Author Topic: What retirement calculator made you FIRE?  (Read 8919 times)

moof

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Re: What retirement calculator made you FIRE?
« Reply #50 on: February 04, 2017, 07:53:13 PM »
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 ..
VFINX growth is up 2.18x over the last 17 years.  Works out to 4.7% rate of return on average.  Not sure where your numbers are coming from.

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #51 on: February 05, 2017, 05:08:30 AM »
you are looking at something else .

"real returns are needed of 2%  over the first 15 years as an average to maintain a 4% safe  withdrawal rate .    not nominal .
every single worst case failure has been quantified as the real return average over the first 15 years has fallen below a 2% real return average while spending 4% inflation adjusted .

the worst time frame for a retiree was 1965/1966 . that time frame included the greatest bull market ever in its time frame . but once the 15 year mark was past there just was not enough left to grow .

really good average return by the way for that group . over 30 years markets averaged over 10% . but none of that matters when spending down .  the die was cast for that 1966 group by the 15th year  as inflation did them in .

here are the nominal returns   for the 30 years for the 1965/1966 group , they look pretty good .
1966 stocks 10.23 - -bonds 7.85 -- rebalanced portfolio 9.56- - inflation 5.38

but the first 15 years were terrible and caused way excessive spending down .

1966-stocks minus .13%--bonds 1.08%--rebalanced .64%-- inflation 5.38%

all the worst case time frames show similar results . all were killed off in the first 15 years when the real return average for the 15 years fell below 2%  .


« Last Edit: February 05, 2017, 05:22:50 AM by mathjak107 »

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Re: What retirement calculator made you FIRE?
« Reply #52 on: February 05, 2017, 07:28:22 AM »
I went FIRE before I knew it was a 'thing'.  I didn't have a community like this one to share ideas and had to find my own way.  I didn't know early retirement calculators existed (my 401k at work had a calculator but it assumed conventional American spending patterns and conventional retirement age).  I mapped things out in MS Excel.  When I was confident I could cover my budget between distributions, dividends, interest, and options premiums, plus some wiggle room to stay ahead of inflation; I pulled the plug.  That was 5OCT2012 so I'm coming up on five years and couldn't be happier.

I ended up over saving in hindsight.  I now produce about double my budget in distributions and options premiums. 
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boarder42

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Re: What retirement calculator made you FIRE?
« Reply #53 on: February 05, 2017, 08:18:27 AM »
I went FIRE before I knew it was a 'thing'.  I didn't have a community like this one to share ideas and had to find my own way.  I didn't know early retirement calculators existed (my 401k at work had a calculator but it assumed conventional American spending patterns and conventional retirement age).  I mapped things out in MS Excel.  When I was confident I could cover my budget between distributions, dividends, interest, and options premiums, plus some wiggle room to stay ahead of inflation; I pulled the plug.  That was 5OCT2012 so I'm coming up on five years and couldn't be happier.

I ended up over saving in hindsight.  I now produce about double my budget in distributions and options premiums.

I think this is a common among most I've heard from.  More people end up with more than they need. Multiple reasons probably exist for this but for me it will be retire now or wait 1 more year. And have an extra 250-300k in the bank.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #54 on: February 05, 2017, 08:50:44 AM »
sequence risk alone can vary a 30 year retirement by as much as a 15 year difference in how long the money lasts . it gets worse going out longer than 30 years like many here .

unfortunately we don't know whether we are a poster child for the best case scenario , average or going to do worse than the worst case . hind site is always great here .

so the safest is plan for the worst . if not the worst  then at least below average and adjust along the way . if things are better you got some raises coming .

depending how much discretionary spending is in your budget you may not be able to cut back much if mostly everything is a need and not a want .
« Last Edit: February 05, 2017, 08:52:50 AM by mathjak107 »

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Re: What retirement calculator made you FIRE?
« Reply #55 on: February 05, 2017, 10:20:06 AM »
I went FIRE before I knew it was a 'thing'.  I didn't have a community like this one to share ideas and had to find my own way.  I didn't know early retirement calculators existed (my 401k at work had a calculator but it assumed conventional American spending patterns and conventional retirement age).  I mapped things out in MS Excel.  When I was confident I could cover my budget between distributions, dividends, interest, and options premiums, plus some wiggle room to stay ahead of inflation; I pulled the plug.  That was 5OCT2012 so I'm coming up on five years and couldn't be happier.

