FireCalc is a retirement calculator focused on portfolio analysis that provides some great what-if scenarios that include supporting data and an insightful illustration of the results of your Monte Carlo analysis. It also manages to gather enough information about your specific situation (as long as you're paying attention) to put it into what I'd call the 'comprehensive planner' category. At first glance it may be a bit intimidating or off-putting due to the homegrown design - but for what it lacks in user interface, or ease of use, it easily makes up for in meat and potatoes analysis. And after scouting around the site a bit it starts to come together and feels almost intuitive, particularly once I started reading all the words on the page, a.k.a. very helpful information, that I was initially trying to navigate around in my quest to see 'figure out how this thing works.'
Stand Out Features
2) Great visuals of your Monte Carlo Analysis if you are not familiar with the method, or even if you are. Monte Carlo Analysis uses your baseline data inputs and runs thousands of randomized scenarios to calculate the probability of success (not running out of money). In the FireCalc calculator’s output you will receive a chart that features one line for each scenario, illustrating how several scenarios run along a similar curve with some more positive or negative results outlying the most probably result.
3) Prompts and suggests several important what-if scenarios not offered, or at least not focused on, elsewhere: a) Retiring before social security kicks in? Change your spending (or not) based on this date. b) Solve for how much you can spend vs. how much you will be deficient. c) Gauge the impact of your investment fees on your retirement portfolio. d) Solve for a success rate, i.e more or less conservative projection of how much you will need in a worst or best case market scenario.
Last updated: May 02, 2012
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Basic Tool Info
- Short Term Bonds
- Long Term Bonds
This calculator is a quick way to play out several multiple portfolio scenarios using a Monte Carlo Simulation, while providing insights and prompting what-if scenarios. After performing an iteration, it features a chart depicting each possible scenario.
FireCalc Retirement Calculator Features
Tool Ease of Use:
A homegrown sight that is very heavy in text at first glance and lacks easy-on-the-eye flow and format.
Tool Wizards, Insights and Tips:
No wizard format, but if you click on each menu item it will lead you through all possible inputs - click submit whenever you're ready. There is helpful information on how to enter the info into the tool, and if you look carefully there are links that will help you calculate some of the basics with ease and then enter into the field provided.
Assumptions are all defined clearly as you go, and with the exception of historical data nearly all assumptions are configurable.
Enter your total portfolio amount, need to know how you would classify your portfolio in order to take advantage of this tool. Investments are classic market investments , i.e. proceeds from real estate investment , inheritance, etc. would need to be estimated seperately and entered as a lump sum or recurring stream of income (as with most other models).
The Monte Carlo analysis can be performed multiple ways:
- Total Market split between equities and fixed income from year you specify (starting in 1871) and you select the fixed income and mix.
- A mixed portfolio spread between several fixed income and small/large cap/index choices.
- Assume consistent annual market growth of a self-entered percent, with self-entered standard deviation and self-entered inflation rate.
You will also be able to make lump sum changes to your portfolio due to sale of house, etc. on specific dates.
The model assumes your portfolio is rebalanced to maintain the allocation you specify - which means your allocation will remain the same throughout retirement.
There is a single line item for your income, and an 'off chart income' entry section which you can likely get anything to fit into with a little back of the napkin calculating before hand - works for both lump sum and recurring for specific period. Elect whether you want these items inflation adjusted or not.
Enter total spending in a single line item, with an option to review spending in a what if scenario via a link to a line by detail of how much is typically spent on each category. There is also an 'off chart spending' entry, that like the income counterpart can likely accommodate what you need it to. Again, elect whether to adjust for inflation.
Provides a chart showing one line for each iteration of the Monte Carlo model run and tells you how many iterations were included in the scenario. Provides range of lowest and highest outcomes, and the overall success/confidence rate that your portfolio will last. Can easily see where majority of lines fall, is a nice visual. No itemized or downloadable detail.
Other Important Factors:
Taxes, Inflation and Fees: Taxes and inflation are not considered, unless you choose the self-entered inflation adjustment in scenarios where allowed. Assumes .18% in investing fees and is configurable.
Scenario Analysis: Provides an "Investigate" page with several 'what if' scenarios you can try, can also can back and adjust your original assumptions quite easily.