FIRECalc

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pedsEDdoc
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FIRECalc

Post by pedsEDdoc » Tue May 24, 2016 7:01 pm

Hello All,

Last night while playing with different scenarios in FIRECalc, I noticed something funny. If I increase my amount saved per year, or change the year I retire (making for a longer retirement) it didn't change the numbers at the bottom of the estimates of what my family would potentially have. No matter what I entered, in the worst case scenario FIRECalc said we would have $290k left after our retirement (despite the different savings amounts per year). The largest possible number changed drastically. Why no change in the bottom number? This makes me a little nervous using this as a potential planning tool. I don't profess to understand all the theory behind FIRECalc and all the assumptions they make to get to certain outputs.

Anyone out there able to enlighten me? I looked in the forums and couldn't find suitable answers.

p.s. I did enter in what my portfolio was and went through and filled in all the other screens FIRECalc offers, not just the first screen. I didn't change the subsequent entries any, only changing entries on the first screen which all gave the same worst case scenario number.

Thanks!

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LadyGeek
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Re: FIRECalc

Post by LadyGeek » Tue May 24, 2016 8:13 pm

This thread is now in the Personal Finance (Not Investing) forum (retirement planning).
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randomguy
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Re: FIRECalc

Post by randomguy » Tue May 24, 2016 8:39 pm

DId you change what year you are retiring in? Pushing out retirement 10 years and saving 100k/year boosted my retirement pile by quite a bit.

pedsEDdoc
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Re: FIRECalc

Post by pedsEDdoc » Tue May 24, 2016 9:49 pm

yes, i moved the retirement date up, meaning that I had to cover more years of retirement on the same amount of savings and interestingly it still had the same number as the worst it could do.

also interestingly, this number is the same number I started my portfolio out at on page one of the FIRECalc.


any ideas?

randomguy
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Re: FIRECalc

Post by randomguy » Tue May 24, 2016 10:35 pm

pedsEDdoc wrote:yes, i moved the retirement date up, meaning that I had to cover more years of retirement on the same amount of savings and interestingly it still had the same number as the worst it could do.

also interestingly, this number is the same number I started my portfolio out at on page one of the FIRECalc.


any ideas?
Lets be clear about what we are talking about. We are looking at the Not Retired tab and setting the retirement year in the future (i.e. 2017+) and adjusting the savings number and not seeing any difference? That sure isn't what I am seeing. Obviously if you retire in 2016, the savings amount doesn't matter (i.e. 1 million/year with 0 years of savings is 0 dollars).

pedsEDdoc
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Re: FIRECalc

Post by pedsEDdoc » Wed May 25, 2016 4:33 am

yes, that is correct. if i change the amount contributed to your portfolio per year (increase it) and change the future year in which I retire (also adjusting for an overall longer length of retirement) the bottom number (what my portfolio would be worth at the end of retirement based on the worst case scenario) doesn't change. in fact, it is always the current value of my portfolio that I input in the first page of firecalc.

this seems fishy.

rai
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Re: FIRECalc

Post by rai » Wed May 25, 2016 7:50 am

Did you change anything regarding the withdrawal method such as the 95% rule or anything on the back page such as leave an inheritance (or other options on the back page?).
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emoore
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Re: FIRECalc

Post by emoore » Wed May 25, 2016 9:15 am

Were all cases 100% success? If so I think the bottom number will always be your current portfolio value.

latexman
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Re: FIRECalc

Post by latexman » Wed May 25, 2016 10:22 am

That may be a bug in the output report. Eyeballing the lowest line at the end of the graph, what is that telling you?

pedsEDdoc
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Re: FIRECalc

Post by pedsEDdoc » Wed May 25, 2016 11:24 am

i didn't change any of the spending models (if i change this I get different outcomes for the smallest amount of the portfolio at the end).

I agree, I think there might be a bug in the model somewhere. this makes me a bit nervous if this bug is there, what else might be off?

yes, all cases were 100% success.

the bottom line was the smallest value and was equal to my portfolio's starting value.

latexman
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Re: FIRECalc

Post by latexman » Wed May 25, 2016 11:34 am

the bottom line was the smallest value and was equal to my portfolio's starting value.
Was this at the far right, at the end of the analysis, or at the far left, at the start of the analysis?

pedsEDdoc
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Re: FIRECalc

Post by pedsEDdoc » Wed May 25, 2016 8:54 pm

it was in the text above the graphs showing all the simulations run. also in looking at the right side of the graph it appears to be at 290k for the lowest one.

latexman
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Re: FIRECalc

Post by latexman » Thu May 26, 2016 4:37 am

Unless you can provide more info, I've got nothing. My cases don't duplicate what you describe. If my 30 year, worst case balance is > my starting balance, the report text above the graphs says my lowest ending balance = my starting balance, which I think is a bug. I thought this is what you were seeing, but apparently not.

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tc101
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Re: FIRECalc

Post by tc101 » Mon Feb 06, 2017 12:43 pm

Firecalc seems very good. Are there other retirement calculators that are as good or even better?
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student
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Re: FIRECalc

Post by student » Mon Feb 06, 2017 12:52 pm

tc101 wrote:Firecalc seems very good. Are there other retirement calculators that are as good or even better?
http://www.cfiresim.com/ is similar. I also like the one provided by Fidelity. Personal Capital also has a good one.

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tc101
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Re: FIRECalc

Post by tc101 » Wed Feb 08, 2017 4:40 pm

Thanks for the info.

I like cfiresim a lot.

The Fidelity ap seems slow and cumbersome.
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liberty53
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Re: FIRECalc

Post by liberty53 » Wed Feb 08, 2017 8:35 pm

pedsEDdoc wrote:yes, that is correct. if i change the amount contributed to your portfolio per year (increase it) and change the future year in which I retire (also adjusting for an overall longer length of retirement) the bottom number (what my portfolio would be worth at the end of retirement based on the worst case scenario) doesn't change. in fact, it is always the current value of my portfolio that I input in the first page of firecalc.

this seems fishy.
It looks like Firecalc uses the initial portfolio value as the lowest value you will ever see since it analyzes your "pre-retirement" years as well as your post retirement years. As long as you are contributing to the portfolio and spending less than your contributions + investment gains your lower bound will always be the value you had to start on day 0 (including the "pre-retirement" years).

You can try keeping the same spending (try something above 4% of initial portfolio value) and then extend out your retirement date with no additional contributions - you should see the lowest portfolio value go down.

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willthrill81
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Re: FIRECalc

Post by willthrill81 » Wed Feb 08, 2017 8:42 pm

liberty53 wrote:
pedsEDdoc wrote:yes, that is correct. if i change the amount contributed to your portfolio per year (increase it) and change the future year in which I retire (also adjusting for an overall longer length of retirement) the bottom number (what my portfolio would be worth at the end of retirement based on the worst case scenario) doesn't change. in fact, it is always the current value of my portfolio that I input in the first page of firecalc.

this seems fishy.
It looks like Firecalc uses the initial portfolio value as the lowest value you will ever see since it analyzes your "pre-retirement" years as well as your post retirement years. As long as you are contributing to the portfolio and spending less than your contributions + investment gains your lower bound will always be the value you had to start on day 0 (including the "pre-retirement" years).

You can try keeping the same spending (try something above 4% of initial portfolio value) and then extend out your retirement date with no additional contributions - you should see the lowest portfolio value go down.
That's right. FIRECalc shows the lowest your balance will ever drop to throughout the withdrawal period, which may be the amount you started with.

I wouldn't recommend using the contribution feature, however, unless you're planning on using the same portfolio during the accumulation period as the withdrawal period, which few people do.
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