Never Run Out of Money in Retirement - Use This Free FIRE Calculator!

Рет қаралды 59,307

Күн бұрын

Do you want to avoid the biggest retirement risk? This simple to use tool will let you model your safe withdrawal rate and help ensure you don't run out of money. In this walkthrough video, we teach you how to use this powerful, flexible, and FREE tool created by Karsten Jeske. Using the SWR Toolbox, you can ensure that you have a personalized plan that works with your own financial situation. Be sure to see the show notes below to get your free copy, and for all the links we discuss in the video.
**Show notes: twosidesoffi.com/toolbox
Timestamps:
00:00 Safe withdrawal rate?
02:01 How this tool is different
03:06 How to get a copy
04:20 Entering your info
08:14 Modeling cash flows
12:39 Your results explained
16:35 Market conditions matter!
20:28 Other tabs in the tool
23:08 Wrapping up
**Show notes, tools, resources + information: twosidesoffi.com
**Our podcast: twosidesoffi.com/podcast/
**Eric’s "NOW" page at 30X40 Design Workshop: thirtybyforty.com/now
**Eric’s KZfaq Channel: thirtybyforty.com/youtube
**Jason's Blog: www.thenextphaseisnow.com
#twosidesoffi #financialindependence #firemovement
@30by40
**Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.

Пікірлер: 177

@TwoSidesOfFI Жыл бұрын

Do you want to see more videos like these? If so, what would you find most useful? Let us know in the comments

@MicahsJourney... Жыл бұрын

Definitely would like to see more videos like this one, including the one you mentioned that dives more into the CAPE-based method. Thanks!

@JB-tj9mm Жыл бұрын

Yes! Please do an example for the SWR part 45 toolkit with solver. Thank you

@timabrams9957 Жыл бұрын

Yes, this was helpful and interesting.

@joelweinstein9301 Жыл бұрын

Absolutely yes, this was super useful to get some confidence using the inputs and outputs of the SWR toolkit

@jfieser Жыл бұрын

Great video! Please consider doing a video on Roth Conversion Ladders.

@marcoopdeweegh8284 11 ай бұрын

Thank you, great guidance and situation!

@autobotdiva9268 Жыл бұрын

must get the income level up! this is good info

@TheTurdballs420 Жыл бұрын

Great video! I found it really helpful. Really appreciate the channel

@TwoSidesOfFI Жыл бұрын

Thanks, Jim! Really glad to hear it. Please consider sharing this video with others who you'd think would benefit!

@danielsheppardtv Жыл бұрын

I use this all the time and it’s nice to see someone break it down in detail. Nice job to you and Carsten.

@TwoSidesOfFI Жыл бұрын

Thanks, Daniel!

@toichiboy 11 ай бұрын

Thank you so much for walking through this!

@TwoSidesOfFI 11 ай бұрын

You're welcome, Reid!

@simmonds3930 Жыл бұрын

Oh man! So helpful...big thank you!

@TwoSidesOfFI Жыл бұрын

You're welcome!

@christinab9133 Жыл бұрын

This is so helpful! Thank you!!!

@TwoSidesOfFI Жыл бұрын

Glad to hear it, Christina! We’d be grateful if you’d share it with others

@Coda1850 Жыл бұрын

Such an important topic, excited to watch this episode & the next.

@TwoSidesOfFI Жыл бұрын

Glad you liked it!

@colbyharder4733 10 ай бұрын

A+ video! Awesome job guys!

@TwoSidesOfFI 10 ай бұрын

Thanks, Colby!

@chuckb2676 Жыл бұрын

Great review of the SWR tool. Wish you had done this before I spent the time figuring it out. 😀 I love your channel. It is one of the most informative personal finance channels on the web. The conversations between you two are great as are those where you feature others. It shows such a varied perspective. I appreciate the efforts you put into this channel. As for other videos like this, maybe reviewing your experiences with other online models and your opinions on them.

@TwoSidesOfFI Жыл бұрын

Thanks, Chuck! We really appreciate your support and the feedback.

@mikedougherty1117 Жыл бұрын

Agree 100% Chuck!!

@PeterMuellerATS 10 ай бұрын

Very helpful. Thank you for doing this.

@TwoSidesOfFI 10 ай бұрын

Thanks

@KetchumAllCollectibles Жыл бұрын

This stuff is gold. Thanks for these videos. Need to find time to dig into the sheets more, but very impressive.

@TwoSidesOfFI Жыл бұрын

Thank you!

@adampunch6766 Жыл бұрын

Nice one Jason - really useful to confirm that actually using the tool is way easier than digesting all of Karsten's excellent blog posts. I'd be really keen for you guys go deeper on CAPE - anything that you can cover on US vs Global CAPE and variances to the median/mean would be super!

