Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

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JoeRetire
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Re: Fidelity says I am in good shape with a 4.5% withdrawal. Living to 85 starting at 55. What do you think?

Post by JoeRetire »

I think it's an extremely simplistic and unrealistic tool.
They seem to prioritize requiring very little input, and the quality of the advice suffers accordingly.
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SlowMovingInvestor
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by SlowMovingInvestor »

If you have an account at Fido, you can access their planning tools, which are far more sophisticated.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by David Jay »

Sorry, but that is a terribly simplistic calculator.

It really only works for those who have not yet retired. For instance, it assumes that I will need 80% of my current income in retirement (I need 100% of my current retirement income in retirement), SS payment is based on my current income assuming it is the income from my earning years, etc. And I do not see any ability to adjust those numbers.
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iamblessed
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by iamblessed »

FIRECalc says 74% success rate going with the calculator. With SS I get up to about 80%
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by RetiredAL »

iamblessed - Like David Jay, I too am concern that about a tool that skips over your actual spending needs.

In a simplistic format, start with your current spending using this simple concept.

Current Spending Needs = last_years_take_home_pay MINUS your_not_employer_plan_savings_$

You then modify that number by KNOWN tax $ changes when retired, such as here in Calif SS is not taxed.

That will bring you close to your income needs when retired. That income will come from SS, retirement pay, withdrawals from retirement plans, and any taxable investment/savings income.

Whereas David Jay needed 100%, I found we only needed 65%. Each person will be different. Our's was low because we had been fully funding our Roths out of our take_home_pay and the impact to CA SS taxation savings.

Work plans such as 401K or 403B don't enter into that equation as they are not in your take_home_pay. In my case, I was also funding 401K in addition to the Roths.

Our withdrawal rate last year is just slightly above 2% of our combined IRA and Roth balances. Leading up to retirement, I was shooting for being under 3%. I personally would not feel secure at a 5% rate.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by student »

SlowMovingInvestor wrote: Wed May 05, 2021 6:33 pm If you have an account at Fido, you can access their planning tools, which are far more sophisticated.
I like the tool and I think Fidelity let you create a guest account to use it. https://www.fidelity.com/calculators-to ... d-guidance In my experience, it is similar to the one from Personal Capital.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by RudyS »

Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by austin757 »

I think a 5% WR is fine.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by stocknoob4111 »

that is a silly calculator, it bases your retirement expenses on your current income... to be fair a lot of calculators do this. For instance, in my personal circumstance, I live on a fraction of my current income so I don't need all that much in retirement.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by 59Gibson »

the calculator is no better or worse then others out there if used appropriately. If you're close to retirement you can simply put in your current expenses/yr.. not income, enter 0 for savings, and enter current portfolio and see what it spits out.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Rudy Tooty »

RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
I believe the average male lifespan in the U.S. is around 77 or so. 85 would be a gift. Judging from those I know over 90, I would not want to reach that age. But to each his own.

Based on my genetics I'll be happy to make it to 80. That's a long life.

So for my retirement calculation I'll push it and say 85 tops.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by UpperNwGuy »

RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
The age 85 is an actuarial number coming from the Social Security Administration. It's used by the IRS in their "simplified method worksheet" to determine how my previously taxed pension income is spread across the remaining years of my life. Some people will live longer, and some will die sooner, but 85 seems to be the number in many of these calculations.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Ferdinand2014 »

Fidelity has a very detailed tool that considers expenses, tax bracket, Monte Carlo simulations with 3 different market conditions and is available free if you have anything at fidelity.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Hues10 »

Mathematically speaking, if the overall US market has returned 9%, and after tax let’s just say the 15% dividend and capital gains rate, so rounding to 7.5% return after paying taxes, why is a 5% withdrawal rate not good? On 1 million, you made 75k, withdrew $50k, and have more money than you started. Using average returns in the market. Mathematically you never run out of money unless your withdrawals go above what you earn.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by celia »

UpperNwGuy wrote: Wed May 05, 2021 9:15 pm
RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
The age 85 is an actuarial number coming from the Social Security Administration. It's used by the IRS in their "simplified method worksheet" to determine how my previously taxed pension income is spread across the remaining years of my life. Some people will live longer, and some will die sooner, but 85 seems to be the number in many of these calculations.
OK, so suppose you are in the group who lives longer. Are you going to get a job at 85?

