I'd Like to Hear About Some Real Life Implementations of ESP for Retirement

Just wanted to say that I really like ESP. I'm hoping some retirees can chime in with their success stories about how they've successfully used ESP. Who has followed the recommendations year after year and has it worked out as you expected? (I guess I'm looking for some stories on "projected" vs. "actual" results.)

I tend to organize my finances in terms of discretionary spending, so this software really works for me. For example, I have everything taken out of my paycheck (pre-tax, post-tax contributions, savings, taxes, mortgage, etc.) so that all that ever hits my checking account is my discretionary spending amount.

ESP is great because it tells me the maximum I can spend every year to maintain my consumption. Interestingly, when I first set up ESP, it told me to spend much more than I wanted to this year and next; so I "tuned" my standard of living index up to 250/year for the seven years before I reach age 60 and can tap into my retirement funds. This drove down my spending and increased my savings for 2015 and 2016, which reflects my plan of saving like crazy so that I'll have more to spend seven years after that. I really like ESP's flexibility.


dan royer's picture

You may have meant to say that you turned DOWN the standard of living early in order to cause more saving. Or perhaps you mean that you RAISE standard of living in some future years in order to create more saving early. Your discretionary spending will go up in those years you set the std. of living index to go up. You can also accomplish this by contributing more to a ROTH or 401K. This kind of retirement saving will tend to lower current discretionary spending and raise future discretionary spending.

For 2015 and 2016, I kept the SOL at 100. For the years after that, until I turn 60, I increased it to 250 per year. That caused my savings in 2015 and 2016 to increase, which reflects my savings strategy. So, yes, it means I'm saving early and, yes, it increased my spending for the years with the 250 index, which is what I wanted. For 2015 and 2106, I'm saving a lot to my retirement and nonretirement accounts both. Sorry if I wasn't clear in my original post.

dan royer's picture

OK, I might be confused what you mean by "saving." Saving as in "contributions to retirement" or "saving" as in seeing a larger number in the Saving column on the Annual Suggestions report. I understand what you are doing now.

I guess I should have said "contributions" to retirement and nonretirement accounts (which is, of course, different than "savings" in ESP).

I found ESP about two years ago and it was the only program I could locate that could incorporate the effects of a government defined benefit pension in planning. I used it to determine what my sustainable discretionary spending could be, compared this to what my expenses would be in retirement, and I found I was in better shape than I thought. Not too long after things soured at work. I went home and checked the impacts of retiring _now_ and found I could still comfortably cover retirement expenses. Shortly thereafter I filed for retirement. This would never have happened without ESP's help. My family was extremely supportive at the time and is still - in particular my wife is glad I have been home to deal with our son's later teenage years.

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