Rich, broke, or dead?

[jacob]

http://engaging-data.com/will-money-last-retire-early/

Putting in my numbers, it's interesting how much my allocation is determined by SWAN. My light green area is quite small but it comes at the expense of my dark green area.

[7Wannabe5]

This calculator is useless for me without some security of minimum withdrawal social security factor.

[jacob]

Just subtract the SS from your spending number.

[7Wannabe5]

I get that part. I just don't know the likelihood that I can rely on drawing at least $500 in S.S. from age 62 to age 97. If that is the case, then all I need is about $30,000 + (62-current age)*$7200= $94,800 now OR only $66,000 at my goal date of Harvest 2022. Of course, this is because the math for Late Retirement Extreme works a bit different.

[jacob]

That likelihood is likely higher than the likelihood that the historical distribution of investment returns is stationary.

[thegreatvoid]

interesting. 90 % cash and 10 % stock allocation at 1,9 % withdrawal rate gives me 100 percent sucess rate.

also scary that the probability of death at 60 is almsot double for men, compared to women.

[IlliniDave]

Since my withdrawals will be nonuniform I couldn't fit it exactly but with a fair approximation it says in the green assuming the future is guaranteed to be constrained to the past. It's a bit disconcerting to hover over with a mouse in areas where the "dead" outcome gets well over 50%. It's one thing to look at a graph that extends beyond life expectancy and sorta know in the back of your mind the odds are slim getting there. Another entirely to see the gray gobble up the chart! Good reminder not to delay gratification too much longer than necessary.

[7Wannabe5]

@IlliniDave:

Yeah, looks likely that I will run out of men before you run out of money.

[thrifty++]

This is awesome! Thanks for sharing this

[Gilberto de Piento]

The same site has a calculator for "days of financial freedom" that is kind of fun: http://engaging-data.com/freedom-calculator-periods/

[RealPerson]

It's a bit disconcerting to hover over with a mouse in areas where the "dead" outcome gets well over 50%. It's one thing to look at a graph that extends beyond life expectancy and sorta know in the back of your mind the odds are slim getting there. Another entirely to see the gray gobble up the chart! Good reminder not to delay gratification too much longer than necessary.

Exactly my reaction! The financial numbers look fantastic. The gray area not so much. I quickly unclicked the grey area, because the green good news is way more fun to look at. Totally confirmed the wisdom of early retirement. At least that was a good feeling.

[BRUTE]

brute wonders: wouldn't it be considered failure to arrive at death with too much money left? because it meant one wasted way too much of one's life saving for something that wasn't needed, i.e. excess savings. unless of course the goal is to leave $1,000,000 to charity or children.

[jacob]

Feeling wealthy/not worrying about money along the ride is also worth something. Economists typically apply a discount factor to devalue the future worth of money. In this case, after discounting, worrying about having too much money 60 years from now when you die might be worth less than not having to worry about whether you have enough money 10 years from now.

[bryan]

Pretty cool twist to add death to the plotting, model. Would be cool to see even more interesting additions, considerations. It could become a tool to do battle against insurance (contracts), sort of.

[Jason]

Rich & Dead > Broke and Alive

[Lillailler]

brute wonders: wouldn't it be considered failure to arrive at death with too much money left?

Indeed. But since you can't get it exactly right, it's probably better to err on the side of leaving some money behind rather than the side of going broke in old age. But then again, that's why annuities were invented, to insure against the risk of outliving your savings.

[Jason]

I thought annuities were invented so Rolex wearing douchebags could dupe ordinary investors* into buying high fee investments instruments that they don't understand.

*Approx. 9k to go before I completely liquidated mine.

[ThisDinosaur]

Since that site seems to use the classic set of US data since 1871, I don't see how this gives me any new information. 4% SWR FTW rah-rah. Wade Pfau taught me years ago to not be so optimistic.

Having kids makes it easy to be ambivalent about saving too much money. I leave them an inheritance? Good. I'm glad. I leave them nothing? Good. That's why I taught them to fend for themselves.

[BRUTE]

maybe that's why kids were invented

[Jason]

The explanation for why people seem so insistent on perpetuating this circle of bullshit is beyond me, and if they do or do not want to leave money to their kids is their decision as was having them in the first place, but I don't see why they can't have the fucking common decency to tell their kids not to buy annuities.