Don’t forget that Bogleheads aren’t like the average person. We tend to have higher incomes because we’re better educated. Both of these attributes correlate with better health and longer lives. No guarantees, but the odds are in your favor that you’ll live longer.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by willthrill81 »

Hues10 wrote: Wed May 05, 2021 9:25 pm Mathematically speaking, if the overall US market has returned 9%, and after tax let’s just say the 15% dividend and capital gains rate, so rounding to 7.5% return after paying taxes, why is a 5% withdrawal rate not good?
Because (1) the OP will likely not have a 100% stock allocation, nor should s/he, (2) it is far from certain that stocks will return 7% (closer to the historic average inflation-adjusted return) over his/her specific retirement period, and (3) because of sequence of returns risk (which is why the '4% rule' is 4% and not 7%).
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JoMoney
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by JoMoney »

Without looking at the tool, I would consider a 5% withdrawal for 30 years "risky".
I would consider a 3.33% withdrawal for 30 years "conservative" or "in good shape".

1/30 = 3.33% and given our current negative real interest rate environment, even that is looking more "risky" since there's not much you can currently put the money in that would promise you to even match inflation. You have to take more risk, and hope things turn out well.
Last edited by JoMoney on Wed May 05, 2021 9:43 pm, edited 3 times in total.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by LunarOpal »

Rudy Tooty wrote: Wed May 05, 2021 9:10 pm
RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
I believe the average male lifespan in the U.S. is around 77 or so. 85 would be a gift. Judging from those I know over 90, I would not want to reach that age. But to each his own.

Based on my genetics I'll be happy to make it to 80. That's a long life.

So for my retirement calculation I'll push it and say 85 tops.
77 is the average male life expectancy at birth.

The average life expectancy of a 65 year old male is 83.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by UpperNwGuy »

celia wrote: Wed May 05, 2021 9:30 pm
UpperNwGuy wrote: Wed May 05, 2021 9:15 pm
RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
The age 85 is an actuarial number coming from the Social Security Administration. It's used by the IRS in their "simplified method worksheet" to determine how my previously taxed pension income is spread across the remaining years of my life. Some people will live longer, and some will die sooner, but 85 seems to be the number in many of these calculations.
OK, so suppose you are in the group who lives longer. Are you going to get a job at 85?

Don’t forget that Bogleheads aren’t like the average person. We tend to have higher incomes because we’re better educated. Both of these attributes correlate with better health and longer lives. No guarantees, but the odds are in your favor that you’ll live longer.
celia,
I am not trying to defend the Social Security life expectancy calculator. I'm simply pointing out that that is where Fidelity likely gets their life expectancy assumptions. If you're interested in calculating your own life expectancy, here's the Social Security calculator: https://www.ssa.gov/oact/population/longevity.html
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Exchme »

Historically, there have been a lot of bear markets that would doom a 5% withdrawal rate. While FireCalc is a simplified look at finances, it's probably in the ballpark that you have a 1 chance in 4 or a 1 chance in 5 of failure based on historical data. Living off only your SS check is obviously a big cut in your standard of living, how will you feel about not having worked a little longer? What will you change to live on just your SS check - are there any of those things you can implement now?

The historical studies generally indicate that a relatively safe withdrawal ratio is 4% for a 30 year retirement (counting $1 left at the end as success). Even at that withdrawal rate, a lot of posters here would point out that with interest rates being so low that today's bonds aren't returning anything and at today's P/E ratios, stocks are priced for things to go perfectly. So those folks would suggest even lower withdrawal ratios might be needed, especially if you live longer than 30 years. The mortality tables I'm using show you have a about a 25% chance of making it to 89 years old, and a 10% chance of almost getting to 94.

FireCalc does nothing to estimate taxes, you have to estimate those yourself and include them as part of your expenses, have you estimated them? Don't forget that your tax deferred accounts are taxable income as you withdraw from them. Have you made allowances for lumpy expenses like major home repairs, a new car, a health issue? Did you include your health insurance to get to age 65 in your expenses?

My bet is with a couple more years of working, you could get to a much safer amount of savings.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by techiegirl »

What if, hypothetically, OP takes a 5% withdrawal at 55 and reduces it to say 4 or possibly 3% when SS kicks in. Is that doable?
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by David Jay »

59Gibson wrote: Wed May 05, 2021 9:05 pmIf you're close to retirement you can simply put in your current expenses/yr., not income ...
Actually, you would need to put in your expenses times 1.25, the calculator assumes you can live on 80% of your current salary.

