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My retirement calculator

Hi Cullen.

I have created my personalized retirement calculator and I wanted your input/thoughts on the variables that I use that impact my worldly possessions in my retirement calculator. I want to be conservative and not think I will make 7% average annual gains per year on stocks for example.

Inflation: 3% average annual.

Opex: 2.5% withdraw to cover all yearly expenses. Household can live with that withdraw rate comfortably.

Savings: 1% average annual gains on cash saved.

Bonds: 2% average annual gains.

Equities: 4% average annual gains on stocks.

2nd Home appreciation (payed complete): 3% average annual. 1st Home (payed complete) not included in calculator since I need a place to live.

Social Security appreciation: 2% average annual increments.

Life expectancy: up to 100 years old. My grandparents lived to and near 100 y/o. I hope I don't have to though, but just in case.




Hi Hugo,

Those look like reasonable estimates to me. Maybe even a bit conservative in some cases....Never hurts to be more cautious than not though.

Good luck!

"Pragmatic Capitalism is the best website on the Internet. Just trust me. Please?" - Cullen Roche

Thanks Cullen!

Can you please tell where you think I may be a bit conservative?

Hi Hugo,

The equity returns might be a little low at 4% if you're using a 100 year lifespan. I have no idea how old you are, but I am just guessing that that means at least 20+ years which would be an unusually and almost unheard of period of bad returns for stocks.

Never hurts to be more conservative with these things though since it's kind of a guess anyhow.

"Pragmatic Capitalism is the best website on the Internet. Just trust me. Please?" - Cullen Roche

Make sure you use a Monte Carlo simulation on those assumptions to check for robustness.

An easy way to do that is to sign up and use FinancialEngines.com (which Sharpe is co-founder of).  Google around for the code.