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Old 09-17-2012, 02:20 PM   #21
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My range was fairly tight because I knew I didn't want a barebone-type retirement and I didn't dream of a lifestyle that required a OMG-sized portfolio either. Basically I wanted something between comfy and extra comfy.
+1

If I wait to retire until we have enough to fund a lifestyle well above what I think I need to be happy, then I've worked way too long...
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Old 09-17-2012, 02:22 PM   #22
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I can retire this coming January, with the basics covered, plus a little more. I'm constantly crunching the numbers, having conversations with myself, and my wife when she wants to hear it for the umpteenth time, about whether it's enough, or whether instead I should work another year or two to add a little cushion.

The biggest elephant in the room for us is that we don't own a home. We're currently renting two apartments, because I work 125 miles from where she lives and works. I sleep 4 nights a week at my apt. then drive to see her on weekends. We've been doing that more than 3 yrs.

It probably makes sense to buy a house now, before I retire, but I HATE the thought of going in debt for a mortgage (although now's the time with the low rates) or even worse....spending the cash from my retirement savings. The majority of our retirement will come from my COLA'd pension that begins when I retire, and then 5 yrs later a smaller military pension begining at age 60. I won't really qualify for much SS, only around $200 or so. Wife will get some SS, maybe $600 at 62, but she's only 52 now.

If I pay cash for a house, that means no mortgage, which is great, but also wipes out a big chunk of our savings. We only have around $300k. If we spend $200k on a house, the pensions will cover everything, with a little breathing room.

I don't know if it makes more sense to carry a mortgage, therefore a requirement to withdraw monthly from the savings to cover the payments, or simply pay cash for the house, leaving the savings 2/3 lower, but then not needing to withdraw anymore due to the pensions covering everything. On one hand, mortgage rates are probably lower than I can earn on savings, however, carrying a mortgage means I can't really look at my portfolio for anything beyond paying the mortgage because I need it to keep earning enough to cover the mortgage. Perhaps a few yrs down the road it will have increased enough to kick off some excess $$.

If I had a substantially bigger portfolio, this would be a no-brainer to me. I'd pay cash for a house, skim off the remainder as needed...or if needed. Probably wouldn't need to touch it except for special occasions (or a new toy, emergency, etc.). Maybe I really do need to work a few more years to build up more cushion.
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Old 09-17-2012, 02:47 PM   #23
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I don't know if it makes more sense to carry a mortgage, therefore a requirement to withdraw monthly from the savings to cover the payments, or simply pay cash for the house, leaving the savings 2/3 lower, but then not needing to withdraw anymore due to the pensions covering everything. On one hand, mortgage rates are probably lower than I can earn on savings, however, carrying a mortgage means I can't really look at my portfolio for anything beyond paying the mortgage because I need it to keep earning enough to cover the mortgage. Perhaps a few yrs down the road it will have increased enough to kick of some excess $$.
No reason you can't take out the mortgage when you buy the house and then pay it off (or partially off) whenever you feel like it. If you buy with cash you can do a cash-out loan, but it will cost more and will not be as easily tax deductible. Also, it will very likely be easier to get a loan when you still have W-2 documented income, though the pension will be good.

The mortgage payment, other than escrow, doesn't inflate, so if we get a nice big inflation you'll be all set.
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Old 09-17-2012, 02:56 PM   #24
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In my plan, I just use a lower end number, but have some travel as part of the budget. I don't have vehicle replacement or major repairs as part of the budget. However, I do have some slop in my expense numbers and I assumed any amount over my retirement goal would go to those items. Since I've already exceeded my retirement goal, I'm fairly comfortable we'll be able to cover everything when I retire within the next two years. It also helps that we've been completing some major home remodels and maintenance during the last few years, so we won't have to face those for 20+ years.
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Old 09-17-2012, 05:42 PM   #25
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Originally Posted by cr7090cap
I think the two most important things you can do is 1) Live below your means and 2) Save as much as you can for as long as you can. The NUMBER will then take care of itself, it did for me.
That sounds wise. I can empathize with the OP too. Our "number" includes a comfy standard of living, I think, but as the years go on I find myself wondering if We should give up a little padding in exchange for an earlier date. As you said though, worrying too much isn't productive. It's probably best to soldier on until we're at that future date and can decide accordingly.

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Old 09-17-2012, 07:28 PM   #26
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From your title I thought this was about a kitchen appliance for cooking. I was eager to see your large range.

Ha
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Old 09-17-2012, 07:52 PM   #27
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From your title I thought this was about a kitchen appliance for cooking. I was eager to see your large range.

Ha
It's not the range, but the size of the burner that counts...
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Old 09-20-2012, 07:24 AM   #28
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I obsess over my budget, financial projections, retirement nest egg, etc. One of the things I'm finding is that the nest egg I will need in about 13 years for retirement varies wildly depending on the variables. Right now my range of desired savings is about $1.2 Million to $2.2 million. The former number assumes not that much travel, driving cars to the ground, skipping organic groceries, etc. The latter number leaves alot of room for travel, newer cars, etc. I think realistically I will need somewhere in the middle. Some days I strive for the former depending on how crappy my job is making me feel. Anyone else have such a large range in their numbers?