I ended up over saving in hindsight.  I now produce about double my budget in distributions and options premiums.

I think this is a common among most I've heard from.  More people end up with more than they need. Multiple reasons probably exist for this but for me it will be retire now or wait 1 more year. And have an extra 250-300k in the bank.

Barring Mad Max catastrophe where we eat our neighbor's children cooked over an open fire -- yeah, I'm there too.  I'm trying to force myself to spend more -- not a lot more -- just a little.  They sell wine in glass bottles!  Dammit, I buy one every now and then.
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steveo

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Re: What retirement calculator made you FIRE?
« Reply #56 on: February 05, 2017, 02:10:35 PM »
so the safest is plan for the worst . if not the worst  then at least below average and adjust along the way . if things are better you got some raises coming .

The safest plan as you define it is not running out of money but some people might state the safest plan is to work as little as possible. There are trade-offs.

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #57 on: February 05, 2017, 03:50:50 PM »
the safest  may be to  be born rich  or marry big money if you want to get technical .
« Last Edit: February 05, 2017, 04:00:35 PM by mathjak107 »

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Re: What retirement calculator made you FIRE?
« Reply #58 on: February 05, 2017, 05:41:46 PM »
Though I'd used a couple of calculators (Personal Capital and cFiresim) it was actually my budget spreadsheet that helped me pull the plug. I found a really detailed budget spreadsheet that helped me map out the big irregular expenses (home repairs, new car, health care, etc) and that build my comfort level that we could manage on the minimum level that the worst case scenarios on all the calculators predicted.

Of course we actually spend more than that based on our portfolio performance, but it was building confidence in how low we could go that let me pull the plug.

Reynold

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Re: What retirement calculator made you FIRE?
« Reply #59 on: February 06, 2017, 10:06:56 AM »
I used both firecalc and cfiresim to help convince my DW that we had to work pretty hard to put parameters in to give us any chance of failure.  We are comfortable we have a handle on the "known" unknowns, meaning how we might do under historical trends, but are less confident on a couple of items mentioned below which aren't handled by the calculators. 

Who would have guessed that our basic medical costs would more than triple? This is an unknown going forward, of course.

That was pretty easy to predict, actually, much like college tuition, medical care costs have increased FAR faster than inflation for decades now.  We are already projecting it to be the single largest ongoing expense we'll have in FIRE, at $25-30k/year for premiums plus copays on a high deductible plan.  How much higher can it go?  Well, how much might you be willing to pay for a custom tailored gene editing to remove that high breast cancer or Alzheimers risk you have, or repair it after the fact?  Will insurance, government or private, cover it?

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.

In the U.S.  That rate has failed fairly often in a lot of other developed countries.  Will the U.S. revert to the mean, and join the rest of the low growth developed world?  Tune in in 30 years and see! 

moof

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Re: What retirement calculator made you FIRE?
« Reply #60 on: February 06, 2017, 01:10:51 PM »
you are looking at something else .

"real returns are needed of 2%  over the first 15 years as an average to maintain a 4% safe  withdrawal rate .    not nominal .
every single worst case failure has been quantified as the real return average over the first 15 years has fallen below a 2% real return average while spending 4% inflation adjusted .

the worst time frame for a retiree was 1965/1966 . that time frame included the greatest bull market ever in its time frame . but once the 15 year mark was past there just was not enough left to grow .

really good average return by the way for that group . over 30 years markets averaged over 10% . but none of that matters when spending down .  the die was cast for that 1966 group by the 15th year  as inflation did them in .

here are the nominal returns   for the 30 years for the 1965/1966 group , they look pretty good .
1966 stocks 10.23 - -bonds 7.85 -- rebalanced portfolio 9.56- - inflation 5.38

but the first 15 years were terrible and caused way excessive spending down .

