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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76237  
Subject: Re: Filling out Monte Carlo Based Calculator Date: 1/2/2008 12:04 AM
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Did you look at the explanation page that goes with the calculator? It's here:
http://www.flexibleretirementplanner.com/index_files/technical_inputs.htm

So I won't repeat what they say. Instead I'll focus on just one main point.


Retirement Age: not sure what to put here, as I'm currently on SSDI and "retired" now. Hopefully not for good, but we should assume worst case for this study. I would like to project to age 70.

OK. Let's stop right here. Being on disability is going to be a major impedement to using most generic calculators. Those are generally built to handle someone who is working and saving for retirement.

However, we might be able to make this work if we can get a bit more information about your disability income and situation.

Are you still able to save for retirement even while on disability? What will happen to your disability income when you get to 65 or so? You mention SSDI, do you have any other sources of income right now?

Now, if we're going to jerry-rig this thing to work for you, we need to make a couple of assumptions. First, you are still saving for retirement even though you're on disability. Next, your disability will stop at your normal retirement age for social security. (That should be something between 65 and 67 depending on when you were born.)

With those assumptions, I'd put whenever your disability income will stop in this field. Probably something like 66 years old.

Life Expectancy: 95 is the default, so we'll keep that.

Let's check that again as well. Does your disability have an affect on your life expectancy? How is your family longevity? Father, mother, siblings, grandparents? 95 would certainly be quite conservative, but you don't want to be overly conservative with this estimate, or you'll end up giving up a lot of your current lifestyle to save for a retirement you may not have.

Income Tax rate: I've no idea. I have not had a tax liability since going on SSDI. My current income is $15000 Social Security and usually a couple of thousand in interest income. No tax now. Maybe tax later? Given this, I don't know how to input.

That would be zero for you for now.

And this also kind of nails things down. You don't really need to do any retirement planning if you're going to stay on SSDI. You are already retired and this calculator doesn't apply. But I'll continue because there is a possibility that you can get back to work sometime in the future and improve your retirement.


Taxable Annual Savings: $2000 is what I can probably manage to add to my mutual funds.

You're living on SSDI plus a bit of interest income and still adding to your savings? If so, that's a remarkable feat. This isn't talking about the growth of your portfolio - it's the money you can set aside from your current income. In this case, just from your SSDI.

--Peter
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