Did you do the 'too good to believe' OMY thing?

[NW-Bound]

The 4% 'rule/suggestion' is another thing that gives me pause and makes me question the FC and FRP results because for the first few years, we will be over 4%. But once SS kicks in, that percentage falls to 4 or less. I realize that over a 30-35 year period the average may work out to 4% but it concerns me (needlessly more than likely) that we can't be at 4% from day one and every year afterwards. Just another thing that makes my 'OMY thinking' to kick in.

FIRECalc will allow you to enter in future SS. It can then tell you that you can go higher than the 4% WR initially, then reduce the amount withdrawal when SS kicks in, such that your spending stays constant.

It also helps if your spending contains a lot of discretionary items that you can cut back in tough years. People say that the amount cut back will not amount to much in the big scheme, and I agree with that in principle. It's because it does not matter much if you cut down to 3% WR from 4%WR, when your stash takes a 10 to 20% haircut. But mentally, to keep on spending when your stash takes a 10% or 20% haircut is tough.

And then, in good years when you get 10-20% jump, do not go out and splurge it all. That should be saved for bad years, which for sure will happen although we do not know when.

 

[Carpediem]

FIRECalc will allow you to enter in future SS. It can then tell you that you can go higher than the 4% WR initially, then reduce the amount withdrawal when SS kicks in, such that your spending stays constant.

Is there some place in the FC results where I can view the variation in WRs? I can do this in FRP but didn't know you could do this in FC if you can.

 

[ABQ2015]

Since 2014 the retirement calculators and Megacorp financial planner were saying my numbers were good to go for a comfortable retirement. I did OMY through mid-2016 and then OMY glidepath from mid-2016 to 2018 to ensure a very comfortable retirement, including getting my pension to a desirable level. Last year at 60 was the right balance of things for me to end OMY and enter the wonderful world of retirement.

My situation was similar except I was 62 when I retired in late 2017. I tracked expenses for several years before retirement but was still not confident of my spending numbers and was leery of the market and the potential for future tax and healthcare increases and cuts in SS. I was eligible to retire with pension at 60 but worked two additional years to save much needed cash and to substantially increase my pension which allows me to be less market dependent.

My investing track record is poor so it is not so much a problem with trusting the financial calculators but more of trusting my investment decisions and whether the results will be similar to the calculator predictions. But I now keep a conservative asset allocation and try not to fiddle too much with my portfolio so have done better in the last five years. I have some regrets about working longer but I sleep well at night and can afford extras and more travel.

 

[Carpediem]

My investing track record is poor so it is not so much a problem with trusting the financial calculators but more of trusting my investment decisions and whether the results will be similar to the calculator predictions. But I now keep a conservative asset allocation and try not to fiddle too much with my portfolio so have done better in the last five years.

I can definitely relate to this ^. That's exactly why I rely on VG Wellington and keep Mr. Bogle's words in my head: "Don't just do something...stand there!"

 

[NW-Bound]

Is there some place in the FC results where I can view the variation in WRs? I can do this in FRP but didn't know you could do this in FC if you can.

After entering in all the info and telling FIRECalc to find the 100% number, you will see what your initial spending amount can be. You can determine the initial WR from that.

PS. Once SS kicks in, your WR will go down in dollar amounts equal to the SS benefits. What the WR is in percentage of the initial stash can be determined. But the WR percentage at that point, with respect to the then account balance, is subject to the market condition. It can be high or low depending on the sequence of returns.

 

[RobbieB]

The calculator results were so good I worked one year less.

 

[NW-Bound]

My FIRECalc results were good, but I could have worked OMY and OMY, because I liked my work. I was working part-time anyway, and taking a month off at a time to travel.

Work was a good activity to have in between travels. However, work politics and red tape caused me to throw in the towel and walk.

 

[audreyh1]

Thanks for that, W2R.

Part of my own hesitation to step off the hamster wheel is the fact that I work from home 100% in a very low stress job in IT. I believe some folks around me think "why would you retire now when you work in your PJs and have zero stress? You have it so good". Of course, I know the reasons why I would retire but their thinking makes me question myself. Maybe I'm being lazy or selfish. Maybe I'm giving up easy money.

It's interesting there are like 3 different active threads about the difficulty in making a decision to step away. Must be that time of year!

Establish your priorities!

And review your resources. How much time do you have left? versus how much money.