@TwoSidesOfFI Жыл бұрын

Thanks Adam! Thanks for the feedback

@rayanderson3164 Жыл бұрын

Thank you. This is a very useful tool to have and model different rates.

@TwoSidesOfFI Жыл бұрын

You’re welcome! Glad you find it useful. We certainly do!

@mike8560a Жыл бұрын

This is great. Rather than people just talking about the safe withdrawal rate you show it in action on Karsten's sheet. Helpful indeed!

@TwoSidesOfFI Жыл бұрын

Thanks, Michael!

@maxpayne7419 Жыл бұрын

Jason you did a masterful job of explaining this tool. This channel has helped me so much as I reach FI and early retirement. Thank you!

@TwoSidesOfFI Жыл бұрын

Thanks, Max! We are so happy to learn our channel has been helpful to you. Best wishes on your journey!

@jmwichert8842 8 ай бұрын

I like the tool because you can fine tune it to your own situation as far as inflows and outflows. The tool does assume a constant real consumption target value which may or may not be an accurate model of your retirement spending. It also does not attempt to minimize taxes (which would require more info about your portfolio). One thing I like is that it does not give unwanted suggestions about course of action; it's up to you to determine how you want to invest and spend. I've found the most important table is the Safe Consumption Amounts on the Cash Flow Assist tab (2nd tab). This gives me a max spending target for my situation.

@careym8437 Жыл бұрын

Wow, Jason, I feel like I just took a free college class in under 30 mins! Very valuable info, thank you and thank you to Carsten too 😊

@TwoSidesOfFI Жыл бұрын

Thanks, Carey! So glad you found it useful. Please consider sharing it online so that others can benefit from this great tool!

@davemiller704 Жыл бұрын

LOVE this video, my fav so far, real executable advice that I can apply to my own plan & portfolio. Jason, you are so so good at simplifying and explaining!! Ty!!

@TwoSidesOfFI Жыл бұрын

Thanks, Dave! We’re so glad you liked it. Stay tuned for Part 2 where we will dig in more and share our own practices with the tool

@nybigtymer 5 ай бұрын

GREAT video. Thanks for breaking it down.

@TwoSidesOfFI 5 ай бұрын

Thanks!

@anilbangia Жыл бұрын

I am a big fan of Jeske's work, like many other quant nerds! Thanks for bringing his tool to our attention, it realy is awesome!

@TwoSidesOfFI Жыл бұрын

You’re welcome, Anil!

@timmcdermott4854 Жыл бұрын

REALLY great walkthrough. The sheet is intimidating at first, but your walkthrough helped us figure out the few key areas on which we needed to focus. Muito Obrigado!!

@TwoSidesOfFI Жыл бұрын

Thanks, Tim! Very glad to hear you found it useful

@matthewbell9683 Жыл бұрын

Great video. I downloaded the spreadsheet last week but didn’t know where to start so I set it aside. This was a great primer that will help me get back to it! Thanks for the video.

@TwoSidesOfFI Жыл бұрын

Great! Thanks, Matthew

@sebstream8440 Ай бұрын

Watched this video again, understood a little bit more this time. Thank you for all the details in this video.

@TwoSidesOfFI Ай бұрын

@tdc3rd Жыл бұрын

Great resource - thanks! And yes, another vid on how you'd use the CAPE-based tool would be very helpful.

@TwoSidesOfFI Жыл бұрын

Thanks!

@russkoon2355 Жыл бұрын

Great review, and one I believe many will benefit from.

@TwoSidesOfFI Жыл бұрын

Thanks, Russ

@playacabo6289 Жыл бұрын

This spreadsheet gave me the confidence to go ahead and retire early 2 years ago. I've now updated with social security estimates and my husband's pension and we are in excellent shape. Thanks for walking through the tool. So many people will benefit from it. 👍

@TwoSidesOfFI Жыл бұрын

Thanks, Jennifer! So glad you're also a happy user of the toolbox. If you like the video we'd be grateful if you'd share it online or with others who you think would find it useful 🙏

@mertokutan1361 Жыл бұрын

Thank you so much! Great video. Can’t wait for the 2nd episode. And YES, a walkthrough on cape based tool would be very helpful and educational. I love big ern’s blog but sometimes I get lost due to lack of knowledge on my end on some concepts and find myself keep reading the same line over and over and over. So, this video was immensely helpful.

@TwoSidesOfFI Жыл бұрын

Thanks, Mert! Really glad you liked it.

