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Old 06-08-2016, 11:27 AM   #61
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...

The financial test you suggest is probably worthwhile, and others have suggested something similar, but for us I am afraid it would not work because: (1) our expenses post retirement would be very different than our current expenses (we still have a kid at home and one in college), including in some ways that I would find difficult to quantify or even estimate; and (2) we have never done any sort of budgeting at all (wife is resistant to it -- she just says "we have enough money so we should just buy whatever we want.")

...
FWIW, we are older (mid 50s) and not in the same income stratum as many on this thread--probably just "very high" income (obg and lawyer). We are, however, in your budgeting camp--never have done it. I've tracked our spending retrospectively in quicken for years though, which has put us in a position to guestimate spending in retirement. Mint would serve same purpose if you don't need investment capabilities of quicken.

Like you, our spending now has little semblance to what it will be beginning next year. But, I've given DW a projected/sustainable spending number, which she has used when ballparking travel expenses (the majority of our projected retirement spending for 10-15 years). Predicting the high end of such expenses was easy, as it tends to be our present trips. The long/slow journeys are a little more difficult, but there are a lot of resources and blogs to assist in spending estimates for them.

Combining her research results with the nondiscretionary spending of the past few years since kids departed, we know that we can live quite well and do pretty much everything we'd want on XXX% of what we spend now; and if markets don't cooperate, we can cut back drastically and still live better than we do now (because of having days off!). This was enough to let us give notice of the need to find replacements for us.

Granted, this isn't fine grained analysis of the type that many people on this forum have employed, but you have to start somewhere. Given your numbers, I suspect you could be even more flexible that we can be, which obviates the need for a great deal of precision.

_____
E.T.A.--projecting costs for the kids' remaining years in your wallet would probably be easier than projecting your couple costs 10 years out...
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Old 06-08-2016, 07:46 PM   #62
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Interesting... Some of you don't actually budget/track your expenses. I would have thought most everyone was anal (me included) in tracking/planning your trajectory. I'm also picking up another vibe that is foreign/uncomfortable to me personally, but have heard this in my local hood. I have a old school "traditional" family whereby my wife stayed home since kid 1 was born (4 kids later) and that has worked great for us. Well, she has 0 interest in finances despite my attempts to explain to her how the financial machine works especially in the case I get hit by a car. On the other hand, I am a control freak that pays all the bills/invests/budgets/plans so I am the man behind the curtain. Not sure what would happen if I wasn't driving the bus. None the less, been married 28 yrs and this works for us. What I have seen often is men who have traditional similar setups, but DW runs the ship and DH "gets an allowance" with little knowledge of how the master plan works. No judgement here, just an interesting observation.
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Old 06-08-2016, 09:38 PM   #63
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Reading this forum inspired me to sit down tonight and calculate (at least roughly) what I spent in calendar year 2015. It was an interesting exercise. It revealed some things that I guess I knew or suspected, but became clear. Aside from taxes, it showed that my major expenses are: stuff for the kids, my wife's discretionary expenses, various forms of insurance, medical care, and restaurant meals -- followed by home maintenance and travel. It also reinforced what I thought was the case, which is that my current expenses are not a very good proxy for what my expenses are likely to be in retirement. But I guess it is a data point. It will be interesting to see how 2016 compares to 2015.
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Old 06-14-2016, 03:15 PM   #64
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I think it is both a personal and a financial decision. To live on $350k, you will need roughly $10-12mm in non qualified accounts depending on how you are invested, or $12-14mm in qualified accounts. Non-qualified money is worth 15-20% more from a retirement income perspective.


I burned out this year and sold my business. I now consult part time but I have to admit, it is scaring the hell out of me to be retired with three kids under 6 at 44 years of age. I have $7mm in investments, $600k in home equity on a $1.6mm house that I am debating whether I want to pay off, and $1.15 mm for the kids education. If I pay off the house, the $6mm would produce about 200k per year in income, and our expenses would be about $220k with out a mortgage. I live in Fairfield County CT so this is actually pretty bare bones to live a lifestyle like our peers. We also use $24k in income from the education fund for sports and activities.


