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Old 11-23-2013, 07:47 AM   #41
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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.
Ah, but for scroogy people like myself who is used to LBYM and saving, there's a certain pleasure in seeing his stash grow.

Just now, I figure that if I delay SS until 70, by that time I am probably too old and tired to spend much and probably can live fine on that. So, if I just invest to match the inflation, then withdraw from the stash to deplete it between now and then, I can spend more than 2x what my WR is now. That would mean 1st class seats, new vehicles every year, bigger homes.

Can I do it? Hell no! I like to see the stash grow, even when I am living off it. That's what scroogy people do.
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Old 11-23-2013, 08:16 AM   #42
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...
That's what scroogy people do.
I've been called scroogy before, for different reasons (mostly in jest...I think/thought).

Anyway, maybe this explains my OMY syndrome a bit: Even though the calculators say I am good to go now; and, I have no huge desire for a more lavish lifestyle at the moment (in fact, simpler would be much nicer for a while)...I do like to watch the stash grow.
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Old 11-23-2013, 10:15 AM   #43
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We have many cohorts here, I think.

PS. I tend to be more generous to other people than to myself. I have been trying to spend more on myself, but I do not need much.
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Old 11-23-2013, 10:27 AM   #44
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We have been watching the stash grow our entire lives. It's not an easy change to make, even though at some point it no longer is necessary to do so. Figuring out at what point in our lives that becomes true is everyone's challenge here.
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Old 11-23-2013, 10:44 AM   #45
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Recently found out about FIRECalc. Before that, I had my own spreadsheet with all kind of formulas.

I've been running through various scenarios (spending 90k-120k, retiring now vs 5 years later, ...). To enjoy a finance stress free retirement and live up (travel being the main one), I need to work a few more years. But if I can't work any more due to continuing stress, I will retire and live as I do now.
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Old 11-23-2013, 11:05 AM   #46
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Speaking of cheap, I remember of what I read from Andrew Tobias. He wrote that cheap only applies to how you treat others. What you spend on yourself does not matter.

Not spending a lot of money on your clothes or your toys is not cheap. Cheap is not giving a waitress the tip she deserves, not pitching in enough to cover your portion when you are out to lunch with coworkers and have a single check, etc...


PS. Similarly, Tobias wrote that going out to expensive dinners, or giving a generous tip would not be waste. The money that you spend is now enjoyed by others.
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Old 11-23-2013, 11:27 AM   #47
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In re- reading the thread, and going to the four stages described:
Survival
Security
Comfort
No Worries
.........
I see a cose correlation to my own three stages:
Austerity
Nominal
Optimum
and now... Phase 2

Also... from a different Era as Midpack mentioned (24 year chart)...
At the time we retired, in 1989, there was no Firecalc... and not much in the way of financial management, at least for people like us with limited assets.
I sense the same kind of worry that we had at the time, about making it. It happened, but not along a smooth path. FWIW, if you're still on the ER site, Act2, try this:
Sharing 23 years of Frugal Retirement
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Old 11-23-2013, 01:10 PM   #48
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Interesting post. DH and I are still working. I plan to exit in the next 5 - 13 months (if I can avoid OMY syndrome). DH will retire in June 2016 with FERS. We won't have any debts and our basic living expenses will be covered by SS and his pension. All the extras will be covered by his 401k and my IRA. All calculators show that we should be very comfortable. We have always lived below our means and I'm like many here - a chronic worrier, so I could never put us in the "no worries" category. My biggest hurdle will be not saving/adding to our nest egg and actually withdrawing from it. DH is afraid that I will go into austerity mode. He is looking to ramp up our lifestyle a bit.
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Old 11-23-2013, 02:30 PM   #49
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It is the most likely outcome that the majorityof the people on this site during the next twenty or so years will be posting - instead of to the FIRE and Money forum - to topics labeled 'estate tax' and 'charitable bequests'.
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Old 11-23-2013, 02:40 PM   #50
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It is the most likely outcome that the majorityof the people on this site during the next twenty or so year swill be posting - instead of to the FIRE and Money forum - to topics labeled 'estate tax' and 'charitable bequests'.
+1 It beats the alternative!