1966-stocks minus .13%--bonds 1.08%--rebalanced .64%-- inflation 5.38%

all the worst case time frames show similar results . all were killed off in the first 15 years when the real return average for the 15 years fell below 2%  .

Inflation from 2001 to 2016 (latest government data) average 1.8% per year.  Works out to 2.8% per year real returns.  Please show your work if you disagree.  You are being quite the doom and gloom fellow and cherry picking a previous peak.  Most folks invest over a long period, and will draw down over a long period.  I will agree that if you are trying to retire with almost no margin in your budget and no prospect of being re-employable you might want to rethink retiring the DAY you hit 25.000x spending, but as has been mentioned that is not a real scenario.

mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #61 on: February 06, 2017, 01:34:19 PM »
AVERAGE  inflation like average returns cannot be used when spending down .sequence of inflation and sequence of returns can make a difference of 15 years in how long the money lasts .

every worst case time frame had very good returns over it 's 30 year time frame , but it was inflation and the fact that they fell below a 2% real return over the first 15 years .




suppose you were so unlucky to retire in one of those worst time frames ,what would your 30 year results look like :

1907 stocks returned 7.77% -- bonds 4.250-- rebalanced portfolio 7.02- - inflation 1.64--

1929 stocks 8.19% - - bonds 1.74%-- rebalanced portfolio 6.28-- inflation 1.69--

1937 stocks 10.12 - - bonds 2.13 - rebalanced portfolio -- 7.24 inflation-- 2.82

1966 stocks 10.23 - -bonds 7.85 -- rebalanced portfolio 9.56- - inflation 5.38

for comparison the 140 year average's were:

stocks 8.39--bonds 2.85%--rebalanced portfolio 6.17% inflation 2.23%

so what made those time frames the worst ? what made them the worst is the fact in every single retirement time frame the outcome of that 30 year period was determined not by what happened over the 30 years but the entire outcome was decided in the first 15 years.

so lets look at the first 15 years in those time frames determined to be the worst we ever had.

1907--- stocks minus 1.47%---- bonds minus .39%-- rebalanced minus .70% ---inflation 1.64%

1929---stocks 1.07%---bonds 1.79%---rebalanced 2.29%--inflation 1.69%

1937---stocks -- 3.45%---bonds minus 3.07%-- rebalanced 1.23%--inflation 2.82%

1966-stocks minus .13%--bonds 1.08%--rebalanced .64%-- inflation 5.38%


boarder42

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Re: What retirement calculator made you FIRE?
« Reply #62 on: February 06, 2017, 04:53:51 PM »
Exactly. You will know early   for people retiring close to normal retirement age knowing in the first 5-10 may be awful still because you're already really old. So working a couple extra years buys you your insurance. Plus it would seem much more like a failure I would assume where as a normal early retiree will know the minor risks and be flexible
« Last Edit: February 06, 2017, 04:55:23 PM by boarder42 »
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AdrianC

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Re: What retirement calculator made you FIRE?
« Reply #63 on: February 07, 2017, 06:57:29 AM »
Who would have guessed that our basic medical costs would more than triple? This is an unknown going forward, of course.

That was pretty easy to predict, actually, much like college tuition, medical care costs have increased FAR faster than inflation for decades now.  We are already projecting it to be the single largest ongoing expense we'll have in FIRE, at $25-30k/year for premiums plus copays on a high deductible plan. 

I don't see how a triple was easy to predict. Why not a double or a quadruple? If you mean a substantial increase was easy to predict then I agree.

We have to build in a substantial margin of safety, especially when we have people dependent on us. Easy for me to say since I already have.

I have $20K budgeted for healthcare costs this year. I currently have no idea what to budget for next year.

boarder42

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Re: What retirement calculator made you FIRE?
« Reply #64 on: February 07, 2017, 08:00:20 AM »
Who would have guessed that our basic medical costs would more than triple? This is an unknown going forward, of course.

