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Dreaming of FIRE by 2029 @ 52 YO
Old 05-11-2019, 05:49 AM   #1
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Dreaming of FIRE by 2029 @ 52 YO

HI All!

I've been lurking on this site for a while and felt it was time to join in the discussion.

A bit about us -
We're 42 yo DINKs and I feel that we're on track for our 2029 target, but it's always good for other opinions & thoughts. My target is 4M total with 3-3.5% WR for 120K-140K spend in retirement. Firecalc gives me over 95% with various spending models, and Fidelity puts us at the high end of 'good" with a score of 93.

I use my own spreadsheet to track quarterly our investment accounts and re-balance overall target AA. I also use the fi.xls spreadsheet from the mad fientest to track monthly income, spending, and account balances. Current spending is about 130K a year (based on 2 years of tracking).

My target is 80/20 Stocks/Bonds

The numbers -
1100K in IRA and 401K
800K in after-tax brokerage accounts
20K in HSA
50K cash emergency funds


Questions for the Forum
- Is 80/20 reasonable for my scenario? ~10 years from retirement, with ~40 of retirement?

- Do you have any "cash" emergency fund, or rely solely on your after-tax investments instead? 50K seems like a lot to leave on the sidelines.

- How does the forum track/analyze their fund allocation? Because I have several accounts at different brokerages, there is little overlap for investment funds. My spreadsheet 'works' but wondering if there are other tools out there for a better idea if actual matches target.

That's it for now.. Thanks for taking the time read this, and even more thanks for responding.
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Old 05-11-2019, 06:44 AM   #2
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Welcome. You seem to have a good handle on things and you're certainly well-positioned for ER, probably even before 2029 if desired.

I think 80/20 is fine at this point. I was 100% equities at 42 and started moving into bonds for the first time a few years before ER at 52.

At 42, we didn't have much of an after-tax stash. It was mostly 401Ks. So we always kept $50-60K for emergencies. Our after-tax grew very fast after that. In your situation, with the large after-tax brokerage account, I'd be more inclined to invest the $50K.

I mainly use my own spreadsheet to track AA. Fidelity's GPS is OK but Personal Capital is much better IMO. I just don't use those tools very much these days. The spreadsheet is easier to customize and link up various related analyses.

Good luck and congratulations on your progress thus far.
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AA: 55% stock, 15% real estate, 27% bonds, 3% cash
WR: 2.7% SI: 2 pensions, some rental income, SS later
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Old 05-12-2019, 01:27 PM   #3
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Does your spending assumptions include medical expenses? For you Iíd assume $10-15k. I just pulled the trigger near your target age with a bit more in assets. Also, do you know your Soc sec and/or pensions in the future? Your Soc Sec estimate you receive assumes income until 67. If you call them, they will confirm the estimate with a different stop age.
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Old 05-12-2019, 02:29 PM   #4
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$130K/year expenses for a couple DINKs is a bit much. Where is it all going? What kind of liabilities are you carrying - mortgage(s), car loan(s), other?

In getting to your $4M number in 10 years, how much is that coming from savings vs. growth, i.e. what annual rate of growth are you assuming?

In my view, 80/20 is high - for almost anyone at any stage.

Quote:
- Do you have any "cash" emergency fund, or rely solely on your after-tax investments instead? 50K seems like a lot to leave on the sidelines.
An emergency fund does not mean it's all sitting in cash earning nothing. Money market, savings, CDs earning 2% to 3% is not sitting on the sidelines - it's earning real money. If you don't believe that, pull out a money market account statement from a few years ago and stare at the bottom line indicating "30-Day Yield = 0.01%". It doesn't all need to be immediately accessible as in being able to have it in your hands tomorrow. Surely you have credit cards which could hold you over for a few weeks (in the worst case) in an emergency. Maybe $40k of it could be laddered in 1 to 3 month treasuries, leaving $10k in truly immediately accessible cash.
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Old 05-13-2019, 04:38 PM   #5
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Quote:
Originally Posted by FireDreamer View Post
- Is 80/20 reasonable for my scenario? ~10 years from retirement, with ~40 of retirement?

- Do you have any "cash" emergency fund, or rely solely on your after-tax investments instead? 50K seems like a lot to leave on the sidelines.

- How does the forum track/analyze their fund allocation? Because I have several accounts at different brokerages, there is little overlap for investment funds. My spreadsheet 'works' but wondering if there are other tools out there for a better idea if actual matches target.
1) 80/20, IMHO, is a bit conservative if you're ~10 years from retirement, and don't have any health or job security concerns. I was at 95/5 until the year before I planned to retire. I'd personally consider 80/20 a good ratio once you retire (although other, more conservative folks will disagree).