I am afraid that is what the OP may have done to get a 95% success rate.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by PDX_Traveler »

techiegirl wrote: Wed May 05, 2021 10:03 pm What if, hypothetically, OP takes a 5% withdrawal at 55 and reduces it to say 4 or possibly 3% when SS kicks in. Is that doable?
you can explore this, e.g. with firecalc. Use different expense values, enter portofolio summary, social security estimates and # of years in retirement, etc. Using historical stock, bond and inflation data in a Monte Carlo sim lets you tweak things till you get estimates for success/failure rate ( not to mention target residual or minimum amounts, etc.) that you're comfortabe with. At that point, the expense estimate as a fraction of the total starting portfolio is your initial WR, and will intrinsically adjust to lower WR when SS is claimed.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Metsfan91 »

Without seeing your input, it is hard to say.

Mathematically speaking, it is possible for someone to draw 5% for 30 years and still be able to leave nest egg behind.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by 59Gibson »

5% for 30 yrs does seem to be pushing it, but without knowing how much flexibility is built in, how much of a drop after SS, lower expenses in downturn. 55 is still young enough that if hit with a downturn early a p/t job could help.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by sls239 »

In what way are you looking to use this information?

When evaluating if something is the best tool for the job, it helps to know what the job is.

So are you actually retired and trying to figure out how much you can withdraw this year? Are you trying to figure out if you have enough to retire? Are you trying to figure out if you are saving enough for retirement?
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Hues10 »

I disagree with most of you. Since 1991 to 2020; US market returns have been over 10.7% over 30 years. 10.9% over past 50 years. Run a simulation in excel using exact returns of S&P 500 from 1990 to 2020, and take out 15% taxes starting with $1M and initial withdrawal rate of 5% or 50k. Increase withdrawal rate by 3% per year for inflation. Left with $465k at the end of 2020. No SS kick in either. Stop the 1 to 2% thing to be safe when the math doesn’t support it based on past 30 or 50 years of returns. If you assume less market return then so be it, but 50 year historical S&P 500 returns support a higher withdrawal rate. Mathematically speaking.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by hnd »

lol that tool said i would be in better position to retire at 65 (i'm 40) if i was in a 50/50 portfolio over a 85/15 portfolio.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by dbr »

Hues10 wrote: Thu May 06, 2021 8:28 am I disagree with most of you. Since 1991 to 2020; US market returns have been over 10.7% over 30 years. 10.9% over past 50 years. Run a simulation in excel using exact returns of S&P 500 from 1990 to 2020, and take out 15% taxes starting with $1M and initial withdrawal rate of 5% or 50k. Increase withdrawal rate by 3% per year for inflation. Left with $465k at the end of 2020. No SS kick in either. Stop the 1 to 2% thing to be safe when the math doesn’t support it based on past 30 or 50 years of returns. If you assume less market return then so be it, but 50 year historical S&P 500 returns support a higher withdrawal rate. Mathematically speaking.
If you look in a tool like FireCalc you can find the data for that experiment for all of over 120 years of possible retirements. From that you can decide what the likelihood of getting various withdrawal rates to succeed is. There are other calculations of exactly that which have been posted here from time to time. The punchline is that the worst years to retire, such as 1966, worked at 4% and other years worked at much higher rates, such as 1982 at 8%. So the problem is how to evaluate the risk that a person retiring in 2021 is going to have the bad luck of 1966, or worse, or the good luck of 1982.

Incidentally, in FireCalc a 1990 retiree starting with $1M and a 4% withdrawal for 30 years would end up with over $5M at the end. However, the 1966 retiree would have gone broke about 25 years out, and the 1982 retiree would have over $10M at the end.

So a significant problem in projecting results for using stock and bond portfolios to sustain long retirements is the high uncertainty in results and the issue of how to consider worst case scenarios. Some options include varying the withdrawal scheme and replacing volatile assets with guaranteed income streams such as annuities or TIPS ladders. The latter options can be less than ideal due to being expensive, certainly now. FireCalc includes some options for withdrawal adjustments and the VPW method can be considered. I am not so sure gimmicks to "manage" sequence of returns risk are actually that helpful in the end.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by protagonist »

Rudy Tooty wrote: Wed May 05, 2021 9:10 pm

I believe the average male lifespan in the U.S. is around 77 or so. 85 would be a gift. Judging from those I know over 90, I would not want to reach that age. But to each his own.

The average lifespan of a 55 y o male in the US is about 81, but that is very dependent on wealth.
If you are in the upper quintile of wealth that goes up considerably.
The average lifespan of a 50 year old male born in 1960 in the upper quintile of wealth is about 88.8. In the lowest quintile it is about 76.1.
https://fas.org/sgp/crs/misc/R44846.pdf (see the bar graph on page 13).

