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Old 04-16-2016, 01:56 PM
 
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now that quote i am stealing ha ha ha i love it
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Old 04-16-2016, 01:59 PM
 
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Quote:
Originally Posted by retireinbliss View Post
That's why it's important to have a liquid emergency fund, so when events like this come up you don't have to sell investments at a bad time to raise cash.
yep , none of this stuff has anything to do with the calculator side , the calculator gives you consistent income like your pay check , what you spend it on is up to you or how you prepare for emergency spending is all on your expenses side no different then taxes are an expense side thing .
for those who want to play here is fire calc . i suggest you give it the detailed info on the tabs on top .

you can put in pensions , rentals ,ss , etc . taxes can be entered as expenses if desired .

http://www.firecalc.com/
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Old 04-16-2016, 02:08 PM
 
Location: Central Massachusetts
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Quote:
Originally Posted by mathjak107 View Post
yep , none of this stuff has anything to do with the calculator side , the calculator gives you consistent income like your pay check , what you spend it on is up to you or how you prepare for emergency spending is all on your expenses side no different then taxes are an expense side thing .
for those who want to play here is fire calc . i suggest you give it the detailed info on the tabs on top .

you can put in pensions , rentals ,ss , etc . taxes can be entered as expenses if desired .

FIRECalc: A different kind of retirement calculator
I think that is the best tool people can use. It helped me feel good about the numbers we have even after I put in the worst case numbers.
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Old 04-16-2016, 02:14 PM
 
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i like it but i like fidelity's built in assumptions . it actually bumps health care costs by higher inflation numbers then general stuff . even ltc gets a special inflation rate .

i also like the fact the simulations not only cover the the worst case that happened but the computer tries to find even worse combo's that could have happened but didn't .

i noticed worst case dropped my opening balance by 15% day 1 . i was like holy cow how did it know .

you can also add in different social security scenario's as well as working income and pensions .

it is a tad more conservative then firecalc and lately i like that .
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Old 04-16-2016, 02:21 PM
 
Location: Central Massachusetts
4,800 posts, read 4,844,519 times
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Quote:
Originally Posted by mathjak107 View Post
i like it but i like fidelity's built in assumptions . it actually bumps health care costs by higher inflation numbers then general stuff . even ltc gets a special inflation rate .

i also like the fact the simulations not only cover the the worst case that happened but the computer tries to find even worse combo's that could have happened but didn't .

i noticed worst case dropped my opening balance by 15% day 1 . i was like holy cow how did it know .

you can also add in different social security scenario's as well as working income and pensions .

it is a tad more conservative then firecalc and lately i like that .
The trouble with that calculator you need an account with Fidelity or at minimum a log-in to their site.
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Old 04-16-2016, 02:23 PM
 
Location: Haiku
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I believe the most common way people use a RIP tool is to assess the likelihood that they will not run out of money with a given input model for expenses. What I liked to do with the tool was to dial the knobs to see to what degree that affected the result.

The knobs vary but for me, I did not start using a RIP tool until a few years before retiring so my savings were pretty much fixed at that point, but for many people the biggest dial is the amount of savings you have at start of retirement.

The next biggest knob to experiment with is the withdrawal rate, or if you are not using a fixed rate, the withdrawal model.

Experimenting with asset allocation is also interesting so I would fiddle with that. The difference between 50/50 and 70/30 is surprising little as far as success likelihood, but it does make a difference in ending balance (i.e., how much money you will have left for heirs when you die).

I would also fiddle with input parameters which are actually out of my control but I wanted to see how sensitive my retirement plan was to uncontrolled changes. These parameters are: inflation rate and bond yield.

