Fun With Firecalc - Lifestyle Implications

[MasterBlaster]

Well just for fun I've been playing around with Firecalc and have been plugging it's output numbers into my after tax (spendable) spreadsheet. between Firecalc and my tax spreadsheet I get some very interesting numbers:

1) According to firecalc I could retire now and have around $1000 more per month than I am now spending. That calculation includes an additional hefty medical insurance payment.

2) If I keep working till I'm 55 (~67 months out) My after tax income doubles to that in #1 above.

3) at age 60 my real income is ~3 times what I could get now.

4) If I work till I'm just under 65 The after tax income is quadruple (4 times) of my income in #1 above.

5) at full SS retirement I get arount 4.5 times the income seen in #1 above.

The implications are profound. That if I work for just a few more years, then I could double,triple,quadruple or more my current spending. The calculations above are due to several factors, such as pension key dates occuring, selling of key assets, and social security increasing at full retirement age, and investment returns - of course.

I feel that I live pretty well now with my present (somewhat frugal) spending. If I were to increase it by a factor of 4.5 times that would seem like fabulous wealth.

Other than traveling in style I really don't quite know what I'd do with that much cashflow. Although I probably won't work until I hit SS full retirement age I like the implications.

Makes me dream big and wonder...

The other implication is that, just maybe, I have been saving too much all of my life. Or that I should spend a little more now than I normally would. After decades of my current (somewhat frugal) spending pattern it is a bit hard to suddenly change ways and start spending money that I don't have to.

But still, it makes me dream big and wonder...

Any comments ?

 

[retire@40]

...according to firecalc I could retire now and have around $1000 more per month than I am now spending.

...if I work for just a few more years, then I could double,triple,quadruple or more my current spending.

Any comments ?

You could die tomorrow, so if you can retire now without depriving yourself AND have an extra $1000 a month, do it and don't look back.

 

[maddythebeagle]

I think that is a common thread on this forum (if I just stay a little longer, I will get more....), but I think that may be the nervous little person inside you just not wanting to change.

 

[REWahoo]

Taking you calculations to the extreme, you can plan on working until you are in your 90's and die filthy rich. It all boils down to how much is enough and when you have the nerve to pull the trigger.

You can always keep working until life taps you on the shoulder and tells you "It's time." This can come from one of several directions: a personal health problem, a change in your working environment (layoff, business downturn, etc.) the death or serious illness of a loved one or close friend, or some other catastrophic event. But that's not the way I would want to make my exit, preferring to leave on my own terms.

So run the numbers until you are thouroughly convinced thay you can make it, set a date, and start making plans for the rest of your life. And hope you make it to the date before one of those "It's time" events comes along.

REW

 

[SteveR]

That seems to be the Universal Question:  "How long to stay?"

It has to be based on individual circumstances and needs.  Each person has their own set of needs and wants that have to be addressed.  Too soon for one may be too late for someone else.  We each have to live with our decisions for many years to come (hopefully!) so it is not an no-brainer.  Obviously, the longer one works, the more money will be available in retirement since you are not spending your nest egg which you have job income and you should still be saving some of that income so the net increase can be pretty big over two or three decades.  

It all comes down to what is your cost of living and how much of that do you want to replace in ER?  The answer to that will tell you how long you need to work and save enough of a nest egg to fund that lifestyle for as long as you might live.  I continue to work because I want a higher standard of living than I can currently afford.   Others continue to get more benefits at retirement.  The Golden Handcuffs and the income associated with that is hard to walk away from.  DW is there and wants to get her hard earned benefits of dealing with MegaCrapCorp for over 20 years.  I think an extra $20K in pension is worth a couple more years especially when it comes with full medical.  That would be worth about another $5-8K per year.  I don't have any specific timetable except that I want to get past the full vesting period on my 401(k) so I can take their money when I go.  

Waiting is not a bad thing as long as you evaluate why you are waiting and what the cost of going vs waiting is.  Each person has to do the math to know what they will give up if they leave on X or Y date.  If you don't have company benefits to deal with the math is much easier.

2 months to full vesting then I can go whenever I want.  

 

[73ss454]

Maddy,

Yea, that nervous little guy scares the hell out of me.

Hope to come to terms with the little guy by next June.

 

[Dawg52]

I think that is a common thread on this forum (if I just stay a little longer, I will get more....), but I think that may be the nervous little person inside you just not wanting to change.

Yeah, we all have a nervous little person inside us. But as long as you have the cash flow, go for it. Certainly you need a nice cushion factored in to cover those unexpected rainey days, but none us know when we will pushing up daisys either. 

 

[RockMiner]

It's a really tough issue...I'm certain I can't handle five more years of this but what about just one extra year? What's a year of freedom worth? Hmmm, I could save another X dollars and buy a cool toy or have a better buffer...it's seductive!

My plan is to stay until my basic financial goals are met and then do a sanity check

 

[retire@40]

What's a year of freedom worth?

It's worth 1/X of your life, where X is the remaining number of years of your life.

 

[Mountain_Mike]

If one year is worth "1/X" of my life, and if my life is priceless....then any portion of my life is of infinite value (to me). Logically, then, I should bail out the moment I become able to.

 

[Cut-Throat]

It's worth 1/X of your life, where X is the remaining number of years of your life.

It's actually worth more! - The first years of retirement are worth more than the last years. Often spent with limited mobility, interest and other physical ailments.

 

[retire@40]

It's actually worth more! - The first years of retirement are worth more than the last years. Often spent with limited mobility, interest and other physical ailments.

True, but I don't know how to quantify that in a formula.   

 

[greg]

True, but I don't know how to quantify that in a formula.

You multiply the first half by pie and the second half is divided by pie.