this post was submitted on 23 Sep 2024
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FIRE (Financial Independence Retire Early)

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FIRE is a lifestyle movement with the goal of gaining financial independence and retiring early.


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I've been reading Yahoo Finance a bit recently due to all of the shifts in the market, and they have a PF section where they cycle through a variety of PF topics. One of them linked to a retirement calculator, which I had a lot of trouble with as someone looking to retire way earlier than typical, so I decided to go look at a few more and compare them.

Warning: these are pretty US-centric.

Smart Asset retirement calculator

  • maxes out at 40% savings rate
  • minimum retirement age is based on birth year (i.e. can't retire before today)
  • default annual rate of return is 4%? This is worded oddly, because it's called "savings" and is right under "cash savings and investments"
  • no option for HSA, but you can lump it in with IRA
  • seems to estimate Social Security income, which is cool
  • has on option to add a spouse, which was cool

This was was pretty awful, but with some fiddling, I got it to spit out some halfway decent numbers. It seems to be a simple flat return tool, so no backtesting or randomness at all, but it does try to account for taxes and whatnot. That said, it got my tax rate completely wrong for some reason.

I guess this is acceptable for someone to get a rough idea of what retirement looks like, but it was also really fiddly and buggy (i.e. Social Security age kept resetting to 66 for whatever reason).

My 401k provider (Empower)

  • minimum retirement age is 50?!
  • automatically pulled in elective deferrals and employer match, but it was way off (surprising because it's literally the custodian for my 401k...)
  • can link accounts, but can't add any accounts w/o linking (weird, because my old 401k provider that they bought allowed me to)
  • assumes 60/30/10 stock/bond/cash split, with no way to adjust it (I'm going 100% stocks)
  • links with a budgeting app they have internally? Why would I use my 401k as a budgeting app??
  • option to simulate what automatically increasing retirement contributions does (not useful for me, but could help others)
  • option to add kids and estimate college expenses, which was cool

This one was absolutely terrible. Not only was it a pain to figure out how to input my numbers, it also didn't really give useful output. Even if I was a typical retiree, I'd still find it largely useless, unless my 401k was literally my only retirement account (which I admit is probably pretty common).

Fidelity brokerage

  • retirement age must be greater than current age (can't retire immediately
  • lots of estimates for retirement expenses (i.e. no stupid % of income metric)
  • can set asset allocation for retirement accounts (domestic, international, bonds, etc)
  • can link accounts, or just enter their values
  • can add Social Security, and it'll estimate for you if you want
  • seems to do some kind of back-testing because portfolio growth isn't a smooth line

All in all, I found Fidelity to be pretty good! It's easy to add all of the accounts and provide as much detail as I'd like, and I feel like the result is pretty realistic.

FiCalc

Primarily for backtesting withdrawal strategies, and it provides a bunch of tools, such as:

  • withdrawal strategy - constant dollar, percent of assets, etc
  • constant withdrawals (e.g. putting a kid through school, pay off house, etc)
  • extra income - i.e. barista FI or whatever
  • adjust range of historical data

It won't tell you when you can expect to retire, but it'll tell you your retirement plan's chance of success, which is way more important IMO.

Fire Calc

Primarily backtesting, but there are some knobs you can mess with as well if you click through the tabs:

  • pensions/additional income
  • future retirement date (plus how much you'll contribute until then)
  • withdrawal strategies
  • portfolio makeup
  • additional portfolio additions (house sale, inheritance) and subtractions (one-time expenses at a certain point in retirement)

This is the first one I used, so it holds a special place in my heart.

What I personally use

I like mucking about with the above, but at the end of the day, I mostly just use my spreadsheet to estimate things. Some specific calculations I find a lot of value in:

  • FI Date - EDATE(TODAY(), NPER(...))
  • progress toward FI - 1-(NPER(with current assets)/NPER(assuming starting from zero))
  • Social Security calculator - this one exists, but it assumes zero inflation going forward; so I wrote my own in my spreadsheet that uses average inflation from my working career going forward, and actual inflation numbers going backward; not used in any calculators, but it's nice as a backup plan
  • withdrawal simulator - how much I'd need to withdraw from tax-deferred accounts before RMDs, by SS max age, and SS min age (helps w/ tax planning)

But at the end of the day, the first is the only one that matters. I update my total spending about once/year, my investment accounts when I remember, and my savings rate comes from my budget. I periodically check my FI number against back-tested portfolios, but I've settled on a SWR of 3.5% and assume a 7% real market return.