So rather than using a RIP tool to see whether you can retire successfully, I think it just as useful to understand how sensitive it is to various choices you have and to economic variables.
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Old 04-16-2016, 02:31 PM
 
Location: SoCal
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I used to have an account with Fidelity but I closed it. But I think the calculator from TRow price was pretty good.
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Old 04-16-2016, 03:14 PM
 
71,507 posts, read 71,674,131 times
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Quote:
Originally Posted by TwoByFour View Post
I believe the most common way people use a RIP tool is to assess the likelihood that they will not run out of money with a given input model for expenses. What I liked to do with the tool was to dial the knobs to see to what degree that affected the result.

The knobs vary but for me, I did not start using a RIP tool until a few years before retiring so my savings were pretty much fixed at that point, but for many people the biggest dial is the amount of savings you have at start of retirement.

The next biggest knob to experiment with is the withdrawal rate, or if you are not using a fixed rate, the withdrawal model.

Experimenting with asset allocation is also interesting so I would fiddle with that. The difference between 50/50 and 70/30 is surprising little as far as success likelihood, but it does make a difference in ending balance (i.e., how much money you will have left for heirs when you die).

I would also fiddle with input parameters which are actually out of my control but I wanted to see how sensitive my retirement plan was to uncontrolled changes. These parameters are: inflation rate and bond yield.

So rather than using a RIP tool to see whether you can retire successfully, I think it just as useful to understand how sensitive it is to various choices you have and to economic variables.
what you have to keep in mind is that in reality as kitces pointed out we basically have 3 choices in retirement as a priority and all 3 run counter to each other .

income , legacy money - safety . all three require planning that will usually short change the other 2 so folks really have to decide what is most important .

if you think safety and lowest risk a single premium annuity wins . you can even add a death benefit so heirs get your money back if you die before you at least get what you put in but that fails on having the most legacy money and depending on inflation it can fail to provide enough income .

then we can take a 50/50 mix and we can draw 6.50% from it and hopefully it will not have a worst case outcome and it will provide the highest income and maybe some money for heirs . but that fails on safety .

but if we drop our spending to 4.00% then we have a success rate of 95% and even worst case the money won't run out for 28 years .

a 65 year old couple only has a 7 % chance of being alive 28 years later so when you take the failure rate of the 50/50 of 5% and combine it with only the 7% chance of that couple being alive the failure rate is less then 2% .

so now we have the 50/50 mix rivaling the annuity in safety with a spending cut . but can you tolerate a spending cut that took a million dollar portfolio and dropped it from 65k a year to 40k . that is a 40% pay cut .


so the point is you have to ask yourself a lot of questions up front .

who am i investing for ? income or legacy ?

what is my pucker factor ?

how much spending cuts can i tolerate if i had to ala the 6.50% to 4% cut .

lots of different combo's will work but everything is a trade off
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Old 04-16-2016, 03:38 PM
 
Location: NC Piedmont
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Here is something that occurs to me...

Even if you are dead set against an immediate annuity, you should get a quote and see if it would work or maybe fall just short (since they are profiting; their guess is adjusted a little). If it doesn't come close, you might want to think about why someone who makes a living betting on outcomes won't bet on the one you predicted. Just one more sanity check.
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Old 04-16-2016, 04:27 PM
 
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Here is a a state tax calculator that many ought to pay attention to when transplanting. It shows the effective tax rate by income which can vary considerably from state to state. Some states have very progressive tax schedules that favor the low income over the very affluent. On the other hands some states when compared to others tax average income more compared to to other states and the wealthy less. What is good for one in state X might not be great for another person in that state. It is a calculator worthy of being in the tool box for some contemplating transplanting. It is a very nice picture display that lays all all out in one screen.

The Best?and Worst?States to Avoid Income Taxes
Quote:
but state income taxes are all over the place. Some have progressive tax systems, where top earners pay a higher marginal rate on their taxable income than those who make less. Eight states have a flat tax, applying the same percentage levy across all incomes. Three states actually have regressive income taxes, where the mega-wealthy pay a lower percentage of their taxable income than those in the middle. And nine states have no income tax at all. See how your state stacks up.
Some time ago someone asked me about NC tax reform and how it was playing out. For us our taxes went down even with income going up.
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