A FIREcalc Review: Is It Useful?

firecalc

We may all have our own interests and beliefs, but, if there is one thing we can all agree on it’s that everyone needs a retirement plan. Hiring a financial planner to help us with such a feat can be costly, though, and knowing where to start can also be a mystery. Before speaking with any retirement consultants, it may be wise to obtain an idea of what you can live off each year with your current portfolio as well as how much you might need to invest in order to live off your goal amount.  Luckily, the internet has come to the rescue with FIREcalc. But, what is it, exactly, and is it useful?

How FIREcalc Works:

FIREcalc is an online retirement and financial independence planning tool that gives you an idea of whether or not you can live off your current lifestyle with what you have in retirement. More than that, it actually compares how well your portfolio would have done throughout some of the toughest economic times in history dating back to 1887. Through this analysis, it helps to give you an idea of how well your investments will do in the future.

firecalc

To get started, you simply enter your goal annual spending amount, your current portfolio, and how many years you plan on using your retirement funds. Once applied, the FIREcalc simulation will calculate a simulation based on 30-year increments from the last 117 years. What will be produced is a color-coded graph with year-end balances. From here, FIREcalc states that you’ll be able to see the “big picture” of your current strategy.

firecalc graph

 

Pros:

The best part of FIREcalc is that it is free to use. There is absolutely no payment required nor do you even need to put a credit card on file. You’ll also not need to worry about creating an account, and you can use the retirement calculator as often or as many times as you need. You’ll be able to play out different financial scenarios with only the cost of time.

The homepage of the site provides an overview of what to expect, and, when you click on “How It Works,” you’ll find an informative FAQ that will be important to review prior to actually using the calculator. It explains the importance of evaluating the market throughout history as well as a step-by-step guide to FIRECalc.

Because this free online tool uses trends from the market since 1887, it automatically calculates the average success rate of your plan over time. The higher your success rate, the better your plan, obviously. There is no waiting for these results as they are generated as soon as you click “Submit.”

As you can see from the above results, the success rate of a $900,000 portfolio with a $40,000 annual withdraw for 40 years had a 71% success rate on average. This shows the user that changes need to be made to improve their success rate, and, because there are unlimited uses, the user can continue to crunch numbers to see what would be better for their current portfolio along with seeing how much they may need to increase it to achieve the desired yearly withdrawal amount.

Cons:

Although quick to use, the visuals of the site are a little underwhelming and overbearing with text. If you use the calculator without reading through the content you may find yourself easily confused, especially considering the historical factor FIREcalc uses to calculate results. It can also be easy to miss the calculator on the first page, as it is not visible right away, even when you click “Calculator” along the top tab.

It’s also important to note that FIREcalc is not meant to predict what will happen, but rather what will not happen. There are limitations, so even though you can incorporate your social security, you can’t tweak it to get the results you want. Part of this limitation includes not incorporating taxable versus non-taxable portfolios, leaving more room for inaccuracies.

Is It Useful?

The FIREcalc tool may not be 100% accurate, but because it is based on predictions, it can still give you an idea of how strong your portfolio is. The sooner you can start making adjustments, the better for your financial future. If nothing else, it’s another free retirement planning tool that shows you what you should consider setting aside to live the life you want. Just remember, the goal is to give you a general idea and is not an end-all solution to retirement planning.

Have you ever used FIREcalc? What are your thoughts? 

Is LASIK Worth It?

is lasik worth it

LASIK surgery took the world by storm in the early 2,000’s, giving hope to those with poor eyesight. As someone who wears contacts and glasses for nearsightedness, this procedure is something that has intrigued me as well. However, when you think of LASIK you also associate it with a hefty bill, one that may seem a bit overwhelming if it is not covered by your insurance plan. (P.S. Most do not cover unless they deem it medically necessary.) So, is LASIK worth it? Does it actually improve your sight long enough or well enough to justify the out-of-pocket cost?

LASIK Surgery: A Little History

According to Lasik.com, LASIK actually has quite the expansive history. The 1970’s introduced the invention of the excimer laser, which intrigued Columbia University researcher Stephen L. Troker, who used it to test laser eye surgery on test subjects, such as animal and human cadavers.

The first laser vision correction procedure was completed in 1988 on a 60-year-old woman with malignant melanoma, Lasik.com states. By 1991, Canada approved the excimer laser for photorefractive keratectomy (PRK) and the Federal Food and Drug Administration (FDA) in the United States jumped on board in 1995. Around the same time, two European eye doctors enhanced the procedure into what is now known as LASIK, which was allowed in the U.S. in 1999. Over the years, it has continued to evolve and improve but has always been associated with a heftier price.