2) At 10 years from retirement, I felt comfortable with 6 months worth of expenses in a money market fund. If you have 20% in bonds, you could consider that your emergency fund. At retirement, I'll have 3 years of expenses in a MM/CD fund (much controversy on the 'bucket approache's usefulness', but it will allow me to feet comfortable during multi-year market drops).

3) Morningstar has a portfolio analyzer if you're not happy with your spreadsheet. I have a custom spreadsheet that includes the size of each fund (Large, Medium, Small), and the Valuation (Value, Blend, Growth), and tracks my preferred AA vs. my actual AA, based on balances in the "Net Investable Assets" worksheet. That way, I always know how much I need to reallocate when I'm ready.
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Old 05-13-2019, 06:05 PM   #6
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Quote:
Originally Posted by FireDreamer View Post

- How does the forum track/analyze their fund allocation? Because I have several accounts at different brokerages, there is little overlap for investment funds. My spreadsheet 'works' but wondering if there are other tools out there for a better idea if actual matches target.


I like the free Personal Capital site. It is a terrific dashboard for everything you own. Youíll get some sales calls at first but, eventually, they leave you alone.

Also, I know we donít market time around here but, in my estimation, itís prudent and I know it feels good to me to own some bond index funds as insurance and ballast at this stage of the longest expansion in history.
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Old 05-13-2019, 08:07 PM   #7
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Quote:
Originally Posted by Markola View Post
I like the free Personal Capital site. It is a terrific dashboard for everything you own. Youíll get some sales calls at first but, eventually, they leave you alone.

Also, I know we donít market time around here but, in my estimation, itís prudent and I know it feels good to me to own some bond index funds as insurance and ballast at this stage of the longest expansion in history.
I am still a Quicken fanboy ... automatically syncs with everything and I feel like it was a major reason it got me here
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Old 05-28-2019, 06:47 PM   #8
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Quote:
Originally Posted by Cobra9777 View Post
I mainly use my own spreadsheet to track AA. Fidelity's GPS is OK but Personal Capital is much better IMO. I just don't use those tools very much these days. The spreadsheet is easier to customize and link up various related analyses.
Thanks for your insights Cobra9777. I signed up for Personal Capital and it looks like it has potential. The dashboard is neat, and it does a good job tracking everything in one place - thanks for the recommendation! I'm already using it for my spreadsheet tracking. I'll probably run them both in parallel so I don't loose any data.


Quote:
Originally Posted by DogGone View Post
Does your spending assumptions include medical expenses? For you Iíd assume $10-15k. I just pulled the trigger near your target age with a bit more in assets. Also, do you know your Soc sec and/or pensions in the future? Your Soc Sec estimate you receive assumes income until 67. If you call them, they will confirm the estimate with a different stop age.
My spending doesn't include medical, but I understand I need to plan for it until medicare kicks in. A lot can change in 10 years and will have it in a detailed plan as our date gets closer. I did not know that SS estimate assumes income until 67! That is unfortunate... Good data here, thanks!

Quote:
Originally Posted by njhowie View Post
$130K/year expenses for a couple DINKs is a bit much. Where is it all going? What kind of liabilities are you carrying - mortgage(s), car loan(s), other?
I started tracking our expenses at a granular level using the default categories in Mint about 2 years ago. Since then, we purchased a car for 30K cash, replaced our HVAC for 8K, painted/exterior repair our house for 5K, and are caring for an ageing pup - just had a 10 lb benign tumor removed - 4K.

At this stage of estimation, planning and margin of error, I think the skew caused by these big spend events are still good data points. I'm sure we can cut a lot of our spending if needed, however, I want to plan for the same lifestyle we're currently living when we retire. Other than mortgage, I don't expect any expenses to go away.

Quote:
Originally Posted by njhowie View Post
In getting to your $4M number in 10 years, how much is that coming from savings vs. growth, i.e. what annual rate of growth are you assuming?

In my view, 80/20 is high - for almost anyone at any stage.
I'm assuming an 8% average increase from the market. Our savings will be max our 401K - 38K + After tax 50K (or more, based on variable income from company RSUs)

Sounds like the consensus for 80/20 is too conservative. I have it stuck in my head from an article I read long ago that the return on 90/10 is only marginally better than 80/20, with more risk. I'll re-evaluate this..
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Old 05-28-2019, 07:02 PM   #9
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My spending doesn't include medical, but I understand I need to plan for it until medicare kicks in.
You'll still need to plan to pay something towards Medicare, Part B, and possibly dental and vision, as well as for drug co-pays. I'm no expert here, but my mom paid something like $130/mo for Medicare, plus another $450 for supplmental Blue Cross coverage, and extra prescription coverage, as well as dental.
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