That was pretty easy to predict, actually, much like college tuition, medical care costs have increased FAR faster than inflation for decades now.  We are already projecting it to be the single largest ongoing expense we'll have in FIRE, at $25-30k/year for premiums plus copays on a high deductible plan. 

I don't see how a triple was easy to predict. Why not a double or a quadruple? If you mean a substantial increase was easy to predict then I agree.

We have to build in a substantial margin of safety, especially when we have people dependent on us. Easy for me to say since I already have.

I have $20K budgeted for healthcare costs this year. I currently have no idea what to budget for next year.

bolded above are very subjective.  and most here would argue the 4% rule is already and incredibly large margin of safety.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #65 on: February 07, 2017, 11:04:29 AM »
the only issue may be the fact that historically things have not been stress tested much or even at all at such high valuations and low rates .  back in the 1930's those low rates were really great in real return since the cpi fell 18% .

AdrianC

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Re: What retirement calculator made you FIRE?
« Reply #66 on: February 08, 2017, 06:49:04 AM »
bolded above are very subjective.  and most here would argue the 4% rule is already and incredibly large margin of safety.

The margin of safety in the 4% rule is eroded if our expenses rise faster than inflation.

What do you have in your budget for health care costs in FIRE?

boarder42

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Re: What retirement calculator made you FIRE?
« Reply #67 on: February 08, 2017, 07:13:59 AM »
bolded above are very subjective.  and most here would argue the 4% rule is already and incredibly large margin of safety.

The margin of safety in the 4% rule is eroded if our expenses rise faster than inflation.

What do you have in your budget for health care costs in FIRE?

Plan to use healthshare so around 6k per year.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #68 on: February 08, 2017, 03:55:15 PM »
that is what i pay in premiums in ny with care connect  . but i have a 4500.00 out of pocket and an insane deductible
« Last Edit: February 08, 2017, 04:03:16 PM by mathjak107 »

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Re: What retirement calculator made you FIRE?
« Reply #69 on: February 08, 2017, 04:58:57 PM »
The safest plan as you define it is not running out of money but some people might state the safest plan is to work as little as possible. There are trade-offs.

Definitely!  I subscribe to this idea: working too long is a failure to maximize life potential, which is more important to me than maximizing money potential.

Though I'd used a couple of calculators (Personal Capital and cFiresim) it was actually my budget spreadsheet that helped me pull the plug. I found a really detailed budget spreadsheet that helped me map out the big irregular expenses (home repairs, new car, health care, etc) and that build my comfort level that we could manage on the minimum level that the worst case scenarios on all the calculators predicted.

Of course we actually spend more than that based on our portfolio performance, but it was building confidence in how low we could go that let me pull the plug.

Nice!  Do you have a link to where you found the spreadsheet?

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Re: What retirement calculator made you FIRE?
« Reply #70 on: February 09, 2017, 12:36:38 AM »
The safest plan as you define it is not running out of money but some people might state the safest plan is to work as little as possible. There are trade-offs.

Definitely!  I subscribe to this idea: working too long is a failure to maximize life potential, which is more important to me than maximizing money potential.

Unfortunately though I'm still working while you're galavanting around somewhere. Not that I'm jealous at all though. It doesn't preoccupy my thinking or anything like that.

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Re: What retirement calculator made you FIRE?
« Reply #71 on: February 09, 2017, 02:33:25 AM »
The safest plan as you define it is not running out of money but some people might state the safest plan is to work as little as possible. There are trade-offs.

Definitely!  I subscribe to this idea: working too long is a failure to maximize life potential, which is more important to me than maximizing money potential.

Unfortunately though I'm still working while you're galavanting around somewhere. Not that I'm jealous at all though. It doesn't preoccupy my thinking or anything like that.

Hah, this made me laugh.