My plan is to divest along the way with a goal of maintaining 40x in my 50s, 30x in my 60s, 20x in my 70s, 15x in my 80s, and 10x in my 90s+.
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Old 11-23-2013, 02:53 PM   #51
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3-4% WR of my current lifestyle = "comfort"
Under 3% = "worries are negligible"

"No worries" level does not exist in my DNA.
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Old 11-23-2013, 05:49 PM   #52
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We are ESR'd at this time (age 50/DW age 49), but by the time we fully retire, I'm pretty confident we will be in the comfort stage. No pensions for DW or I, mostly a decent sized portfolio of rental properties, along with 401k's/IRAs. Our current spend rate is around $8k/month, which I'm hoping will be reduced a bit by the time we fully retire. I think that will be around the time our kids are off to college (currently ages 11 and 8).
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Old 11-30-2013, 09:11 AM   #53
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I find the real elephant in the room is inheritance issues.

I have been planning my ER as though I will receive nothing from my parents. My wife and I are at our peak earning potential while simultaneously having eliminated all debts and found our groove in finding a nice life balance of frugality and comfort. In short, we are saving/investing 8k monthly. Add to this our respective bonuses, and financial assets are building up at a rate that is pleasantly shocking to us.

Like others in this thread, I am a bit of a worrier. After yet another close call at my job (injured fairly badly), I am done with this career. Part of my worry is that I am only 41, very young to be thinking of quitting I realize. Yet, in the back of my mind I know that sometime in the hopefully distant future I will receive a financial windfall from my incredibly successful parents. I would guess 2M on the low end, 5M on the high end.... like I said, we are saving like maniacs and have already exceeded 1M in investable assets on our own. But it hard not to look at a future inheritance and realize that I am probably more than good to go to ER right bloody now. Forget that my wife still wants to work another 10 years in her 6 figure income job which she enjoys.... and that we live easily on 30k or less annually.

Despite all this, I still fret about leaving my current job...

I find there is not a lot of talk on this site about inheritances... is this because not many will receive any, or is it because its kind of creepy and grasping to talk about?
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Old 11-30-2013, 09:45 AM   #54
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I find the real elephant in the room is inheritance issues.

I find there is not a lot of talk on this site about inheritances... is this because not many will receive any, or is it because its kind of creepy and grasping to talk about?
I think everyone's situation is a little bit different. But there are many factors that come in to play with inheritance money. Some parents could end up giving more away to charity than their children may expect. Some may need long term health care that could erode their inheritance. My parents don't have much saved, but even if they did, my Mom is 88 years old and still going strong. My grandmother lived until 99 years old. So the money may come much later than one could expect.

Inheritance should be looked at as uncertain, so that your financial plan doesn't fall apart should it not come to be. If it does come some day, then you can always reevaluate your situation. And if you have children, you may want to leave as much to them as your parents left to you, so you may still not think of this as money to be spent freely as part of retirement.
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Old 11-30-2013, 10:13 AM   #55
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I find there is not a lot of talk on this site about inheritances... is this because not many will receive any, or is it because its kind of creepy and grasping to talk about?
Perhaps a desire to make it on our own, without relying on someone else's efforts and foresight.

A potential inheritance takes us from straddling the security/comfort fence to being unabashedly comfortable. But that of course is very scenario dependent on the benefactor's possible future health care needs, so I'd just as soon not count on it. It rightly belongs to her, and the primary use of the funds is to ensure she lives in appropriate comfort. If her money outlives her and an inheritance is in our future it will be a welcome event to be sure, as it represents a couple of family generations LBYM and wise investments. That lesson was worth more than any inheritance.
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Old 11-30-2013, 10:19 AM   #56
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I have known more than one person who "knew" they were going to inherit money someday, and they planned their lives based on that "knowledge."A couple of them were in for an unpleasant surprise when the inheritance never came. Best to make all your plans without counting on a dime of inheritance, for many of the reasons in the previous post.
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Old 11-30-2013, 10:22 AM   #57
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We have many cohorts here, I think.

