If you accept that assumption, then just tell FIRECalc Now and the day you no longer have any need for your retirement Then it is likely to withstand whatever might happen between Have withstood the worst ravages of inflation, the Great Depression,Īnd every other financial calamity the US has seen since 1871, What's success? You died before your portfolio did.įIRECalc makes a single fundamental assumption: According to the calculator, that strategy would have succeededĨ1.5% of the time. Portfolio of 60% stocks and 40% bonds and were looking to spend $20,000Ī year for the next 30 years, with your spending rising each year along Suppose you retired with $400,000 invested in a low-cost How often your strategy would have panned out historically. Happened if you retired in 1871, in 1872, in 1873 and so on. But the calculator doesn't useĪverage historical rates of return. To gauge your strategy's likely success, Forget plugging in a litany of financial information. At the same time, I also favor instant gratification.
Ith Web sites, what I particularly look for are slick calculators that can help investors make smarter decisions. Staff Reporter of THE WALL STREET JOURNAL You don't need to click Submit until you are finished.įrom The Wall Street Journal, Nov 2002: Online Calculators Investigate allows you to investigate the consequences of some of the other choices you can make in planning your retirement.Īll data is preserved as you go among these tabs. Portfolio Changes lets you make lump sum changes to your portfolio at some future year. Your Portfolio allows selection of different investments. Spending Models lets you select from several approaches to spending during retirement. Not Retired? is where you specify when the plan is to start, and how much you'll add to your portfolio until then. Other Income/Spending is where you enter Social Security, pensions, and other yearly adjustments. Just click on any of the tabs at the top to enter the optional information.Įach tab will take you to a description as well as the place to enter the optional information, but in short: Start Here is this page, where you enter spending, portfolio balance, and years. You can refine the spending and investment assumptions, explore the impact of some of your decisions, factor in all sorts of exceptions, and/or let FIRECalc search for savings or spending levels that will let you meet your goals. But you can change any or all of those assumptions. Without any other information, FIRECalc will assume you want to keep your annual spending about the same for as many years as you specify, you aren't planning on receiving any Social Security or pension, and your retirement portfolio is invested in a "couch potato" portfolio of 75% stock index and 25% bond funds, with a 0.18% fee to the fund. Not sure how many years to plan for? See Vanguard's (Not sure how much you will need? Check the US averages.
#Fincalc com full
Seeing the results will illustrate better than thousands of words.Īt the right, enter how much you need, how much you have, and how many full years you want the plan to last (or the calendar year you want the plan to end).Ĭlick the submit button to view the results in a new window. You can get a sense of just how safe or risky your retirement plan is, based on how it would have withstood every market condition we have ever faced. Instead of the results of three different starting points as shown here, FIRECalc shows you the results of every starting point, since 1871. Or any of the past years for which we have data. So much for relying on averages!įIRECalc can tell you how much you would have needed to insure that you wouldn't have depleted your portfolio if things are as bad as 1973. One starts in 1973 (red), another in 1974 (blue), and the third in 1975 (green). Shown here are the year-end balances of three identical portfolios. Retire in the early 1970s, starting with $750,000 and taking out $35,000 each year, and on average you'll do just fine. What you have today, and what it costs you to live, can you retireĪverages don't tell you much at all.
Getting a pension or Social Security, and before you have ready Thinking of chucking it all and retiring early, long before you start
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