The awesome thing is basically how sure FIRE is. Like sure, something terrible could happen (knock on wood and all that), but that's quite unlikely (and could happen anyways, having nothing to do with FIRE), so in the vast, vast majority of cases, spend less than you earn for year after year, and you'll hit FI/ER.

That makes me happy, knowing that you will get there.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #72 on: February 09, 2017, 02:41:25 AM »
it can also be thought of as the goal is working as little as possible . a  good financial plan helps you get and stay there .
« Last Edit: February 09, 2017, 03:33:13 AM by mathjak107 »

jim555

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Re: What retirement calculator made you FIRE?
« Reply #73 on: February 09, 2017, 04:06:56 AM »
What calculator?
A simple amortization table set with a reasonable rate of interest for the return.  The stashe total is put in the sheet and the number of years between FIRE and pension/SS calculated.  Very simple.  I need to get to pension/SS (70 old for max benefit) age from the FIRE age.  The pension/SS is enough to survive on indefinitely.

steveo

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Re: What retirement calculator made you FIRE?
« Reply #74 on: February 09, 2017, 04:23:59 AM »
The safest plan as you define it is not running out of money but some people might state the safest plan is to work as little as possible. There are trade-offs.

Definitely!  I subscribe to this idea: working too long is a failure to maximize life potential, which is more important to me than maximizing money potential.

Unfortunately though I'm still working while you're galavanting around somewhere. Not that I'm jealous at all though. It doesn't preoccupy my thinking or anything like that.

Hah, this made me laugh.

The awesome thing is basically how sure FIRE is. Like sure, something terrible could happen (knock on wood and all that), but that's quite unlikely (and could happen anyways, having nothing to do with FIRE), so in the vast, vast majority of cases, spend less than you earn for year after year, and you'll hit FI/ER.

That makes me happy, knowing that you will get there.

I was only joking but I completely agree with your comments. FIRE to me is robust. It's basically going to work in most cases in the western world.

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Re: What retirement calculator made you FIRE?
« Reply #75 on: February 09, 2017, 04:27:57 AM »
it can also be thought of as the goal is working as little as possible . a  good financial plan helps you get and stay there .

I think so but trying to be 100% safe goes against this goal. You can't have meet both goals. Personally I'm prepared to take more of a risk or adjust a little earlier. I'm comfortable with a 5% WR to FIRE but I may choose to work part-time or do OMY at that point if work seems fine. I don't want to be blindly working towards a 4% or lower WR.

As per the thread topic I use cfiresim and I'm pretty comfortable with a probability of success greater than 70%. Once I get to that level I will be reassessing work on a year by year basis.
« Last Edit: February 09, 2017, 04:30:45 AM by steveo »

boarder42

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Re: What retirement calculator made you FIRE?
« Reply #76 on: February 09, 2017, 05:26:01 AM »
it can also be thought of as the goal is working as little as possible . a  good financial plan helps you get and stay there .

I think so but trying to be 100% safe goes against this goal. You can't have meet both goals. Personally I'm prepared to take more of a risk or adjust a little earlier. I'm comfortable with a 5% WR to FIRE but I may choose to work part-time or do OMY at that point if work seems fine. I don't want to be blindly working towards a 4% or lower WR.

As per the thread topic I use cfiresim and I'm pretty comfortable with a probability of success greater than 70%. Once I get to that level I will be reassessing work on a year by year basis.

i'm pretty similar to this.  My old largest concern of healthcare is now not much of a concern since i've found healthshare.  So what the politicians decide to do now doesnt really affect me in the largest used to be variable cost arena.  Depending on my side gig income and my current status/position/happiness at my current job a may FIRE up to 2 years before hitting our 4% SWR level.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #77 on: February 09, 2017, 05:35:53 AM »
What calculator?
A simple amortization table set with a reasonable rate of interest for the return.  The stashe total is put in the sheet and the number of years between FIRE and pension/SS calculated.  Very simple.  I need to get to pension/SS (70 old for max benefit) age from the FIRE age.  The pension/SS is enough to survive on indefinitely.

