5% WR or higher.

A 4% WR is a "slightly overfunded" plan, IMO.  :)
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #21 on: January 29, 2017, 05:17:09 AM »
a 4% swr  is really dependent on the first 15 years producing at least a 2% real return or mathematically game is likely over at that rate of draw and that is only based on a 30 year retirement , not some of the time frames folks here will have .    . but , your life expectancy and healthcare costs are   added in  too as a variable ..

life expectancy plays a big roll in success rates . most planning goes out to 90 or 95 ,especially for our wives . odds are though they will not live that long statistically speaking  so that improves success rate . once you combine the odds of the portfolio lasting with the odds of life expectancy even 90% can be 100% success rate .

 but healthcare costs can eat up any gain from life expectancy  being shorter . (there is that worst case stuff again cropping up , like long term care expenses )

it is really only under battlefield conditions as time goes on that you know if you are really underfunded or not . driving and looking in the rear view mirror tells us where we were but does nothing to know about where we are headed .

our plan really only pertains to us . in our case  we are delaying social security . that cuts our draw rate and market sequence risk drastically . we fall from 3.50% now to 2-1/2% once our delayed ss kicks in . we also have a long term care plan in place . so we have quite a lot of worst case scenario mitigating in place .

your mileage will differ of course and what you want to allow for vs ruling it out .  you just have to think beyond markets and see what your own worst case scenario's are that you want to build in to the planning . retiring young and health insurance costs are a big wild card . they can range from medicaid to insane numbers if you are not that healthy .
« Last Edit: January 29, 2017, 05:36:20 AM by mathjak107 »

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Re: What retirement calculator made you FIRE?
« Reply #22 on: January 29, 2017, 05:36:03 AM »
Mathjak you're notoriously over conservative in this area. More often than not the 4% rule grows money indefinitely. In very rare cases do you need more money. Also using a variable withdrawal method and a mortgage makes 4%+ even safer.

It seems the most conservative people are the people who are older. I don't know if it's a generational thing or maybe us yunguns are just naive. But if you look at all back tested data and follow the logic you've tried to preach you will end up working way longer and dieing with millions more than is necessary
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #23 on: January 29, 2017, 05:39:22 AM »
Mathjak you're notoriously over conservative in this area. More often than not the 4% rule grows money indefinitely. In very rare cases do you need more money. Also using a variable withdrawal method and a mortgage makes 4%+ even safer.

It seems the most conservative people are the people who are older. I don't know if it's a generational thing or maybe us yunguns are just naive. But if you look at all back tested data and follow the logic you've tried to preach you will end up working way longer and dieing with millions more than is necessary

your statement about me being conservative is wrong .  over a 30 year period 4% swr's have left every rolling retirement with more than it started 90% of the time and 2x what you started with 2/3's of the time ,.


but it has failed to last 100% of the time when real returns have averaged less than 2% the first 15 years of a 30 year retirement time frame . so worst case scenario planning is based on the time frames that did not make it which are 1907 ,1929,1937, 1965 1966 .

if you want to just plan around averages and eliminate those dates a swr would be 6.50%  , throw in the fact statistically we won't live to 90 and you can raise that draw rate likely even more .

those are  mathematical facts and have zero to do with being conservative or not.

but that is not what a safe withdrawal rate is based on nor is modern retirement planning .  a safe withdrawal rate is considered one that needs no pay cuts as long as conditions are not worse than the worst of the past . that means before human intervention . .

you need to monitor your own results over the  early years to really know where you stand , forget the statistics . that is why in real life we plan for 4% at the gate and take raises typically when things are not worst case . but you won''t know which side of the statistic you are on until you are on your own journey and see how your time frame is unfolding .

being humans we introduce our own human spending patterns in to the equation , so these draw rates are only laboratory comparisons . they are what they are but they are not road maps for life . life is filled with emergency and un-expected expenses as well as we have the ability where we can to adjust  but there is no way to have a one size fits all comparison .

