Welcome #

FI Calc is a powerful and flexible retirement calculator.

Retirement involves an important decision: how much money will you withdraw from your investments each year? Most people wish to withdraw as much as they can to maximize their quality of life, but not so much that they run out of money.

It's impossible to know with certainty how much you can safely withdraw each year, because you can't know how the market will perform during your retirement, nor how long you will live. But there are ways to make an informed decision.

Finding a Safe Withdrawal Rate #

In the early 90's, a financial advisor named William Bengen came up with a novel idea to determine a safe withdrawal rate: simulating retirements using historical data. He took a retirement plan and calculated how it would have performed if an individual had started their retirement in 1926. He ran the numbers for each year of this simulated retirement (up to 50 years in his study), and determined if there was any money left in the portfolio at the end. Once this was done, he ran the simulation again, but this time he started the simulated retirement one year later. He continued to repeat this process, running simulation after simulation to see how different kinds of retirements would have fared throughout history.

After running all of the simulations, he determined that portfolios lasted about 95% of the time with a 4% initial withdrawal rate. A few years after Bengen's study, a group of professors reconfirmed his results in a paper known as The Trinity Study. This result is now known as The 4% Rule, and it remains a foundational idea in retirement planning today.

Using FI Calc #

FI Calc allows you to run retirement simulations using historical data, just like Bengen. You can recreate his original results, or tweak the inputs to discover new ones. Run retirements that are shorter or longer, or that withdraw less or more, and see how these changes impact success rates.

In the time since the 4% Rule was originally conceived, new withdrawal strategies have been created, each having different goals. Some attempt to spend every dollar that you have to maximize your quality of life. Others aim to preserve the value of your portfolio throughout the retirement. FI Calc allows you to explore a number of these alternative withdrawal strategies.

If you need to run additional analysis, you can export your results as a CSV file and continue your calculations in your spreadsheet app of choice.

Getting Started #

Continue reading these Guides to learn more about the different features of FI Calc. Or you can jump right in and start running calculations.