Outstanding post
@nereo .
@jeromedawg , I used the calculators extensively when planning for FIRE and I think they're among the most valuable tools we have to plan. However, I think they can be very misleading for so many reasons. For me, the main use of the various metrics, whether cFIRESim, FIRECalc, 4% rule, or other tools is to get into a general range for a FIRE number. I know that for myself, if I hadn't had any of them I wouldn't have been able to come up with a realistic target to work towards. However, once I got into that range, they became essentially useless. As others have mentioned, two different people who come up with a 95% success rate in the calculators could have vastly different actual risks.
Also are there any variables to intentionally don't factor in such as Social Security? I hear warnings out there to never expect social security income (as the fund could dry up etc) - I'm about 20+ years out from it...
To address this question directly, here's what I did. I'm not saying this is right for anyone else or optimal, it's just what I did to make myself feel comfortable. First, I tracked my expenses to the penny for about 18 months, and then I modified it to adjust for increases and decreases because I was not working. I multiplied that by 25x. I then worked an extra full year after I hit 25x, and was confident that I would retire then regardless of where the 'stache was. If it was below 25x at that point, I was confident that I had already mitigated the SoRR from if I had quit right when hitting 25x.
Think of it this way - I was basically saying that if I retired right when I hit 25x but after a year the 'stache was well below that, there was a chance I was in the 5% failure cohort. So I preemptively worked that year, taking zero from my 'stache and adding about 2 years of spending to the 'stache. That should fully mitigate the risk from being in the 5% failure cohort even if my numbers didn't look good after the extra year. I was willing to do that because I had a fantastic job that I was happy to stay in for an extra year, and once I quit I knew I couldn't go back due to lapsing certifications. This was probably unnecessary, but I was in such a good place in my job (thank you FU money!) that the extra year was actually the best of my career.
The second thing I did was, about 2-3 years before FIRE, my partner (who FIREd at the same time I did) and I sat down together and we came up with a set of triggers and cuts. For example, if our 'stache drops below the 25x our full spending we have a set of relatively minor cuts that we agreed to beforehand. If we drop below 20x, we have a set of deeper cuts that we'll make in the budget. If we get to 18x then we have more severe cuts, and at 15x we start looking for work. Those aren't exactly the metrics, but you get the idea. Because we've talked these through before we need to make the cuts we both fully understand what each of us will give up and when we'll need to do so. I think this gives us a huge safety buffer, both in terms of financially making it through a rough spot in FIRE but even more importantly it gives us a big relationship safety buffer if/when times get tough. For us being totally on the same page throughout the planning and execution of FIRE has been a real positive in an already great relationship.
I also am ignoring Social Security, although between the two of us that should actually make up a significant part of our spending. We also both have a pension, and we ignored that as well. It's likely that we'll get some inheritance - nothing huge, but probably a 1-5 years of spending - and we ignored that as well.
You'll notice that after hitting 25x, I basically stopped using any tools. This analogy might be strained, but I'm going to see if it goes anywhere. I see the tools providing a similar function to the work you might do to find a neighborhood to move to in a new city. The tools give you a general target to aim for, but lack really vital specifics that make your situation unique. Similarly, you might find a neighborhood that fits the lifestyle you want to have in the new town, but that area has apartments, houses of different sizes, condos, etc. After you've found the neighborhood you stop that search and move on to the search for the specific residence the meets all the unique needs you have. Once you get to 25x, or 80-100%+ in the sims, set them aside and work on fleshing out the actual detailed plan. Your plan will be unique to you, but it'll be a much better fit than generically setting a target percentage to hit in some online tool.