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View Poll Results: 51 YO, 3.25% WR - yes or no ?
Yes and did 18 31.58%
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Old 11-27-2013, 05:07 PM   #21
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I think this comment ignores the methodology.

Methodology is to use a X% withdrawal rate and use that initial withdrawal amount and adjust annually for inflation.

In all scenarios, using historical data and either a) FireCalc or b) ORC (Jim Otar's Firecalc), a 3.2% WR using this methodology will withstand any historical market for any duration of time. Obviously, we have had fewer 50 year periods of time to "test" than 20 or 30 year cycles.

The point: At the OPer's spending level (3.2% WR), he doesn't have to worry about, or change his spending if the "markets turn sour" to survive historical market conditions.

Now, will the future look different than historical markets? That is a different question....


Indeed. My point was less about the OP's WR - clearly sustainable on a historical basis - and more about the proximity to a bare bones existence. Certainly that can work for many. Many of us, though, would look askance at the prospect. When I run my own numbers, for instance, the difference between my desired/expected retirement budget vs. my survival budget is closer to 100% That's just me, of course.
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Old 11-27-2013, 05:26 PM   #22
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My assessment without knowing you is that you would worry too much if you retired.
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Old 11-27-2013, 05:41 PM   #23
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Is it possible you've reached the point where OMY affects your health?
Yes Michael - that's what I think also.

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Indeed. My point was less about the OP's WR - clearly sustainable on a historical basis - and more about the proximity to a bare bones existence. Certainly that can work for many. Many of us, though, would look askance at the prospect. When I run my own numbers, for instance, the difference between my desired/expected retirement budget vs. my survival budget is closer to 100% That's just me, of course.
Yep - that's called cushion, and while I think I have some, I'm not sure I'll ever think its "enough". I think I've planned for the worst however - including full OOP maximum of 12.6k for healthcare and pricing the HI premium as if we were 64 and adding 20% to that number ! I've ignored the fact that DH gets subsidized HI premiums and will be working for the next 6 years (G-d willing).


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My assessment without knowing you is that you would worry too much if you retired.
Very observant Shanky. I worry about me worrying too much also !!!
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Old 11-27-2013, 05:44 PM   #24
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Very observant Shanky. I worry about me worrying too much also !!!
People who worry about worrying are called metaworriers!
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Old 11-27-2013, 06:11 PM   #25
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Given a 39 yr real return of -0.8% (our port's TER) our port can sustain a 2.2% AWR.
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AA = 60/35/5. Expected CAGR = 5.7%. GSD (5y) = 7.8%. USD inflation (10 y) = 1.8%. AWR = 3.0%. TER = 0.5%. Net Port Yield = 1.7%. Term = 36 yr. FI Duration = 4.9 yr. Portfolio survival probability = 86%.
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Old 11-27-2013, 06:32 PM   #26
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People who worry about worrying are called metaworriers!
OH that is SO me !!! Its definitely a disorder, but its also what has gotten me to the enviable position of being able to potentially retire at 51. I've been saving for a rainy day since my first job at age 16.
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Old 11-27-2013, 09:05 PM   #27
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Audrey - not to hijack this thread, but would you mind describing what this looks like (perhaps on another thread?)
It just seems to happen naturally as we seem to change our lifestyle considerably every 5 years including where we live, as well as how we live.

Hmmmm - looks like another lifestyle change will be due in 2015......
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Old 11-27-2013, 09:07 PM   #28
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I've ignored the fact that DH gets subsidized HI premiums and will be working for the next 6 years (G-d willing).
Are you telling me that after all this angst all we're talking about is one-half of a couple retiring while the other keeps working?

I mean I sort of think that clifp has hit the nail on the head, but I didn't even realize you had a working spouse who would continue to work!

Live and Learn - My DH thinks I worry too much and that I'm insanely risk averse. He rolls his eyes at me with some regularity. I have to say that you make it seem like I am blissfully carefree and risk crazy.

In all seriousness, DH and I talked a few months ago about whether I should fully retire (DH fully retired in 2010 and I've been working very, very part-time since then). I would tell him what all the various retirement calculators said (you can see how OCD I am about this. I soon as I read your first message, I went and ran firecalc with my own up to date numbers, saw the 100% and then proceeded to work at finding ways to break it and get it below 100%. Anyway, now that I'm back...) He would quickly lose interest with his eyes glazing over. (He thinks 80% is good enough and thought I was insane to work about Scenario 1 being 100% while tweaking this and that to try to break it made it 98%).

