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09-20-2018, 11:35 AM
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#1
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Dryer sheet wannabe
Join Date: Sep 2018
Location: Johns Creek
Posts: 12
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Is it time to jump in?
My husband and I created a Fidelity retirement plan years ago and we have make changes and updates to it each year as costs, medical insurance, and our lifestyle has changed. We have been living within this plan for the last three years, other than expenses, like home remodels that we are completing before retirement, that will not be needed again for many years. No one in our family has ever gone to this extent to plan before pulling the trigger for retirement. We want to retire early and have over 1,400,000 in investments and are debt free. Our plan has us living to the longest longevity age possible 94 and 97. We want to retire as soon as we reach the financial goal of being able to. We are 54 and 59. The current plan shows that we will be delete our cash when we are in our mid 90's. We have made no increases in our plan for any inheritances that we many get or the final life insurance proceeds if one of us dies before the other. So I know you have to be able to sleep at night when you pull the trigger to retire, but do we need a 100 score and to show no depleted cash to do so. Looking for info from others that have gone before us.
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09-20-2018, 01:07 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2017
Location: Western NC
Posts: 4,633
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Other sources of income?
Expenses?
You should be able to spend nearly $60,000/year from your assets, not counting SS or pensions.
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09-20-2018, 01:16 PM
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#3
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Moderator
Join Date: Nov 2014
Posts: 9,182
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If I’m retiring early and voluntarily, then yes, I want 100% or more. If I have to retire, then I’d feel comfortable with 90%. Of course if you have to retire, it doesn’t really matter but I’d feel more comfortable the closer to 90% I am in the modeling.
Remember, if you run out of money, at 90 years old, you’re not going back to work. Better to work a couple more years while you can if you need to in order to do your best to avoid that.
__________________
Every day when I open my eyes now it feels like a Saturday - David Gray
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09-20-2018, 01:30 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
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All these programs can say is: "If the next 30 years are like the past 30 years, then here is your number." Said another way, it is a guess and it has a large margin of error. So when you see 100%, 90%, and 80% all those numbers are saying "Probably you will be OK." Similarly, when you see 10%, 20%, and 30% all the numbers are saying is "Probably you will not be OK." There is no practical difference between a reported 90% and a reported 100%. Probably there is no practical difference between 80% and 100%.
Almost certainly the biggest uncertainty we face is inflation, which has been very benign for the past 30 years at IIRC an average of about 2.5%. But if you look back another 10 years to get a 40 year average suddenly you are looking at something like 4%. So, like the guy in the movies says: "Are you feeling lucky?"
IMO you are looking for certainty where none is possible. If you are seeing 90% and 100% from the magic box, then "Probably you will be OK."
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09-20-2018, 01:42 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by OldShooter
... when you see 10%, 20%, and 30% all the numbers are saying is "Probably you will not be OK." ...
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I think it means "it is highly likely you will not be OK (unless you die early)".
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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09-20-2018, 01:42 PM
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#6
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Gone but not forgotten
Join Date: Jul 2012
Location: Peru
Posts: 6,335
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DH life expectancy is 83. When figuring the odds, you have to start somewhere. We decided to take a chance at age 53, and planned our finances based on a life expectancy of 85. We're 82 now, and well ahead of the plan, and now our life expectancy is 89. A different time frame, and with a lot less $$$ than you'd believe.
That said... my own thinking is to rely on an actual planned budget that you create, rather than only using a retirement calculator. It's a reality check. Must think ahead to determine if the travel budget of $10K will still be valid when you're 70 (and like that). Without numbers... even if they're just guesses, there will always be uncertainty. Thinking 25 years ahead puts a touch of reality on future plans.
I used a twenty year large green spreadsheet budget to look ahead, and spent many, many hours reasoning out the numbers. FWIW, now, 30 years later, we're exactly on plan. We didn't really follow the budget, but used it to check where we stood at least once a year.
Best of luck.. Retirement is Great!
__________________
If you want others to be happy, practice compassion. If you want to be happy, practice compassion.
--Dalai Lama XIV
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09-20-2018, 02:04 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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I say not enough information to help you make a decision to jump or not.
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09-20-2018, 02:33 PM
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#8
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Dryer sheet wannabe
Join Date: Sep 2018
Location: Johns Creek
Posts: 12
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We want to retire early voluntarily
Annual expenses are around 65,000 not including medical insurance. or taxes
We included a 4% inflation factor and a 18% tax rate and a 4% rate of return on our investments
Our score was a 97 out of 100% that our plan had enough money to last until the end of age 97
Other sources of income - SS will cover about 22K per year, I think - need to confirm this amount
The retirement budget that this plan is based on was one that we created and is based on our actual expenses of maintaining the lifestyle that we want and have been living within these means for 3 years. It also includes replacements of vehicles as the ones we have wear out. I am very detailed about our finances and try to account for everything.
