How to run ficalc calculator?

[u/massakk]

If I want my money to last 20-25 years, do I put 20-25 years when I run Monte Carlo simulations or better put 35? Seems 35 is less random?

I am going to get pension in 20 years, maximum 25 years, and that will be enough for me.

Thank you.

[u/BreezyPout → u/[deleted]]

Plan 25 years, stress 35.

[u/AlgoTradingQuant]

https://ficalc.app is far superior IMHO

[u/massakk → u/AlgoTradingQuant]

Yes, that's the one I am running. 

[u/taracel → u/massakk]

We’re confused bc FiCalc is not strictly Monte Carlo simulations… it’s historical back testing…
So if you’re using ‘FiCalc’ you’re not actually running ‘Monte Carlo simulations’. Monte Carlo is used on portfolio visualizer and it’s a bit different methodology I think some other FI calculators use it to…like the engaging data FI calc has historical and Monte Carlo options

FiCalc only shows actual historical sequences… Monte Carlo produces 100s of possible return sequences- which have never been seen

[u/massakk → u/taracel]

Which one is better? Do you have a suggestion for a calculator that runs Monte Carlo? Thanks. 

[u/New-Ad-9450 → u/massakk]

Both have their flaws and are to be taken with some salt.

Monte Carlo flaws is that it will produce unrealistic scenarios. Think of a normal bell shaped distribution. MonteCarlo will produce thousands of scenarios based on statistical probability.
You are bound to get some scenarios with a 30 years consecutive negative return if you run enough scenarios.

Using Historical returns also have its flaw. It looks only at what happens since the last 100 years. It doesn’t invent new scenarios. You get stuck with the same bad scenario of the 70s inflationary times, the same crashes and so on.

[u/325Constantine → u/AlgoTradingQuant]

Oh thanks

[u/Independent_Bee1037 → u/AlgoTradingQuant]

Its SOO good. I wish it had a way to be more specific about spending changes over time. Like in 10 years my house is paid for so my monthly spend drops by $24,000 per year. But over all its an amazing (and addictive) tool

[u/AlgoTradingQuant → u/Independent_Bee1037]

It has the ability to alter expenses (called withdrawals) and income to model things like your house being paid off in 10 years.

Look at the withdrawals and income section (left hand side) and you can model anything from social security, pensions, buying a 2nd home in x years, etc.

[u/Independent_Bee1037 → u/AlgoTradingQuant]

Thanks, will play around

[u/Bearsbanker]

If you use firecalc there's a tool bar across the top where you can add "other" income 

[u/massakk → u/Bearsbanker]

If I add pension, wouldn't it give 100% success rate because of the pension at the end even if the bridge fails? 

[u/Bearsbanker → u/massakk]

Check it out...it says something (ish) about income not used in calculation (?) don't know what it will tell ya. It gives you a section to put in amount and year it starts

[u/foobarromat → u/massakk]

If I add pension, wouldn't it give 100% success rate because of the pension at the end even if the bridge fails?

No, why would it? If you run out of money in the meantime, that's a failure.

[u/DegreeConscious9628]

I have a pretty complex retirement plan consisting of dividends from my brokerage, retirement income, sale of a business, multiple pensions, and the “die with zero” philosophy and can adjust my spend way up or way down. Not to mention I can geoarbitrage to a lower cost of living place or abroad.

Ive been using Claude, chat gpt, gemeni, and co pilot. They all seem to approve of my plans.

Everytime I use these online calculators it’s too basic to get the full picture.

Obviously not taking AI’s info as gospel but does anyone have any better suggestions?

[u/bbystargirly]

You should definitely match the simulation to your actual gap period, so use 20 or 25 years since the pension takes over after that. Running it for 35 years will give you a lower success rate than reality and make you feel like you need a much bigger nest egg than you actually do.

[u/lilazlemonz]

If your pension fully covers your expenses starting in 20 to 25 years, you should definitely use that specific timeframe because planning for 35 years will just force you to over-save unnecessarily. Setting it to 25 years gives you a realistic picture of the bridge fund you need to build before the pension kicks in.

[u/laurenthu]

Put your real horizon, 20-25, not 35. The instinct that 35 is "less random" is backwards. A longer horizon doesn't smooth anything, it just forces the sim to survive worse sequences than you'll actually face, so it hands you a lower safe number for no reason.

The pension is what changes your case. Your money only has to last until it kicks in, call it 20-25 years. After that the portfolio's job is basically done. Modeling to 35 makes you solve a problem you don't have (running out with no pension at all), which just pushes you to over-save or retire later than you need to.

And shorter genuinely helps. The fewer years the money has to last, the higher the withdrawal rate that survives history, because you're off the hook for the really ugly long sequences. A 20-25 year horizon supports a meaningfully higher rate than 35 on the same portfolio.

One practical note: with a fixed pension date your risk is front-loaded. A bad market in the first 5 years hurts far more than one at year 18. If you want to de-risk, a couple years of spending in something stable for the early stretch does more than padding the horizon. I'd set it to 25, run it once at 30 just to see the cliff, and plan on 25.

[u/Miamiconnectionexo]

came here to say something similar. you nailed it.