Of course, it depends on your health status.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Hues10 »

DBR, nice intelligent post instead of yelling at me that I am nuts. 14 months away from retirement and trying to figure this all out. Thanks again.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by RudyS »

I'm currently also reading a thread about how much to leave to your kids (heirs.) So I am going to propose something derived from both topics. Shoot for a "final" age of at least 90. Or more based in family history. If you last that long, wonderful; if not let the kids enjoy the excess.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by celia »

UpperNwGuy wrote: Wed May 05, 2021 9:43 pm
celia wrote: Wed May 05, 2021 9:30 pm
UpperNwGuy wrote: Wed May 05, 2021 9:15 pm The age 85 is an actuarial number coming from the Social Security Administration. It's used by the IRS in their "simplified method worksheet" to determine how my previously taxed pension income is spread across the remaining years of my life. Some people will live longer, and some will die sooner, but 85 seems to be the number in many of these calculations.
Don’t forget that Bogleheads aren’t like the average person. We tend to have higher incomes because we’re better educated. Both of these attributes correlate with better health and longer lives. No guarantees, but the odds are in your favor that you’ll live longer.
celia,
I am not trying to defend the Social Security life expectancy calculator. I'm simply pointing out that that is where Fidelity likely gets their life expectancy assumptions. If you're interested in calculating your own life expectancy, here's the Social Security calculator: https://www.ssa.gov/oact/population/longevity.html
I don't doubt the Social Security life expectancy information at all, which applies to the general US population. I was just pointing out that the average Bogleheads are likely to live longer than the average of everyone else born the same year as they were.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by UpperNwGuy »

celia wrote: Thu May 06, 2021 2:16 pm
UpperNwGuy wrote: Wed May 05, 2021 9:43 pm
celia wrote: Wed May 05, 2021 9:30 pm
UpperNwGuy wrote: Wed May 05, 2021 9:15 pm The age 85 is an actuarial number coming from the Social Security Administration. It's used by the IRS in their "simplified method worksheet" to determine how my previously taxed pension income is spread across the remaining years of my life. Some people will live longer, and some will die sooner, but 85 seems to be the number in many of these calculations.
Don’t forget that Bogleheads aren’t like the average person. We tend to have higher incomes because we’re better educated. Both of these attributes correlate with better health and longer lives. No guarantees, but the odds are in your favor that you’ll live longer.
celia,
I am not trying to defend the Social Security life expectancy calculator. I'm simply pointing out that that is where Fidelity likely gets their life expectancy assumptions. If you're interested in calculating your own life expectancy, here's the Social Security calculator: https://www.ssa.gov/oact/population/longevity.html
I don't doubt the Social Security life expectancy information at all, which applies to the general US population. I was just pointing out that the average Bogleheads are likely to live longer than the average of everyone else born the same year as they were.
You have no proof for that statement. It may or may not be true. I read a lot of posts on here about people having health problems and not expecting to live to 90.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by RetiredCSProf »

I have used Fido's tool but have not been able to tweak it to make it more closely match my expectations.

For example, my pension is based on a complicated formula that adjusts annually, depending on market returns -- it can go up or down in any given year. Fido's tool assumes my pension remains constant and that I need to withdraw more each year from savings to keep up with inflation.

Also, Fido's tool assumes I am reinvesting my RMD into a taxable account, but I spend my RMD on taxes to pay for Roth conversions. I see no vehicle to fold that into the calculation.
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Re: Fidelity says I am in good shape with a 4.5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Horton »

JoeRetire wrote: Wed May 05, 2021 6:32 pm I think it's an extremely simplistic and unrealistic tool.
They seem to prioritize requiring very little input, and the quality of the advice suffers accordingly.
Just because it’s simple doesn’t mean it’s bad. This view of the tool is meant to encourage you to login to your Fidelity account or to create an account.

This is the first time I’ve seen this version of Fidelity’s tool. I tried it and was surprised that it basically gave me the same score as when I’ve used the more detailed version and painstakingly entered my: income, assets, demographic data, personal SS estimates, detailed asset allocation by fund, etc.
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Re: Fidelity says I am in good shape with a 4.5% withdrawal. Living to 85 starting at 55. What do you think?

