Author Topic: Financial independence - Calculator ( Covering TFSA / Equity and RA)  (Read 23533 times)

mike.h

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Re: Financial independence - Calculator ( Covering TFSA / Equity and RA)
« Reply #45 on: September 01, 2018, 01:58:34 pm »
its a pleasure :) - glad it is still helping out there
you have a few really odd entries there lol.


i don't believe it is a bug, i checked through the monthly calculations and seems to match. but yes - if you manage to earn a 5 bar salary, without having anything invested then there is bigger problems afloat :P

lol yeah I don't have the "problem" of a 5 mil salary and no investments :D

Why do scenario 3 and 4 arrive at different values? With 5 mil salary, my intuition is that the 27.5% RA contribution and the R33,000 TFSA contribution will both "fit" into the salary available for investment. In both scenarios, I had thought the final number would be identical as both RA and TFSA get "saturated" by the massive salary (i.e. it doesn't matter if you go into TFSA first or RA first, as there is "plenty" of salary to go around and fill up both).

Actually, I think I might know the answer since you mentioned the monthly calculations (had a closer look at them). With scenario 3 (TFSA first) the TFSA contribution is done in the first month of each year, whereas with scenario 4 (RA first) it goes in a few months later.

Could that still be a slight error then? It seems the first month of contributions are taken into account at the end of the 1 year period (in the image). I.e. 1 year is actually considering 13 months, and therefore catches an extra 33,000 in the "RA first" scenario. In the Max TFSA then RA then equity sheet
G29=OFFSET($J$283,D3*12,0,1,1) - this should maybe be
G29=OFFSET($J$283,D3*12-1,0,1,1)

I am still wrapping my head around all this stuff. I see you have a cool optimization in that monthly section where the SARS return from RA contributions gets plugged directly back into the next year's RA smart! I am learning a lot, thanks again! ;D

erwintwr

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Re: Financial independence - Calculator ( Covering TFSA / Equity and RA)
« Reply #46 on: September 01, 2018, 08:25:49 pm »
its a pleasure :) - glad it is still helping out there
you have a few really odd entries there lol.


i don't believe it is a bug, i checked through the monthly calculations and seems to match. but yes - if you manage to earn a 5 bar salary, without having anything invested then there is bigger problems afloat :P

lol yeah I don't have the "problem" of a 5 mil salary and no investments :D

Why do scenario 3 and 4 arrive at different values? With 5 mil salary, my intuition is that the 27.5% RA contribution and the R33,000 TFSA contribution will both "fit" into the salary available for investment. In both scenarios, I had thought the final number would be identical as both RA and TFSA get "saturated" by the massive salary (i.e. it doesn't matter if you go into TFSA first or RA first, as there is "plenty" of salary to go around and fill up both).

Actually, I think I might know the answer since you mentioned the monthly calculations (had a closer look at them). With scenario 3 (TFSA first) the TFSA contribution is done in the first month of each year, whereas with scenario 4 (RA first) it goes in a few months later.

Could that still be a slight error then? It seems the first month of contributions are taken into account at the end of the 1 year period (in the image). I.e. 1 year is actually considering 13 months, and therefore catches an extra 33,000 in the "RA first" scenario. In the Max TFSA then RA then equity sheet
G29=OFFSET($J$283,D3*12,0,1,1) - this should maybe be
G29=OFFSET($J$283,D3*12-1,0,1,1)

I am still wrapping my head around all this stuff. I see you have a cool optimization in that monthly section where the SARS return from RA contributions gets plugged directly back into the next year's RA smart! I am learning a lot, thanks again! ;D


re-looking at all these formulas really made me wonder where did i find the time :O

in the specific test data you entered, the above corrections might be more accurate, but then lots of other dependencies is affected (for example the RA tax return).
looking at it now, it is a bug, but the work required to fix it seems daunting... i might sleep on it and feel intrigued to fix it tomorrow:P

for now, think it will be safe to stick with the calculated values, and "work" one month longer eg 1 year +1 month :)

thx for testing in such detail!




mike.h

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Re: Financial independence - Calculator ( Covering TFSA / Equity and RA)
« Reply #47 on: September 02, 2018, 01:13:58 am »
re-looking at all these formulas really made me wonder where did i find the time :O

in the specific test data you entered, the above corrections might be more accurate, but then lots of other dependencies is affected (for example the RA tax return).
looking at it now, it is a bug, but the work required to fix it seems daunting... i might sleep on it and feel intrigued to fix it tomorrow:P

for now, think it will be safe to stick with the calculated values, and "work" one month longer eg 1 year +1 month :)

thx for testing in such detail!

A little while after I posted, I also noticed the tax return thing, so I'm glad we're on the same page there. It does look like it would be difficult to fix, and in a longer term scenario of ~25 years (which is what I'm most interested in) it will hardly matter.

After plugging in some conservative numbers, I'm feeling a lot more comfortable now about my prospects in retirement! ;D

erwintwr

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Re: Financial independence - Calculator ( Covering TFSA / Equity and RA)
« Reply #48 on: September 02, 2018, 10:39:32 am »
re-looking at all these formulas really made me wonder where did i find the time :O

in the specific test data you entered, the above corrections might be more accurate, but then lots of other dependencies is affected (for example the RA tax return).
looking at it now, it is a bug, but the work required to fix it seems daunting... i might sleep on it and feel intrigued to fix it tomorrow:P

for now, think it will be safe to stick with the calculated values, and "work" one month longer eg 1 year +1 month :)

thx for testing in such detail!

A little while after I posted, I also noticed the tax return thing, so I'm glad we're on the same page there. It does look like it would be difficult to fix, and in a longer term scenario of ~25 years (which is what I'm most interested in) it will hardly matter.

After plugging in some conservative numbers, I'm feeling a lot more comfortable now about my prospects in retirement! ;D

always glad to hear :)
now just to get equities etc to start growing a bit faster :P

francismichael

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Re: Financial independence - Calculator ( Covering TFSA / Equity and RA)
« Reply #49 on: September 27, 2018, 09:58:31 am »
Thanks, this is amazing ! I know on the Fat Wallet show they are waiting for someone to do this, but here it is. Fantastic work.

I have a rental property which I wish to payoff before retirement that can act as part of my income, would be great to include this. (Yes I know the stats re buy-to-let, but this is a convenience thing as well, to have a place in the city if I want to move out to farm at some stage)

Thanks again for the hard work and the updates!