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09-20-2018, 02:45 PM
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#9
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Moderator
Join Date: Nov 2014
Posts: 9,182
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What did you do for healthcare? That and inflation seem to be the black holes that we just can’t predict. Also, good retirement calculators will inflate different expanses at a different rate. Again, health insurance is likely to go up more than average inflation.
__________________
Every day when I open my eyes now it feels like a Saturday - David Gray
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09-20-2018, 02:47 PM
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#10
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 145
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I haven’t gone yet but like imoldernu, I have a detailed spreadsheet that (In my case) Brings me till SS with expected annual balance/run rates. I’m giving myself the flexibility of decreasing my budget if need be Incase of an unplanned catastrophic expense.
I am at 100% on the calculator but as mentioned above, it’s based on history. The slight unknown is the future returns, inflation and unexpected expenses
__________________
Person who will often put his foot in his mouth and not realize it.
2020 or bust!
Or
Perhaps 2021...2022...NVM
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09-20-2018, 03:08 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,300
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Are you filling in the detailed expense budget in the Fidelity calculator? The healthcare expenses are inflated at 5.5% vs. 2.5% for other expenses. Did you include the SS numbers?
I retired with the Fidelity calculator at 105, but some on this site had much higher numbers.
The Fidelity calculator is one of the most conservative out there.
Have you tried Firecalc?
__________________
TGIM
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09-20-2018, 03:41 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,375
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Quote:
Originally Posted by roaming2
We want to retire early voluntarily
Annual expenses are around 65,000 not including medical insurance. or taxes
We included a 4% inflation factor and a 18% tax rate and a 4% rate of return on our investments....
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Your 0% real rate of return assumption (4% return less 4% inflation) is very conservative, depending on what your overall asset allocation is... historically, a 60/40 portfolio has generated a ~5% real return... I haircut it to 3.3% for my retirement planning and even that may be too conservative.
18% for tax is probably too high as well... best practice is to do a pro forma tax return as if you are retired to fine-tune what your taxes will be in retirement. For example, in 2018 if you had just $80k of tIRA withdrawals for a married couple your federal tax would be just $6,339... 7.9%... plus state tax if applicable might put you up to 10% or so.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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09-20-2018, 04:45 PM
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#13
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Dryer sheet wannabe
Join Date: Sep 2018
Location: Johns Creek
Posts: 12
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For healthcare, i have a quote of the retiree healthcare cost of 24K per year that will take us to medicare age. Than I used the first year numbers for our situation of $70,000 withdrawal income to get medicare costs of 6K per year. Dropped this number lower after the death of one of us.
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09-20-2018, 04:53 PM
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#14
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Dryer sheet wannabe
Join Date: Sep 2018
Location: Johns Creek
Posts: 12
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Thanks for the information, I filled in the detailed Fidelity calculator for the budget including the SS Numbers from our last SSA notice.I will try firecalc. Had not heard of it.
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09-20-2018, 04:59 PM
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#15
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Dryer sheet wannabe
Join Date: Sep 2018
Location: Johns Creek
Posts: 12
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We have a balance asset allocation and over the last 7 years have a rate of return between 5.31 and 13.78%
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09-20-2018, 05:03 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,300
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Quote:
Originally Posted by roaming2
Thanks for the information, I filled in the detailed Fidelity calculator for the budget including the SS Numbers from our last SSA notice.I will try firecalc. Had not heard of it.
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Firecalc is connected to this site and there are many folks here who can assist with questions.
Additionally, it provides results based on historical sequences in the markets and can be used in conjunction with the Monte Carlo based Fidelity calculator.
__________________
TGIM
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09-20-2018, 05:13 PM
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#17
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Administrator
Join Date: Apr 2006
Posts: 23,041
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Quote:
Originally Posted by roaming2
Thanks for the information, I filled in the detailed Fidelity calculator for the budget including the SS Numbers from our last SSA notice.I will try firecalc. Had not heard of it.
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The FIRECalc link is at the bottom of every page.
__________________
Living an analog life in the Digital Age.
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09-20-2018, 06:45 PM
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#18
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Dryer sheet wannabe
Join Date: Sep 2018
Location: Johns Creek
Posts: 12
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Thanks for all the help, I am new to this website, but don't want to jump off the deep end without my safety gear. When I ran the numbers here our score was 100. I have a lot to learn about retiring
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09-21-2018, 02:41 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Dec 2017
Posts: 2,555
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Quote:
Originally Posted by roaming2
When I ran the numbers here our score was 100.
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Congrats! Assuming all your inputs were correct, it sounds like you're in great shape!
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09-21-2018, 03:24 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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I didn’t know how to run FIRECALC, one of the inputs for AA was 75 equities, I never changed it. I didn’t know. So do double check. My equities AA is about 25-45%.
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