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May 02, 2011


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Nice post. I picked up on it on my blog:
A lot can be done with this calculator as you illustrate.

Wow, 9 dollars leftover. That is pretty perfect planning. Although if you live past 85, that 9 dollars will have to go a long way. :)

Thanks for sharing a useful resource.

That's a nice tool! It saves us from having to set everything up in Excel/Goalseek.

But yikes, it's depressing to find out how much money one has to have saved up. Even with just spending $10,000 a year, I'll need to have a minimum of 250,000 saved up, and I'm nowhere near that amount, even though I save like crazy, due to my ultra-low earning power. I know there must be plenty of other people in my shoes too, who can't possibly save the minimum amount to survive in old age. What do they do? Just end up homeless in the end? I plan on working til I physically can no longer work, but what if something happens, and I can't? Old age always worries me. I seriously hope I don't live long. 0_o

BD --

Remember that this calc doesn't take Social Security into account. If you spend $10k per year, SS will cover a big part of that, I'm sure, maybe even the entire amount (does someone know for sure?).

One thing not to ignore is that if your retirement lasts a long time, as we all hope, and mine is in its 19th. year there will be some home maintenance expenses that can be quite high and cannot be ignored. For example, we needed a new roof some years back which was over $20K, apart from lesser expenses such a new furnace, water heater, and various appliances. Having your home painted is also quite expensive, $5K in our case. We also made many home improvements of a non urgent nature. When you figure out your annual expenses be sure to include some money that can go in a savings account for home maintenance.

This calculator may be doing a fairly decent job in general but it cannot be accurately running the simulations on a yearly basis. The reason is I discovered that if you put in 100,000 for spending and 3,000,000 million for savings that it will survive 50 years 100% of the time but will fail 45 years once. This of course is impossible. If it fails over 45 years 1 time then for that simulation you are in negative territory and the extra 5 years cannot bring you back from negative when you have no income.

There is some kind of averaging going on that is not mathematically correct. This makes me not quite trust the results.


Ponder this more I shall

FMF - By the time I retire, Social Security might not even be around. I know, everyone has differing views on this, and some people are very optimistic. Perhaps the government will find a way around it. But I keep hearing statistics that suggest that by 2037 (the time I turn 67), the Social Security fund will officially have more people taking out of it than paying into it. Either the Feds will have to raise taxes to make up for this deficit, or cut Social Security benefits severely. Either way, the outcome will be less money for people who are retired, perhaps even far less than the basic needed for housing & food. So I fear relying on any government assistance - it might not pan out.

I don't think the simulator is doing year by year calculations. In its example, it said "FIRECalc looked at the 120 possible 20 year periods in the available data", so for your example it probably looked at all available 45 year and 50 year periods. If it failed at 45 years but not in 50 years, I think that means that over the 50 year span it had a couple better years early on that built a buffer that carried it through the failure point when there was only 45 years included.


After reviewing your comment I ran a few more scenarios and I think you are correct. The reason is that I must have stumbled on a scenario where the 45 years happened to fall on the last 45 years of the data set, basically ending with this year. As such going to 50 years did not merely add years on the end but had to add years to be beginning because we do not have data for years after this year yet. And thus as you stated, those few years on the beginning were good and made up for the bad years later.

I was wrong. Thanks for the correction.

FIRECalc will work well unless we have a once in a 300 year event / crash that may well be much more worse case than all scenarios. Basically for a 35 year retirement a 3% of portfolio annual rate of spending is considered 100% secure.


My SS is $1067 a month after Medicare is taken out. My 2 pensions are $478 and $544 after taxes and insurance. I only have $74k in my 401k type account.

In the last 5 years, I have withdrawn almost $19k from my 401k and am only down $4.5k. And it is only in a savings type account. Yeah for MO. Our pension funds of all types are doing quite well. (Both my pensions are from the state.) My 401k is used only for home fix ups so far and our final debt payoff in 2006.

I am sitting comfortably now, but I realize that costs will keep going up. Right now, I'm endeavoring to save all of the smaller retirement pension. I currently have about $7.8k in savings. Ouch - I just checked and my Emigrant-Direct account is down to .8%. Guess I need to start looking at other options.

Read up on retirement calculators before you place too much into the results. If you understand what's under the hood, the way you use the output will be enhanced.

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