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Old 05-19-2014, 05:43 PM   #41
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The OP's $5M in post tax investment and < $10k expense/mo (and he is not even counting SS income) can go a long way for RE. If he can't retire with $5M today, who among us can RE?

Well I for one would need to go back in time 4 years ago and take back my resignation letter! Congrats to Travel for a very impressive portfolio. Social Security has to be a huge backstop that isn't even being accounted for. Travel already mentioned he is being generous in yearly expenses, so it sounds like the process is being doubly conservative. Maybe I am more pessimistic about aging but as an earlier poster wrote, you just will not spend the money when aged as in the earlier retired years. Heck I'm 30 years away from 80 and I am already spending less in my 4th year of retirement than I did the first couple.


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Old 05-19-2014, 06:20 PM   #42
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Originally Posted by Mulligan View Post
Well I for one would need to go back in time 4 years ago and take back my resignation letter! Congrats to Travel for a very impressive portfolio. Social Security has to be a huge backstop that isn't even being accounted for. Travel already mentioned he is being generous in yearly expenses, so it sounds like the process is being doubly conservative. Maybe I am more pessimistic about aging but as an earlier poster wrote, you just will not spend the money when aged as in the earlier retired years. Heck I'm 30 years away from 80 and I am already spending less in my 4th year of retirement than I did the first couple.


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Thanks, Mulligan. I am an OVERplanner. I plan for more expenses and no SS with lowish average returns. I cannot get safer other than simply dividing the portfolio by the number of years and assume I simply keep up with inflation. In that case it would last 41.67 years. In that scenario most of us on this board would be in trouble!

I think part of the issue is the fees. 0.78% advisory fee plus embedded fees in the MFs. Net is likely >1%. I have already opened the VG account. Now...as to moving the money over. . .working on that. Time to visit the Bogleheads for advice.
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Old 05-19-2014, 07:01 PM   #43
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Thanks, Mulligan. I am an OVERplanner. I plan for more expenses and no SS with lowish average returns. I cannot get safer other than simply dividing the portfolio by the number of years and assume I simply keep up with inflation. In that case it would last 41.67 years. In that scenario most of us on this board would be in trouble!



I think part of the issue is the fees. 0.78% advisory fee plus embedded fees in the MFs. Net is likely >1%. I have already opened the VG account. Now...as to moving the money over. . .working on that. Time to visit the Bogleheads for advice.

I thoroughly enjoy their website...it keeps me on the straight and narrow path. My only advise is don't let this worry take away from your enjoyment of retirement. Anyone who can amass the amount you have and the awareness that you possess will be just fine. I am a retired pensioner who has a generous pension and continue to save $1500-$2000 a month, probably for the rest of my life. But unless I live to be in my mid 70s will never have a 7 figure portfolio. There are several posters here just like yourself, and I personally admire all of you. It's easy to allocate expenses and lifestyle from a check given to you each month. But to draw down an amount that you have spent your whole life accumulating would be very unnerving to me. But then again, I have seen my dad starting over at 40 from divorce and never making more than $50k a year in his life accumulate a million dollars, and won't turn one penny loose to spend on himself and enjoy it.


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Old 05-19-2014, 07:27 PM   #44
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... But to draw down an amount that you have spent your whole life accumulating would be very unnerving to me. But then again, I have seen my dad starting over at 40 from divorce and never making more than $50k a year in his life accumulate a million dollars, and won't turn one penny loose to spend on himself and enjoy it.
...
No doubt your dad, like mine had, has many hard times in his mind while he clings onto that bit of security that he knows he can never get again if lost.

Into my 2nd month of retirement now and this is the hardest part for me, switching from never touching the account to actually drawing from it. I cant get it back when it is gone, it is my security. But in the end we really don't have the security we seek.

Borrowing some Neil Young lyrics, while Rock and roll may be here to stay, we are not. So better to take some chances while we still can. Better to burn out than to rust.

There's more to the picture than meets the eye. Hey hey, my my.

Sorry Neil
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Old 05-19-2014, 08:35 PM   #45
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To the OP:

For one final check, I'd go to the website otar retirement calculator and download the free trial version of his calculator.

Jim Otar has written a very thorough book (mentioned on this site several times over the years), that describes how sequence of events is a MAJOR determining factor for your success. Basically, his calculator is an enhanced version of FIRECalc.
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Old 06-03-2014, 03:56 PM   #46
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So I wanted to report what the FA indicated about our numbers and the reason for the differences:

Apparently the numbers they run are AFTER tax numbers. FIRECalc, etc.
do not factor in taxes.

So my question on calculators: if you are running a scenario, are you assuming the number for annual spending to be AFTER-tax or PRE-tax? And I have no idea what my tax bracket will be once ER'd. Thoughts? Thanks!
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Old 06-03-2014, 04:01 PM   #47
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Firecalc assumes all taxes are paid out of withdrawals. Fair enough. But it does mean you have to model what your taxes might be so you know your likely expenses.
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Old 06-03-2014, 04:37 PM   #48
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Originally Posted by Travelwanted View Post
So I wanted to report what the FA indicated about our numbers and the reason for the differences:

Apparently the numbers they run are AFTER tax numbers. FIRECalc, etc.
do not factor in taxes.

So my question on calculators: if you are running a scenario, are you assuming the number for annual spending to be AFTER-tax or PRE-tax? And I have no idea what my tax bracket will be once ER'd. Thoughts? Thanks!
Most calculators include taxes as an input expense (either % or $ amount), I think principally because taxes are so complicated and can vary so much.

It should be pretty easy to get a good idea of your tax bracket once you retire. Take last year's tax return, eliminate your earnings from working and make any other appropriate changes and see what the result is. You may need to do a full year retired version and then a year of retirement version. You can use TurpoTax or one of a number of tax calculatiors.

I like Income Tax Calculator - Tax-Rates.org because it also includes stat income taxes.
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Old 06-03-2014, 05:16 PM   #49
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I assume my effective tax rate in retirement will be 15%. So whatever my amount of withdrawal is I lop off 15% for state and Federal and that is how much I figure we can spend on living. I think that is probably even a bit too much of a haircut because we have a 2/3 of our money in taxable accounts so we should be able to stay close to 0% Federal taxes and our state top tax bracket is 6%...I was amazed to see how with deductions exemptions and crafty use of cap gains and return of principle one can take out close to $100000 a year and pay ZERO Federal taxes...

The "advisors" will try to convince you you will be paying 40% in taxes becuase again this will keep,you shovelling money into their hands as a larger and larger set of assets for them to skim their % off of. Again, get a flat rate pay by the hour advisor for a more accurate assessment of your situation.
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Old 06-03-2014, 05:58 PM   #50
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Firecalc uses Gross spending.
Quicken Lifetime Planner has you input net spending (gross minus taxes and any savings or debt reduction targets you've set up.)
I believe financial engines outputs gross spending.

I did a brute force calculation on my spending. I took my gross income, subtracted out 401k contributions and other savings contributions, added in increased health care costs, subtracted out mortgage (P&I) because the plan is to pay it off lump sum when I retire. That's my spending number. I know I can live on it -because I have been living on it. I took several years average - to make sure big ticket purchases that aren't annual were accounted for.
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