I suggest you ...

bug in time estimate?

I think something's wrong with the time-until-retirement estimate, or there's something i'm misunderstanding.

I entered $100k income, $75k expenses, and $1m portfolio, and got this result:

https://networthify.com/calculator/earlyretirement?income=100000&initialBalance=1000000&expenses=75000&annualPct=5&withdrawalRate=4

It looks like the ROI reaches $75k shortly after 6 years, but the time-until-retirement is over 9 years. The table of figures stops updating some but not all of the columns after 6 years. A glitch?

1 vote
Vote
Sign in
Check!
(thinking…)
Reset
or sign in with
  • facebook
  • google
    Password icon
    I agree to the terms of service
    Signed in as (Sign out)
    You have left! (?) (thinking…)
    Sebastian Kuzminsky shared this idea  ·   ·  Admin →

    5 comments

    Sign in
    Check!
    (thinking…)
    Reset
    or sign in with
    • facebook
    • google
      Password icon
      I agree to the terms of service
      Signed in as (Sign out)
      Submitting...
      • Anonymous commented  · 

        I noticed the exact same thing. The graphical representation does not match the written one.
        The figure shows that I reach retirement a couple years BEFORE the numerical one does...

      • Adminkablamo (Admin, Networthify) commented  · 

        Hey those are really good ideas. I don't have a repo for this. But I totally should. I'll try to make that happen tomorrow. I'll update here when I do.

      • Sebastian Kuzminsky commented  · 

        That makes sense, thanks for clearing that up for me.

        I think the "Percent Of Expenses Covered By ROI" column threw me off, the number i was expecting was really "Percent of Expenses Covered By Withdrawal Rate" and i didn't look close enough.

        Some suggestions to make the table clearer:
        * Have the Expenses and ROI columns extend down all the way (mine end as soon as ROI reaches Expenses).
        * Replace the "Percent Of Expenses Covered By ROI" with "Percent Of Expenses Covered By Withdrawal Rate".
        * Add a "Income from Withdrawal" column that starts at retirement.
        * Add a "Amount of ROI reinvested" column.

        Is there a repo somewhere with the code? I could add those features if you think it'd be useful.

      • Adminkablamo (Admin, Networthify) commented  · 

        Thanks for commenting! Good question. Its not a glitch. Its because you're withdrawal rate is less than your rate of return.

        Your withdrawal rate is 4% and your rate of return is 5%. So at 6 years you are making 75k every year due to your 5% rate of return. However you're withdrawal that year will be less than 75k because your withdrawal rate is 4%.

        5% of your nest egg = $75k.
        4%of your nest egg = some number less than $75k

        In other words your nest egg isn't big enough to cover your expenses yet.

      Feedback and Knowledge Base