What if there's a big market drop when I retire?

What if equities don’t return an average similar to recent years?

What if capitalism, as we know it, collapses the year that I retire?!

For as long as I've paid attention to communities where people are planning their retirement, I've seen anxious people. And wherever there are anxious retirement planners, there are "what if" statements. I'm posting today to let a little light on the newest bug feature of FIREproof: the "What-if?" page.

After you enter all of your information on the Inputs page and click either Run or Proof, you'll be brought to the Proof page and shown all of the statistics of your specific situation. On that page, you'll now see on the sidebar a new item: "What-if?"

Clicking on that will pop-up the new What-if editor:

How does it work?

The scenarios (I hope) are pretty self-explanatory, and are common worries of people in retirement. I've included only 6 for now, but I am open to suggestions for more. Each one of these takes your base simulation and layers on an extra piece of data.

• One-time equity drop at retirement: This overwrites the equities dataset with a single year value of your choosing, on whatever retirement year you already have set.
• Equity return lower long-term: This overwrites the equities dataset with a modifier on all current historical years. Example: Setting this to -2% means that every year's equity returns is 2% less than the historical data shows.
• Inflation +X% higher or -X% lower than actual: This overwrites the inflation dataset with a modifier on all current historical years. Example: Setting this to +2% means that every year's inflation numbers is 2% more than the historical data shows. ie: 3% inflation turns into 5%
• Inflation Spike +X% first 5 years, then normal: This overwrites the inflation dataset with a modifier on the first 5 years. Example: Setting this to +4% means that every year's inflation numbers is 4% more than the historical data shows. ie: 3% inflation turns into 7%. Then after 5 years, historical numbers are used.
• Social Security Lower: Worried about Social Security changing? Example: Setting this to -25% will take your already set Social Security inflow value and reduce it by 25%.
• Long-term capital gains rate change: Worried that the tax regime might change? Example: Setting this to 30% moves the lower long-term capital gains tax bracket value from 15% to 30% for the entire simulation.

Play with those anxious thoughts

Use these sliders to modify your existing simulation and see the differences that they might make. If you have any ideas for new What-if scenarios, use the Contact Us button at the top of the page when you're logged in.

-Lauren

This project is currently in Beta, but I'm including a subscription for a "Pro" version. Pro users will be the first to see new features, and will have a limited set of features available only to them. These subscriptions will support development of this tool and allow me to consider spending even more time on this project (Early Retirement anyone? A girl can dream).