The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: nsmall on February 12, 2019, 11:41:32 PM

I am planning having 850k invested when I am 43. I am 39.5 right now.
When I am 60 I get a pension (CalSTRS) of $2,900 a month that has cost of living increase to be added (I think)
When I run my numbers here https://www.firecalc.com/ I add the pension of 2,900 but I only get a .8% improvement.
Can someone help me with my math? I thought it would give me a 100% chance of not running out of money.

OP here. My yearly spending number is 36k and at 30 years with 850k these are my numbers WITHOUT the pension....
FIRECalc looked at the 118 possible 30 year periods in the available data, starting with a portfolio of $850,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 118 cycles. The lowest and highest portfolio balance at the end of your retirement was $632,355 to $4,646,438, with an average at the end of $1,418,000. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 9 cycles failed, for a success rate of 92.4%.
These are the numbers when I ADD the $2900 a month pension
FIRECalc looked at the 118 possible 30 year periods in the available data, starting with a portfolio of $850,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 118 cycles. The lowest and highest portfolio balance at the end of your retirement was $565,385 to $4,688,228, with an average at the end of $1,459,716. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 8 cycles failed, for a success rate of 93.2%.
What am I doing wrong? I dont see how the success rate can only be .8% higher.
Thanks in advance as I have tried 10 times and cant figure this out.

did you put in the monthly amount (2900) or the annual amount (2900*12 = 34800)? If I recall, firecalc uses annual numbers.

CCCA, if you are correct, THANKS.
I just ran the numbers and here is what I got....
Here is how your portfolio would have fared in each of the 118 cycles. The lowest and highest portfolio balance at the end of your retirement was $98,934 to $5,147,918, with an average at the end of $1,918,591. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 0 cycles failed, for a success rate of 100.0%.
This is awesome news. I actually have some other income from 4347 so I dont have to start touching the stash until I turn 47. This just totally pumped me up as I was thinking I would have to work until 50.
Thanks again.