It is impossible to predict returns, inflation, tax rates and financial events that may occur in your future such as
your elderly parents running out of money and needing help--or an adult child of yours with children of her own
getting divorced and needing assistance. Few retirement planning programs encourage people to be conservative.
Many programs now are based on "average" or a "success" probability. They fail to tell you that these are results
from past economic conditions and likely will not represent the next 20 or 30 years of your retirement. Further,
they seldom account for investment costs which can rob a large part of your investment growth. Researchers have
found that the average investor does far worse than security indexes used in these plans because the average
investor often buys near the top of market cycles and sells near the bottom. It's for these reasons that I like
to see people not enter all of their savings in a retirement plan so that they have some reserves for economic
surprises. It's also for these reasons that I like people to look at what would have happened to them had they
retired in 1965 because the following years had many return downturns and a period of very high inflation.
I have no idea whether such conditions were worse or better than we will see in our future, but the huge debts
of the world, our country, our states, our industry and our people are things that are not represented in any
of the historical "averages" or "success" probabilities, nor do they account for two decades of little individual
savings for retirement that certainly will have an effect on future consumption and when people will be able
to afford to retire. So my own personal recommendations are to be conservative with your inputs into any
retirement plan.
Last edited by MachineGhost on Wed Nov 04, 2015 5:02 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
the only two i ever liked are fidelity's rip planner and firecalc . i find them the most flexible . i am still playing around with the new revised fidelity planner .
it seems a bit more conservative then the older one . it also does not guesstimate the taxes you would figure in the final report like the old one did .
you can now only choose between average markets -50% success rate and below average -90% success rate . they used to let you do a 95% success rate as well but i only see the two options now .
the other thing i would like see changed is it always will choose to spend the deferred accounts first and no way to change that .
but all in all it is still my favorite . i use firecalc as a 2nd comparison .
Last edited by mathjak107 on Thu Nov 05, 2015 6:01 am, edited 1 time in total.
i also saw on the financial independence and retire early forum who are the founders of firecalc there is a discussion of the new fidelity planner .
it seems if you are not retired yet it generates a score as to how you are doing . i never saw it since we are retired . once you retire it only gives you a projected balances left after meeting the expenses you enter . the projected balance is either on average conditions or worst case . you can see both .
i don't actually bother entering our expenses since i am more interested in a maximum budget i can safely spend . i just keep increasing the expense amount as a lump sum until i get something in the 3-1/2% withdrawal rate range .
it is safely telling us we can draw up to 12k a month inflation adjusted and still stay under 4% . what is nice is you can see the difference when ss kicks in and the results of delaying or taking it early .
you can also add immediate annuity income and see what that does both to balance , rmd's and taxes .
Last edited by mathjak107 on Thu Nov 05, 2015 8:20 am, edited 1 time in total.
over on the early retirement forum they did a comparison of results from some of the planners .
Fidelity RIP and ESPlanner were almost identical, both being the most conservative.
cFIREsim just slightly less conservative, giving me a spending rate about 1% higher.
FIRECalc still less conservative, at 5% higher.
ORP still less conservative, at over 7% higher.
all pretty much in the ball park .
the more conservative planners used monte carlo simulations where much of the others used actual historical data .
historical tends to run a little higher draws since it only deals with the worst we actually have had rather then the worst possible if time frames were not inter-twined with one period effecting the next period . .
Last edited by mathjak107 on Fri Nov 06, 2015 6:15 am, edited 1 time in total.
I wasn't impressed with Fidelity's online planner, but it wouldn't support all of the Full View accounts for some reason. Couldn't set the inflation rate either. So far I like Personal Capital's retirement planner best which runs 5000 simulations, but it does not let you set the investment return as it is determining it from all the linked accounts. If you have a lot of manual accounts as I do with no way to set the return, then its useless.
Have you tried FinancialEngines? http://corp.financialengines.com/ It's pretty heavy duty as far as simulating portfolio outcomes goes and Sharpe is on the board of directors. No gold or alternatives though. Typical Ivory Tower thinking.
Otherwise, I don't find the online versions very trustworthy. They seem way too dumbed down and simplistic.
Last edited by MachineGhost on Fri Nov 06, 2015 9:01 am, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
All you need to do to get any account included is be sure it is designated on your asset page as part of your "retirement" goal.. it does not grab them from full view .
i have every account , even my bank accounts and vanguard all included . they all update instantly automatically . even checks clearing .
i think what the page does where you enter the assets is work in conjunction with full view to auto up date because i manually up date zero out side accounts .
as far as inflation , there is a note when you click on " how is inflation calculated" . right now the new planner is using 2.50% but they are working on the final touches that will let you enter your own rate like the old one let you .
Last edited by mathjak107 on Fri Nov 06, 2015 11:21 am, edited 1 time in total.
mathjak107 wrote:
All you need to do to get any account included is be sure it is designated on your asset page as part of your "retirement" goal.. it does not grab them from full view .
i have every account , even my bank accounts and vanguard all included . they all update instantly automatically . even checks clearing .
i think what the page does where you enter the assets is work in conjunction with full view to auto up date because i manually up date zero out side accounts .
The problem is only 6 of my accounts from Full View show up on the Accounts section to assign to the Retirement goal.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
mathjak107 wrote:
give me an example of one , i will check with mine
E*Trade.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
i understand if you have a fidelity 401k only , you log in through a different screen called fidelity net benefits . the old tool is still being used there .
mathjak107 wrote:
did you add e-trade to full view and do the accounts come up there ?
you should be able to go to the asset page in the planner and check the account box to include it .
Its in Full View but it doesnt come up in the planner. Maybe I should message Fidelity.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
in the planner did you go to the asset sheet and make sure the boxes are checked to include in the retirement escalations ? that is an extra step from just having them in full view .
Yup, but there's a problem with the planner. They're escalating it.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
i have my meeting on monday with our team at fidelity so if you have any thing you would like to see in full view or the rip planner let me know and i will talk to them .
the people we meet with are pretty far up the food chain so their input carrys more weight .
had a nice 2 hour meeting this morning . they will be running quite a few calculations for me .
some interesting points about the rip planner .
inflation figured is expense based.
general goods and services are at 2.50%. they are a combination of historical and the forward looking feds fund rate . healthcare is at 7% , fixed rate mortgages are at zero and college spending is 5% , long term care costs 5.50% .
like i said they do not need thousands of scenario's . they only need worst cases and enough sampling to represent average.
So while they use actual historical data going back to 1926 just like firecalc would it then subjects those time frames to monte carlo simulations testing them out of sequence as well. The 250 simulations are the minimum amount run.
i have another session after they run the simulations next week . they are going to show me how to plug in future one time events too , like house sales , weddings etc
they have another nice tool on line , the income strategy planner . i just ran it for the first time but i have to go through the information as it provided a 28 page report
Last edited by mathjak107 on Tue Nov 17, 2015 4:47 am, edited 1 time in total.
mathjak107 wrote:
had a nice 2 hour meeting this morning . they will be running quite a few calculations for me .
Is there a seven-figure minimum balance to get this kind of service? You don't have to answer if you don't want to. I got jacked up to premium status with Fidelity at a certain point. Not sure what advantage that has unless maybe it's no wait time when I call (maybe once a year).
Despite appearances these are NOT cheezy, half-assed, traffic-draw spreadsheets with no ultimate use for the complex real world.