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Re: Introduce yourself here!
Old 05-17-2003, 02:11 AM   #21
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Re: Introduce yourself here!

Welcome 4jems!

Without any spreadsheet, you can make some back-of-envelope calculations about your needs. I suggest this can be much more accurate than a planning tool or a percentage suggestion from anyone who doesn't know the intimate details of your finances.

For a start, your health insurance costs may have changed. Add/subtract that from your preretirement gross income.

Next, subtract that percentage of gross currently going to 401k, Social Security, and after-tax savings and investments. You'll be withdrawing, not contributing, so this goes to zero.

Subtract the percentage of gross currently going to work-related expenses such as commuting, business attire and laundry, and so forth. Maybe costs of a no-longer-needed second car. (Be sure to tell your car insurance people that you no longer commute -- that often saves insurance $$!)

Subtract the income taxes you were paying on your gross income. You'll likely take out the maximum from your IRA (taxable upon withdrawal) to exhaust your standard deductions -- something like $15,000 or so -- and probably take much of the rest from after-tax savings and investments, so you'll only pay tax on the interest and growth, not the principal. So your tax will be probably in the neighborhood of 10% of your spending, or perhaps 2-4% of your preretirement gross income, rather than 20-30%. Add the estimated tax back to your income requirement.

The only thing else is probably based on changes you make. Did/will you pay off the mortgage? Get rid of the 2nd car? Those common changes at retirement time will also reduce your income requirements.

Finally, allow yourself something for spending more time at those hobbies, and maybe some new ones.

Hope this helps!

Dory36
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Analyzed Over and Over and Still Nervous !
Old 05-17-2003, 06:09 PM   #22
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Analyzed Over and Over and Still Nervous !

Dory36,

Thx for the information. 4JEMS is a new 260 Sea Ray Sundancer. No mortgage but we finally did the boat we have always wanted.

Have gone through all the simple analysis and even hired a Morgan Stanley Dean Witter retirement counselor (what a waste of time and $$) to help me understand the ins and outs of retirement planning.

Spent about a week going through the last several years spending patterns to try to develop a spreadsheet that was representative of what I thought we would spend in retirement. Everythoing looks good but I just can't help feeling nervous about things like inflation, market down turns etc. I have tried to bucket assets to protect our retirement from these types of fluctuations so we can 'ride them out' but I just can't help being nervous. Once I make the final decision I do not want to have to put the tie back on again !!

4JEMS





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Re: Introduce yourself here!
Old 05-18-2003, 02:32 AM   #23
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Re: Introduce yourself here!

Hello Mark! Congrats on the boat. We don't have our
big boat yet but it is doable, so......................

I went through most of what you posted in my life, i..e.
talked to investment counselors/etc., (a total waste
just like your experience). I never wanted to "go back"
either and so I remain diversified, but totally out of common stocks. When I semiretired in 1993 I had an
eight year old at home, a big spender spouse, a net
worth which was laughable and some debts. Ten years later,
all the kids are on their own, my new wife is quite
frugal, my net worth has more than doubled and I have
no debt other than what I sometimes borrow for
arbitrage situations. It wasn't all skill. I had some luck
too. I am living on less than 25% of my most recent
income when I last worked full time (1996). I haven't ever been bored. I have never felt deprived. Most importantly, as time passes I know ER was 100% right
and that I will never go back to work. In other words,
my security level increases steadily as I age. I am a
habitual financial number cruncher, but it comes so
naturally that I am hardly aware I'm doing it. Bottom line? Come on in. The water's fine.
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Re: Introduce yourself here!
Old 05-26-2003, 10:44 AM   #24
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Re: Introduce yourself here!

Ooops,Gary Campbell here again I should have looked over the entire forum before I posted a new topic,I should have introduced myself here.All my info is on my first post,If anyone would like to contact me,I may be reached at siwashed@shaw.ca
To Happiness
Gary R Campbell
BC Canada
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Re: Introduce yourself here!
Old 05-26-2003, 01:47 PM   #25
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Re: Introduce yourself here!

I am the nurse that wrote in January that I was thinking of retiring but liked the patients and other staff so much I was having second thoughts. Well, I am now starting to work 3 days a week thru the summer and have set a firm date in late September to retire. I have also started a list of all the things I hope to explore, accomplish, or get involved in once I'm retired. Now I can't wait! I think it is all a process that takes time. A major life change but it is certainly looking positive to me at the moment. I have follwed the postings here and they have helped me to clarify my thinking. Thanks to all that contribute.
V. Ellis
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Re: Introduce yourself here!
Old 05-31-2003, 08:19 AM   #26
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Re: Introduce yourself here!