@steveb2346 6 ай бұрын

Fantastic video. You do an excellent job explaining the tool, and the visuals are top notch. I’m very interested in a second video that dives deeper into CAPE and Glidepath, and further into how to use the tool after retirement (you made a comment to subtract a year…but what does that look like?). I might be making it harder than it is…. Thanks again. Great work. Excellent channel!

@TwoSidesOfFI 6 ай бұрын

Thanks!

@jeske100 Жыл бұрын

This is awesome. Thanks for putting this together! And you're right: it may seem intimidating initially, but most users don't need all the geeky math. Just getting a good sense of the SWR/SCR and how much of a difference the supplemental cash flows make is a great start and shouldn't take much longer than than a few minutes. Getting retirement simulations right and retiring with more confidence, shouldn't that be worth 20-30 minutes of our time? Looking forward to part 2!

@TwoSidesOfFI Жыл бұрын

Thanks, Karsten! That’s high praise coming from you. Thanks for all the work you share with the community

@susanharkema2888 Жыл бұрын

We think you found your new calling! This was crisp, clear and so exciting. Thank you guys for creating a wonderful intro so we can tap Karsten’s tool. And THANK YOU Karsten for all you do and share.

@TwoSidesOfFI Жыл бұрын

Thanks very much, Susan! So glad you liked the video

@susanharkema2888 Жыл бұрын

@@TwoSidesOfFI - I just did my first round of scenarios using the calculator! THIS is exactly what we needed to go deeper than other calculators and get more output other than "You're good to retire!" Can't thank you enough for the easy-to-follow walkthrough.

@TwoSidesOfFI Жыл бұрын

@@susanharkema2888 That's great to hear! You're very welcome

@maryanntaylor2179 Жыл бұрын

Fantastic! Your presentation was very clear and very useful. Yes, I would like to hear more about CAPE ratio determined SWRs. It will help me during the next run-up in the stock market to not get too giddy.

@TwoSidesOfFI Жыл бұрын

Thanks, Mary Ann! Glad you liked it. We appreciate the feedback

@isabelg8788 Жыл бұрын

Wow, this PROVES your decision to stop your blog has freed up time that resulted in your excellent performance in this video. Well done!

@TwoSidesOfFI Жыл бұрын

Thanks, Isabel! Glad you liked it

@eileenfrancis9491 Жыл бұрын

Believe it or not Jason, I listened to this on audio podcast on my walk today. I chuckled to myself about listening to a very visual presentation. But I think it actually helped me to decide I can and should use the video and walk thru the SWR Toolbox. I think if I listened to the whole thing, it shows how well you did with it. Can't wait for part 2!

@TwoSidesOfFI Жыл бұрын

Jason here - That's great! I think you'll find the video useful. I appreciate the feedback very much

@GilreathDental Жыл бұрын

Great video and great spreadsheet. I'm am very comfortable with all of the main two tabs except for the area dealing with the SP500 performance. In that column, going from 0% down to 50.81%, I don't know what that means and how to use the columns to the right... drawdown 0-5%, 5-10% etc. Can you explain this in more detail? Thanks. Love the work guys and Karsten too!

@sbkpilot1 Жыл бұрын

very cool tool, I like the way it gives probabilities by SWR and also allows detailed entries of cashflow by month which most other tools don't allow. I love the analysis by CAPE which gives a very useful perspective given our current situation with valuations.

@TwoSidesOfFI Жыл бұрын

We agree! Glad you find it useful

@dtownbabe7028 Жыл бұрын

Great video, thanks for explaining the spreadsheet. Have to admit, I have opened it and closed it many times as I was too intimidated by the spreadsheet. Now I have my basic starting point that I can retire next April!

@TwoSidesOfFI Жыл бұрын

So glad you liked it! Wow, you are in the home stretch! Best wishes to you

@anguslaing6611 Жыл бұрын

Jason, you sounded like a pro! You could do voiceovers as a side hustle

@TwoSidesOfFI Жыл бұрын

You’re very kind, thank you! -J 🙏

@markadkins4776 Жыл бұрын

Excellent video! I have been using the SWR toolbox for a couple of years. This helps validate that I have been using it properly. The ability to put in future cashflows is powerful. Yes - please make more videos on this subject. You guys are doing an amazing job on the podcast! Kudos to Karsten for making this toolbox.

@TwoSidesOfFI Жыл бұрын

Thanks, Mark! We truly appreciate your support and the feedback! Please share the video with anyone you think can benefit. We'd love for people to be more comfortable with this incredibly useful tool

@Lmessimer1567 Жыл бұрын

Awesome and yes, please expand on CAPE. 😊

@TwoSidesOfFI Жыл бұрын

Thanks!