« Last Edit: January 29, 2017, 05:56:24 AM by mathjak107 »

arebelspy

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Re: What retirement calculator made you FIRE?
« Reply #24 on: January 29, 2017, 06:04:38 AM »
We're talking a scenario where you ER and pull the plug without a crystal ball of what the first 15 years of your ER return will be.

In that case, you need to pick an SWR, and then be flexible in case poor returns do happen.

We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #25 on: January 29, 2017, 06:12:15 AM »
which is why we do pick a draw rate that has a high rate of success against those worst conditions taking them out and also we have to include what each one of  us considers our own worst case scenario's . that is only our starting point , not a life long plan .

heck , to me , me having to work and not because  i want to is one of my worst case scenario's i planned for . my plan  was designed with only the remotest chance of me having to work . which means i tried to build enough slack in our plan so even extended down turns may not require me working .

 you may have aging parents that will be your responsibility . you may want to include caring for them in your plan as a worst case .

others may choose to roll the dice . they are fine if they end up working at 70 or 80 .

we are all snow flakes.

this is our 3rd year in retirement and we use a variable draw that sets our maximum goal posts i try to stay within .

our punch list of things we want to do  is easily  bigger than 2x our  budget so we need to set goal posts to stay between each year or we could easily over spend .

it is variable so when we do well we spend more. the beauty of a plan that has a high level of discretionary spending is the flexibility , since our lifestyle is structured so our non discretionary bills represent only about 60% of the years budget .

we could have lived in a more expensive area in a bigger place but our plan intentionally called for not exceeding 60% in non discretionary stuff .

we do have things we call discretionary like food and clothes  , but other things like our gym are part of non discretionary since it is a part of life for us .
« Last Edit: January 29, 2017, 06:22:39 AM by mathjak107 »

arebelspy

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Re: What retirement calculator made you FIRE?
« Reply #26 on: January 29, 2017, 06:26:48 AM »
heck , to me , me having to work and not because  i want to is one of my worst case scenario's i planned for

And if someone is already working a job, not because they want to, but because they have to?  They're already in that situation, and working longer to lower to a silly WR for the small chance they might have to work later is guaranteeing that worst case scenario of working not because they want to.

Quote
others may choose to roll the dice . they are fine if they end up working at 70 or 80 .

This is a straw man.. no one early retiring will have to work in their 70s or 80s.  As you pointed out, you see it coming in the first decade, and can adjust then.  No one will not adjust and literally run out of money later.
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Re: What retirement calculator made you FIRE?
« Reply #27 on: January 29, 2017, 07:05:58 AM »
When youre retiring in you 50s or 60s your first 10-15 years may have you working in your 70s or 80s. But a vast majority of us are retiring in our 40s or 30s. Mathjak you're in a much more standard retirement scenario than an early retirement scenario.

So yes in standard retirement never working or making another dollar again maybe a top priority. But for those who are Re and put everything together at a young age and accomplished a 4% swr.  To think they will never make another dollar is highly unlikely. Most fire people are driven by the challenge and goal and to upset the societal view on retirement. These types of personalities are much different than some one stumbling across this site at a later age worried about how to make it thru a much more standard retirement at 50-60+.
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Re: What retirement calculator made you FIRE?
« Reply #28 on: January 29, 2017, 08:31:28 AM »
what it takes mathematically to have 4% swr be considered over funded does not change  . it only means you need better than that 2% real return  and for a longer period of time than 15 years if you are going out longer . that may not be "over funded " as much as you think . in fact since 2000 we barely saw a 2% real return on the s&p 500 on any existing money .

sure , working or cutting expenses can always fix a situation that is miscalculated but the whole theoretical idea of the term safe withdrawal rate is to avoid that .

other wise you are not talking a safe withdrawal rate , you are simply talking a withdrawal rate supplemented where needed .

the term has a very specific meaning with very specific criteria pertaining to very specific time frames ..
« Last Edit: January 29, 2017, 08:40:03 AM by mathjak107 »

