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? 

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