Flexible Retirement Planner Support Forum

How does FRP compare to the 4% rules that's commonly used for retirement calculations?

When I plug in my annual expenses into FRP and how much I'll need saved when I hit retirement, I get a median portfolio value that's about twice the amount needed compared to when I use the 4% rule to calculate how much I'll need. Seems to be a pretty big gap.

Anyone have any thoughts on this? I'd just like an idea of if FRP is ultra-conservative, or if 4% rule is not conservative enough. With such a large difference in the numbers pumped out, I'm struggling to figure out which "retirement model" to follow.

Did you plug in all your income streams? Social Security, pensions, etc. And an accurate # for annual expense? Average tax rate? What return rate and inflation rate did you enter?

Lot of moving parts here. The "Goal Seek" Function (which I assume you're referring to, since that's the only setting that will show you how much the planner things you will need) is not super reliable in my experience.

Yup, plugged in all of that. What do you mean by "goal seek" function?

All I did was input all that info, zero out the inflation to get a rough idea of future dollar amounts, then hit "RUN".
Then I look at "detailed view" and see how much the median portfolio needs to be at my retirement age to support my lifestyle.

When I compare this number with the 4% rule (adjusted to future dollars, as well), FRP tells me I need to save roughly double of what the 4% rule tells me to live the same lifestyle.

The numbers aren't close at all.

FRPJunkie wrote: ↑Thu Feb 13, 2025 5:00 pm Did you plug in all your income streams? Social Security, pensions, etc. And an accurate # for annual expense? Average tax rate? What return rate and inflation rate did you enter?

Lot of moving parts here. The "Goal Seek" Function (which I assume you're referring to, since that's the only setting that will show you how much the planner things you will need) is not super reliable in my experience.

StayPuft wrote: ↑Fri Feb 14, 2025 3:12 am Yup, plugged in all of that. What do you mean by "goal seek" function?

All I did was input all that info, zero out the inflation to get a rough idea of future dollar amounts, then hit "RUN".
Then I look at "detailed view" and see how much the median portfolio needs to be at my retirement age to support my lifestyle.

When I compare this number with the 4% rule (adjusted to future dollars, as well), FRP tells me I need to save roughly double of what the 4% rule tells me to live the same lifestyle.

The numbers aren't close at all.

FRPJunkie wrote: ↑Thu Feb 13, 2025 5:00 pm Did you plug in all your income streams? Social Security, pensions, etc. And an accurate # for annual expense? Average tax rate? What return rate and inflation rate did you enter?

Lot of moving parts here. The "Goal Seek" Function (which I assume you're referring to, since that's the only setting that will show you how much the planner things you will need) is not super reliable in my experience.

Settings>Activate Goal Seek Parameters>Use Goal Seek to Find retirement portfolio value...

When you say "adjusted to future dollars are well..." ? FRP reports in current dollars, not future dollars.

Also can you provide some numbers? The 4% "rule" is simply a calculation. If my portfolio balance is $1m and my expenses are $80k, well, that means the "4% rule" is only going to give me half as much money as I need (i.e. $40k). In this example you'd either need lower expenses or a higher portfolio balance (or a higher withdrawal rate) in order for 4% to work.

Ah! Very interesting! I've never even used the goal-seek function. Thank you! Is there somewhere I can learn more about what the goal-seek function does so I can understand it?

As far as numbers, when I use the 4% rule to multiply my expenses, it tells me I need $800k saved up in future dollars to pull it off. However, if I use the same expenses in FRP, delete the inflation rate to roughly predict future dollars, it tells me I need about $1.6 million...so double. I must be doing something wrong because why would it be double?

Maybe I should look more into this goal-seek function. I looked online, but can't find a more in-depth explanation of goal-seek.