PS. I tend to be more generous to other people than to myself. I have been trying to spend more on myself, but I do not need much.
I have been too generous to others and I have recently decided to spend ("splurge") on myself a bit before retirement.
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Old 11-30-2013, 10:40 AM   #58
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I find the real elephant in the room is inheritance issues.
...
Like others in this thread, I am a bit of a worrier. After yet another close call at my job (injured fairly badly), I am done with this career. Part of my worry is that I am only 41, very young to be thinking of quitting I realize. Yet, in the back of my mind I know that sometime in the hopefully distant future I will receive a financial windfall from my incredibly successful parents. I would guess 2M on the low end, 5M on the high end.... like I said, we are saving like maniacs and have already exceeded 1M in investable assets on our own. But it hard not to look at a future inheritance and realize that I am probably more than good to go to ER right bloody now. Forget that my wife still wants to work another 10 years in her 6 figure income job which she enjoys.... and that we live easily on 30k or less annually.

Despite all this, I still fret about leaving my current job...

I find there is not a lot of talk on this site about inheritances... is this because not many will receive any, or is it because its kind of creepy and grasping to talk about?
As others have said, unless there is a trust 'guaranteeing' a certain minimum level of assets, I would heavily discount it and use it more to the point of having an ability to turbocharge your bucket list if it materializes.

I'm in a somewhat similar boat - my parents have an estate that I really can't see them spending down to zero, given their net worth and their somewhat frugal habits. Also, there's a life insurance policy in a trust that is 'guaranteed' (as long as someone starts paying the premiums again at age 100 if either of them live that long).

I'll be able to retire comfortably without any inheritance, but it is somewhat of a challenge knowing that your NW could suddenly mushroom by 100%-200% overnight....yet, that may/may not happen until 20 years from now, at which point you would likely be retired already.

Suggest to your parents that you, the DW, and them do something together with a small part of the money so you all can be guaranteed to enjoy it now, so you don't have to go through the extended timeline to suddenly have more money than you know what to do with. Perhaps do a few trips, or buy a car that you could drive sometimes or perhaps an RV/camper, etc.

I don't know what your comfort level is with them on the topic of money, but if you shared your current financial status and goals, they might be more amenable to it and realize that you're not living day-to-day and only want to use their money for a good time because you have none of your own. If they have shared with you that you are an heir in their estate (and you aren't simply assuming that you are and will find out that instead they are leaving it all to some charities), stress to them that you thank them for their financial success, but you also want to see them enjoy some of the fruits of their labors, and think it would be more memorable for you to be able to enjoy just a small part of their stash with them now while they're still here, rather than have to spend/invest it all later on when they're gone and you can't make any more memories with them.
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Old 11-30-2013, 10:48 AM   #59
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I have known more than one person who "knew" they were going to inherit money someday, and they planned their lives based on that "knowledge."A couple of them were in for an unpleasant surprise when the inheritance never came. Best to make all your plans without counting on a dime of inheritance, for many of the reasons in the previous post.
Like I mentioned, I've been planning for my own ER as though I will receive nothing, even though my parents have sat me down to explain that there will be a large amount bequeathed upon one day. I didn't inquire about it, but I think they have sensed for awhile my desire to walk away from my job, knowing how its slowly destroying their only son. I think they want me to ER as much as I do, and wanted to assure me, in their own way, that I shouldn't stress about losing my income, that my financial future set. Lucky to have them as parents, to be sure.

Could unforeseen circumstances prevent this from happening... sure. But you would think that between a "highly likely" large inheritance, the large amount we have already saved in our early 40's, our debt free and low cost lifestyle, and a wife who will continue to work for the foreseeable future that I could shake the death grip that OMY sydrome has upon me.
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Old 11-30-2013, 11:35 AM   #60
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All very good thoughts.

I am of the view that my parents' money is their money, not mine. The only money that is mine is what I have personally worked for and saved.

I hope they will use their money in a way that makes them happy and secure and that provides for all their wants and needs throughout their lives. That seems to be what they are doing. If they spend it all, that is fine with me, so long as they do their best to provide for themselves financially their entire lives. If there is money left that they wish to leave to me, that is quite ok with me but I will not build a plan based on it.

Having said that, my parents are sensible and saved well throughout their working lives. They are not prone to foolish expenditures. I cannot imagine that they would ever be a financial burden on any family member or that they would die destitute. But, sometimes very expensive things happen as people move into old age. Their money gives them options. And it gives me the security of knowing that it is unlikely that I will have to support them. That is worth a lot and I am very grateful to them for having saved enough that they are self-sufficient financially.
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