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Re: What retirement calculator made you FIRE?
« Reply #29 on: January 29, 2017, 08:47:24 AM »
a plan that works is one that enables you to live your life as planned  without taking cuts you really don't want to take  or doing things you really do not want to do .

we all have different ideas and values as to what that means .

to me it means working because i can and i want to , not because i have to work in order to sustain my level of income at times . plan b in my life is one i rather not have to fall back on  and that is working because i have to ..

we could be living a better lifestyle on a bigger budget  but we won't do that .that would be putting us in the position of maybe needing that plan b .

but with me working because i want to we do spend more because that money is going to trips we would not have taken if i didn't work . but that money is not part of the plan . if it is there great we spend it , if not we don't need it and should be fine just planning around worst case scenario's .

Effectively you are trading away "5-10% chance I might need to work for a year later" to get "100% chance I must work for a year now"

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #30 on: January 29, 2017, 08:54:31 AM »
no ...that is not what i am saying .

i could have retired at 50 or even younger  if i wanted . but that meant cutting expenses to the point we would have to leave the area we live  . it did not involve working longer , it just involved lifestyle changes .

but those changes were not something i preferred to do , so since i liked my job i stayed on my own terms .   what your own priority's are will be up to you .  cutting spending or going part time are options if you are willing to do that . but they do come with risk . the risk being you hit bottom on the expense cutting and the fact you may not be able to work ,find work or hate what you do find ,worse than the job you left early .

retiring very young just increases all the variables even greater to a point that odds are so much higher something is not going to go as planned so plan b better be something you can live with comfortably as well as with so many years of the  unknown you really can't call anything a safe withdrawal rate , over funded or anything else .

you just don't know with that many years what will be . .
« Last Edit: January 29, 2017, 08:59:47 AM by mathjak107 »

TomTX

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Re: What retirement calculator made you FIRE?
« Reply #31 on: January 29, 2017, 08:59:34 AM »
It certainly seems to be your argument.

You are arguing that someone should work longer to guarantee a 100% chance of not working ever again.

If someone is making $500k/year like our "Baller" - well, that might make sense. Work <6 months and save an extra 4-5 years of buffer at Mustachian spending levels.

If someone is making $70k/year or less, you're basically talking about working an extra year (or two, or three) NOW instead of a 5-10% chance of having an issue with your 4% SWR and having to work for a year later. Or do some side gig stuff. Or whatever for cash.

If your 4% SWR isn't going to work out, you should notice in the first 2 years, 5 at the absolute most.

« Last Edit: January 29, 2017, 09:02:15 AM by TomTX »

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Re: What retirement calculator made you FIRE?
« Reply #32 on: January 29, 2017, 09:01:43 AM »
the problem is making more money really imply's working while the concept of  retirement imply's we are not .

yeah , we stretch the term to include working part time today  which many retiree's do but the basic concept of retirement is figured around not really working .

i think of my buddy who retired early from nyc ems . he took his pension or should i say part pension . now he needs a part time job . so while he had his stress's at ems he now has  these lower end crappy part time jobs with crappy hours ,  low pay , few benefits,  and crappy  days to work wherever he goes  . to make things worse , while he was off the radar at ems after so many years , now he works under these grunt supervisors who have him under a microscope .

so he now has new stress's and new misery and for all purposes is "working "

This example is totally inapplicable to this discussion. He didn't have his SWR fail (his pension is still paying out what was expected at the time of retiring) - he had a lifestyle failure. He's spending more than he planned (or he just failed to plan)

Sure, if you can't stick to your planned budget - any WR will fail.