Post by JoeRetire »

Horton wrote: Thu May 06, 2021 4:00 pm
JoeRetire wrote: Wed May 05, 2021 6:32 pm I think it's an extremely simplistic and unrealistic tool.
They seem to prioritize requiring very little input, and the quality of the advice suffers accordingly.
Just because it’s simple doesn’t mean it’s bad. This view of the tool is meant to encourage you to login to your Fidelity account or to create an account.
Some simple tools are terrific. Some simple tools are too simple to be of any real use.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by mrspock »

stocknoob4111 wrote: Wed May 05, 2021 8:54 pm
that is a silly calculator, it bases your retirement expenses on your current income... to be fair a lot of calculators do this. For instance, in my personal circumstance, I live on a fraction of my current income so I don't need all that much in retirement.
It’s not silly when you consider that most people don’t have 40-60% disposable income they can spend on building up a giant nest egg. I suspect these tools work fine for the majority of investors.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by JoeRetire »

techiegirl wrote: Wed May 05, 2021 10:03 pm What if, hypothetically, OP takes a 5% withdrawal at 55 and reduces it to say 4 or possibly 3% when SS kicks in. Is that doable?
Certainly. Many do just that.
Whether that makes financial sense, depends on your specifics.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by North Texas Cajun »

Rudy Tooty wrote: Wed May 05, 2021 9:10 pm
I believe the average male lifespan in the U.S. is around 77 or so. 85 would be a gift. Judging from those I know over 90, I would not want to reach that age. But to each his own.

Based on my genetics I'll be happy to make it to 80. That's a long life.

So for my retirement calculation I'll push it and say 85 tops.
Life expectancy increases as one survives. I think the life expectancy for a 55 year old U.S. male is 27 or 28 years.
I’ve seen that statistic, but I cannot remember if that was the mean or the median life expectancy. So it may be that 50% of the 55 year old males will exceed age 82.

Do you think that someday you might change your mind about wanting to reach age 90? I don’t think many 85 year olds commit suicide.
JBTX
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by JBTX »

UpperNwGuy wrote: Thu May 06, 2021 3:42 pm
celia wrote: Thu May 06, 2021 2:16 pm
UpperNwGuy wrote: Wed May 05, 2021 9:43 pm
celia wrote: Wed May 05, 2021 9:30 pm
UpperNwGuy wrote: Wed May 05, 2021 9:15 pm The age 85 is an actuarial number coming from the Social Security Administration. It's used by the IRS in their "simplified method worksheet" to determine how my previously taxed pension income is spread across the remaining years of my life. Some people will live longer, and some will die sooner, but 85 seems to be the number in many of these calculations.
Don’t forget that Bogleheads aren’t like the average person. We tend to have higher incomes because we’re better educated. Both of these attributes correlate with better health and longer lives. No guarantees, but the odds are in your favor that you’ll live longer.
celia,
I am not trying to defend the Social Security life expectancy calculator. I'm simply pointing out that that is where Fidelity likely gets their life expectancy assumptions. If you're interested in calculating your own life expectancy, here's the Social Security calculator: https://www.ssa.gov/oact/population/longevity.html
I don't doubt the Social Security life expectancy information at all, which applies to the general US population. I was just pointing out that the average Bogleheads are likely to live longer than the average of everyone else born the same year as they were.
You have no proof for that statement. It may or may not be true. I read a lot of posts on here about people having health problems and not expecting to live to 90.

I have seen quite a few articles that shows the relationship between wealth/income and life expectancy. Protagonist already pointed this out. I don't think there is any question the median income / wealth of Boglehead participants is significantly higher than median American.
protagonist wrote: Thu May 06, 2021 10:04 am by protagonist » Thu May 06, 2021 10:04 am

Rudy Tooty wrote: ↑


I believe the average male lifespan in the U.S. is around 77 or so. 85 would be a gift. Judging from those I know over 90, I would not want to reach that age. But to each his own.

The average lifespan of a 55 y o male in the US is about 81, but that is very dependent on wealth.
If you are in the upper quintile of wealth that goes up considerably.
The average lifespan of a 50 year old male born in 1960 in the upper quintile of wealth is about 88.8. In the lowest quintile it is about 76.1.
https://fas.org/sgp/crs/misc/R44846.pdf (see the bar graph on page 13).