@DerStabby Жыл бұрын

Thank you for making this sheet less intimating. Epic!

@TwoSidesOfFI Жыл бұрын

You're very welcome!

@navymathboy Жыл бұрын

Thanks for the legwork done here by to clarify Karsten's otherwise intimidating looking SWR tool. I appreciate the effort to cite specific references to Karsten's blog source and provide clear step-by-step explanations. Great informative introduction video.

@TwoSidesOfFI Жыл бұрын

Very welcome!

@slrobertson Жыл бұрын

Thank you for the excellent walkthrough and explanation of Karsten’s indispensable toolbox. I wonder if you have advice on modeling supplemental cash flows like an anticipated windfall - an inherited IRA with a 10-year RMD schedule, for example?

@celloplayermom 11 ай бұрын

Hi Scott, I didn't see any responses to your question so I thought I would respond. What you are asking about modeling an inherited IRA and the 10-year RMD schedule is fairly easy and simple to do if I understand the spreadsheet well enough. My wife and I have an inherited IRA from which we are taking a flat amount/month for the next 8.5 years (that is the current situation and planning assumption, though the amounts could change in the future based on future changes in the tax code). I put that amount in the Cash Flow Assist tab in column J or K under Cash Flows Not Adjusted for Inflation. You could just put your monthly withdrawal amount in cells in column J or K for each of the first 120 months or whatever period of time you have left in the 10-year period or defer it by a few years if you expect to inherit it some time in the future. A future inheritance is tricky because generally you have only a vague sense of when you are going to inherit the money and the date could swing pretty significantly based on the person's health. I hope that helps. John

@pvrspvrs4781 Жыл бұрын

Good time of day. I didn't catch - in the tab of the CARE-based Rule, do all the values of SWR (capital preservation) after the first retirement period require adjustments for inflation or not? Thanks

@ReesesPieces81 Жыл бұрын

That's some serious naration skills. Time for a new sidegig?

@TwoSidesOfFI Жыл бұрын

Thanks, you’re very kind

@nelsonang Жыл бұрын

awesome video Jason 😊 but the naughty part of me is wondering about the bloopers!

@TwoSidesOfFI Жыл бұрын

Thanks, Nelson! Ah yes, there are always bloopers! At times in the past we've included a few outtakes after the episode credits but there aren't any for this one.

@nelsonang Жыл бұрын

@@TwoSidesOfFI looking forward to part 2 ☺

@Stitchtyson Жыл бұрын

Thanks for putting this together can't wait to see Part 2. Please do more videos like this! Has anyone else noticed when adjusting the projected returns on the (Parameters & Main Results page) it does not impact the SCR tables results significantly for the lower WR rates or Failure rates? Even when changing to say 20-30% For example I have 80% in stocks and 20% in Bonds: 10y U.S. Treasury. When I update the projected returns below for 10Y Bonds for the next 10Y and 10Y Bonds after that it has a very minor change in the SCR in the tables. Same holds true for stocks - I would expect that to have greater impact since 80% of funds are held there. Am I doing something wrong?

@TwoSidesOfFI Жыл бұрын

06:38

@Stitchtyson Жыл бұрын

@@TwoSidesOfFI Thank you! Exactly what I needed! You guys are great! Sorry for asking a question you had already answered.

@bettting2131 2 ай бұрын

I am sorry for this stupid question but I just want to ensure that I am understanding the definitions and terminology correctly - 1. In the sheet, I see the word initial (consumption or withdrawal), does this imply that it is always based on the initial portfolio value or as we progress through retirement, we can adjust the portfolio value to come up with the appropriate withdrawal rates? 2. Essentially what does the “initial” mean if this sheet can be used to calculate both initial and subsequent withdrawal rates. Thank you so much for taking the time to respond.

@mxk 19 күн бұрын

How do you account for taxes in the cash flow assist tab? The safe monthly portfolio withdrawals must be adjusted for capital gains tax to make sense, right? This is because if I look at my yearly expenses, and want to understand how these would be covered by portfolio withdrawals,. then I must multiply these withdrawals by a factor that represents whatever would be withheld for capital gains by my broker. I tried fiddling with the column S (scaling) with values above 1, but this then *reduces* the SCR, which is not what I want either (I want the SCR to reflect what I *actually* need to spend, incl. taxes) Thanks!

@susanharkema2888 10 ай бұрын

I have run into an issue with the toolbox and wondered if/how you handled this, Jason. Our portfolio is so diverse that I'm told by our advisor that to force-fit the types of holdings into the few listed in the toolbox would be a disservice. There are 8 items listed for portfolio holdings but I have in just one account - US Mid, Small, Micro Stocks, US Value Stocks, Total US Stock Market, VTSAX, S&P 500 Large US Stocks, Developed International Stock, Long Term US Treasury Bonds, Emerging International Stocks, Cash, International Bonds, Aggregate US Bonds. Any advice?? Thanks so much!