Conclusion

These aren't the only retirement calculators I've played with, but the easier ones to access (i.e. search results or though 401k) tend to be pretty awful, while the good ones are a bit more hidden away.

I think with a bit of searching, you can find some decent tools without having to DIY. Then again, I prefer to DIY.

Do you have any retirement calculators you like? Do you DIY?

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[–] [email protected] 6 points 1 month ago* (last edited 1 month ago)

Thanks for posting!

I like the tools available here:

https://engaging-data.com/early-retirement-calculators-and-tools/

Particularly the "Rich, Broke, or Dead?" simulator and visualization.

But if you have a mind for numbers, you will often get the best results for your use case by modeling it yourself, as you mentioned.

[–] [email protected] 5 points 1 month ago

This is really useful information, thanks!

[–] [email protected] 3 points 1 month ago (2 children)

Thanks for sharing! I have quite a collection, so I'll throw in my two cents too. I hope this helps someone!

cFIREsim

Along side FIRECalc (which you already shared), I consider cFIREsim to be one of the best FIRE calculators on the internet. Similar to FIRECalc, it does backtesting based on your current portfolio would perform throughout history. cFIREsim does a better job of allowing you to configure details about your portfolio, income, and expenses than FIRECalc. Frustrating, if you're not yet at retirement age, it doesn't allow you to model additional contributions to your portfolio.

FI Calc

Another backtesting calculator, but this one with a nice graphical interface. While very similar to FIRECalc and cFIREsim in it's function, it does a better job of highlighting the different scenarios based on start year. It also allows you to 'drill into' specific start years for a more indepth look into that particular simulation.

Rich, Broke or Dead?

@xyzzy@[email protected] beat me to it, but a great little calc to test what is the probability that you'll either: -Run out of money before you die -Die before you run out of money -End up with more than your initial savings

The site summarizes:

This interactive post-retirement fire calculator and visualization looks at the question of whether your retirement savings can last long enough to support your retirement spending and combines it with average US life expectancy values to get a fuller picture of the likelihood of running out of money before you die.

It helps to answer the question: If I start out with $X dollars at the beginning of my retirement, will I run out of money before I die?

Financial Freedom Calculator

Not a traditional FIRE calculator, but instead it helps you visualize based on your current savings, your annual expenses, and a given withdrawal rate, how many days could you live off of your savings.

Freedom days refers to the number of days that your retirement savings could sustain you (without working) each year (indefinitely) at your current spending level. Once you reach 365 freedom days per year, you’ve got enough money saved up to never have to work again. While I don't use this one regularly, I find this one to be very motivating to check every now-and-then for encouragement.

ProjectionLab

This one seems like a very comprehensive option that allows you to fully model your financial situation, including backtesting with Monte Carlo simulations, analyzing cash flow, reviewing tax analytics, and is very visually appealing. The big problem is that while most of it's features are accessible for free users, some of the more advanced strategies are gatekept behind a paid recurring subscription and it offers no save/import/export functionality (for free users) so you have to go through a rather laborious process of inputting all your information each time. I wouldn't let that deter you from trying it at least once though to see if it meets your needs/is worth the subscription.

Open Social Security

I know there's a lot of debate around whether Social Security will continue to exist or not, or maybe pay out differently. For those of you who would like to calculate your benefit and try to optimize your Social Security benefit, Open Social Security is a GREAT tool. Unlike other some other tools, it also allows you to include your spouse's benefits in your planning to account for spousal benefits!

SSA.tools

Similar to the above but with a snazzier interface and the ability to copy-paste your benefit history directly into the calculator.

ERN: Safe Withdrawal Rate Series

Not actually a calculator, but I highly recommend reading EarlyRetirementNow's series on safe withdrawal rates. It's a (sometimes painstakingly) detailed analysis of the 4% withdrawal rule and other withdrawal strategies. How painstakingly? It has 61 parts. I can't say I understood 100% of it, but it's absolutely worth a read even if you're no where close to retirement.

[–] sugar_in_your_tea 3 points 1 month ago

ProjectionLab

This looks super cool, I'll have to check it out. Thanks!

[–] [email protected] 2 points 1 month ago

Ooh thanks! Very helpful.