Of course, it depends on your health status.
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celia
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by celia »

UpperNwGuy wrote: Thu May 06, 2021 3:42 pm
celia wrote: Thu May 06, 2021 2:16 pm I don't doubt the Social Security life expectancy information at all, which applies to the general US population. I was just pointing out that the average Bogleheads are likely to live longer than the average of everyone else born the same year as they were.
You have no proof for that statement. It may or may not be true. I read a lot of posts on here about people having health problems and not expecting to live to 90.
Educated Americans live longer, as others die younger
This is the summary of a research project. When you get to the "New Research" link, that will take you to the study paper.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by TechieTechie »

iamblessed wrote: Wed May 05, 2021 6:46 pm FIRECalc says 74% success rate going with the calculator. With SS I get up to about 80%
What's the general consensus on the acceptable % with FireCalc? Curious.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by Rudy Tooty »

North Texas Cajun wrote: Thu May 06, 2021 6:45 pm
Rudy Tooty wrote: Wed May 05, 2021 9:10 pm
I believe the average male lifespan in the U.S. is around 77 or so. 85 would be a gift. Judging from those I know over 90, I would not want to reach that age. But to each his own.

Based on my genetics I'll be happy to make it to 80. That's a long life.

So for my retirement calculation I'll push it and say 85 tops.
Life expectancy increases as one survives. I think the life expectancy for a 55 year old U.S. male is 27 or 28 years.
I’ve seen that statistic, but I cannot remember if that was the mean or the median life expectancy. So it may be that 50% of the 55 year old males will exceed age 82.

Do you think that someday you might change your mind about wanting to reach age 90? I don’t think many 85 year olds commit suicide.
On a long enough timeline the survival rate for everyone drops to zero.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by vineviz »

RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
I agree. That's a terrible number to use for financial planning purposes unless the OP is in VERY poor health.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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teen persuasion
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by teen persuasion »

vineviz wrote: Fri May 07, 2021 8:52 am
RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
I agree. That's a terrible number to use for financial planning purposes unless the OP is in VERY poor health.
Another agree - I plan out to 105, at least.

My dad is going strong at 90, he and his older sister both renewed their driver's license just before Covid hit. A great aunt lived to 102, and we have a favorite patron at work who is 102 and sharp as a tack!

There's no way I'd want my stash to run out before I do.
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by bertilak »

I think these predictions assume you have run out of money (spent it all) by the end date. I consider that a failure. Someone's life should be a net positive, not a break even.

Don't tell me there are other things in life. True, but it's best to come out ahead in all aspects, including financial.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by iamblessed »

teen persuasion wrote: Fri May 07, 2021 8:57 am
vineviz wrote: Fri May 07, 2021 8:52 am
RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
I agree. That's a terrible number to use for financial planning purposes unless the OP is in VERY poor health.
Another agree - I plan out to 105, at least.

My dad is going strong at 90, he and his older sister both renewed their driver's license just before Covid hit. A great aunt lived to 102, and we have a favorite patron at work who is 102 and sharp as a tack!

There's no way I'd want my stash to run out before I do.
My family are not long livers. Just about all are gone at 85 many before.
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teen persuasion
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Re: Fidelity says I am in good shape with a 5% withdrawal. Living to 85 starting at 55. What do you think?

Post by teen persuasion »

iamblessed wrote: Fri May 07, 2021 9:48 am
teen persuasion wrote: Fri May 07, 2021 8:57 am
vineviz wrote: Fri May 07, 2021 8:52 am
RudyS wrote: Wed May 05, 2021 8:46 pm Biggest concern in my mind is the part about living to 85. Why such an early age? I know many people who get to their 90's and a few over 100.
I agree. That's a terrible number to use for financial planning purposes unless the OP is in VERY poor health.
Another agree - I plan out to 105, at least.

My dad is going strong at 90, he and his older sister both renewed their driver's license just before Covid hit. A great aunt lived to 102, and we have a favorite patron at work who is 102 and sharp as a tack!

There's no way I'd want my stash to run out before I do.
My family are not long livers. Just about all are gone at 85 many before.
Perhaps, then, it makes sense for you. But there's always those outliers, and that's the contingency I'm planning against. If I die young, with $$ left over, no problem. It's if I live longer than planned that I have an issue.

Looking at relations' lifespan is only partially useful, because heredity is only part of the picture. If I use my parents, they are both still healthy at 80/90. They both have at least one sibling that is 90+, suggesting longevity. But they both also had at least one sibling die in their 30s (health issue, not accidental). If I look at their parents, they lived 60 - 75 years each.

I know my dad crunched the numbers on when to take SS, and opted for earlier rather than later, based on the assumption/calculation he'd never reach breakeven in his 80s (based on his parents' lifespans). Wrong! They've both outlived their parents by roughly 2 decades each. To some degree, it's because of medical advances that might have prevented early deaths common generations ago. We and our children/grandchildren might outlive them, with more advances to come, or just generally healthier living.
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