Author Topic: Fidelity Retirement Planning Tool - thoughts?  (Read 2602 times)

ZiziPB

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Fidelity Retirement Planning Tool - thoughts?
« on: September 27, 2017, 11:35:03 AM »
Does anyone use the Fidelity Retirement Planning Tool that is available on their website?  The one where you plug in all your numbers and it gives you a score indicating how well you are doing in preparing for retirement.  It seems to run a number of simulations in the background and you can set it to see what your results would be if the markets performed at, over or under average.

What are your thoughts on it?

Frankies Girl

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #1 on: September 27, 2017, 11:58:41 AM »
I like it but it obviously has to be tinkered with to work for those that are doing ER.

I also know it is VERY conservative. So if you're getting a "seems to be on track" type of response, it likely is pretty damn good IRL. They really, really believe everyone is going to be spending money like they were when they were working, if not moreso, so it ends up skewed to wanting you to have WAY more money than you really would need for a typical MMM follower. 

I did like it better when it was called Retirement Income Planning, because it shortens to "RIP" and it makes the morbid part of me giggle - RIP also = rest in peace... which is kind of retiring too I guess? Dog knows, I'm definitely resting more peacefully since I quit working. :)
« Last Edit: September 27, 2017, 12:06:56 PM by Frankies Girl »

ixtap

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #2 on: September 27, 2017, 12:01:44 PM »
My (younger) husband looks likely to run out of money in his 80s if we retire in two years.

It is more flexible than most tools, as it allows you freedom to set any retirement age. It also allows you to set your retirement budget, rather than being based on salary.

It might be interesting to do a side by side with firecalc or other calculator focused on early retirement.

honeybbq

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #3 on: September 27, 2017, 12:40:11 PM »
I was just playing with it quickly and checked the 'spending above average' button for expenses. It came up with me needing 22,000 a month! Whoa, nelly!

Guess I need to be more specific, lol.

Telecaster

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #4 on: September 27, 2017, 12:53:09 PM »
Does anyone use the Fidelity Retirement Planning Tool that is available on their website?  The one where you plug in all your numbers and it gives you a score indicating how well you are doing in preparing for retirement.  It seems to run a number of simulations in the background and you can set it to see what your results would be if the markets performed at, over or under average.

What are your thoughts on it?

It is pretty good as far as retirement calculators go, but it has the basic problem that most of them do, namely that that retirement is set at an age, instead of at a number.  I suppose that's the way the majority of people want to use it, but for most people here our retirement age is the age when we get to 25x living expenses.  That depends a lot on market returns, especially when you get close. 

ZiziPB

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #5 on: September 27, 2017, 01:26:32 PM »
I was just playing with it quickly and checked the 'spending above average' button for expenses. It came up with me needing 22,000 a month! Whoa, nelly!

Guess I need to be more specific, lol.

The tool allows you to plug in specific numbers for spending, income, retirement age, etc.  so try that instead of relying on what Fidelity thinks you should be spending :-)

ZiziPB

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #6 on: September 27, 2017, 01:32:12 PM »
I like it but it obviously has to be tinkered with to work for those that are doing ER.

I also know it is VERY conservative. So if you're getting a "seems to be on track" type of response, it likely is pretty damn good IRL. They really, really believe everyone is going to be spending money like they were when they were working, if not moreso, so it ends up skewed to wanting you to have WAY more money than you really would need for a typical MMM follower. 

I did like it better when it was called Retirement Income Planning, because it shortens to "RIP" and it makes the morbid part of me giggle - RIP also = rest in peace... which is kind of retiring too I guess? Dog knows, I'm definitely resting more peacefully since I quit working. :)

Yes, I remember when it was called RIP :-)  Someone must have finally realized...

I was able to set the exact parameters I wanted in terms of age to stop working, longevity, expenses, future income, etc.  So it seems to have all the flexibility possible in terms of inputs.  But the actual "magic" that happens to come up with a score is a mystery, so I was curious how people feel about that. 

honeybbq

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #7 on: September 27, 2017, 01:52:07 PM »
I was just playing with it quickly and checked the 'spending above average' button for expenses. It came up with me needing 22,000 a month! Whoa, nelly!

Guess I need to be more specific, lol.

The tool allows you to plug in specific numbers for spending, income, retirement age, etc.  so try that instead of relying on what Fidelity thinks you should be spending :-)

I know, I was just trying out the button to do it quickly. I'll say 22k is "above average". Whew!

Gone_Hiking

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #8 on: September 29, 2017, 10:42:00 PM »
I use it.  My previous employer had its 401(k) program with Fidelity and the financial planner in their office showed me how to tinker with it to the best advantage.  The tool has enough flexibility built in to enable a detailed simulation with varying times and settings of planned retirement age, future expenses, pensions and other benefits.  Expenses can be divided into essential and discretionary.  I quite like the display options: time horizon, graphical or tabular format, and desired level of detail. 

Average, Below Average, and Significantly Below Average are three possible stock market return scenarios.  The score represents the expected percentage of expenses at retirement according to the chosen scenario.  Mustachians will probably chose the Significantly Below Average, which should give a nice margin of confidence.    Like many calculators, the scenario it draws is more accurate for those closer to FIRE than those just starting out the journey.

My chief complaint is that a single account has to be designated to one goal only, which makes it hard to model accounts that support more than one goal, such as FIRE and kids college


Mrbeardedbigbucks

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Re: Fidelity Retirement Planning Tool - thoughts?
« Reply #9 on: September 30, 2017, 08:54:56 AM »
I use it regularly. To get the most out of the tool, I think you should use the detailed budget analysis rather than just estimating your expenses. If you estimate your expenses, the tool assumes 2.5% inflation for all of your expenses but if you use the detailed budget option, health care expenses are increased by 5.5% annually for inflation and everything else at 2.5%.  Also, if you have a mortgage or any other type of loan or expense that will end at a certain date, you can enter that in the detailed budget.

Also be aware of their salary growth rate assumption. If you're not yet retired and you enter in your current salary, it assumes you'll get a 4% raise every single year until you retire (1.5% on top of their avg inflation assumption of 2.5%). 

If you plan on working part time or have some kind of side hustle that will bring in some income, you can enter the amount of monthly income you might generate and the year that might start and end under the "additional income sources".

 I plan on early retirement after Q1 2018 (44 yo, wife 39yo) and the Fidelity planning tool is saying we'll run out of money in 2072 with a 90% confidence level. We can live with these results.

Overall I like the tool because it's customizable and conservative but of course it has limitations like any other retirement calculators. I use the Fidelity tool along with Cfiresim. I get much better results with Cfiresim.