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Show HN: I spent 2 years building a personal finance simulator

projectionlab.com

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Re: Show HN: I spent 2 years building a personal finance simulator

#11

Post by irrational »

Bostonian wrote: post #6

Probability of success is a common and relatively simple metric to compute and explain, but it is not a good one. If you retire at 60 and expect to live until 90, there is a big difference between running out of money at 70 vs. 85. A metric such as expected shortfall https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3674232 is better since it considers the magnitude of the shortfall.

This is one that concerns me. My family members typically live into their 100s and are still very independent and mentally healthy up until a week or so before dying. I am incredibly healthy and don’t expect anything different, barring accident. I plan on waiting as long as possible to start collecting social security, but I’m wondering what else I need to consider when anticipating 30-40 years of retirement.

Re: Show HN: I spent 2 years building a personal finance simulator

#13

Post by scubakid »

fishtoaster wrote: post #9

Oh hey, it's you again! I discovered projectionlab (formerly projectfi) on HN a while back and have been loving it. Every other "retirement calculator" I found was a dozen text fields and a simple output graph or two - Projection Lab gave me what I really wanted, which was the ability to do much more involved modeling of various scenarios: - What happens if I buy a house in X years? - What happens if my old company I…

Thanks so much! I use PL for all my own planning too of course, and keeping it around is very much the plan.

Is there a particular direction in which you'd like to see me build from here? The public roadmap is overflowing with ideas at this point, and I'm curious how folks would rack and stack them.

Re: Show HN: I spent 2 years building a personal finance simulator

#15

Post by CobaltFire »

I see you have Pensions for Commonwealth Countries; what about US Government Pensions? I FIRE'd at 40 with a US Military Pension and some other investments, and can't really adapt your tool to my case due to that.

There are some interesting things about those pensions though (and the related VA compensation metrics). I have a spreadsheet I use to advise veterans who get sent my way because there are no decent tools out there for that population.

Otherwise it looks awesome!

Re: Show HN: I spent 2 years building a personal finance simulator

#17

Post by Syzygies »

Bostonian wrote: post #6

Probability of success is a common and relatively simple metric to compute and explain, but it is not a good one. If you retire at 60 and expect to live until 90, there is a big difference between running out of money at 70 vs. 85. A metric such as expected shortfall https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3674232 is better since it considers the magnitude of the shortfall.

Yes, the twin idiocies of the freebie planners offered by the major investment firms: "Expect to live until" huh? My death has a probability distribution that's better understood than the market, any Monte Carlo simulations should include varying my life expectancy? And "probability of success" huh? Are we so stupid that we fly the plane into a mountainside at 85, rather than modifying behavior? I want to simulate my actual varying life expectancy and varying budget as I respond to market forces. Our house is paid off and I'm a great cook, but I love to spend money as our budget allows.

MaxiFi Planner is the best consumer tool I know; my advisor also uses it. A puzzle that's too hard for it, making me want to script scraping its reports: Should I choose an annuity for part of my TIAA-CREF retirement savings? Even if one understands that the answer is generally no, there's always a number that flips the decision. TIAA annuities pay more than market, but enough more? There's an annuity paradox that programs like MaxiFi Planner reveal: Even a poorly priced annuity lets one plan to spend more. On the other hand we want to optimize our daughter's inheritance.

Economists optimize varying notions of "utility". The above is a game, scoring what one gets to spend adapting to market conditions, taking into account the inheritance as one's year of death varies. This is beyond any planning software I've seen, yet it's exactly the game I will instead play out badly by hand.

Re: Show HN: I spent 2 years building a personal finance simulator

#18

Post by scubakid »

CobaltFire wrote: post #15

I see you have Pensions for Commonwealth Countries; what about US Government Pensions? I FIRE'd at 40 with a US Military Pension and some other investments, and can't really adapt your tool to my case due to that. There are some interesting things about those pensions though (and the related VA compensation metrics). I have a spreadsheet I use to advise veterans who get sent my way because there are no decent tools o…

Congrats! (or in FIRE parlance, f you haha)

Curious what you feel is missing for modeling military pensions. Have you checked out the configuration options for Custom income streams, the Advanced change-over-time editor, and/or binding the start/end of things to milestones?

Re: Show HN: I spent 2 years building a personal finance simulator

#19

Post by Bostonian »

Syzygies wrote: post #17
Bostonian wrote: post #6

Probability of success is a common and relatively simple metric to compute and explain, but it is not a good one. If you retire at 60 and expect to live until 90, there is a big difference between running out of money at 70 vs. 85. A metric such as expected shortfall https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3674232 is better since it considers the magnitude of the shortfall.

Yes, the twin idiocies of the freebie planners offered by the major investment firms: "Expect to live until" huh? My death has a probability distribution that's better understood than the market, any Monte Carlo simulations should include varying my life expectancy? And "probability of success" huh? Are we so stupid that we fly the plane into a mountainside at 85, rather than modifying behavior? I want to simulate my…

A current WSJ article may interest you: "A Retirement Tax Break That Ends the Fear of Outliving Your 401(k): The pros and cons of using your nest egg to buy a special longevity annuity in retirement" https://www.wsj.com/articles/retirement-tax-break-qlac-annui...

Re: Show HN: I spent 2 years building a personal finance simulator

#20

Post by CobaltFire »

scubakid wrote: post #18
CobaltFire wrote: post #15

I see you have Pensions for Commonwealth Countries; what about US Government Pensions? I FIRE'd at 40 with a US Military Pension and some other investments, and can't really adapt your tool to my case due to that. There are some interesting things about those pensions though (and the related VA compensation metrics). I have a spreadsheet I use to advise veterans who get sent my way because there are no decent tools o…

Congrats! (or in FIRE parlance, f you haha) Curious what you feel is missing for modeling military pensions. Have you checked out the configuration options for Custom income streams, the Advanced change-over-time editor, and/or binding the start/end of things to milestones?

Nope, I completely missed where you put them. I've always considered them as an asset, as it were, not a fixed income stream. That's my mistake, and I found where you put them. It just wasn't where I expected!
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