unless you are getting that interest rate every year ,with never spending down in a down year like with markets and or  inflation that has negative return years your simple calculator can run out of money up to 15 years to soon depending on the sequence of those gains and losses . the exact same average return varies by up to 15 years  in how long  the money will last .

sequence risk is the biggest factor  once you are spending .

boarder42

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Re: What retirement calculator made you FIRE?
« Reply #78 on: February 09, 2017, 05:39:48 AM »
What calculator?
A simple amortization table set with a reasonable rate of interest for the return.  The stashe total is put in the sheet and the number of years between FIRE and pension/SS calculated.  Very simple.  I need to get to pension/SS (70 old for max benefit) age from the FIRE age.  The pension/SS is enough to survive on indefinitely.

unless you are getting that interest rate every year ,with never spending down in a down year like with markets and inflation that has negative return years your simple calculator can run out of money up to 15 years to soon depending on the sequence of those gains and losses . the exact same average return varies by up to 15 years  in the money lasting .

so what's your recommendation.  i mean you keep spouting doom and gloom and basically you're saying oversave ... whats your SWR number that people should be shooting for in your opinion and how many years of work should the sacrafice to get it.  Yes when you're retiring at 55 or 60+ its gonna be a lot harder to make an extra buck and you likely have already lived a life full of extra luxuries and built up a large lifestyle and likely a large paycheck to match so your risk has been increased when leaving.  but a 20 something saving 60%+ that was dedicated and driven at an early age to learn about this and accomplish it ...  I mean i guess just lay out what your number is b/c you keep saying oh but dont for get about what if this what if that.  you can what if yourself down to 100% expected hyperinflation adjusted cash and never retire at all.  so where do you draw your line.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #79 on: February 09, 2017, 05:45:02 AM »
i like 90% in fidelity and firecalc , especially for long periods of retirement . at least for the starting gate if you want some pretty high odds of not going back to work .

if you are not trying to rule out working than go with any amount you like .

i don't spout doom and gloom .  .  i don't want to work out of need  , ever again if i can help it  so i like high odds of success . but  i would not work longer to get those odds . i would make lifestyle changes to raise the odds based on what i did have at the point i wanted to pull the plug . . .

« Last Edit: February 09, 2017, 05:46:46 AM by mathjak107 »

boarder42

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Re: What retirement calculator made you FIRE?
« Reply #80 on: February 09, 2017, 05:55:17 AM »
Yes you still are using non exact terms.  90% success exact.  "lifestyle changes" non exact and just a big bubble in which to store things. 

90% is where the 4% SWR comes in at when i run Cfiresim with a 90.10 split for 40 years - b/c much longer and you start to miss some bad years.  if you take 2MM and 80k in spending which is greatly non mustachian .  and you allow yourself to work (or spend 5k less) on a variable spending plan this goes to 100% and your actual spending climbs thru the roof if you want it to. 

just further proof that the 4% rule is 100% fine and if anyone FIREs based on this rule knowing they need slight flexibility to earn a bit or spend a bit less then there is no reason to be spouting doom and gloom you say you dont but you do ... i dont have time to go back and find posts of i had a friend who ran out of money etc. posts.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #81 on: February 09, 2017, 06:05:22 AM »
the key word is flexibility .

i tried explaining that to you guys earlier .

if you are planning on cutting back if things do not go well market wise before considering working you need things to be able to cut back .

there is little to cut back when you planned a lifestyle around an amount that has much if not all the budget a need and not a want.

so the ratio of non discretionary spending vs discretionary has to be planned when you set up that retirement life style .

the more discretionary spending in the budget the more flexibility you have for the awe craps in life .

for the 2nd year in retirement we are getting hammered again with dental expenses that are 5 digits for us . luckily we can adjust spending elsewhere easy enough .

not everyone is going to plan around the same level of discretionary spending . some will have planned around more expensive basic lifestyles  that are a lot more non discretionary .

then the recourse is work ,like it or not .

my example is we own investment co-op's in manhattan over looking central park . i would love to live there in retirement . but the cost of living is so high our non discretionary expenses would be insane . so instead we are staying here in queens in a nice area  which costs a fraction of what manhattan cost . if we had to cut back   we would have little flexibility living in manhattan . so we balanced out the lifestyle to the point that we felt comfortable with the ratio .