@scottreid2470 Жыл бұрын

Great video. Thank you!! One thing I find confusing is at 9:03 where you say "where the portfolio is worth $3,000,000 at the beginning of retirement", however, the sheet says "Portfolio Today". What if I am planning on retiring in 2032? What value should I enter in the "Portfolio Today" field? Is that the value of my accumulation so far or is it my expected portfolio value at my projected retirement date? Also, on tab one, the field "Retirement Horizon" is a little confusing. Does that mean "Days until retirement + days after retirement until I die" or does it mean "just the years after I retire...until I kick the bucket"? FYI I am 9 years from retirement and I am really struggling with the retirement withdrawal strategy part.

@joemyers 4 ай бұрын

portfolio today = today ... youadd to it in cash flow assists, I assume ... I have't tried this yet, as I am retired already, but will add my wife's future work income. horizon = just days after retirement ... how long do you want your portfolio to last

@berniekeene868 16 күн бұрын

Thank you for this very helpful video. I have a question about the Final Value Target (% of initial) field. I am inputting the whole number of 100, meaning that I want my final dollar amount of investments to equal what I have now. I get a certain SWR. When I change this to 50 or 75 or to any number, the SWR information does not change. Does anyone know why this is? Thank you.

@cayankeelord3730 5 ай бұрын

I only withdraw about 75% of my dividends and roll the remainder into more shares of select ETFs. I started with debt 30 years ago and now have a dividend income that exceeds my expenses. Built a portfolio of only under valued dividend paying stocks. Hint; keep cash on hand in your brokerage account to buy big when markets crash. i.e.: For the last "crash", MPC went from $90+ a share, down below $21 a share. With a divy yield of 14+%, I backed up the truck and hit it hard. Current price is about $150 a share. Of course the reflected yield is about 1.4%, but the divy is actually higher now. Be smart!

@MicahsJourney... Жыл бұрын

GREAT review. I have never had the willpower to figure out Karsten's spreadsheet, although knew I'd do so at some point. You have helped immensely and I realize it's not as complex as I had expected. Yes, please do more videos on this if you can, including the deeper CAPE-based analysis. Lastly, all my bond investments are in Total Bond Market Index, so it's a bit difficult and probably inaccurate to try to fit that within the parameters of 10- and 30-year US Treasuries like his spreadsheet requires. Any advice on how to somehow factor in or approximate the corporate and non-US Treasury portion of a Total Bond Market Index fund when using this spreadsheet? (By the way, this is my favorite video thus far on your site . . . very relevant)

@TwoSidesOfFI Жыл бұрын

Thanks, Casey! So glad you found it useful. My bonds are a mix of treasuries funds and total bond as well. In any case, the return rates don't have a huge impact on the model as I mentioned, so don't sweat it. Just pick a blended rate for the whole thing.

@tedhuettl 6 ай бұрын

Jason I'm still confused a bit...when you say "Just pick a blended rate for the whole thing." Are you saying that if we are not sure to put 15% for the 10y and 15% for the 30y (assuming we have 30% in bonds)? @@TwoSidesOfFI

@MrYogagaga Жыл бұрын

Hey Guys, First like everyone else, thank you for breaking this all down so clearly, and thank you to Karsten for sharing your tool with the community. I do have one question (apologies if already addressed)... On the Cash Flow Assist Page, Karsten has carried the distribution to age 115. Though healthy, I'm guessing that I'll kick the bucket long before that ripe age. Wondering the reason that this was chosen and is there any reason that I should not adjust to a likely Life Expectancy, using one of the calculators out there, which it seems would change my SCR. Appreciate the feedback!

@clayelliss1762 Жыл бұрын

I think possibly you should ignore that, if you change the retirement horizon months it changes the probabilities, therefore it seems the spreadsheet is only to collecti additional cashflow information and it assume that 60 years is the maximum additional cashflow information he expects anyone would require. For on how the months affect the safe withdrawl rate probabilities.

@TwoSidesOfFI Жыл бұрын

Clay is correct. Just ensure cell B36 in the Parameters and Main Results sheet reflects the duration of your retirement timeline in months.

@MitchelDSouza Жыл бұрын

Going through the SWR for my own numbers while listening to your audio was so easy to navigate. Thanks for all the work put together Karsten and Jason! This is super helpful even for non-native excel users like me.

