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Old 06-05-2015, 07:47 AM   #21
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I want my standard of living to increase in retirement, and I'm willing to work just a little longer to make sure that is the case.
+1

I can only share my experiences...

I have a different net worth amount, but much of the other numbers are similar. I decided to keep working this year because I do want to, as you listed, travel the world (or at least have the freedom to do so). I wouldn't be able to go out with the amount you list because of the failure rate without the reduced spending model.

I guess it all comes down to your spending flexibility. What I kept thinking about: if the market drops 20% tomorrow and doesn't recover (that is always possible), would I be OK with the lifestyle that would provide. I have discovered after much self-reflection that I don't have much so I'm hanging in there for a while.

What I also did was something you mentioned. I sold my high-dollar house on the lake (great life, but not-so-great costs) and added the equity to my stash. We're looking to buy something smaller cheaper.

I've also been spending a lot of time talking to my 80+ year old friends, of which I have a surprisingly large number, to get their takes on whether spending really does drop off the way Bernicke suggests. At least in our area, the general message is that it doesn't significantly until 75-80 at least. I think Bernicke overstates the drop a bit so maybe go for somewhere in the middle?

Good luck with your decision!
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Old 06-05-2015, 10:44 AM   #22
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OP, I understand your dilemma. You are on the cusp of FI. So close you can taste it. And eager to get going.


I can 100% relate to all that. My numbers are different but my situation is similar. In the sense that my NW is higher but unfortunately so are my anticipated expenses. But I'm oh so close. For now, I've opted with the OMY scenario you listed. It sucks cause I just am burned out and very confident of being ready to enjoy ER. But I guess not willing to sacrifice further on the expense side (not my decision alone) to quit quite yet. And I want more buffer. All the usual reasons behind OMY.


I feel your pain.


Good luck!
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Old 06-05-2015, 02:28 PM   #23
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I would say if you HAD to retire then you would probably end up ok, as you'd do what you needed to do to increase your chances of success.

I planned on the same standard of living in retirement as before. I also planned for flat level of spending as I am assuming that I will hire more work out we age. My travel budget is meager, but we have never been big travelers and I'm quite happy staying in my little slice of heaven.

You really need to sit and determine what your priorities are. My priority was to get out a j*b that was slowing killing me with a rapidly filling BS bucket, without the stress of having to find a new j*b, so that I could spend more time on the things that are important to me. Once I reached a 3% WR I was done.
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Old 06-11-2015, 03:42 PM   #24
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I may have missed this in the string...what is plan end? If I plug in living to 85, 90, 95 etc in most calculators it can make a difference.

Plugging in this and especially an amount and year I might get a relatively small inheritance when my parents are gone still gives me the creeps.

Also, you say without the Bxxx spending plan your run fails...is this giving your a probability of success under 70%?

85. Using Firecalc, 90 & 95 does not make much difference. Without using Bernecke option, Firecalc failure rate is about 75%. Using the Bernecke model is the right option for me though.
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Old 10-15-2015, 01:00 PM   #25
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I've posted the following about 6 months ago.

One final check with fine folks here.

The consensus was that I may be taking a too much of risk to retire and I vowed to revisit the post 6 months later. Since then, the only change is that my investment portfolio have gone from $1.75M to 1.90M.
  1. Ages = 53 (DW & I). Total asset = 2.25M (350k in house equity), SS in 10 years at 63 = $38k.
  2. 45/55 investing.
  3. Yearly expense = $100k and room for reduction if needed, Firecalc = 100% using Bernicke spending model. Fails otherwise. Willing to reduce it to $90k/year when push comes to shove.
  4. Current income = 250k/year, current yearly asset increase = $200k/year
  5. Pressure points to quit = desire to goof off rest of my life, and my psycho boss (otherwise, my job is ideal).
  6. Conflict = 2 - 4 of OMY can add 350k - 800k to my ER fund which means I don't have to LBYM in ER, can travel the world, assist family members/relatives in financial need
Any input/suggestion will be much appreciated.
4 months after I posted this thread, my portfolio is down a bit to $1.84M but my desire to retire has peaked. To prepare for ER, I've reduced my yearly budget to $90k/year. The push came to shove (see bold above). I started refinance process to lower my mortgage by a few hundred dollars/month. I looked into signing up process for ACA and found that I can qualify for subsidy if I stop trading stocks. Good bye, Dish & hello Netflix.
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Old 10-15-2015, 01:16 PM   #26
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4 months after I posted this thread, my portfolio is down a bit to $1.84M but my desire to retire has peaked. To prepare for ER, I've reduced my yearly budget to $90k/year. The push came to shove (see bold above). I started refinance process to lower my mortgage by a few hundred dollars/month. I looked into signing up process for ACA and found that I can qualify for subsidy if I stop trading stocks. Good bye, Dish & hello Netflix.
You certainly seem mentally ready if not financially. I respect and share your strong desire to pull the trigger. Likely the more sage advice is to wait and pad OMY to buffer your egg. But I know how hard that can be once the mental threshold has been crossed. Only you know for sure.