DH said to me that the problem was that if I kept working part-time I would be annoyed every day I went to work (at the time I was going into the office 2 days a week but that required a 3 hour long round trip commute which was starting to annoy me). And, he pointed out I kept complaining about it. The problem he said was that if did fully retire, thereby giving up my last claim to a really good job that I couldn't replace, then I would start agonizing and worrying over whether we have enough money. He knew that the income from my part-time work in the greater scheme of things makes zero difference to the success of our portfolio. It is more that it is a security blanket. So, he said I was in a no-win situation. Keep working and complain about the commute all the time. Let go of the part-time work and then be worried about how our portfolio was doing and whether it would survive... He said it was basically pick your poison. (As it turns out I haven't picked my poison yet. I tried to. I really did. I went in and resigned, but was told I could work even more reduced hours and could do it entirely from home. So that's where I am now).
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Old 11-28-2013, 05:47 AM   #29
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It looks like you're good to go. If it was me, instead of leaving work now on a sour note, I would start scheduling lots of vacation days within the next 2-3 months to use it up before giving your resignation notice.
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Old 11-28-2013, 09:27 AM   #30
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Are you telling me that after all this angst all we're talking about is one-half of a couple retiring while the other keeps working?
He works for the school system and brings home less than 10k a year after taxes. The HI subsidy adds another 10k to the value of his job.
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Old 11-28-2013, 09:32 AM   #31
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DH said to me that the problem was that if I kept working part-time I would be annoyed every day I went to work (at the time I was going into the office 2 days a week but that required a 3 hour long round trip commute which was starting to annoy me). And, he pointed out I kept complaining about it. The problem he said was that if did fully retire, thereby giving up my last claim to a really good job that I couldn't replace, then I would start agonizing and worrying over whether we have enough money. He knew that the income from my part-time work in the greater scheme of things makes zero difference to the success of our portfolio. It is more that it is a security blanket. So, he said I was in a no-win situation. Keep working and complain about the commute all the time. Let go of the part-time work and then be worried about how our portfolio was doing and whether it would survive... He said it was basically pick your poison. (As it turns out I haven't picked my poison yet. I tried to. I really did. I went in and resigned, but was told I could work even more reduced hours and could do it entirely from home. So that's where I am now).
I so understand this ! He's right. We need our security blankets - but we sort of resent the fact that we need them !

I still think I'm going to stay until March 2014 but I'm hoping that he confidence that I really can go at anytime (rather than just a "feeling") will help my attitude towards it. It really is a good gig. There is ALOT of BS but I w*rk from home full time. I just need to stop getting so upset about the nonsense and adopt an attitude of "what they want is a waste of time, but they are paying me for it so just do it and don't even try to convince them that it makes no sense"
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Old 11-28-2013, 09:44 AM   #32
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At 51, if things are going south, you can always go back to work (another employer) for a while. It's harder to do this when you are a decade or so older.
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Old 11-28-2013, 09:45 AM   #33
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I so understand this ! He's right. We need our security blankets - but we sort of resent the fact that we need them !

I still think I'm going to stay until March 2014 but I'm hoping that he confidence that I really can go at anytime (rather than just a "feeling") will help my attitude towards it. It really is a good gig. There is ALOT of BS but I w*rk from home full time. I just need to stop getting so upset about the nonsense and adopt an attitude of "what they want is a waste of time, but they are paying me for it so just do it and don't even try to convince them that it makes no sense"
That latter bit is good. At some point I changed my view to seeing myself as simply work for hire and it reduced the stress immensely. I think a lot of folks who reach FI but still work make this healthy mental adjustment. It's an important part of the transition to retirement anyway IMO.

I'm not saying turn into a slacker. I saw myself as a professional and as such I would point out when I thought there was a better way to do things, but if they didn't take my advice and proceeded down the wrong path anyway, it wasn't my problem.
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Old 11-28-2013, 10:31 AM   #34
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One antidote to the OMY syndrome would be to instead of working more and making more money, is to lower your expenses, especially if you can find ways to lower your expenses without impacting the quality of your life, like less expensive but more fun hobbies or using all LED light bulbs.

A $5K cut in annual living expenses now would mean needing $200K less over 40 years. Or if you can get your basic expenses down to where you could live well on SS alone, then your portfolio WR could be 0% or even less, and you have a cushion in case SS is ever reduced.
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Old 11-28-2013, 11:22 AM   #35
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I didn't vote, as my answer wasn't there. It would have been something like "Possibly, with reservations, though I didn't do it this way." Allow me to explain.

