Is FIRECalc too optimistic?

[Anonymous]

Anonymous wrote:fwiw, I'm the Firecalc PP. I just ran Cfiresim again. Did Firecalc as well. Plus FA ran them for me yesterday on their massive system. I got the same #s from all three. The outcome on both Cfire and FireC you are putting basic categories in. With FA, he is using our actual accounts and how they have actually performed, in addition to the Monte Carlo on that data.

I think these are great tools as long as everyone understands that so much is dependent on timing in terms of when you retire--into what kind of a market.

I think they’re great tools, too. I have an employment benefit (well, I pay imputed taxes on it) of a certain amount for financial planning every year. Some of the recommended planners seemed scammy, but I picked a reasonable one and had them run numbers. I got a report with so many numbers it makes my eyes glaze over, but once I got through it I realized they were basically running exactly the same kinds of simulations as these tools. Great to validate where I am, and I don’t need to go back to them.

[Anonymous]

All I can say is that my father in law was forced to retire at age 58 and never worked full time again (consulted, taught a couple university classes). When he died at age 84, he and my MIL had the same $500,000 they had when he retired.

[Anonymous]

Anonymous wrote:All I can say is that my father in law was forced to retire at age 58 and never worked full time again (consulted, taught a couple university classes). When he died at age 84, he and my MIL had the same $500,000 they had when he retired.

That’s pretty amazing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:fwiw, I'm the Firecalc PP. I just ran Cfiresim again. Did Firecalc as well. Plus FA ran them for me yesterday on their massive system. I got the same #s from all three. The outcome on both Cfire and FireC you are putting basic categories in. With FA, he is using our actual accounts and how they have actually performed, in addition to the Monte Carlo on that data.

I think these are great tools as long as everyone understands that so much is dependent on timing in terms of when you retire--into what kind of a market.

I think they’re great tools, too. I have an employment benefit (well, I pay imputed taxes on it) of a certain amount for financial planning every year. Some of the recommended planners seemed scammy, but I picked a reasonable one and had them run numbers. I got a report with so many numbers it makes my eyes glaze over, but once I got through it I realized they were basically running exactly the same kinds of simulations as these tools. Great to validate where I am, and I don’t need to go back to them.

Agreed. Once you really get a handle on how they work it is easy to run your own. I prefer the online (as long as you have a decent level of data input) is that you can see all the different trajectories (even if you can follow them) and you are given a range. Worst case, best case, average. As long as I can live with the worst case I feel okay. Many FAs give one outcome, though also state the variability percentage. Granted, FA's is based on 1000s of scenarios and I think that some online calculators are based on around 200. So there's that.

[Anonymous]

Anonymous wrote:All I can say is that my father in law was forced to retire at age 58 and never worked full time again (consulted, taught a couple university classes). When he died at age 84, he and my MIL had the same $500,000 they had when he retired.

That's great! It really is all about expenses. How much one spends as it relates to how much they have.

[Anonymous]

Anonymous wrote:50/56yo with $5.25m in retirement/brokerage accounts, DH will have a pension of about $50k/y.

Trying to figure out if we can retire in 5 years. FIRECalc thinks that we are good to go as long as we spend less than $500k/year (using the Bernicke's Reality Retirement Plan that reduces the spending as one ages). Moreover, it projects us dying with possibly many millions left in our estate....

Do you think that FIRECalc is too optimistic?

I was going to say I think the FIRE calculators are way too optimistic since they do not consider long term care. Retiring at 55/61 with a NW of 7M+, a pension of 50k, and presumably a nearly maxed SS, is not really the definition of Financial Independence Retire Early as you have been independent for a long time and missed the retire early part.

[Anonymous]

FIRE as a movement is also about finding a way to have just as good of a life while spending less money. Maybe focus on that a bit and you can get out of the rat race even sooner.

[Anonymous]

Anonymous wrote:FIRE as a movement is also about finding a way to have just as good of a life while spending less money. Maybe focus on that a bit and you can get out of the rat race even sooner.

No. I want to retire when I cam but spending a lot. Have no desire to spend less. Probably stay until 65 to do that.

[Anonymous]

Anonymous wrote:FIRE as a movement is also about finding a way to have just as good of a life while spending less money. Maybe focus on that a bit and you can get out of the rat race even sooner.

Thing is plenty of people don’t mind work in their 40s and 50s, and collecting a salary is preferable to paying down principle. So much more beneficial financially to find a job you don’t mind and enjoy your daily life as opposed to being unemployed and forced to watch every penny.