Please keep us posted of your direction. Best of luck in your decision.

Muir
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Old 10-15-2015, 01:34 PM   #27
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To prepare for ER, I've reduced my yearly budget to $90k/year. The push came to shove (see bold above). I started refinance process to lower my mortgage by a few hundred dollars/month. I looked into signing up process for ACA and found that I can qualify for subsidy if I stop trading stocks. Good bye, Dish & hello Netflix.
Good work! We've been working at decreasing our overhead and increasing passive / easy income (besides the portfolio income) for several years now and I am still amazed that we never run out of projects to work on. I like trying to live better yet pay less. It has turned into a fun hobby.
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Old 10-15-2015, 04:10 PM   #28
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... I looked into signing up process for ACA and found that I can qualify for subsidy if I stop trading stocks...
If you are successful trading stocks, why not continue doing that in the tax-deferred account? Perhaps you have more in the taxable account than in tax-deferred.

And then, can you make more in the market than the value of ACA subsidy?
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Old 10-15-2015, 04:49 PM   #29
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If you are successful trading stocks, why not continue doing that in the tax-deferred account? Perhaps you have more in the taxable account than in tax-deferred.

And then, can you make more in the market than the value of ACA subsidy?
Both of my "trade" accounts are not tax deferred. I think I need to look at the option of trading using a tax deferred account.

This is the 1st year I have started trading for an income generation. YTD, I've made about $50k from trading but need to pay tax for it. If I read ACA plan info correctly, by going with Silver plan for a couple, the max money out of my pocket for a CY is about $20k (premium + deducts/co-pays). I guess I can continue to trade as a part time job and forget about ACA subsidy.
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Old 10-15-2015, 05:18 PM   #30
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My numbers are similar to Robnplunder's, but a bit higher after 2.5 OMY's and I'm a couple of years older. While the OMY's have definitely helped my financial position my health is also noticeably worse and I'm not sure I can now be quite as active in ER as I'd hoped. So if your numbers are close to what you need I'd be tempted to tell you to go for it.

Just remember there are risks whether or not you do the OMY. Not all risks are financial.
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Old 10-15-2015, 06:29 PM   #31
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My numbers are similar to Robnplunder's, but a bit higher after 2.5 OMY's and I'm a couple of years older. While the OMY's have definitely helped my financial position my health is also noticeably worse and I'm not sure I can now be quite as active in ER as I'd hoped. So if your numbers are close to what you need I'd be tempted to tell you to go for it.

Just remember there are risks whether or not you do the OMY. Not all risks are financial.
DW, DS, and I went to Delicate Arch & Canyonland NPs last week. Going in, I thought the person who would be hurting after series of hikes up and down the canyon would be DW. She does not work out as much I do. But after a 3 mile hike on the 3rd day, I found that it was my knees which were hurting the most. I played a lot of BB and soccer all my life and it definitely showed. After coming back from the trip, it made me think hard about pulling the trigger. I think I have limited time left on my knees before my trips involve just sight seeing.
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Old 10-15-2015, 10:02 PM   #32
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DW, DS, and I went to Delicate Arch & Canyonland NPs last week. Going in, I thought the person who would be hurting after series of hikes up and down the canyon would be DW. She does not work out as much I do. But after a 3 mile hike on the 3rd day, I found that it was my knees which were hurting the most. I played a lot of BB and soccer all my life and it definitely showed. After coming back from the trip, it made me think hard about pulling the trigger. I think I have limited time left on my knees before my trips involve just sight seeing.

