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Old 11-18-2013, 01:54 PM   #21
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I am currently on day 18 of being in ESR mode. Although I enjoy the extra 'free' time, I am thinking now that a full ER would be stressful. At my age, 46, very few people in my world are actively planning for retirement, so it could be a long and lonely endeavour. As for the longterm aspect of financial freedom, a worrier will always worry, while others focus on the here and now. Our Plan A is to live a comfortable life with quite a bit of traveling but Plan B is always on my mind, which is dealing with the crisis at hand, whether it be financial or health related, etc. As NW-Bound aptly stated this can crop up out of nowhere. I don't fear the future I just want to be ready for it.
At the tender age of 38, I had a serious health issue which (a) almost killed me; (b) put me out of work for about 3 years; and (c) made me scramble and radically change my carefree spendthrift ways.

Was the best thing that happened to me because it (a) introduced me to frugality; (b) gave me a preview of what an ER lifestyle is like (hint: i will never get bored); (c) demonstrated to me that in the starkest of circumstances i can not only overcome but triumph (e.g., my net worth is such today that i will be able to FIRE soon). Point: it's amazing what we can handle when we have to.
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Old 11-18-2013, 02:41 PM   #22
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I am at "comfort" level by OP's definition. The only thing that scares me is something like what happened in 2008, or in early 2000 when dot.com bubble burst. It's hard to be ready for something like that. If it happens again, it can set my comfort level to survival one. That is what's making me go OMY. I feel I need another 300k or so to retire. But that's what I felt 300k ago and so it went. I admire ER people who took the plunge knowing that things can go wrong with their finance.
I too am a "goal line mover" and could have written the above verbatim ! While I was probably "ok" to ER last year, I didn't. And now I've moved the goalpost enough that I am planning on working 15 more months. Not the end of the world but if I have to wonder if I will be a perpetual OMY-er until I'm forced into the decision.
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Old 11-18-2013, 03:25 PM   #23
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I always thought I'd be able to retire at 55 like many do at the Fortune 500 company I work for then I found this forum Boy was I wrong. I've been socking a good chunk of my salary away to my 401k plan for over 25 years but after finding this site and seeing how little I have compared to most of the posters here, it ain't gonna happen anytime soon. I thought I had a nice nest egg until I started reading the posts here where people will ask with a straight face if they have enough to retire on and you read their portfolio and they've got a couple million in assets. Man have I got a long way to go. I just can't imagine how they do it. Now with the whole health care issue rearing it's ugly head I may have to work until I qualify for Medicare. Talk about depressing.
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Old 11-18-2013, 04:54 PM   #24
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I always thought I'd be able to retire at 55 like many do at the Fortune 500 company I work for then I found this forum Boy was I wrong. I've been socking a good chunk of my salary away to my 401k plan for over 25 years but after finding this site and seeing how little I have compared to most of the posters here, it ain't gonna happen anytime soon. I thought I had a nice nest egg until I started reading the posts here where people will ask with a straight face if they have enough to retire on and you read their portfolio and they've got a couple million in assets. Man have I got a long way to go. I just can't imagine how they do it. Now with the whole health care issue rearing it's ugly head I may have to work until I qualify for Medicare. Talk about depressing.
Well, it may depend. Some of the people who have a couple of million in assets and are working (a) want to spend a lot more money a year than many here want to spend, (b) are retiring really young and are looking at plan for a 45 or 50 year retirement, or (c) want cast iron certainty, 5 belts, 4 sets of suspenders and then want to make sure they have double what they need. Some of them may be people who expect to receive little SS or who are so conservative they want to plan for no SS at all. All of which is fine, because people need to do what gives them their comfort level.

How much you need to retire really has nothing to do with how much someone else needs to retire. The person who is 45, married with 2 kids at home, and who wants to spend $100,000 a year for 50 years and who doesn't want to include SS is going to need a very different amount that the 60 year old couple, with no kids at home, who is living happily on $40k a year with a paid for home with each person in the couple able to collect $20k each in SS even if taken at age 62. The first person needs a whole lot larger portfolio than the second person.

So, I would suggest you look at Firecalc, and the Fidelity retirement planner (and any others you want to look at) to determine what amount you need to have to retire.

As an aside - I did go back and read your initial post to the board where you mentioned your 401(k) not having recovered fully to pre-crash levels and mentioned your company stock plummeting a dozen years ago. I hope that aren't saying that your 401(k) is heavily invested in company stock. If it is, you might want to do some research into the negatives of investing retirement money in company stock.
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Old 11-18-2013, 05:08 PM   #25
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I always thought I'd be able to retire at 55 like many do at the Fortune 500 company I work for....:.
Please do not despair, there are many of us on this forum who do not have a company pension. There is a comment somewhere in a past post about the $ value of a company pension, which you surely must have. The original comment about confidence in RE regardless of what the financial calculators say is interesting and relevant regarding government and corporate pensions. I was insanely jealous when I finally realized the value of a pension, and knew I had to find a way to replace it in my retirement plans.