Since you are a self-proclaimed worrier, my main concern would be not so much whether your portfolio would survive. According to Firecalc, it would have survived everything that history could have thrown at it. My main concern would be whether you could stomach it were your portfolio to dip severely during the withdrawal phase, before recovering. This is something only you will know after that first bear market happens during your retirement. It hasn't happened for me yet - I'm still waiting for mine.

I began withdrawals a little earlier than you have - at the age of 47 (a little less than 3 years ago), and have been using a 2.5% WR (not factoring SS in). This gives me the necessary degree of comfort. The relatively low 2.5% WR is not because I have a large stash (I don't) but because I live on a very modest income. However - you do have that contingency fund. I like your "stuff I might want to buy" category!

One other factor to consider - the market is riding pretty high now after a several year bull market. If you were thinking of retiring a few years ago, there would be a very good chance you wouldn't experience any of those "low-hanging" Firecalc lines. I'd say the chance is a bit higher at this point. How much higher? Who knows?

I hope I haven't discouraged you - that is not the intention. My intention was more to bring any risks (as I perceive them) to your attention so that you can determine how you feel about those possible risks. Only you can make that determination, of course.

You sound like you're in pretty reasonable shape. That fact alone should help you to deal with the BS at work. Think of all the other folk who do what you do, who have no other option but to keep working. You are blessed - you have options!

P.S. I think you'll most likely be OK. It's what you think that matters though.
P.P.S. I'm just a guy who lives on his own with 3 cats, a foster cat, and a bicycle, in a cheap apartment. What I think about your situation really doesn't matter all that much at all
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Old 11-28-2013, 02:04 PM   #36
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Is it possible to work part time and try out semi-retirement first, just to see how it feels? If it works for you, then you get more free time and still have some income coming in. And if you find you don't like it, you can always go back to work full time. But it's a nice way to bridge the transition from full time work to full time retirement.
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Old 11-28-2013, 02:30 PM   #37
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I found your thread interesting because I wrestled with stay working F/T, retire early or work P/T at age 51 in 2008, 6 months before the crash. I chose to work P/T and still am 5 1/2 years later. Working P/T allows me to live on a W/R of about 1.5%.

I tend to worry too and the timing of the crash after leaving full time benefitted employment was pretty awful emotionally. However the roller coaster went back up and the market restored my net worth (although my home value has not recovered).

Reading your posts I get the sense you know you want to retire from what you are doing, but I didn't get a clear sense of what you plan to retire to, how will you fill your days. Sounds like a silly question, but it's not.

Why not ease into retirement by leaving F/T work and taking on P/T work. I can tell you that my attitude towards work changed immensely for the better when I realized I was there because I wanted to be and more on my terms. Perhaps you could work P/T until your spouse reached the point where they could retire too. Just my .02, good luck with whatever you decide.
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Old 12-01-2013, 10:01 AM   #38
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A couple of people have mentioned part time work. I've definitely considered that and probably would at least for the next 10 years or so. I'd be comfortable making $5k / year to keep me from fretting over making some "frivolous" purchase (as an example, I bought two beautiful side chairs this weekend at an "antique" shop for $100 .... I love them but I wasn't in desperate need for them, although they will be very useful when I have guests). That $5k would also keep me from driving myself bonkers over some unplanned expense (as an example, I need to have all my HVAC ductwork redone - $2k !! I only have $1,200 / year for "I didn't think of THAT" home repairs).

As to what will I retire to ... the list is LONG ! I live in a 55+ community that has tons of activities, including 27 holes of golf. I read the activity sheets and dream of joining the garden club, the nature club, the ladies golf club and learning to play pickleball. There are also several lovely parks for walking, biking and bird watching. I will volunteer in hospice in the "no one dies alone" service and I'd like to volunteer at the zoo two days a month. And then there is the beach ! Should that not be enough to keep me busy I've had a fleeting interest in learning to play mahjong.
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Old 12-01-2013, 11:42 AM   #39
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I've been thinking about part time work too, simply because it would allow me to spend a bit more on fun, and maybe a few frivolous things.
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Old 12-01-2013, 01:22 PM   #40
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I don't know about other fields but in IT, if you like programming, it is pretty easy to make $5K a year from part time work.

App developers make $100 - 200K a year full time. I don't do that but if I was starting over now leaving a corporate job and needed a work at home or part time income that is what I would go back to school for.
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