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04-06-2012, 09:47 AM
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#1
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Recycles dryer sheets
Join Date: Aug 2009
Location: Southern California
Posts: 489
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Have enough for 4% SWR
Hello All! Happy Easter to those who celebrate this holiday. And Happy Spring to everyone else!
I write to share some personal happy news. As of last month, I have accumulated a nest egg that would give me 4% SWR if I quit right now. I will work an additional 2 to 3 years to bring that down to 3% SWR before I ER. I do NOT include the value of home in portfolio, only what's at Vanguard and Fidelity, etc.
Also, I have paid off my mortgage (sent Wells Fargo a check for $41K) this month and have zero car payments. I charge everything on a credit card to earn miles or hotel stays, etc. but I pay the entire balance at the end of each month to avoid paying any interest. I have zero debt. Feeling pretty great! Just would like you all to be happy with me!
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04-06-2012, 09:55 AM
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#2
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Confused about dryer sheets
Join Date: Mar 2010
Location: N Florida
Posts: 5
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Very happy for you and Happy Easter as well
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04-06-2012, 10:43 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,134
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Congratulations!!!
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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04-06-2012, 12:08 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,148
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Congrats, that is one of life's real milestones! I take it you're under 65 (like man of us) based on your WR target. Happy Easter.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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04-06-2012, 01:45 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,499
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Congratulations! A wonderful accomplishment.
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04-06-2012, 02:08 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,975
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Great job. It's a lot easier to go to work on Monday knowing your FI
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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04-06-2012, 02:57 PM
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#7
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Full time employment: Posting here.
Join Date: Feb 2008
Posts: 748
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Great job, can't wait till we're there.
Happy Easter!
__________________
I don't want to spend my entire life at work. I deserve more. - Want2retire aka W2R
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04-06-2012, 04:01 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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Congratulations!!! Nice work.
You say you would have a 4% WR if you quit now and are hanging in there to reduce it.
In my case, my WR will decline later on when I start a pension and again later on when I start SS. So in your case it may be that you 4% WR will decline later on if you have other income streams coming on line. If so, you may be more comfortable than you think.
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04-06-2012, 04:37 PM
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#9
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,021
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That is a great position to be in - congratulations, and Happy Easter
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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04-06-2012, 04:44 PM
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#10
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Moderator Emeritus
Join Date: May 2007
Posts: 12,890
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Congratulations! I am happy for you.
Have a great Easter.
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04-06-2012, 11:30 PM
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#11
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,855
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Quote:
Originally Posted by Retire2014
I write to share some personal happy news. As of last month, I have accumulated a nest egg that would give me 4% SWR if I quit right now. I will work an additional 2 to 3 years to bring that down to 3% SWR before I ER. I do NOT include the value of home in portfolio, only what's at Vanguard and Fidelity, etc.
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Congratulations!
Serious request: could you update this post quarterly to share your thoughts on "Just two to three more years" versus the level in your BS bucket?
__________________
*
Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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04-07-2012, 04:11 AM
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#12
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Dryer sheet wannabe
Join Date: Nov 2008
Posts: 18
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Congratulations!!!!
Hope to be in your place soon!
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04-07-2012, 07:01 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Nov 2006
Posts: 2,288
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My understanding is that the 4% is a fairly safe withdrawal rate and covers all of your expenses. If your house and car(s) are paid off, you are much safer right now than the rule of thumb 4% suggests. Why wait to get to 3%? I say pull the cord right now!
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04-07-2012, 07:10 AM
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#14
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Recycles dryer sheets
Join Date: Aug 2009
Location: Southern California
Posts: 489
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Hi Midpack -- I am 51. I hope to get to 3% SWR by age 54.
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04-07-2012, 07:11 AM
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#15
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,518
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Retire2014, congratulations on your achievement.
Reducing your WR from 4% to 3% means you need to increase your portfolio by 1/3 after inflation, which many would find challenging. Is this coming mostly from stepped up contributions or are you expecting oversized investment returns as well?
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04-07-2012, 07:13 AM
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#16
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Recycles dryer sheets
Join Date: Aug 2009
Location: Southern California
Posts: 489
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Quote:
Originally Posted by utrecht
My understanding is that the 4% is a fairly safe withdrawal rate and covers all of your expenses. If your house and car(s) are paid off, you are much safer right now than the rule of thumb 4% suggests. Why wait to get to 3%? I say pull the cord right now!
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Hi Utrecht, I really like your way of thinking, especially on Sunday nights when setting the alarm for the Monday commute to w*rk. The only reason I want to go for 3% is because I will have to buy my own health insurance. I am not eligibe for any retiree health benefits. But on really bad days, I can remind myself that I can pull the plug at any time and will not be living out of a cardboard box. I do feel much "safer" after reading your comment. Thank you.
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04-07-2012, 07:18 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,148
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Quote:
Originally Posted by utrecht
My understanding is that the 4% is a fairly safe withdrawal rate and covers all of your expenses. If your house and car(s) are paid off, you are much safer right now than the rule of thumb 4% suggests. Why wait to get to 3%? I say pull the cord right now!
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You may be overlooking an important variable.
4% is the classic safe WR based on a 30 year retirement. At 65, 4% is indeed considered safe. At 55, most would consider 4% WR pretty aggressive, lower probability of success. Many consider a 3-3.3% WR indefinitely sustainable, IOW you could retire at almost any age unless the future is markedly worse (real returns) than the past...
Given the OPs age target, I'd say it would be wise to shoot for 3% or so. YMMV
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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04-07-2012, 07:21 AM
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#18
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Recycles dryer sheets
Join Date: Aug 2009
Location: Southern California
Posts: 489
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Quote:
Originally Posted by MichaelB
Retire2014, congratulations on your achievement.
Reducing your WR from 4% to 3% means you need to increase your portfolio by 1/3 after inflation, which many would find challenging. Is this coming mostly from stepped up contributions or are you expecting oversized investment returns as well?
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Hi Michael,
You are correct with your math. That is what I've calculated as well. I need to increase my portfolio by a 1/3. I do not factor ANY investment returns in my calculation; the increase will come purely from savings. I have no mortgage and no car payment. I cook nutritious delicious meals at home for myself. My hobbies are inexpensive: yoga, and hiking w/ my dogs, and bicycling the many trails in and around Washington DC. Hence, I have a lot of money leftover each month to buy into more funds at Vanguard. I am assuming zero percent return from investments between now and 2014. That said, I also do not factor in any major market downturn between now and 2014 either. Thank you for your comment.
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04-07-2012, 07:24 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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Is SS factored into your 4%? In other words, is the withdrawal your living costs minus SS or is it just your living costs?
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04-07-2012, 07:28 AM
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#20
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Recycles dryer sheets
Join Date: Aug 2009
Location: Southern California
Posts: 489
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Quote:
Originally Posted by Nords
Congratulations!
Serious request: could you update this post quarterly to share your thoughts on "Just two to three more years" versus the level in your BS bucket?
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Hi Nords,
Were you really being serious about quarterly update of thoughts on the "2 to 3 more years?" I would be happy to but 2 to 3 more years is such a long time that I worry I'd be a nuisance to Forum members if I provide update quarterly. I think there are many on this Forum who are living in the 2-to-3-more-years mode.
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