Anyone used FiCalc to backtest retirement drawdown plans?

GazzaBloom

Albermarle said:

but really I think there is a serious gap in the market for someone to introduce a freemium tool to the mass market which would provide some of these additional features.

I do not think there will ever be a 'mass market' for this type of product. The majority of the public are clueless about even basic financial issues. 

These planners will only ever be for financial advisors, and a very small minority of pension/financial DIYers, especially the ones who like spreadsheets,

 (which does not include me )

Sadly, I think this is true. A colleague of mine have run a few unofficial pension awareness briefings with the office staff, giving simple information such as what the difference between an income and accumulation fund is, how fees work and their impact over time, what the main asset types are, how "volatility" is measured (ie standard deviation), difference between an actively managed and passive fund, how salary sacrifice works, that kind of thing.

Some of the people in the office, in their 50s, couldn't even find the login details to check their pension and had no idea how much they were paying in and much of what we discussed went over their heads.

Pat38493

GazzaBloom said:

daveharruk said:

The best planner I have found so far is guiide.co.uk. I believe, as I didn't write the software myself, that it doesn't use Monte Carlo simulation but does allow stress testing of various scenarios. Most importantly, it supports UK tax rates and gives a full breakdown of estimated tax paid every year. FICalc is also easy to use and a useful additional tool to check your plans will work. The big drawback of all that I've tried is that they don't allow couples to contribute towards an overall plan. Also, it would be nice if it was possible to see the effect of different tax regimes upon plans. There may be other better tools which are only available to financial advisors too, but really I think there is a serious gap in the market for someone to introduce a freemium tool to the mass market which would provide some of these additional features.

Timeline allows couples to input details and calculates UK taxes.

From what I understand, Timline is intended as a paid (and very expensive) tool for professionals but they do currently allow you to use the tool for free if you only want to set up a couple of clients.

I was also told on this forum to be a bit careful about tools like firecalc as they are using mainly US data.

There is also a paid site called Retireeasy that you can use (monte carlo based).

There was some discussion recently on another thread about how even advanced tools like Timeline seems to have some glitches when you have a mixed portfolio and you start to click on options like Guyton Klinger rules - or at least you have to interpret the results quite carefully.  I also noticed that the "Balance" graph on Timeline doesn't work properly for me in some scenarios - in some of them it seems to show me with a postive balance at end of retirement on the worst case scenario, even when the numbers says zero.

GazzaBloom

Pat38493 said:

GazzaBloom said:

daveharruk said:

The best planner I have found so far is guiide.co.uk. I believe, as I didn't write the software myself, that it doesn't use Monte Carlo simulation but does allow stress testing of various scenarios. Most importantly, it supports UK tax rates and gives a full breakdown of estimated tax paid every year. FICalc is also easy to use and a useful additional tool to check your plans will work. The big drawback of all that I've tried is that they don't allow couples to contribute towards an overall plan. Also, it would be nice if it was possible to see the effect of different tax regimes upon plans. There may be other better tools which are only available to financial advisors too, but really I think there is a serious gap in the market for someone to introduce a freemium tool to the mass market which would provide some of these additional features.

Timeline allows couples to input details and calculates UK taxes.

From what I understand, Timline is intended as a paid (and very expensive) tool for professionals but they do currently allow you to use the tool for free if you only want to set up a couple of clients.

I was also told on this forum to be a bit careful about tools like firecalc as they are using mainly US data.

There is also a paid site called Retireeasy that you can use (monte carlo based).

There was some discussion recently on another thread about how even advanced tools like Timeline seems to have some glitches when you have a mixed portfolio and you start to click on options like Guyton Klinger rules - or at least you have to interpret the results quite carefully.  I also noticed that the "Balance" graph on Timeline doesn't work properly for me in some scenarios - in some of them it seems to show me with a postive balance at end of retirement on the worst case scenario, even when the numbers says zero.

I've found the cashflow chat a bit odd to understand at times, I can go from all positive cashflow to suddenly being -£6K down each year for several years on the bounce with just tiny tweaks.

gwapenut

daveharruk said:

The best planner I have found so far is guiide.co.uk. I believe, as I didn't write the software myself, that it doesn't use Monte Carlo simulation but does allow stress testing of various scenarios. Most importantly, it supports UK tax rates and gives a full breakdown of estimated tax paid every year. FICalc is also easy to use and a useful additional tool to check your plans will work. The big drawback of all that I've tried is that they don't allow couples to contribute towards an overall plan. Also, it would be nice if it was possible to see the effect of different tax regimes upon plans. There may be other better tools which are only available to financial advisors too, but really I think there is a serious gap in the market for someone to introduce a freemium tool to the mass market which would provide some of these additional features.

This planner worries me because then figures it uses for my retirement assume low inflation between next year and the year after, which is a fundamental mistake.

Pat38493

GazzaBloom said:

Pat38493 said:

GazzaBloom said:

daveharruk said:

The best planner I have found so far is guiide.co.uk. I believe, as I didn't write the software myself, that it doesn't use Monte Carlo simulation but does allow stress testing of various scenarios. Most importantly, it supports UK tax rates and gives a full breakdown of estimated tax paid every year. FICalc is also easy to use and a useful additional tool to check your plans will work. The big drawback of all that I've tried is that they don't allow couples to contribute towards an overall plan. Also, it would be nice if it was possible to see the effect of different tax regimes upon plans. There may be other better tools which are only available to financial advisors too, but really I think there is a serious gap in the market for someone to introduce a freemium tool to the mass market which would provide some of these additional features.

Timeline allows couples to input details and calculates UK taxes.

From what I understand, Timline is intended as a paid (and very expensive) tool for professionals but they do currently allow you to use the tool for free if you only want to set up a couple of clients.

I was also told on this forum to be a bit careful about tools like firecalc as they are using mainly US data.

There is also a paid site called Retireeasy that you can use (monte carlo based).

There was some discussion recently on another thread about how even advanced tools like Timeline seems to have some glitches when you have a mixed portfolio and you start to click on options like Guyton Klinger rules - or at least you have to interpret the results quite carefully.  I also noticed that the "Balance" graph on Timeline doesn't work properly for me in some scenarios - in some of them it seems to show me with a postive balance at end of retirement on the worst case scenario, even when the numbers says zero.

I've found the cashflow chat a bit odd to understand at times, I can go from all positive cashflow to suddenly being -£6K down each year for several years on the bounce with just tiny tweaks.

I think it's because when you are looking at the cash flow chart, you are looking at the results of one discrete scenario out of the hundreds that were tested - you can only select to look at the worst case, median and so on, which I guess are just one particular scenario.

If like me you have programmed a combination of DC and DB benefits and state pension, you can come across scenarios where your money runs out, but then one of your DB kicks in to make up the difference.  

For me, I  can also come across scenarios where after so many years of retirement, your DB benefits in real terms start to cover my entire spending.  Whereas in another scenario, (sometimes a so called "better" scenario, it's not the case and I am making small withdrawals from DC right to the end.  I cannot quite figure this out because it seems to me that both DB benefits and spending are uprated by the same inflation per scenario each year, so either our combined total pensions as a couple (once state pensions have kicked in) should cover the spending, or not.  Can't figure this bit out but maybe I am missing something there.

The other thing that worries me a bit about timeline is that if you are not retired, you program your DC pension contributions in there only by year.  If you are in the middle of the year, are some of your pension contributions being double counted if you have updated your fund balances but you still have that year set as included in the contributions?  I have never yet figured this out.