FIRECalc Retirement Calculator
Best of the Breed
FIRECalc®: A different kind of retirement calculator
I really like the FIRECalc retirement calculator because it allows you to input so many variables that are unique to your own personal situation. There is no hype on its pages, just good information about the calculations.
It does not just apply a percentage of current salary (say 70% - 85%) as an estimate for your spending, but allows you to input your own spending patterns. Vary those patterns and see what impact it has on your savings.
Default settings are available, if you want to use them, or insert your own data.
You will find a retirement calculator that performs its calculations by using averages. That gives you an average answer, but not the range of possibilities. I have pulled a chart from the FIRECalc® Retirement Calculator home page that shows the year-end balances of three identical portfolios.
Each one starts in a different year: 1973 (red), 1974 (blue) and 1975 (green). The year you start your retirement can made a significant difference in the portfolio balance at the end of retirement.
Instead of using averages to perform the calculations and coming up with results for three different starting points, FIRECalc® shows you the results of EVERY starting point, since 1871. You can then tell how risky your plan is based on how it comes out under every market condition since 1871.
Input tables are available for Income, Spending, Not Retired Yet, Spending Models, Your Portfolio, Portfolio Changes, and Investigate.
The results show you how much you would have needed to insure that you would have enough money if the economy was as bad as it was in 1973 or any of the past years for which they have data. In fact, the data includes the 40% decline in the equity and fixed income returns from December 2007 through December 2008.
One section that is well worth reading is their "How It Works" tab at the top of the page. Click that and you will see a wealth of information. It describes how you can vary the parameters to tell Firecalc how safe you want to be with your money. You also have the option to describe how much you are willing to spend each year. Then you will receive an answer of how much you will need in your savings.
They are quick to point out that the Firecalc retirement calculator does not predict the future. It does try to give a percentage success rate based on your input. You can vary your spending by the amount of money left in your savings or by a certain percentage each year.
They point out that you probably can't include your classic car or your old LP collection, since they don't behave the same way that stock market does. But you sure can get a great overview of what might happen to your funds during retirement.
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FIRECalc® Retirement Calculator is the best online retirement calculator that I have seen.
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