@TwoSidesOfFI Жыл бұрын

You're welcome, Mitchel! So glad it was helpful to you. Did you see Part 2? kzfaq.info/get/bejne/qMeghtKd3Zmbl40.html

@MitchelDSouza Жыл бұрын

@@TwoSidesOfFI Thats my next weekend plan :)

@lascanio Жыл бұрын

Thanks for this video, I'll definitely need to watch it again once I download the template and maybe a couple of times more to digest the how to... but in watching the first time made me ask the question on how to project for a portfolio focused on generating cash flow instead of selling positions. In my case I have real estate and a dividend portfolio, both positions I am building intentionally to generate cash flow to avoid the need to sell principal positions; in that case how would you recommend to use this template? Does this SWR apply the same way in this case? Both my dividend and real estate portfolio I'm targeting to generate close to 4% and in both cases I have dividend growth and rental adjustments every year to account for inflation, of course in a case of a dividend cut I may need to rebalance or sell some positions, as well as in the case of a rental being cancelled or finished abruptly, both worst case scenarios for which I plan to have a safety fund. Just wondering. Thanks!

@TwoSidesOfFI Жыл бұрын

If you can fully fund your lifestyle in perpetuity then you never need to draw down and the concept of a safe withdrawal rate doesn't really apply. If you need to count on income beyond that for your lifestyle, you'll need to model the delta being withdrawn from your portfolio.

@lascanio Жыл бұрын

@@TwoSidesOfFI Got it, thanks!

@mikec.6571 Жыл бұрын

Awesome video! As others noted, this can be a pretty intimidating spreadsheet without a tutorial but your walk-through made it really easy to figure out. I have one question. At marker 9:03, you state that the "Portfolio Today" field represents the portfolio value at the beginning of retirement, assuming, it appears, that the retirement date is 01/01/2023, as shown in the "Start Date" field. If my planned early retirement date is 01/01/2028, do I still enter the portfolio value as of today (02/28/2023), or the portfolio value I expect on my planned early retirement date? Clarification on that would be very helpful.

@gregstockslager663 Жыл бұрын

I have the same question and can't find the answer in the SWR series. Thanks for doing this video and adding so much value!

@roncarlson537 Ай бұрын

I had the same question. Here's a quick hack for that: 1. project the dollar amount you'll have at retirement and set that as Portfolio Today, and 2. adjust your birth year back in order to set yourself as your retirement age.

@MEYER99100 Жыл бұрын

Great video. I am not sure I understand what SCR means. If you fill all data and then run a second calculation doubling your Portfolio amount,. should the SCR go up? Meaning you can spend more without risking failure. When I do that the SCR goes down.

@MEYER99100 Жыл бұрын

Never mind, figured it out

@alonsaggie Жыл бұрын

Thank you so much for putting this together. I have a quick question: let’s say I retire today and my safe withdraw rate is 3%. What should I do in year 2? Should I adjust the withdrawal rate to inflation? And if so, how exactly should I do this? Do I trust the official inflation rate published FTX the fed or use something like Trueflation?

@TwoSidesOfFI Жыл бұрын

You're welcome! I talk about how I use this tool on an ongoing basis at 23:08.

@BryceThomassub Жыл бұрын

Question: On Cash Flow Assist you input your portfolio value in today's dollars, but my start retirement date is 10 years out. How do I model additional savings toward my portfolio between today and my retirement start date? This should include additional yearly savings + growth of my portfolio during that time. Thanks!

@roncarlson537 Ай бұрын

I had the same question. Here's a quick hack for that: 1. project the dollar amount you'll have 10 years from now and set that as Portfolio Today, and 2. adjust your birth year back 10 years to set yourself as your retirement age.

@richardpierson242 Жыл бұрын

Since the 90s, CAPE ratio for S&P 500 has not been less than 20 very much. I don't see how using the withdraw rate at a less than 20 CAPE is relevant in the last 30 years.

@TwoSidesOfFI Жыл бұрын

It’s not relevant presently, true. But it may be again in the future and so the tool is setup to handle it. It also is useful for modeling historical periods.

@jenellebarkley 9 ай бұрын

Helpful video, though I think the spreadsheet has broken... No matter the value entered in "portfolio today", the results do not change on the main results tab.

@TwoSidesOfFI 9 ай бұрын

I've just made a fresh copy of the tool and the good news is that it's working as expected. If you're looking at the SWR percentages (or failure rates) on the Main Results tab, that is correct. Those are independent of starting amount. What *will* change if you alter the Portfolio Today value are the Safe Consumption Amounts (i.e. dollars) starting in Col V of the Cash Flow Assist tab. For example, change the Portfolio Today from the default of $3MM to $1MM, and the 0% failure rate for all time (cell V15) change from around $103K to $34k. If you want to see the failure rates on Main Results change, swap the portfolio from 80% S&P500 / 20% 10-year T-bills to 20/80. That will cause the SWR for 0% failure rate considering all time (cell D9) to drop from 3.25% to 2.5%. Changing other orange-shaded input fields in Col B will also result in changes to Main Results tables. In both examples here many other values change too but I'm just giving a single example for each.