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #33 on: January 29, 2017, 09:05:07 AM »
nope i am not saying work longer . i am saying structure your lifestyle so you have more  discretionary spending room as opposed to a lifestyle that pushes the envelope .

we could have adopted a lifestyle that requires me to keep working even longer , which was never going to be an option so it was off the table . , or we could have adopted a lifestyle that was 80- 90% non discretionary spending , that would have a higher risk i might end up working a bit if adjustments and cost cutting couldn't fill the gaps .  or i could adopt a lifestyle that is 50-60% non discretionary spending
and cut the risks  of working again because odds are we can just adjust it out .

none of those last choices involve working longer . they only involve the chances of having  to  go  back to work by need   and where you live and what your retirement expenses will be .. they have no parameter that says you have to work longer .

it trades time for lifestyle choices . if i wanted to retire in my 40's i would have just moved to cheapsville to get a lower rate of non discretionary spending not worked longer.

that way i have more of a cushion for adjusting  before i had to work again .


 .
« Last Edit: January 29, 2017, 09:12:40 AM by mathjak107 »

TomTX

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Re: What retirement calculator made you FIRE?
« Reply #34 on: January 29, 2017, 09:26:00 AM »
nope i am not saying work longer . i am saying structure your lifestyle so you have more  discretionary spending room as opposed to a lifestyle that pushes the envelope .

That means "work longer"

If I need to go from a barebones "just the minimum for food/shelter/clothing" to "Hey, I have 25% travel and toys in my budget" - that means a HIGHER budget, which means WORK LONGER.

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #35 on: January 29, 2017, 09:35:41 AM »
we are not talking barebone lifestyles . at least i hope no one is retiring and living just above a shelter . we are talking living in nice places  where there are differences from say zip to zip or even  just in the size of what you buy or rent .

there is enough differences in places we can choose to live that we can easily ramp our lifestyle up or down and none of these place would be somewhere you wouldn't want to live .


it is all a question of where  your priority's are . i can rattle off dozens of nice places here in even nyc where you can live for a lot less then a dozen other places and all the difference may be is proximity to manhattan .


would i work longer to actually live in manhattan ? not on your life but there are some that will . i would even call our area of queens which is bay terrace nicer than parts of manhattan . we are just 20 minutes from manhattan and far cheaper .

so nooooooo  , making changes in discretionary spending vs non discretionary does not equate to  working longer  or mean living in some hobble .

« Last Edit: January 29, 2017, 10:03:11 AM by mathjak107 »

TomTX

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Re: What retirement calculator made you FIRE?
« Reply #36 on: January 29, 2017, 10:10:55 AM »
we are not talking barebone lifestyles . at least i hope no one is retiring and living just above a shelter . we are talking living in nice places  where there are differences from say zip to zip or even  just in the size of what you buy or rent .

there is enough differences in places we can choose to live that we can easily ramp our lifestyle up or down and none of these place would be somewhere you wouldn't want to live .


it is all a question of where  your priority's are . i can rattle off dozens of nice places here in even nyc where you can live for a lot less then a dozen other places and all the difference may be is proximity to manhattan .


would i work longer to actually live in manhattan ? not on your life but there are some that will . i would even call our area of queens which is bay terrace nicer than parts of manhattan . we are just 20 minutes from manhattan and far cheaper .

so nooooooo  , making changes in discretionary spending vs non discretionary does not equate to  working longer  or mean living in some hobble .

Nope, you're still shucking and jiving.

If your minimum acceptable is Bay Terrace, it's Bay Terrace. Throwing Manhattan in there is a distraction. Irrelevant.

The scenario is retire today at 4% SWR in Bay Terrace (or wherever you want) - or somehow make it "safer" - the only way to make it "safer" is to add to the stash and use a lower WR.

Since you ruled out any other method of getting cash, the only way to do so is work.