Basically, we are $20k short of our lifestyle on our investments, but my wife makes $12k teaching part time and I make $75k consulting. If I were you, and you need $350k, I would make $10mm the goal, unless you were like me and miserable working basically all of the time.
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Old 06-14-2016, 09:56 PM   #65
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and $1.15 mm for the kids education..
Wow - $1.15mm for saved for the kids' education! Does that include private schools prior to university, or just anticipated university expenses? If the latter, that seems very high.

When I first got promoted at my organization, one of the top dogs gave me some good advice: "if you want to financially comfortable, there's three things you should do: send your kids to public school, keep living in whatever house you live in now (don't trade up because your pay is going up), and stay married to your first wife. I have done all three; worked out pretty well.
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Old 06-15-2016, 12:26 AM   #66
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Neat to hear from the next level, the insecurities of walking away strike at all income levels. I'm shooting for a third of his retirement goal and feeling it's quite comfortable!

I work closely with C suite execs and noticed that as they enter their 50's and are still hard charging they only take off work to deal with their teenage kids - drugs, etc. Can't make up for time with your kids with $$. I had one guy call me on my cell on a Sunday asking "what's up with the radio silence??" as I hadn't responded to his email. Now that I've got a target date locked in and a countdown started, I've spoken to a few of them about it and they are wide eyed with a look of "how'd you do that??" I don't explicitly point out my mortgage is 1/2 to 1/4 of theirs but I mention where I live and how we've kept expenses low and that I'll still have some part time work and let it go at that. 394 work days left...but who's counting?
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Old 06-15-2016, 06:23 AM   #67
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Wow - $1.15mm for saved for the kids' education! Does that include private schools prior to university, or just anticipated university expenses? If the latter, that seems very high.

When I first got promoted at my organization, one of the top dogs gave me some good advice: "if you want to financially comfortable, there's three things you should do: send your kids to public school, keep living in whatever house you live in now (don't trade up because your pay is going up), and stay married to your first wife. I have done all three; worked out pretty well.

This is for university and graduate school, or medical school etc. I like to quip that my kids will either go to UConn or Yale. That may be an exaggeration but unless it is a top decile university or private school, UConn is probably as good as anything else. I have low return assumptions, 6.5% and spending 2.5% a year this should grow to $1.9mm or so in 15 years, which will be about $600k per child. That will be just enough for either option.
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Old 06-22-2016, 09:09 AM   #68
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I had a friend who put life's tribulations and triumphs in perspective by saying, "Eh, nobody's going to remember that in 50 years anyway". I don't find that the least bit depressing but rather, highly logical and liberating.

A given work place is only a train that we're completely on for a while and then completely off, then we're usually forgotten soon enough. That's why they say "Welcome aboard" when you suddenly materialized in their midst. They also say "Happy Trails" when you leave, meaning "You're now cut from the work herd and so I won't have a reason to invest any further 'bandwidth' in you, but 'so long'." That's just the way it is because we were only really there to solve particular problems for a business in return for payment. Why would we let ourselves get too emotionally attached to what really is a commercial relationship, one that usually emphasizes its lack of commitment to you in the employee handbook in the section stating that is an At-Will Employer. I don't expect to have a hard time letting go and getting on with life when I have enough money saved in 5-7 years because I have learned the hard way twice to invest my emotional health in firmer stuff.
Well said! I couldn't agree more!
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Old 06-22-2016, 09:11 AM   #69
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Interesting... Some of you don't actually budget/track your expenses.
nope; not yet anyway


DW just looks at the checking account. If it goes down from the prior month, we spent too much.
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Old 06-27-2016, 12:37 AM   #70
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...to live a lifestyle like our peers.
Looking forward to moving once retired and picking my peers.
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