So really both these calculators are saying similar things - one is saying there’s a 78% chance you’ll have enough money, the other is saying there’s a 50% chance.
I think it is a mistake to focus on the outermost extreme numbers and treat those like they are likely to happen. You don’t know what the future performance of the market is going to be, and whatever it is, it’s not going to be the steady 6% per year with 3% inflation, or whatever, that most of these other calculators use. I’d much rather see my situation simulated against 100+ actual historical market periods. And if my plan would have succeeded historically 80 or 90% of the time, then I feel pretty comfortable.
If ESPlanner is giving probabilities, chances are (ha!) it is computing these huge outliers as well, it’s just not telling you what they are. If filecalc only reported there was a 78% chance you wouldn’t run out of money, without reporting the result of each simulation, would that make you feel better about it?
The other reason I like filecalc is that there are way more knobs and dials to twiddle than any other calculator I’ve seen about future income, when you get it, spending patterns, portfolio construction, using the 4% rule, one time events, etc. Might be too complicated for some, but I like twiddling the knobs.
I have my old 401(k) money in Fidelity, but it is such a puny amount ($60k or so) that they do not bug me. They also do not bug Mr. B even though he has substantially more in his. Probably too little for them to bother, too!
Mr. B says we need to spend all of our retirement funds… the whole idea of leaving inheritance is repulsive to him (the kids can have fun with our old house when we are gone). If we could do it starting from $0, the kids could do, too, especially when we paid for their education.
Fidelity doesn’t bug us, even tho we have half our assets with them. Schwab doesn’t either, tho we have the other half of our assets there. We prefer to be left alone so everyone’s pretty happy.
We have most of our money at Fidelity, it’s gotten to be a pretty big pile, and several times a year I’ll find a message on the machine from some account rep who wants to get together to “review my retirement accounts and make sure we’re on track” or “tell me about the services Fidelity offers” or some-such.
I think they would like me to sign up with their managed account people, so they can scrape another percent off of my balance every year, or sell me annuities, or whatever. I never return their call, they haven’t gotten the hint.
But I have no doubt that if they catch me using their retirement calculator, within a week I’d be getting another call.
Just ignore it. That’s what we do with the messages form E*trade - they would love to help us “diversify our portfolio” (by creating unneeded capital gains tax, lol). Mr tells them that he hopes to strike it rich when cancer is cured.
The majority of our retirement income will come from rental properties, can’t “spend” those or there’s no more income!
Could leave it all to charity, I guess. It won’t be such a huge pile that it would really spoil the kids, I don’t think, just help them with their retirements.
Isn’t this one of the reasons caller ID was invented?
@notrichenough Do you foresee a point as you age where you would cut back or liquidate your real estate portfolio? I would assume that takes some fairly active management. Due to physical or mental limitations in old age, many people move to more passive investments at some point.
I didn’t describe it well. ESPlanner gives probabilities, based on MonteCarlo, on what our “standard of living” will be, based on stated life expectancy, asset allocation, etc. It reports on the 5th, 25th, 50th, 75th, and 95th percentiles of what our standard of living will be in constant dollars per living adult. ESPlanner, as I use it, smooths consumption to determine the standard of living; it doesn’t do a FIRE thing where you specify the annual drawdown and then it figures out if you’re homeless or living below your means.
The outer bands keep getting more extreme, but the 50% band stays relatively steady over the years.
@doschicos Hopefully one of my kids will be local and can take over some of the management burden. After all, they will be inheriting it!
If that doesn’t pan out, at some point we will get a property manager and take the 10% hit on our rental income.
My cap rate is at least 8% at the moment, and I have tenants increasing my equity by about $8K/month. Hard to see what other investment could provide this kind of income stream that will continue forever.
Mr. B thinks that rental properties are a headache and a money sink… He is sort of right. On a $400k condo (don’t laugh - that is what a 1 BR condo costs in Seattle), there will be close to $12k a year in taxes and HOA. Realistically, it can be rented for $24k a year ($2k a month is what the rent will realistically be)… It is a 3% return on your $400k principal, before taxes, and a pain in the butt.
I don’t use the free online one. Tbh, I couldn’t make heads or tails of it last time I tried it (some years ago).
I use ESPlannerPLUS, because that has MonteCarlo. It costs $199 (the non-MonteCarlo costs $149), but annual renewals are (iirc) $70. It’s kind of stupid for me to keep renewing, because I know that we’re good to go. But, I keep it to show DW that, yes, honey, I’m not lying, you really could retire and we won’t be eating Alpo.
I got it initially because I wanted a real economic analysis, without a vested interest (you need to save more, and have we ever got the place for you to do that). It accounts for many things that are of interest and I can set it for a pretty pessimistic outlook, which reassures me.
It’s the pain in the butt part that always nips the idea in the bud for me. I have a few family members that do investment real estate and they actually seem to enjoy it, even dabbling in the airbnb thing. To me, it seems like a lot of headaches I wouldn’t want to worry about. We talk on here a lot about SWAN (sleeping well at night). With my personality, any tenants issues would not allow me to SWAN.
Now, a relative in another state bought a dilapidated condo for $50k, put $20k in repairs, and comfortably rents it out for $1500 a month. If one can find this kind of a deal, then it makes sense even with the PIA.
" But, I keep it to show DW that, yes, honey, I’m not lying, you really could retire and we won’t be eating Alpo."
@IxnayBob Why do I have the impression that this isn’t why your wife is still working? My guess is she reaps something other than just a paycheck from her job.
@doschicos, yes, you caught me, I was fibbing :)) But, that said, we still do the merry-go-round on:
Me: Honey, why not work at something you love, or that does good things for the world?
DW: Well, do we have enough?
Me: It depends on what you mean by “enough.” Enough to fly private? No. Enough to live a happy, secure life? Yes.
DW: Well . . .
DW gets great satisfaction from her job. When I say retire, I don’t necessarily mean never working again. It would be nice if she were less stressed and worked for people whose success made her happier.