Work now, 100% chance, or retire now with a 5-10% chance of needing to work for a year sometime in the next 5 years (probably you know by 2 years)

Metric Mouse

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Re: What retirement calculator made you FIRE?
« Reply #37 on: January 29, 2017, 07:37:43 PM »

it trades time for lifestyle choices . if i wanted to retire in my 40's i would have just moved to cheapsville to get a lower rate of non discretionary spending not worked longer.

that way i have more of a cushion for adjusting  before i had to work again .
There are always trade offs. Some people have a minimum lifestyle that involves living in NYC. Many find they can have an even better lifestyle for much cheaper away from NYC, and thus have to work fewer years. Nothing wrong with either.
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Re: What retirement calculator made you FIRE?
« Reply #38 on: January 30, 2017, 12:50:57 PM »
wow...rather than argue over lots of points that may or may not be relevant, depending on what happens, I'll just see what the future actually brings with a good stache, an informed plan, flexibility, and an open mind.

so how about those calculators?
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Re: What retirement calculator made you FIRE?
« Reply #39 on: January 30, 2017, 01:57:35 PM »
wow...rather than argue over lots of points that may or may not be relevant, depending on what happens, I'll just see what the future actually brings with a good stache, an informed plan, flexibility, and an open mind.

so how about those calculators?

I use those calculators to get a good idea and to give myself a chance of having a WR greater than 4% but this is correct.

Ozstache

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Re: What retirement calculator made you FIRE?
« Reply #40 on: January 30, 2017, 05:44:08 PM »
I used firesim and cfiresim as a starting point but ended up making my own FIRE spreadsheet to account for Australian-specific nuances (eg superannuation, senior tax rebates, slightly lower historical SWR).

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Re: What retirement calculator made you FIRE?
« Reply #41 on: January 30, 2017, 07:31:58 PM »
I am still baffled as ever that people think a 4% SWR is safe for 45+ years of retirement - especially as we float at market highs.

Remember success is defined as dying with 1 cent or more as well.

For myself am far more comfortable at around 3.1% which is essentially my dividend yield on capital - ie spend the dividends approach which yes I realize has its flaws.


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Re: What retirement calculator made you FIRE?
« Reply #43 on: January 31, 2017, 12:08:18 AM »
I am still baffled as ever that people think a 4% SWR is safe for 45+ years of retirement - especially as we float at market highs.

It was safe for 30-year ERs 95% of the time.  And yes, safe meant any money left, sure, but the vast majority left you with well more than you started.

In the majority of the cases, your ER should get lower and lower as your inflation-adjusted withdrawals are outpaced by market gains.  I see no reason why "it's different this time," despite the market being high.  It's been high before, and will be again.
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boarder42

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Re: What retirement calculator made you FIRE?
« Reply #44 on: January 31, 2017, 04:18:39 AM »
I am still baffled as ever that people think a 4% SWR is safe for 45+ years of retirement - especially as we float at market highs.

Remember success is defined as dying with 1 cent or more as well.

For myself am far more comfortable at around 3.1% which is essentially my dividend yield on capital - ie spend the dividends approach which yes I realize has its flaws.

Going to that withdrawal rate has to cost you multiple years of extra work. In addition to the fact that 3.5 has never failed.
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Re: What retirement calculator made you FIRE?
« Reply #45 on: January 31, 2017, 06:38:04 AM »
I have never found a calculator that worked for me correctly. Maybe my facts are just so odd they don't make a calculator for me.

I make X in retirement now.

I wish to make X plus 35K before I retire again.

When I collect SS I will make an extra 36K +/-

meaning once I reach SS age I should never need to make any extra money as my pension and SS is enough.

Let's just say I retired at 50 and drew SS at 62 then that is 12 year x 35k = 420k.  Even if I never made any interest when I hit 420k I could retire.

For some reason no calculator other than my brain has ever give me real numbers.

Mind you I currently spend less than X per year. The 35K more is just party like it is 99 money.

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Re: What retirement calculator made you FIRE?
« Reply #46 on: January 31, 2017, 07:27:23 AM »
I like that mathjak is challenging the status quo (here).  It's good to consider his conservative view to test our own assumptions.  It is about the life individuals want to lead, there is no right or wrong answer.  Only levels of comfort around assumptions of the future no one can know.  Mathjak is offering an ultra conservative view of that, and I think it's valuable to test ourselves against that to see if we are comfortable with our assumptions or if he brings up points we have not considered.