The Cost of LASIK Back Then (And the Cost of LASIK Today)

When LASIK gained popularity (and FDA approval) in the late 1990s, the average cost was $2,200 per eye, Alex Tabarrok writes in a 2004 article on economics site Marginal Revolution. At the time the article was written, LASIK cost an average of $1,350 per eye, without putting into consideration inflation. Over the years, though, this number has fluctuated. In fact, according to a 2015 survey of refractive surgeons reported by Liz Segre of AllAboutVision.com, the average cost in the United States for laser eye corrective surgery was $2,077 per eye just a couple years ago, bringing us practically right back to where we started from.

However, cost does depend on location and facility. Additionally, the price may vary depending on the type of surgery, the technology used, and so on. You can opt for more sophisticated procedures, such as wavefront-guided LASIK, which corrects eyesight to result in the best vision possible, and would ultimately increase the end rate. But, overall, Lasik.com states LASIK costs can range from $1,000 to over $4,000 per eye.

Although you will often see ads for LASIK for just a couple hundred dollars per eye, you need to be wary of such deals. These often do not include follow-up appointments that are necessary for care, and so on, LASIK provider Qualsight advises.

So, with an average rate $4,000 or more for the surgery, is LASIK worth it?

Is LASIK Worth It?

Eye care can add up, especially depending on whether or not you need special lenses for astigmatism and the like. Not including your eye doctor visits, which may or may not be covered by your insurance plan depending on your policy, AllAboutVision.com estimates you may pay up to $400 a year or more for contact lenses and solution alone. Eyeglass frames plus the lenses can be an extra $200 or more, although those would be replaced much less than your yearly contacts, that is if your prescription does not change.

Even though LASIK is often not covered by insurance plans due to being considered a cosmetic surgery, Qualsight.com, who try to reduce the cost of LASIK to their patients, claims that many find the initial higher costs of the procedure to be worth it because, over time, they are saving thousands on continuously paying for their eyeglasses and contacts. Not to mention, many facilities will offer a payment plan to help alleviate the financial stress of paying out of pocket all at once. These payment plans, with no down payment of Health Savings Account assistance, can be as low as close to $90 per month for 48 months, according to Lasik.com’s LASIK calculator. Of course, you can pay more and pay the bill off sooner within 12 months.

AllAboutVision.com states that, in most cases, LASIK eye surgery is permanent. So, considering this, paying a little over roughly $1,000 a year for four years to have your eyesight corrected versus continuously paying $200 or more each year for the rest of your life to only assist your eyesight may make the case for LASIK alone and potentially save you money over time.

So, what do you think? Is LASIK worth it? Weigh in on the comments below. 

Retirement Planning: A cFIREsim Review

cFIREsim

It’s never too early to start planning for retirement. In fact, the sooner you start planning the better. But, when retirement age feels light years away, it can be hard to be motivated to do so. Not to mention, how do you know how much you should contribute to a retirement fund? What will be best for you when you don’t have a current retirement budget? The internet is full of helpful retirement tools to assist, such as cFIREsim, which just might have the answers you need.

What is cFIREsim?

cFIREsim is a free web-based tool that stands for Crowdsourced Financial Independence and Early Retirement (FIRE) Simulator. It uses data from the last 146 years to simulate how your portfolio would stand the test of time. According to the cFIREsim website, it “uses historical stock/bond/gold/inflation data from 1871 to present, and calculates how your portfolio would have fared throughout history.”

To use the simulator, you will fill in few responses regarding your current retirement plan. From there, it mimics your financial future based on how well your portfolio did throughout some of the toughest times in history. Using this tool, you’ll be able to see whether or not you’re account will survive based on how much you want to take out during retirement. Once you’ve put in your information, you’ll be directed to a color-coded interactive graph, which will show your portfolio compared over time.

cfireism graph

cFIREsim Pros

There are no frills with cFIREsim; upon entering the site, you can immediately start entering your information. There is no copy to navigate through to get to the simulator. The entire site is essentially the simulation.

If unsure where to start, you’ll be able to reference the cFIREsim FAQ and tutorial, but you can start with the most basic information. This includes the year you plan to retire, the year you plan to live until,  your current retirement information, and how much you’d like to live off of per year. Thus, to get an idea of what your retirement will look like, you only need basic information to start. Although the more details you enter, the better idea you’ll have.

One of the biggest pros of cFIREsim is the fact that you do not have to create any kind of account to participate nor do you have to pay anything. The tool is completely free to for users.

cFIREsim Cons

Even though the site allows you to immediately get started with your retirement simulation, the fact that there is no introduction to the page makes it a little confusing. The layout can feel overwhelming if you did not read the tutorial first or know what type of information you should enter. The graph can also seem overwhelming, but it is simply showing you how well your retirement would have done back through 1871.

Accuracy can also be an issue due to the fact that taxes are not incorporated into the simulation as well as inflation rates calculated yearly. In addition, the forms do not appear to be updated, and their tutorial could also provide more details explaining the varying capabilities of cFIREsim, as there are quite a few beyond the basic retirement planner, the site claims.

Overall, when used as just a tool to provide an idea of how to plan for your future retirement, it can be useful.

What are your thoughts of cFIREsim?