@erniekeller1093 3 ай бұрын

I'm invested almost completely in dividend paying stocks and funds. Even if your portfolio isn't large enough to cover your entire income needs from dividends alone, the dividend strategy means you don't have to take 4% out of your portfolio each year. You might be able to reduce that to, say, 2% and that would give you a better shot of having market gains keep you from running out of resources prematurely.

@TwoSidesOfFI 3 ай бұрын

Dividend stocks prioritize income over capital appreciation. Value is distributed as dividends, resulting in slower price growth compared to let’s say an S&P 500 fund, which captures both price appreciation and dividends. Typically, on the ex-dividend date, when dividends are paid, the share price of a stock decreases by an amount roughly equal to the dividend. This adjustment reflects the fact that shareholders are receiving a portion of the company's value in the form of dividends. There is no free lunch! The choice between the two depends on your investment goals, your tax situation and whether you prioritize income paid out on a regular schedule or seek a mix of income and capital appreciation.

@LegacyStacker Жыл бұрын

Hi Jason! You nailed it in your intro, withdrawing 4% in a bear market, and then not being able to make it up during the following bull market. This is why I am focusing on dividend stocks now, instead of index fund investing. I'm also still trying to reach my precious metals 10% of wealth goal, during my current accumulation phase! I love the videos you and Eric produce on Two Sides of FI! 😎

@TwoSidesOfFI Жыл бұрын

Thanks! We appreciate your support

@subman656 Жыл бұрын

Guys, I want to express my thanks for taking the time to put together this run through simplifying the use of the tool. I was able to enter my information easily. The explanations were clear and very helpful. As others have mentioned it initially did seem intimidating, but after this it became clear how to get started with the basics. Excellent work that was very much appreciated!

@TwoSidesOfFI Жыл бұрын

Great! Glad to hear it, Russ. Best wishes to you

@wallst4fun1 Ай бұрын

This is phenomenal information. But honestly, the biggest threat to retirement is not the size of your portfolio, but the threat of hyperinflation. We have $33T in debt. Not unrealistic that we could see double digit inflation in the coming years. Using 2% inflation seems naive TBH

@dseagull3567 4 ай бұрын

I'm having an issue with CAPE-based results in that the withdrawal figure based on current CAPE is 67% higher than the number presented on cash-flow sheet. I have trouble believing this result, or I don't have a good understanding on what the numbers are telling me. Comments?

@jessiquilla1 Жыл бұрын

Thanks Jason for such a great tutorial on the SWR tool! My husband and I are hoping to reach FI in a couple of years and then go the geo abitrage route to achieve early retirement. I've really been enjoying your and Eric's podcast/YT and wouldn't have found out about Karsten's great tool without you guys. And +1 to a deep dive into more of the SWR tool, never hurts to get more technical. Using this tool will definitely give us more confidence that we can ride the long-term waves of the wonderful world of FIRE. Excited to discover more of your podcasts/YT videos, we appreciate you!

@TwoSidesOfFI Жыл бұрын

Jason here - you're welcome, Jessica! So glad to learn you found it useful. We appreciate your support of the show! Best wishes to you and your husband on your own journey! Keep us posted

@jessiquilla1 Жыл бұрын

@@TwoSidesOfFI Thanks Jason, will do! Just checked out your most recent show on portfolio progress and left you a like and comment :)

@sixstringsdaddy2477 4 ай бұрын

I modeled having an external source of income from day 1. It seems the SCR is expressed by calculating the value of income into the withdrawal. So it tells me my withdrawal rate is 7.7% when in fact I can only sell 2.7% of the portfolio, the remaining 5% is brought in by the income stream. the cash flow assist tab confirms that I should only get 2.7% in column T. I would have preferred the SCR be expressed in the form of a % of the portfolio to withdraw every month, and some other column showing the total of my income + the withdrawal for total available (before taxes)

@TwoSidesOfFI 4 ай бұрын

Be sure to drop Karsten a comment in the main SWR Toolbox thread as he very often responds there!

@dseagull3567 4 ай бұрын

It seems to me that column T is giving you what you can take from the portfolio and the SWR is based on that number in relation to total portfolio value. It is not a monthly total consumption number.

