Retirement calculator

[noppenbd]

Has anyone used this calculator? It is pretty interesting, it calculates your yearly spending based on your retirement investments, contributions, retirement date, tax brackets, etc. The yearly spending it comes out with is in today's dollars. The only things I don't like about it are it doesn't allow you to set an initial withdrawal rate, and it is deterministic instead of monte-carlo type.

Retirement Calculator - Parameter Form

[jIM_Ohio]

calculator gave me an error- I have seen better which are more user friendly.

[noppenbd]

It worked fine for me, but do you have any specific suggestions?

[jIM_Ohio]

yes- (if you were the designer of this)-use terms familiar to people, I had to click web links to read the definitions, and some of the definitions also used big words I did not understand.

I also did not know the intended result when inputting numbers- was it a savings calculator, spending calculator, or draw down calculator.

I did not see the point to the whole thing.

The error I got was the age which I sold the house was not valid. I entered 65.

[noppenbd]

yes- (if you were the designer of this)-use terms familiar to people, I had to click web links to read the definitions, and some of the definitions also used big words I did not understand.

I also did not know the intended result when inputting numbers- was it a savings calculator, spending calculator, or draw down calculator.

I did not see the point to the whole thing.

The error I got was the age which I sold the house was not valid. I entered 65.

Jim, try it again, there have been some updates that seem to make the whole calculator more robust.

As far as I can tell the idea of the calculator (which is really like no other on the web) is to take into account retirement contributions, account types, tax rates, returns, retirement age, ending estate size, etc. It then gives you one number, which is the annual amount you can spend. The other charts that it outputs give you more info. The first chart is a year-by-year breakdown of your account balances. The 2nd chart shows the locations where you are withdrawing your money, and how much your tax bill is each year. The other charts show your individual account balances year-by-year.

I wouldn't use this calculator to plan my absolute spending, but it does allow relative comparisons between contributing to Roths/401ks/after-tax accounts, as well as changing age of retirement or working part-time in retirement.

The calculator seems to more thorough than almost any other calculator I have seen.

[jIM_Ohio]

is this a calculator you created?

[jIM_Ohio]

I would look at calculators like these
FIRECalc: A different kind of retirement calculator

Flexible Retirement Planner Support Forum • Index page

The one you have uses the wrong inputs (IMO) and gives the wrong outputs (IMO).

I input ages and it tells me spending info. I have more control over the age I retire than I do my spending, so most retirement planning I have is save as much as possible, then retire at an age when my savings can sustain my current spending (4% rule). Meaning leave age as a variable and spending as a constant- because spending drives when retirement will happen more than age.

Here are the issues I had with calculator (if this was a HS economics project I give it a D-).

1) The age as an input and spending as an output are backwards to any retirement model I have seen before.
2) The returns are all linear and use averages. Most available calculators use monte carlo to simulate withdraws vs actual market returns.
3) The links to the tax tables for state exemptions are broken
4) The tax rates on taxable accounts is 20%? who pays that much? I thought highest rate on capital gains was 15%?
5) The draw down needs to factor in account types (taxable-tax deferred-tax free) and Roth conversions of the tax deferred and RMDs into the consideration.
6) The rates of return will change pre and post retirement
7) this assumes both spouses retire the same year?

I could probably find more issues- like using bucket approach to solve spending issues, advanced tax planning and similar. If you are trying to make a new calculator (different from what is out there) consider

a) graphical results (not excel tables)
b) tax planning (based on current tax code or simple assumptions)
c) ability to reverse market returns when doing monte carlo (so assume 1999 came before 1998, and 1998 came before 1997...) so after showing if results worked going forward (1999-2000-2001-2002-2003-2004-2005-2006-2007), do the same analysis, but assume results came as 2007-2006-2005-2004-2003-2002-2001-2000-1999).

Many calculators show success going forward. If the bear of 2000-2002 came before the bull of 1997-2000 many of the same successes would turn into failures (poor returns early really kill some calculations).

[noppenbd]

Jim, no I am definitely not associated with the program in any way. I'm just looking for a very robust calculator. I have tried firecalc and I don't like the fact that it completely ignores the type of account you have your retirement funds invested in. I mean any calculator that doesn't take into account the fact that $1M in a Roth is worth a lot more than $1M in a 401k is definitely not worth its salt in my book.

I had not tried FRP before, so I took a good look at it. I like it, although one thing that is particularly vexing is that there is a single input for Income Tax Rate. Isn't this a variable that is going to change a lot depending on your withdrawals? Also, as a first time user I would assume that the program wants the marginal tax rate rather than the effective one. Changing that value from 25% (my marginal federal rate) to 10% (my effective federal rate) has a huge effect on my probability of success. How do you deal with that when using FRP? I would prefer a program that computed the tax bracket like ORP, rather than having to guess what my effective tax rate will be (and assuming it is fixed, which it isn't).

[jIM_Ohio]

The 4% rule generally includes taxes as part of withdraw (based on trinity study). Considering Firecalc uses withdraw rates and spending as it's premise, and that a person's spending should include the taxes they owe, a person should be able to use firecalc if they budget properly (taxes are part of spending).

I don't mess with calculators too much now (I run through one maybe 1-2X per year). I need to accumulate money and grow my money. I don't need a calculator for that. Until my savings approaches 25X my spending, I don't need to worry about draw down too much. I take withdraw into consideration some (now), but not much.

I am by no means an expert on either calculator, but those are the two I use the most.

[anonymous_saver]

I just used the calculator above, and I thought it was probably one of the worst I have ever used. There are many others online that are pretty decent. Plus, I had errors for saying I couldn't possibly retire when I am planning on retiring (around 55 years old). Still though, these calculators are always fun to play around with!

[scfr]

The Wall Street Journal recently gave a positive write-up to one created by the US government:

Taking The Mystery Out Of Retirement Planning

This one seems to be geared to people who are close to retirement, as it requires you to enter your current age but it has to be 50 or older.