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Old 11-18-2013, 05:29 PM   #26
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How much you need to retire really has nothing to do with how much someone else needs to retire. The person who is 45, married with 2 kids at home, and who wants to spend $100,000 a year for 50 years and who doesn't want to include SS is going to need a very different amount that the 60 year old couple, with no kids at home, who is living happily on $40k a year with a paid for home with each person in the couple able to collect $20k each in SS even if taken at age 62. The first person needs a whole lot larger portfolio than the second person.
I'm the first person and I'm a bit of a worrier. The headlines, potential long-term high inflation, and QE Infinity aren't helping me relax any. I was thinking 40x would be safe, but I'm not so sure now.

I know most of my fears are irrational and not likely to occur. It's more likely that our whole system will collapse than 40x not survive a 40-50 year retirement.
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Old 11-18-2013, 06:43 PM   #27
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I'm the first person and I'm a bit of a worrier. The headlines, potential long-term high inflation, and QE Infinity aren't helping me relax any. I was thinking 40x would be safe, but I'm not so sure now.

I know most of my fears are irrational and not likely to occur. It's more likely that our whole system will collapse than 40x not survive a 40-50 year retirement.
Highlights mine .... if you have 40x spending then you are good to go. Once the BS gets to you enough, or health issues force you, you'll retire and be fine. Why not make the decision YOURS ?
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Old 11-18-2013, 07:11 PM   #28
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To me, there is a level of 'survival' readiness, meaning a person could, by living frugally and being willing to make some trade-offs, provide for the basics and a treat (a little cheap travel?) every now and then if they retired.

Then, there is 'security', which to me is a higher level of confidence than mere survival. For me, this would include a bit more in the way of assets, no debt at all including no mortgage, and a bit more wiggle room in the budget, but not luxury.

Up a little further is a level I consider 'comfort', which does include some luxury but not a crazy level of wealth.

Beyond that, there is a level I consider 'no worries', where a person could indulge a great deal in luxury, would be able to leave a significant estate, and would never have to worry at all about running out of money or making financial compromises.
I suppose this is one way to think about it, but my experience is a little different. I retired in 2010, at age 54.5. I ran the numbers enough to know that I should be able to draw roughly the same monthly income in retirement that I did while working, without taking on too much risk. That was good enough for me. So far, it has worked out just fine. My wife and I have been able to do all the things we enjoy doing and planned to do in retirement (including some travel and spending 2 months in a warmer climate every year). At this point, maintaining good health and fitness is a primary goal, and I really don't worry too much about finances. If you don't have your health, no level of income in retirement is going to make you feel more secure. Also, you can work XX more years in order to reach the "no financial worries" level if it makes you feel better, but remember that you can never get those years back. The freedom to spend my time as I choose to spend it is more important to me than working a few more years to accumulate more $$.
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Old 11-19-2013, 08:38 AM   #29
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As an aside - I did go back and read your initial post to the board where you mentioned your 401(k) not having recovered fully to pre-crash levels and mentioned your company stock plummeting a dozen years ago. I hope that aren't saying that your 401(k) is heavily invested in company stock. If it is, you might want to do some research into the negatives of investing retirement money in company stock.
Not anymore although I did have a good chunk invested in it in the late 90's/early 00's. Our company's stock price soared to $100+/ share then bottomed out at $1.50. A lot of people took a huge hit, myself incuded. It has set me back and I still haven't recovered to pre crash levels in my 401k.
My own fault, I know. I have redirected my investments but they seem kind of puny compared to many posters here. It also doesn't help that my wife has no pension plan through her employer (hospital). Both of my parents retired early but I'm pessimistic that I'll be able to follow their lead.
I'm not knocking this site, although it may seem so, I just think it's skewed to higher income individuals.
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Old 11-19-2013, 08:54 AM   #30
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Not anymore although I did have a good chunk invested in it in the late 90's/early 00's. Our company's stock price soared to $100+/ share then bottomed out at $1.50. A lot of people took a huge hit, myself incuded. It has set me back and I still haven't recovered to pre crash levels in my 401k.
My own fault, I know. I have redirected my investments but they seem kind of puny compared to many posters here. It also doesn't help that my wife has no pension plan through her employer (hospital). Both of my parents retired early but I'm pessimistic that I'll be able to follow their lead.
I'm not knocking this site, although it may seem so, I just think it's skewed to higher income individuals.
I think you'll find much more financial diversity amongst the community. Here's a current thread that shows a great deal of thrift Grocery Money - Food Only

It's never too late to start the journey.
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Old 11-22-2013, 08:56 AM   #31
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Pace car

Define 'higher income'.