@edwardtolentino7210 Жыл бұрын

Does this apply if I'm just simply withdrawing the dividends generated from my portfolio and not touching the capital at all?

@TwoSidesOfFI Жыл бұрын

earlyretirementnow.com/2020/10/14/dividends-only-swr-series-part-40/

@maggmaw Жыл бұрын

Hello! Thank you, thank you for putting this video together! It is so insanely helpful as a nervous-recently-FIRE'd person. I would absolutely love to see more videos using this tool; perhaps some case studies✋🏼😬!I also would love to learn more about the CAPE-based Rule tab. I just discovered your podcast and found my way to KZfaq. Keep up the great content and looking forward to more nerdy videos!!

@TwoSidesOfFI Жыл бұрын

Thanks, Mabel, and congrats on your recent FIRE status! If you haven't seen Part 3 of this series yet, it covers the CAPE tab: kzfaq.info/get/bejne/obaTa9GYmNm9cmQ.html But don't miss Part 2 either which is a discussion we had on how we use this tool for our own finances : kzfaq.info/get/bejne/qMeghtKd3Zmbl40.html

@jeffreyhess7929 Жыл бұрын

How do taxes play into this? If I have a 1,000,000 portfolio but 500,000 if that are taxable gains how does that impact these calcs or what if my entire portfolio is in a 401k where all distributions are taxable?

@TwoSidesOfFI Жыл бұрын

Taxes are so individual that you can't really include them in a modeler like this. In essence, Karsten is modeling how much you can withdraw from your portfolio, pre-tax. Just like the tool has no view on how you spend those dollars, paying taxes is just another expense you need to plan for. Given the 0% capital gains limits, most in the FIRE community are paying little in income taxes unless doing larger Roth conversions is a big part of their strategy, or they have a very fatFIRE position. In essence, you just need to plan for paying taxes as part of your budget just like any other expense.

@amyb.894 Жыл бұрын

Have you tried the New Retirement software? If so, how do you think the results compare to this spreadsheet?

@TwoSidesOfFI Жыл бұрын

Jason here - I have tried it, yes. It's a really interesting tool that has continued to evolve nicely since its release. In my view they're just going after related but different things. NR is a fuller personal financial planning environment. But it doesn't attempt to deliver the same things that the Toolbox does. We may do a video about NR at some point

@whitney2870 11 ай бұрын

Unfortunately it looks like the sheet has been updated to remove future returns.

@TwoSidesOfFI 11 ай бұрын

I dug through his recent blog comments to get info on this. Here's what Karsten said: 'The “projected returns” are merely filling in missing data at the end of the 1960s and 1970s cohorts with not enough history for simulating very long horizons. They will not be used to simulate your immediate retirement returns. So, for the most part, the fail-safe WRs are not impacted much by changing those values. [I mentioned this in the video as well] In response to #3, I’ve decided to remove the “Project Future Real Returns” from the parameter section, because that’s likely going to confuse readers. I moved that section to the bottom and put a note: “Do Not Change” ' - Jason

@johnkelley1426 Жыл бұрын

I want to have a free Monte Carlo simulator for retirement.

@TwoSidesOfFI Жыл бұрын

Check out www.honestmath.com/ - neither of us have tried it yet but seeing some positive feedback on social media. Let us know what you think!

@Bleys0072 Жыл бұрын

When changing the expense ratio, be sure to put in a % after your number. Otherwise your results will be WAAAAAAAY off. Try it out to see :D

@TwoSidesOfFI Жыл бұрын

Thanks for the tip, Bleys

@ingridoomen867 Жыл бұрын

my apology... as I may be the one non numbers spread sheet person here....can i use this tool if I don't have a spouse can I just delete that row...any advice on how should I accommodate this ? Thank you so much for your show....your show is much appreciated and helpful thank you

@TwoSidesOfFI Жыл бұрын

Hi Ingrid, are you talking about columns E-N in the Cash Flow Assist tab? Those columns, and this sheet as a whole are optional. You can enter data in one or more columns as you see fit. You can also put the same date in cells G6 and G7.

@subman656 Жыл бұрын

I know this isn't a trouble shooting forum, but I did lose the Failure Rate of Different Consumption graphic on the Main Results tab, how about others?

@TwoSidesOfFI Жыл бұрын

Sorry you’re having trouble. We haven’t had any other reports of this happening. We’d recommend copying a new version of the tool to Google Drive

@gregstockslager663 Жыл бұрын

I had the same problem when I downloaded the file to my computer. The graph worked when working on a copy on Google Docs.

@DevinSmith1486 Жыл бұрын

I dont think the plunge protection team will let the markets go too low for too long like in the great depression. America would be a 3rd world country at that point with retirees living like paupers