Nov 2009
30
If you have been looking for a good online retirement calculator that is free (our favorite word), I can recommend FIRECalc. I've used it for years and believe that it's very accurate. Play with it for a while and see if it works for you.
Averages don't tell you much at all. Retire in the early 1970s, starting with $750,000 and taking out $35,000 each year, and on average you'll do just fine. But that average is meaningless.
Shown here are the year-end balances of three identical portfolios. One starts in 1973 (red), another in 1974 (blue), and the third in 1975 (green). So much for relying on averages!
FIRECalc can tell you how much you would have needed to insure that you wouldn't have depleted your portfolio if things are as bad as 1973. Or 1929. Or any of the past years for which we have data.
Instead of the results of three different starting points as shown here, FIRECalc shows you the results of every starting point, since 1871. You can get a sense of just how safe or risky your retirement plan is, based on how it would have withstood every market condition we have ever faced.
http://firecalc.com/index.php
