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pilgrim:
If you are using a reverse amortization calculator it will not work.
it assumes a certain gain and inflation rate year after year as a constant.
the real world order of gains ,losses and years of negative real returns and inflation make for totally different results than straight line.
MJ: I've no clue what you're referring to in the context of ER's post.(Yes, I'm familiar with RA calculators, as well as most other types). I don't use calculators as I've developed my own Excel worksheets/macros/etc. over the years. (I used to teach Excel as part of my job.) We former accountant/financial analysts tend to be relatively conversant with the subject.
And no, I don't use constant inflation rates or any other typical gain or loss assumptions. I've been computing my own, real world inflation factors for decades. Like you, I'm well aware of the real world impacts of the order of gains, losses and inflation rate variables.
Yes, certainly there should be something in a person's life, when he starts his life of earning, that guides him towards investment. Those early years are the one's that mean the most with compounding, and also when you should be learning things about how to handle risk.
Yes there should be a users manual for life. It would be a huge book and it should be geared towards the sexes, one for women the other for men.
MJ: I've no clue what you're referring to in the context of ER's post.(Yes, I'm familiar with RA calculators, as well as most other types). I don't use calculators as I've developed my own Excel worksheets/macros/etc. over the years. (I used to teach Excel as part of my job.) We former accountant/financial analysts tend to be relatively conversant with the subject.
And no, I don't use constant inflation rates or any other typical gain or loss assumptions. I've been computing my own, real world inflation factors for decades. Like you, I'm well aware of the real world impacts of the order of gains, losses and inflation rate variables.
I was just trying to see why your results differed from golfingduo without checking them myself through firecalc
Everyone with pensions should use FireCalc and then monitor the discussions of folks who use it and don't have pensions. You will realize how blessed you are,
Amigo, don't mean to be picky, BUT - you are doing something seriously incorrect with the calculator or being very casual with rounding. $40K inflated over 15 years at a 3% factor requires $806,275, and thats assuming 0% return on the yearly declining balance.
The balance from $1M at the EOY 16 (end of year) (age 70-85) would be $193,725. $1M, $40K inflated at 3% per year with 0% earnings would cover 18.93 years. Note that I used a base year + 15, which is the 70 thru 85 number of periods.
I quite understand your basic point but unless you're rounding 800k ish to a M and disregarding almost several 100sK, recheck your calculator. I suspect the vast majority of folks wouldn't disregard the ending balance or the additional almost 4 years of coverage. Yes, we former financial types are anal about accuracy.
Well I personally am not doing anything incorrect at all, because all I did was plug numbers into one of the three links to calculators provided by a post of Golfingduo, and I believe it was the third one listed. You have calculated a different result. Maybe if I had tried all three calculators I might have gotten three different results, I don't know. I did it as a lark, just to see what would happen; the result means absolutely nothing to me and matters to me not one iota. I am set for life. At age 69, I save about $2,000 per month out of my retirement income, which will go down to $1,000 in two more years. I have a paid off townhouse and very substantial reserves in case I would ever need to spend more than my pension income, which is totally inconceivable to me anyway.
As for the rounding it came out to $900,000 plus change, something like $943,000 if memory serves, so I called it "almost a million" in my post, but it's of no interest to me anyway other than idle curiosity.
I did not enter my pension into the calculator because I was curious to see what one calculator would think I needed to live to age 85 spending $40,000 per year. For gains on the unspent funds I plugged in 1% just to be conservative. It's all pretty meaningless anyway in my case. We might as well argue about how many angels can dance on the head of a pin, as far as I am concerned.
Everyone with pensions should use FireCalc and then monitor the discussions of folks who use it and don't have pensions. You will realize how blessed you are,
How true. I just went and tried with and without pension money and what a difference.
I had a 48% chance of not running out of money in 30 years vs a 98% chance of not running out of money.
How true. I just went and tried with and without pension money and what a difference.
I had a 48% chance of not running out of money in 30 years vs a 98% chance of not running out of money.
Bada Bing we have. 99 percent plus rate of not running out of money barring a pension or SS disruption. In fact the investment balance becomes truly impressive. We are already in the Permanent accumulation phase. FireCalc is very assuring, however I know for others it reflects real uncertainties and ever changing assumptions. Anyone with a pension who wants to try FireCalc should convert their pension benefit to a lump sum amount necessary to provide that amount at a 3 and 4 percent drawdown rate and watch the possible differences.
ER - no offense was intended, its not a matter of argument, just simple math. Something is flakey with the calculator you used. Any calculator should provide the same answer.
ER - no offense was intended, its not a matter of argument, just simple math. Something is flakey with the calculator you used. Any calculator should provide the same answer.
Everyone with pensions should use FireCalc and then monitor the discussions of folks who use it and don't have pensions. You will realize how blessed you are,
Don't need no freakin' calculator, earth, wind or fire, to tell us how fortunate we are. We managed to figure that out long before we retired just using our wee little brains. Imagine that!
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