I was just at Arches and Canyonlands last week as well. Did the delicate arch hike. Who knows, might have seen you.
Long vacation. Was great. When younger I'd come back from a vacation ready to get back at it with work. Now....not hardly. It only reinforced my desire to leave it all behind.

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Old 10-16-2015, 12:07 AM   #33
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I was just at Arches and Canyonlands last week as well. Did the delicate arch hike. Who knows, might have seen you.
Long vacation. Was great. When younger I'd come back from a vacation ready to get back at it with work. Now....not hardly. It only reinforced my desire to leave it all behind.

Muir
We did the Delicate Arch hike on Thursday morning, our last day of the trip. DW and I couldn't do the hike 15 years ago when we first visited the park. Due to lack of good planning, we ran out of time to do the hike then. It was 15 years in waiting but was worth it.

Looked into what'd be the best time of the year to quit my job. I concluded that it has to be November. It gives me 2 months of free ride on COBRA before ACA kicks in January.
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Old 10-16-2015, 07:31 AM   #34
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.... I think I have limited time left on my knees before my trips involve just sight seeing.
You can just get new knees. Uncle was a mailman and wore his out.... got new ones and is doing fine. Neighbor is getting a new one in November.

So just keep working and supporting us with the taxes you pay.
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Old 10-16-2015, 11:56 AM   #35
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You can just get new knees. Uncle was a mailman and wore his out.... got new ones and is doing fine. Neighbor is getting a new one in November.

So just keep working and supporting us with the taxes you pay.
I believe my time to live off of other people's money is fast approaching.
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Old 10-20-2015, 12:29 PM   #36
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Just got a copy of house appraisal for refinancing my mortgage. Geesh! The house value went up quite a bit. House equity has increased from $350k to $550k. I had to do a double take on the report b/c it was such a large increase. It certainly gives me more confidence in making the jump.
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Old 10-20-2015, 03:15 PM   #37
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85. Using Firecalc, 90 & 95 does not make much difference. Without using Bernecke option, Firecalc failure rate is about 75%. Using the Bernecke model is the right option for me though.
As you are still having a mortgage you can enter the mortgage amount and payout date into FIRECalc. That should allow you to spend more money in the early years, as your later years will not have that mortgage burden, plus you will be covered by SS and Medicare. But if you have many years left on the mortgage, then it's not so cool.

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Just got a copy of house appraisal for refinancing my mortgage. Geesh! The house value went up quite a bit. House equity has increased from $350k to $550k. I had to do a double take on the report b/c it was such a large increase. It certainly gives me more confidence in making the jump.
But unless you plan to move to a lower cost area and cash out that equity, it is not doing much for you. It may even make you feel rich and spend more money.
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Old 10-20-2015, 04:52 PM   #38
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As you are still having a mortgage you can enter the mortgage amount and payout date into FIRECalc. That should allow you to spend more money in the early years, as your later years will not have that mortgage burden, plus you will be covered by SS and Medicare. But if you have many years left on the mortgage, then it's not so cool.



But unless you plan to move to a lower cost area and cash out that equity, it is not doing much for you. It may even make you feel rich and spend more money.
Mortgage won't come off any time soon. But monthly cash to my parents will come off at some point. So will the golf budget. As you said, SS & Medicare will kick in too.

Downsizing, or moving to a less costly location always has been my back up plan.

Anyway I look at it, I think I am ready to pull the trigger, sooner than later.
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Old 10-20-2015, 06:07 PM   #39
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Mortgage won't come off any time soon. But monthly cash to my parents will come off at some point. So will the golf budget. As you said, SS & Medicare will kick in too.

Downsizing, or moving to a less costly location always has been my back up plan.

Anyway I look at it, I think I am ready to pull the trigger, sooner than later.
Did you decide where to live, or is moving just plan B down the line if needed?
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Old 10-20-2015, 07:16 PM   #40
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For the $550K equity that you have, in my town you can get a nice home of 3,800-sq.ft., with 5 BR, 3-1/2 bath, 3-car garage, swimming pool, ready to move in, and in a nice secluded low crime rate area, with hilly terrain and near a mountain preserve. And in this suburb of a metropolitan area, all shopping one needs is within 5 miles.

It only requires you to stand 2 months of summer with temperature of 110F+. But as ER, you can just stay indoors in cool AC surfing the Web, and go out only after sundown, or shortly after sunrise.
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