« Last Edit: February 09, 2017, 06:15:38 AM by mathjak107 »

boarder42

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Re: What retirement calculator made you FIRE?
« Reply #82 on: February 09, 2017, 06:15:01 AM »
no one here i think is advocating for lack of flexibility. 

increasing discresionary just increases years to FIRE.  you dont have to magically come up with the extra the market lost or the extra you need to spend in any given year. 

and 'work' is not the correct term.  finding a stream of income is the correct term.  when you say work you're acting like you must re enter the market place.  there are many ways to find streams of income thru hobbies or other things than the job you left.  or going to mcdonalds.

its not a 1 for 1 replacement.  the market dropped 40% in 2008 you dont have make up 40% of your spending level that year b/c the market dropped.  a simple calculation based on historic models says you could just drop your withdrawal based on the variable spending patterns to no more than 6.25% less of your starting SWR and still be fine forever at 100%. 

i make probably close to 30k a year in mostly passive income thru buying and selling tickets and tradelines.  this isnt really "work"
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #83 on: February 09, 2017, 06:17:24 AM »
2008 was a short v-shaped drop , it really was not a factor as far as retirement planning . recovery was fast . what is a problem is moderate drops that are extended and u-shaped  and burning up excessive assets trying to pay the bills if they occur .

we have had a few but with some flexibility in the budget even that could likely be adjusted out unless it was severe .


the problem with trying to earn "extra income " is extra income becomes harder to find in the times you may need it the most . downturns can be not the best time to try to find a source of extra income whether hobby , working or other wise .

but these are issues you will have to work through on a case by case .
« Last Edit: February 09, 2017, 06:20:57 AM by mathjak107 »

boarder42

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Re: What retirement calculator made you FIRE?
« Reply #84 on: February 09, 2017, 06:19:28 AM »
2008 was a short v-shaped drop , it really was not a factor as far as retirement planning . recovery was fast . what is a problem is moderate drops that are extended and u-shaped  and burning up excessive assets trying to pay the bills if they occur .

we have had a few but with some flexibility in the budget even that could likely be adjusted out unless it was severe .

that statistic is not based on 2008 but based on back testing against 40 years of all the bad times in the markets.  and 2008 you wouldnt have had to adjusted at all based on where we are at now.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #85 on: February 09, 2017, 06:22:14 AM »
2008 was a non event for retirees who stayed the course . their balance this far in is no different than any other average retire group would have been without 2008 . .

as kitces said
Ultimately, the key point here is simply to recognize that the 2000 retiree is merely ‘in line’ with the 1929 retiree, and doing better than the rest. And the 2008 retiree – even having started with the global financial crisis out of the gate – is already doing far better than any of these historical scenarios!

https://www.kitces.com/blog/how-has-the-4-rule-held-up-since-the-tech-bubble-and-the-2008-financial-crisis/#more-7856
« Last Edit: February 09, 2017, 06:25:53 AM by mathjak107 »

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Re: What retirement calculator made you FIRE?
« Reply #86 on: February 09, 2017, 06:24:56 AM »
correct thanks for repeating what i said.  above you i said it was just an example of a down year.  you can use the 60s or the 30s etc. they all show in cfiresim and show the strategy i mentioned above works.
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mathjak107

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Re: What retirement calculator made you FIRE?
« Reply #87 on: February 09, 2017, 06:27:52 AM »
2000 was a worse event for retirees than 2008  in the classic portfolio allocations ..

jim555

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Re: What retirement calculator made you FIRE?
« Reply #88 on: February 09, 2017, 07:42:02 AM »
What calculator?
A simple amortization table set with a reasonable rate of interest for the return.  The stashe total is put in the sheet and the number of years between FIRE and pension/SS calculated.  Very simple.  I need to get to pension/SS (70 old for max benefit) age from the FIRE age.  The pension/SS is enough to survive on indefinitely.