You sound very happy with your "September plan".
That's good. Although I am well into retirement now,
my wife still works (healthcare) and trying to integrate
her into my retired state has proven troublesome.
Before we married in 2001, I had it (ER) all worked out,
but for one person. Now that 2 of us have to be
considered, things are complicated, and more than twice so. For example, I am a "planner" and spend a lot of time on "what ifs" etc.. My wife is more impulsive
and tends to plunge into things. I get into enough trouble even after extensive planning and so it may
appear that I am footdragging, when in fact I am
gung ho, just trying to avoid mistakes. Of course,
too much of this leads to paralysis by analysis. On the
other hand a lot of ER types (me included) don't have
a lot of margin for error. This makes us cautious.
I suppose that getting older adds to this trait.
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Re: Introduce yourself here!
Old 05-31-2003, 02:12 PM   #27
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Re: Introduce yourself here!

Quote:
I have also started a list of all the things I hope to explore, accomplish, or get involved in once I'm retired. *Now I can't wait!
Once you start thinking about it, you're hooked! Congrats in advance!

Dory36
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Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain
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Re: Introduce yourself here!
Old 06-16-2003, 02:46 AM   #28
 
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Re: Introduce yourself here!

I had been planning on working til 01-2005, but am being pressured to retire within the next couple of months. I think my spendable income in retirement will be about the same as when I was working, about 30K. Staying til '05 would have gotten me a lump sum check of about 53K. I would like to have seen that money, not knowing any other way I could save up another 50 grand in 2 years. But I have become disenchanted with my job and think I will really enjoy being free to fish, hunt, and travel. I have about $130K in 457 and IRA's in addition to my $30K pension. I will try to refrain from hitting the 457 money for a couple of years unless I have to tap it for some must-have trip to Italy or Spain or something. At 52 I probably should be blowing it while I have good enough health to enjoy it. I am thinking some of my travel will be camping or traveling in our Grand Caravan with the back seats removed. I live in St. Louis and have vowed not to spend another winter here. I have invited my wife to take some vacation and come visit me in Florida. She will probably be retiring when I had originally planned in Jan. '05.
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Re: Introduce yourself here!
Old 06-16-2003, 04:31 AM   #29
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Re: Introduce yourself here!

Re. the health issue, a major reason I ERed. I could see
my contemporaries dropping at an increased rate
or dealing with various health problems. I wanted to
get out while I could still do the things I wanted
(adventures, etc). Wish I'd done it sooner. BTW, we
live west of Chicago and have vowed not to spend another winter here. As usual, the devil's in the details.
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Re: Introduce yourself here!
Old 06-16-2003, 05:16 PM   #30
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Re: Introduce yourself here!

Hey, now I'm replying to my own posts (pay no attention
to that man behind the curtain!)

I had 2 business mentors, both gone many years now.
I had 2 friends who hunted with me before I gave it up.
Both younger and both gone. Neighbors, fishing buddies,
business associates gone in their 30s, 40s and 50s.
My Dad's sisters both gone at age 42. Looking on the bright side, I've outlived Custer by 20 years and Caesar
by 2...............................

Seriously, don't postpone your dreams. Tomorrow
is promised to no one.
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Re: Introduce yourself here!
Old 06-26-2003, 06:15 PM   #31
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Re: Introduce yourself here!

Hi.
I am a 49 y/o professional with a decent income, currently non-working wife and one child in private middle school. I used to 'invest', but got burned in the tech crash. I don't know beans about bonds (or much of anything with regard to investing, it feels like). I'm need help. I feel lost in the world of investing. I have 100K to invest in a 529 for about 6 years before I begin withdrawing it and don't know if I should invest in bonds, if so what kind, or if I should just leave in in cash.
I have a jillion other questions.
Sorry about not making a new topic, but I couldn't figure out how.

kmurphy
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Old 06-27-2003, 02:35 AM   #32
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Re: Introduce yourself here!

I am an ultraconservative ER who just went into bonds
although very reluctantly. When rates were higher
I was almost 100% CDs and MMs. Couldn't stand it
any more. I am less nervous about bonds now
since the FED just cut rates yet again. Also, just
yesterday I was reading (MONEY I think) where a bunch
of "experts" think bonds (including some "junk") are
the way to go. I may be wrong, but I think Warren
Buffet was quoted as saying he had more faith in junk
bonds than the stock market. Me too I guess as I took
the plunge big time.
Anyway, I went 50% investment grade and 50%
in an aggressive income fund, heavily junk bonds
but with a lot of diversity, company=wise and industry- wise. Time will tell. By the way, in the same magazine
someone else was quoted that in every stock trade
on one side is a genius and on the other an idiot, and
only time will reveal which is which. I like that one.
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Re: Introduce yourself here!
Old 07-01-2003, 09:43 AM   #33
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Re: Introduce yourself here!

Cut Throat,

I must admit that I agree with your view. BUT I look at Japan and what has happened to their stock market I must admit it causes one to worry.

Overall low cost index funds spread over various sectors proably give the most protection. Easy to say sometimes hard to do!
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Re: Introduce yourself here!
Old 07-01-2003, 12:42 PM   #34
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Re: Introduce yourself here!