Yeah, well, I'm definitely guilty of this as well. I have to admit tho, over the years things have gotten more and more refined. Of course I started this analysis when I was about 28 and I'm 42 now. As I learn more and more (much of it from this forum) my budget has gotten more refined (you can see it in Live & Learn's other thread, "why is my budget so high"). When I compared it to other peoples budget over the years, I added things in that I hadn't thought of. Also, I'm getting a better handle on what I want the withdrawals to look like. My latest thinking (which is getting more and more firm) is that I would like to be able to take a maximum of 4% out of my taxable accounts and a maximum of 3% out of combined taxable/tax deffered accts, whichever is lower. With these two pieces, I am able to develop a "necessity" budget with which I can calculate a "necessity" number. This isn't complete bare-bones, but doesn't include any extra $$ for travel or more extravagent fun, but does have cable, boat/motorcycle expenses and enough $$ for hiking and camping. I will hit this number hopefully by early next year (although I would have to sell some assets, but nothing necessary). So, after that, every dollar I add to the pile goes in the "fun" category. My early goal is to have the "fun" category large enough to cover all (foreseeable) out of pocket health care costs each year not covered by health insurance. I'm in Mass, so this is somewhat easier to calculate. At that point, every $$ just goes toward more fun. All of this is my latest thinking on how this is all gonna work, and as I said, it gets revised as I learn new things, but I think I'm getting close.
I guess the bottom line is, there is a point when you have enough, for me that's when fun#=out of pocket health care costs. Then of course, you have to decide if you want any more $$ for fun. Hmph, I guess this doesn't help after all, lol!!
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Old 09-20-2012, 04:11 PM   #29
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Glad to hear other people obsess over this as much as I do. I would really love to be able to get a set it and forget it approach, but I don't think I'm capable of that.
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Old 09-21-2012, 12:47 AM   #30
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My range is even larger, due to 1) my age (47) so I plan on a 48-year retirement to 95 2) the significant impact of inflation 3) whether I practice medicine part time after I FIRE, hopefully this year.
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Originally Posted by accountingsucks View Post
I obsess over my budget, financial projections, retirement nest egg, etc. One of the things I'm finding is that the nest egg I will need in about 13 years for retirement varies wildly depending on the variables. Right now my range of desired savings is about $1.2 Million to $2.2 million. The former number assumes not that much travel, driving cars to the ground, skipping organic groceries, etc. The latter number leaves alot of room for travel, newer cars, etc. I think realistically I will need somewhere in the middle. Some days I strive for the former depending on how crappy my job is making me feel. Anyone else have such a large range in their numbers?
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Old 09-21-2012, 01:00 AM   #31
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Originally Posted by ziggy29
Every time I rerun the numbers and re-think things, it seems like I reach a different conclusion about when I can get out. To a large degree it depends on the stability of my wife's new career in ministry, but as of now I'm eyeing 2016 as the time when I get out (maybe not complete retirement, but at least to something a lot less stressful with less demands on my time). That would make me about 50 at the time. But we'll see.
But what does Rev. Mrs. Ziggy say? God will provide?
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Old 09-21-2012, 08:22 AM   #32
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It's not the range, but the size of the burner that counts...
It's not the size of the burner, but the total heat generated ...
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Old 09-21-2012, 08:49 AM   #33
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As I have mentioned a few times, it is all about healthcare that is causing a large range in my estimations.

If I assume zero healthcare costs, I can get a barebones budget that is based on working 40 hrs/week for minimum wage. This would be around $18,000 a year, or around $17,000 after SS and medicare tax.

This is worst case scenario and I would want an investment income that allowed me at least this lifestyle because I know I could survive on that budget since millions in the USA already do.

$17,000 from a SWR of 3% would need a portfolio of $570,000. Double that for two people and you get about the 1.2 million as the lower end. This assumes no social security income.

Anything above that and you can do extra fun stuff besides just walks in the park and library visits. On the other hand, having the 1.2 million means you can take walks in the park and library visits instead of working 40 hours a week as a walmart greeter.

I want a little extra buffer, so we established the lower magic number at $1.5 million.
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Old 09-24-2012, 09:59 PM   #34
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From your title I thought this was about a kitchen appliance for cooking. I was eager to see your large range.

Ha
My first thought was a cattle ranch.
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Old 09-25-2012, 02:39 PM   #35
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Hello fellow obsessor.

I think such a range is expected, especially given that you're 13 yrs away from retirement.
+1...it's the distance from FIRE that is partly to blame. Shoot for the top end for now, and then in 4-5 years, your range will be $600k versus the $1M range you see now...then 4-5 years after that it will be $300k....etc.

Hang in there.
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