My wife and I had slightly higher than median incomes. When I was on the military she didn't work. We started early with IRAs, later had pension plans to contribute, choosing jobs with a degree of security rather than high income, took advantage of tax deferred options when they came along (403b and 457), lived frugally. Our pensions are not fantastic, but we could survive on them. Only debt is a pickup truck (0% interest rate) we splurged on at retirement, to haul our camper. We managed to accrue $1M in investments; which covers our entertainment and assisting the kid get his act together lol. But we retired early, and - to answer the OPs query - with a large degree of confidence. We spent the first couple of months of retirement living as we wished, while tracking expenses. We tend to spend $500 to $1000 a month over our pension every month; that's easily covered by the $20k annual withdrawal I had planned. We spend about $400 - $500 a month eating in restaurants and spend about a week traveling each month, so we could drastically trim our expenses. Firecalc shows 100% success rate, with the portfolio growing to varying degrees over 40 years. So I guess we're about as confident as possible, realizing that nothing is ever guaranteed.
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Old 11-22-2013, 09:25 AM   #32
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We are in the "no worries" group. This realization came on quite suddenly when I was 53. I had been amassing employee options for many years but never really thought of retirement. Then in the early 2000's our stock doubled and suddenly we were sitting on quite a large sum. This realization started me thinking about retirement as the job wasn't as much fun by this point, I think mostly because reaching FI really made the job a pain in the butt. Three years later (2006) I retired but had to manage through the financial crises with most of my options still outstanding. At one time they were all under water! Our retirement could have been very different if the market had not recovered. All cashed out now and lively very well on our pension and dividends.
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Old 11-22-2013, 10:03 AM   #33
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I'm not knocking this site, although it may seem so, I just think it's skewed to higher income individuals.
That may be the case, but only to the extent that people who are interested in FIRE tend to work hard to maximize their earning potential while in the workforce. However, there are many forum members who become FIRE on relatively low incomes. What unites FIRE people is LBYM. This leads to a skew towards higher NW.

You've probably heard of "the wealthy barber".
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Old 11-22-2013, 10:31 AM   #34
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I'm in the "still a little worried group". I notice a lot of people on the web site have pensions, often with a COLA. For me, I think this would increase my confidence a bit because at least part of my income would not be subject to the complete unknown of what may happen in the markets over the next 40 years. I have never worked for a company that offered a pension, so I can't relate to what it's like to have it available to me upon retirement, rather than having to rely solely on savings, dividends and capital gains to fund 40 years of living expenses.
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Old 11-22-2013, 03:01 PM   #35
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Well, when I quit my day job, I was in the "security" mode. Really, just enough for 10 years or so. Since then, I've developed a small business and am firmly in the "comfortable" stage. .. I'm still only 41 and still single, so a lot could (and hopefully will) change.

I will say that most of my comfort comes from not having to go to a day job. I don't have a lavished lifestyle, but when I want to travel or buy something I can.
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Old 11-22-2013, 04:02 PM   #36
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I just think it's skewed to higher income individuals.
Hardly the case. DW and I are solidly stuck in the 5 figure salary range. Mine is on the high end, but chasing the high pay just did not appeal to me as we like where we live, and enjoy the company of friends and family in the region. We both have non Cola'd pensions, a great blessing - although mine was frozen a few years back, and DWs is changing significantly soon also.

Long story short, Firecalc shows us very soon able to support our current spending and live somewhere in the range of security/comfort as defined in the original post; I believe adaptability is key in making the commitment to ER for folks in that range. If things go south, sure we can give up some 'luxuries'; but to me there is always the other (green) side of the fence, and we might just have to increase spending and live it up to make "ends meet"
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Old 11-22-2013, 04:42 PM   #37
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I sure wasn't a high earner. Last couple of years at work I was at $63k, wife around $15k. Took a bit of a risk to retire in 2011 just short of 54. House paid for and almost $800K saved with a pension (and just started annuity supplement...between the two about $1700 a month total) that pays for about 70% of our expenses. If something really bad happened we might be in a little trouble.....but we planned on living at around the same expenses as we did while working (done) and at 56 things are going better than expected with the run-up in the market.
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Old 11-23-2013, 05:55 AM   #38
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We all go into this journey of ER with our calculations, withdrawal rates and monte carlo simulations (FIRECALC) with comments along the lines '98% chance of success', ect.

In doing so we seem to miss the point that the most likely outcome is that we will be much better off than the simulations indicate, i.e. the 50% median value of outcomes supports a radically higher spend rate than the 2% failure case. And that we could be leaving behind a much higher estate upon 'check out' than what we anticipate.
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Old 11-23-2013, 06:06 AM   #39
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I'm in the "still a little worried group". I notice a lot of people on the web site have pensions, often with a COLA. For me, I think this would increase my confidence a bit because at least part of my income would not be subject to the complete unknown of what may happen in the markets over the next 40 years. I have never worked for a company that offered a pension, so I can't relate to what it's like to have it available to me upon retirement, rather than having to rely solely on savings, dividends and capital gains to fund 40 years of living expenses.
I'm in the same boat re: no pension. Thinking of retiring before 50 and worried about making a 40x portfolio last that long . . .

Then I got to thinking. If the market is so bad that a properly diversified, indexed, portfolio won't survive a 2.5% withdrawal rate, then there is no way those pensions with COLA will survive either. We would all be in a mess.
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Old 11-23-2013, 06:07 AM   #40
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We all go into this journey of ER with our calculations, withdrawal rates and monte carlo simulations (FIRECALC)...
Although the point of your post is certainly valid, I think it needs to be noted that FIRECalc isn't a Monte Carlo based calculator. While FIRECalc does provide a Monte Carlo option, the core design of the calculator looks at actual history, not random returns.
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