unless you are getting that interest rate every year ,with never spending down in a down year like with markets and or  inflation that has negative return years your simple calculator can run out of money up to 15 years to soon depending on the sequence of those gains and losses . the exact same average return varies by up to 15 years  in how long  the money will last .

sequence risk is the biggest factor  once you are spending .
The calculation is run every year.  If I am under budget the amount will increase as time shortens by one less year and the under amount is "backed up".  The investments are very conservative and are a lot less volatile than an ordinary portfolio. A lot less risk and less reward than a normal person would take.

This approach works for me.  YMMV.




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Re: What retirement calculator made you FIRE?
« Reply #89 on: February 09, 2017, 01:40:39 PM »
I was also pretty happy with the cfiresim and personal capital.
I also like the drawdown tables made by www.i-orp.com
Recently, I really like the SWR toolbox on ERN.

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Re: What retirement calculator made you FIRE?
« Reply #90 on: February 09, 2017, 01:42:14 PM »
correct thanks for repeating what i said.  above you i said it was just an example of a down year.  you can use the 60s or the 30s etc. they all show in cfiresim and show the strategy i mentioned above works.

mathjak107 makes some reasonable points however I think most people on here get that. I agree that if you are aiming for a bare bones spending level and you just get there and if something goes wrong you may need to adjust. Personally I have plenty of backup options in my plan and I assume most people do.

In reality the statement should be don't have no room to move and if you meet a 4% and possibly higher WR you should be fine.

human

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Re: What retirement calculator made you FIRE?
« Reply #91 on: February 15, 2017, 06:38:40 PM »
I think I'm blind. I can't figure out how to include yearly additions to my portfolio between now and retirement in cfire. Where does this go?

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Re: What retirement calculator made you FIRE?
« Reply #92 on: February 16, 2017, 12:18:18 AM »
I think I'm blind. I can't figure out how to include yearly additions to my portfolio between now and retirement in cfire. Where does this go?
Which calculator are you using?
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Re: What retirement calculator made you FIRE?
« Reply #93 on: February 16, 2017, 03:17:23 AM »
I think I'm blind. I can't figure out how to include yearly additions to my portfolio between now and retirement in cfire. Where does this go?

I put this in "other income." Put in your yearly amount and the years you'll be adding to your portfolio. It doesn't matter if it's before or after your RE date.

human

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Re: What retirement calculator made you FIRE?
« Reply #94 on: February 16, 2017, 07:10:22 PM »
Thanks mmmdonuts. Metro mouse I was talking about cfiresim.

Metric Mouse

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Re: What retirement calculator made you FIRE?
« Reply #95 on: February 17, 2017, 01:48:11 AM »
Thanks mmmdonuts. Metro mouse I was talking about cfiresim.
*facepalm* You clearly stated that. Not sure how I could have missed that; sorry!
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Re: What retirement calculator made you FIRE?
« Reply #96 on: February 17, 2017, 02:51:58 AM »
Thanks mmmdonuts. Metro mouse I was talking about cfiresim.
*facepalm* You clearly stated that. Not sure how I could have missed that; sorry!
I missed it too, and had the same question. Apparently we both glossed over it.
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Re: What retirement calculator made you FIRE?
« Reply #97 on: February 18, 2017, 10:02:42 PM »
If you track your spending, I don't think you need a retirement calculator. Like Spartana, if you know how much you need and want (discretionary) to spend in a month, it's pretty easy to figure it out. For example, using 4% as my safe withdrawal rate, which can be adjusted a bit in response to the market, I figured I wanted a certain amount per month from my savings on top of pension and other income. In my case, we reached the savings amount that gave us the target monthly SWR and retired.

I like Mathjak's cautious and sensible approach. I am reminded of friends and family who are struggling to get by because they failed to save enough money. My heart goes out to them, whatever caused the situation.