Hello kmurphy, I would like to suggest going to the library, and start checking out books from the financial section. Your librarian can help you to find them. There is absolutely no substitute for learning about financial planning if you are going to mangage your own account. Don't do anything until you understand what you are doing. Here is a helpful web site that explains some of the basics about safe withdrawal rates for when you retire. Since you seem to have a very low risk tolerance, pay special attention to the section on using TIPS to lower portfolio volatility. Time is short. Do not delay in educating yourself about these matters. You are solely responsible for what happens to you and your family.

http://www.retireearlyhomepage.com/

Mike
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Re: Introduce yourself here!
Old 07-03-2003, 05:44 AM   #35
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Re: Introduce yourself here!

Hello, everyone lewmac here so glad i found this site can get new information and maybe help on occassion. I am planing on retiring next year ( JUNE 2004 ) if all goes well am a little worried about insurance coverage ( cost going up all the time ) , but we figure why worry about nothing you can do about it. I really do not know what i would like too do yet, we do not have the resources to travel all the time , all these pictures of people happy ,travling around the country seems like you better have deep pockets, well if any one shares any of my connceres let me know.
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Old 07-03-2003, 08:08 AM   #36
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Re: Introduce yourself here!

If you are looking for advice, lewmac, we need a little more info. Like, is this ER for you or just normal (if there is such a thing!) retirement?

Regardless, the cost and/or even availability of insurance is always an issue when retirement is being considered. Worrying about insurance coverage is a little different than worrying about where or when to take your next trip or buy a new car.

And since you imply that the rest of us ER's are enjoying our lives strictly via deep pockets that you currently don't have, it really sounds like you may not be ready for this move.

I think most of the others on this board would agree that some planning is required before taking this rather substantial step. Sorry to burst your bubble, but this is just the way I see your situation.
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Re: Introduce yourself here!
Old 07-03-2003, 10:22 AM   #37
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Re: Introduce yourself here!

He lewmac, I would recommend applying for insurance well in advance of retiring to make sure you qualify under the normal underwriting process. You will not know how much to budget for health insurance until you find out what rating you qualify for. If you have any health conditions that insurance companies don't like, your health care costs could become astronomical.

It is not necessary to travel to enjoy ER, unless this is your passion in life. You should sit down with your spouse and decide on the life style you want so that you can plan your budget accordingly. If 3 1/2 to 4 % of your portfolio will support your desired life style plus health care, ER becomes one option for you to consider. If you cannot afford the health insurance, you should seriously consider working until you can. A single illness or accident can claim your entire portfolio. Health insurance is not optional for ER.
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Re: Introduce yourself here!
Old 07-03-2003, 11:59 AM   #38
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Re: Introduce yourself here!

I strongly second Mike's comment about health insurance being a must! *Don't stay home without it!

Simple math... 65 - your age = number of years of health insurance vulnerability. *I too am not sure how much it will go up over the years, other than lots! *A high deductable policy will reduce the premium, but can't get too high, because if something does happen to you, you will be paying the policy, plus everything up to the deductable, plus maybe other items that a real high deductible policy may not cover. *Wouldn't want to have to pay that every year if it turns out to be *something chronic. *Can't boost your insurance when you are claiming away, they don't want more risk.

About all those "happy retired people traveling around"... there is a lot of advertising to that effect. *Oh so happy, active (always active!) retirees, playing golf, on cruises, laughing while strolling all points of the world, stopping to pop some "Centrum Silver" tablets, and on and on. *Advertising! *They see retiree dollars as a big market, so they are going to try to tap it for all sorts of products, services (even financial services *eek ).

Kmurphy had a question about a week ago, about how to post a new topic:

Click on HOME PAGE up at the top of page.
Then select what you think is the appropriate FORUM, click on it.
Now will see a list of all topics in that FORUM.
Look down the chart of topics, then either up at the top right side, or down the right side near the bottom, click on the little yellow folder with the green plus symbol on it.
Then fill in the new name for your topic and go at it!

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Re: Introduce yourself here!
Old 07-05-2003, 05:20 PM   #39
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Re: Introduce yourself here!

This is in reply to Cut-Throat, but really may be of
interest to many.

I do NOT move in and out of investments, nor do I try to
time the market. In that way lies madness. I go for
very long term investments on money that I can afford to tie up. But, ......................no common stocks.
My view is that even if a major bull market is just
around the corner, I don't care. I never count on being
here to enjoy it, but I do take into account the
possibility that I might still be alive. Live as if you will die tomorrow, but have a back up plan in case you don't.
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Old 07-07-2003, 04:23 AM   #40
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Re: Introduce yourself here!

Hello! I'm 53 years old and, after 32.5 years with the Federal Gov't, I'm really burn't-out. I can retire in Sept. 2003 with a 2.5% penalty for being short of 55. Although I want to work some when I retire, I want to do something I enjoy and preferably be my own boss. It will be a major jump for me.
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