Author Topic: Anyone Using ERN SWR Spreadsheet?  (Read 808 times)

kenmoremmm

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Anyone Using ERN SWR Spreadsheet?
« on: February 16, 2019, 02:19:47 PM »
I downloaded the spreadsheet that ERN has developed here:
https://earlyretirementnow.com/2018/08/29/google-sheet-updates-swr-series-part-28/

On the Cash Flow Assist tab, there are 3 columns for Cash Flow. Examples listed include Social Security (for self and for spouse) and for Additional Medical Expenses.

I'm a bit confused why there would be medical expenses listed here and I'm curious if other users of his spreadsheet have questioned it as well. It seems like the spreadsheet should only allot for income (stocks, rentals, social security, etc) and then you establish your SWR. From there, you compare to your anticipated expenses in retirement and you're good to go.

It's probably one in the same to include medical expenses here vs on a 'spending spreadsheet', so maybe it's semantics. Just curious what others are doing.

secondcor521

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Re: Anyone Using ERN SWR Spreadsheet?
« Reply #1 on: February 17, 2019, 11:05:21 AM »
It's explained in the article:

"We expect $1,000 in additional monthly expenses (e.g. medical) 30 years into retirement (in today’s dollars, adjusted for inflation) and that amount rises to $2,000 after 40 years. This corresponds to the two spouses reaching a certain age where they may scale back other expenses (travel) but face increase medical, in-home care expenses, etc. that will case in a net increase in expenses."

"And, finally, the additional budget for medical expenses, care, nursing homes, etc., see below. This is now inputted as a negative cash flow!"

I have my own home-grown Excel spreadsheet.  It accounts for my SS but, for various reasons, does not account for increased medical expenses in the future.

kenmoremmm

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Re: Anyone Using ERN SWR Spreadsheet?
« Reply #2 on: February 17, 2019, 03:12:08 PM »
But, isn't that just expected expenses? I'm failing to see a reason for differentiation.

secondcor521

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Re: Anyone Using ERN SWR Spreadsheet?
« Reply #3 on: February 17, 2019, 06:41:11 PM »
Well, yes and no.

BTW, I agree that listing expenses on the income side of things is confusing.

I think the idea is that one can think of one's income and expenses today, and have enough to retire, potentially early.  But then one should account for significant changes in the future that might happen to get a more accurate picture.  On the income side, there is SS and maybe a pension.  And of course one should do so on the expense side as well.  I think ERN's thesis is that medical costs increase later in life (expensive cancer treatments or long-term care or memory care).  I think his reason for differentiating is that this category increases later in life more than just the regular x% for inflation every year kind of thing.