I generally am looking at a 4% with flexible spending via cfiresim.  I also like Todd Tressidors calculator on financialmentor.  I'm likely to overshoot because I am fortunate enough to have a high paying job, so an extra year is very valuable.  As I've considered fire more, I'm ok with working a little longer to gain that extra padding because it means piece of mind.  I also like the idea of a glide path to equity to insure against early sequence of return risk.





AdrianC

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Re: What retirement calculator made you FIRE?
« Reply #47 on: January 31, 2017, 07:43:18 AM »
I've been using firecalc for a while, but recently tried cfiresim and I have to say I like the options on cfiresim like putting in a minimum and a maximum annual payout. I can tweak it so that my % goes to 100. How much faith should I put in it? I like it better than the 4% rule.

Any other calculators I should try? What options should I try on them?

Putting your own unique situation into cfiresim and firecalc is better than the 4% rule. Why argue about Bengen and Trinity studies when you can do your own in a few minutes? Including social security can make a big difference.

I also did a calculator on Fidelity's website and the one in Quicken. Vanguard has a Monte Carlo simulator you can try also:

https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

As other's have pointed out, though, these are all based on the same set of data. We are all betting on the future being no worse than the past. A reasonable bet, I think.

We do need to be mindful that we don't place too much emphasis on the investment part of this and too little on the expense part. Estimating expenses out 30 or 40 years is just a WAG. For example, we had enough at the end of 2007 that we could have FIRE'd at a 4% WR. Mrs. C did take a lay off package and become a SAHM. I started a new consulting gig and carried on working, albeit very flexibly. If I had FIRE'd it would have been gut wrenching through 08/09. Could we have held on, I wonder? But, by the end of 2013 capital would be back above the starting number. So, all good, right?

No. We failed to control our expenses. Our comfortable margin on expenses would have completely gone and we'd be looking at cutting expenses. Our expenses rose faster than inflation. Who would have guessed that our basic medical costs would more than triple? This is an unknown going forward, of course.

I'm glad that I did work longer than I might have needed to based on the conventional wisdom. Each to his/her own.

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Re: What retirement calculator made you FIRE?
« Reply #48 on: January 31, 2017, 10:30:43 PM »
cfiresim is where it's at if you ask me as far as calculators go.  The variable spending option fits my scenario perfectly.  As others have mentioned, flexibility is the real key to planning out an early retirement. 

The variable spending option lets me set a floor at my bare bones spending level (3% WR equivalent), initial spending at my target level (6% WR equivalent), and set an extravagant maximum spending level (8% WR equivalent).  With high sensitivity to varying the withdrawals (z=1), the result is 100% success at an average of 6% withdrawal rate.  Sure that means spending has to vary significantly as the market moves but, even though the "variable spending" option sounds like changing spending is the part that's variable, the reality is that spending less == withdrawing less == earning more.  If the model suggests I should lower my withdrawal amount based on market performance, I can do that in any mixture of lowered spending / gaining additional income.   

I'm leaving full time employment in my early 30's but fully expect to be find interesting and rewarding activities that earn me income in some form at some point over the following 30 years.

All that said - the calculators/models should all be taken for what they are - models of what might happen.  There is no way to guarantee any withdrawal rate will work 100% of the time when applied to an unknowable future.  My real plan is to see what happens and constantly adapt.


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Re: What retirement calculator made you FIRE?
« Reply #49 on: February 01, 2017, 03:09:36 PM »
 First, I'm older at 61 yrs old.
I used firecalc many times and was comfortable I could retire. But I really hadn't thought much about it.
It was reading the forum that put the idea in my mind. I have more than what many here say is their number.
Plus SS is only 1, 5 or 9 years away, depending on when I take it.
  So, really not so much a calculator, just reading about all you people retiring early on your stache.
             THANK YOU VERY MUCH