## Best and/or Recommended Retirement Calculator

### Best and/or Recommended Retirement Calculator

A recent thread about Firecalc revealed it has not been updated since 2007, and calculates on data through 2006. Not including the 2008-2010 market seems to me a fatal flaw.

The Wiki lists Firecalc, T Rowe Price Retirement Income Calculator, and Motley Fool Withdrawal Calculator. In the Firecalc thread referenced above, there was a recommendation for Fidelity Retirement Income Planner.

I'm interested in learning both which one the Bogleheads think is the best, as well as what might be done with your data when you input it. I might forgo using the best if it means my data is going to be sold, or used to target me for sales. I'm currently a Fidelity customer, but not everything is there, so they know far from the entire picture. Has anyone noticed being targeted after giving them more info through using the retirement calculator?

eta: the Fidelity Retirement Income Planner says it is for those who are "within 5 years of retirement or already retired."

The Wiki lists Firecalc, T Rowe Price Retirement Income Calculator, and Motley Fool Withdrawal Calculator. In the Firecalc thread referenced above, there was a recommendation for Fidelity Retirement Income Planner.

I'm interested in learning both which one the Bogleheads think is the best, as well as what might be done with your data when you input it. I might forgo using the best if it means my data is going to be sold, or used to target me for sales. I'm currently a Fidelity customer, but not everything is there, so they know far from the entire picture. Has anyone noticed being targeted after giving them more info through using the retirement calculator?

eta: the Fidelity Retirement Income Planner says it is for those who are "within 5 years of retirement or already retired."

Last edited by Saving$ on Sat May 04, 2013 1:45 pm, edited 1 time in total.

### Re: Best and/or Recommended Retirement Calculator

I have not been targeted after using many different calculators, unless you worry about an e-mail from Fidelity that says something like "Thanks for using our planner, if you have any questions please call us." That's a nice touch I think.

### Re: Best and/or Recommended Retirement Calculator

Played around with this one. Seems to have a fatal flaw - it's max. number of years in retirement is 40. If someone wants to calculate to 99, and is under 59, it won't let you.

### Re: Best and/or Recommended Retirement Calculator

I think the fatal flaw is that it is very likely that you will die before age 99.

But seriously, if you are worried about that then all the calculators have a fatal flaw: They cannot predict the future no matter how hard you try to make them do so. One has to accept that no matter how complicated the calculator is, that life is even more complicated and stochastic and cannot be modelled with any degree of certainty.

But seriously, if you are worried about that then all the calculators have a fatal flaw: They cannot predict the future no matter how hard you try to make them do so. One has to accept that no matter how complicated the calculator is, that life is even more complicated and stochastic and cannot be modelled with any degree of certainty.

### Re: Best and/or Recommended Retirement Calculator

I'm not sure that the Wiki article you are referring to is Retirement calculators and spending, since that Wiki lists many, many more calculators that the ones you mentioned.Saving$ wrote:The Wiki lists Firecalc, T Rowe Price Retirement Income Calculator, and Motley Fool Withdrawal Calculator. In the Firecalc thread referenced above, there was a recommendation for Fidelity Retirement Income Planner.

**Here's how I like to think about which calculators (plural, you need to use many) to explore**.

(1)

**Pick based on the retirement spending model you think will best describe you own future experience**. Although most calculators use the

*model (first year's spending is increased by inflation each year until death), that approach is actually very unreaslistic. The Wiki article Models of spending as retirement progresses will help your more intelligently select a spending model.*

**Constant Real Spending**(2)

**Pick based on the method used to model future investment gains**. Most Internet retirement models use a deterministic investment returns approach. Since that approach doesn't factor in

*Sequence of Returns Risk*, it leads to overly optimistic withdrawal rates, or equivalently underestimates the savings needed at the start of retirement. Much better are calculators using Monte Carlo or Historical Returns approaches for factoring in uncertainty in future investment returns. Actually, use both types of calculators!

(3)

**Pick based on the ability to incorporate federal and state taxes**. Most free calculators do not incorporate complete taxe calculations, so sometimes you are driven to consider calculators that will cost money.

So with these three major decision guides in mind, you can go through the lists in the Retirement calculators and spending Wiki and find suitable candidates.

The Fidelity Retirement Income Planner is a very good free calculator. It uses a Monte Carlo approach to deal with investment returns uncertainty, and offers a high degree of flexibility in dealing with retirement spending patterns.

The Flexible Retirement Planner is another free calculator that is excellent. It also uses a Monte Carlo approach to deal with investment returns uncertainty, and also offers a high degree of flexibility in dealing with retirement spending patterns.

I typcially recommend the Optimal Retirement Planner because it includes a very complete treatment of federal taxes. It provides valuable guidance in developing an optimum strategy for dealing with your taxable and tax-deferred savings accounts. But it is weaker in the area of dealing with future investment returns uncertainty.

Although not free, I suggest you also take a look at the ESPlanner website. I really like this "Economics Approach" to retirement planning. If nothing else, you'll learn a lot at their website.

I personally don't care for the T. Rowe Price Income Calculator because it only allows a Constant Real Spending model in retirement. As I stated earlier, the Constant Real Spending model is too unrealistic for my tastes!

Art

Investment skill is often just luck in sheep's clothing.

### Re: Best and/or Recommended Retirement Calculator

i'm 62 wife 66 i shoot for 95. i like the "fatal flaw" thoughSaving$ wrote:Played around with this one. Seems to have a fatal flaw - it's max. number of years in retirement is 40. If someone wants to calculate to 99, and is under 59, it won't let you.

what i like about it is it is relatively easy. i always put in 3 percent inflation and 2 percent return on investments just to be conservative