Help with Ages

[mountainsoft]

I need help understanding the age entries.

As of January 2017, I am 53 years old. Is that the age I would enter for "Current Age" or would I enter 54 since that's the age I turn in 2017?

My birthday is in November, so my plan is to retire in December right after I turn 62. However, I will only be 62 for one month of that year. What do I enter for the retirement age?

Sorry, I know this should be obvious, but it's confusing me for some reason.

Thanks,

Anthony

[jimr]

There isn't an exact right way to do this, but it may help to understand how the simulation works.

The planner doesn't understand calendar dates at all expect that it does translate between age and calendar year for display purposes. It considers 'today' as the start of the plan and counts years from today on. That means if you put retirement age as current age, it'll assume you are retiring at the start of the first plan year. If you put retirement age one greater than current age, it'll assume you are retiring one year from now.

Also, logically the planner makes adjustments to the portfolio for cash flows (eg income, savings, expenses) at the beginning of the year and computes portfolio returns at the end of the year.

[mountainsoft]

I am still having trouble with the age settings. I am 53 now, but will turn 54 in November.

Starting now, FRP shows the balance after the first year, when I'm actually 54. OK, no problem, I just changed my current age to 54 so that works out nicely.

However, I plan to retire when I turn 61, at the end of that year (2024). I will continue to make contributions to my IRA until I retire. However, if I tell FRP I will retire at 61, it stops contributing new investments to my portfolio the year before. So instead of 8 years of contributions, it only shows 7.

I can get the contributions to work out by setting the retirement age to 62, but then I'm not sure how the pension and SS ages fit in.

It's all very confusing...

[jimr]

I think the biggest issue is that you changed your current age from 53 to 54, which isn't quite accurate.

The year-by-year portfolio values in the detailed view show the portfolio value as of the end of the year. So the portfolio value at the end of this year (the 'Age 53" year) should be the current value + contributions + growth. Even though the entry is for age 53, it really means "the planner year that starts when you're 53".

[mountainsoft]

OK, gotcha. I don't know what I was doing wrong, but I changed back to current 53 and retire 61 and it's all working out now. Weird, I couldn't wrap my head around that for some reason.

Onward. Thanks!