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Old 11-05-2012, 09:21 PM   #161
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Maybe he means not spending down the assets but living off dividends/interest ?
No I mean to live off pension, SS from US and UK and rental income. There will be a time between ER and taking SS where I will have to spend some dividends, but once SS starts all my expenses will be covered without needing to spend anything from my portfolio, all the income from my portfolio will be reinvested.....so I'll actually have a negative WR.
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Old 11-05-2012, 09:34 PM   #162
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Originally Posted by nun

No I mean to live off pension, SS from US and UK and rental income. There will be a time between ER and taking SS where I will have to spend some dividends, but once SS starts all my expenses will be covered without needing to spend anything from my portfolio, all the income from my portfolio will be reinvested.....so I'll actually have a negative WR.
Nice!
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Old 11-05-2012, 10:03 PM   #163
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No I mean to live off pension, SS from US and UK and rental income. There will be a time between ER and taking SS where I will have to spend some dividends, but once SS starts all my expenses will be covered without needing to spend anything from my portfolio, all the income from my portfolio will be reinvested.....so I'll actually have a negative WR.
Would you like to adopt a 56 year old? I want to be your heir.
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Old 11-06-2012, 06:31 AM   #164
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Would you like to adopt a 56 year old? I want to be your heir.
Sure..... seriously the only reason I can make it work is I'm single and frugal. In today's dollars my SS, pension and rental income add up to $40k a year. As I have no mortgage and a good health plan I can live comfortably on that. I hope to leave my heirs some money, but who knows, I might have an end of life crisis and buy a Porsche in my 80s.
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Old 11-06-2012, 07:03 AM   #165
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Or splurge a bit more now on experiences and things that you enjoy, mke life more convenient and bring you joy. You can't take it with you so you might as well enjoy the fruits of your labor (prudently, of course).
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Old 11-06-2012, 07:19 AM   #166
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Or splurge a bit more now on experiences and things that you enjoy, mke life more convenient and bring you joy. You can't take it with you so you might as well enjoy the fruits of your labor (prudently, of course).
I appreciate the advice, but I've got room for the fun stuff, plenty for theatre tickets, weekend beers and vacations. My ER retirement decision point has become being able to finance my spending from after tax money up to SS age and keeping my portfolio growing
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Old 11-06-2012, 08:31 AM   #167
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Quote:
Originally Posted by rbmrtn
Maybe he means not spending down the assets but living off dividends/interest?
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Originally Posted by nun View Post
No I mean to live off pension, SS from US and UK and rental income. There will be a time between ER and taking SS where I will have to spend some dividends, but once SS starts all my expenses will be covered without needing to spend anything from my portfolio, all the income from my portfolio will be reinvested.....so I'll actually have a negative WR.
So you have more than enough floor income to meet your spending needs and you're planning on a (large) residual from your investment portfolio, which is great.

That's something very different than stating the only safe withdrawal rate for stocks and bonds is 0%. Whatever the safe withdrawal rate from a portfolio is, it's not 0% (actually an oxymoron), no matter what future real returns may be.
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IMHO a SWR for stocks and bond funds is 0%
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Old 11-06-2012, 12:53 PM   #168
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Though some of us don't have the luxury of never touching our portfolio, so we have to roll the dice carefully study the data, then decide on a SWR we can live with...
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Old 11-06-2012, 05:03 PM   #169
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So you have more than enough floor income to meet your spending needs and you're planning on a (large) residual from your investment portfolio, which is great.

That's something very different than stating the only safe withdrawal rate for stocks and bonds is 0%. Whatever the safe withdrawal rate from a portfolio is, it's not 0% (actually an oxymoron), no matter what future real returns may be.

we are basically backing into our allocations based on the amount of income we want with the minimal amount of risk.

when we retire at 62 my wife will file, she has a small pension, we have rental income until we finish selling off all our holdings .

i figured needing about 2.5% -3% prior to me taking ss at 66 or 70 and about 2% after.

that will give us quite a few conservative options as opposed to drawing alot more income but having to go to a much larger allocation to equities.


our first reaction was to go 50/50 or so and base a lifestyle around 4% swr or so.

we have since cut that down and will base our lifestyle around a 2% withdrawal.
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Old 11-06-2012, 06:10 PM   #170
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Though some of us don't have the luxury of never touching our portfolio, so we have to roll the dice carefully study the data, then decide on a SWR we can live with...
Early on in my planning I decided to set up stable income sources for retirement. So really it's not a luxury it's just how I've prioritized my investing. 27 years ago I took the opportunity to continue to pay into the UK SS system so that at 66 I'll have both US and UK SS. I also bought a 2 family home so that I can get rental income. Finally I'll get a $5k annual pension at 62 and from 1987 to 1991 I contributed to a TIAA annuity that will produce another $5k when Im 65. I'll have to spend taxable income between ER and 65 and I'll be doing IRA to ROTH rollovers, but I'm not planning on spending any of my tax deferred money. Of course if my two SS checks get reduced my plan will change, but I should be able to handle that.
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Old 11-07-2012, 09:51 AM   #171
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Early on in my planning I decided to set up stable income sources for retirement. So really it's not a luxury it's just how I've prioritized my investing. 27 years ago I took the opportunity to continue to pay into the UK SS system so that at 66 I'll have both US and UK SS. I also bought a 2 family home so that I can get rental income. Finally I'll get a $5k annual pension at 62 and from 1987 to 1991 I contributed to a TIAA annuity that will produce another $5k when Im 65. I'll have to spend taxable income between ER and 65 and I'll be doing IRA to ROTH rollovers, but I'm not planning on spending any of my tax deferred money. Of course if my two SS checks get reduced my plan will change, but I should be able to handle that.
I involuntarily paid into SS, and will likely get the full amount I'm "entitled" to get. My pension from megacorp was involuntarily "frozen" years ago, though I will qualify for a small one from my current employer. I threw as much money as possible at tax-deferred savings, and benefited from the matches available. Have NO desire to be a landlord...

I suppose I could have quit my j*b, where I had significant seniority and other longevity benefits, and found a j*ob with a pension.

So, it didn't work out that I'll get a lot of "pension" benefits, but that was beneficial to me in other ways, vis a vis a higher salary and higher match. In reality, I've created my own pension, and I'm managing it, and pocketing the expense and management fees.

How is buying an annuity is not "investing", since you're counting on TIAA to invest for you, so they can continue paying your benefit? You still have a SWR, based on the annuity payment vs. the money you traded for that monthly benefit.

Don't really care, buy why would you shortchange yourself by investing a lot of money you never intend to spend?
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Old 11-07-2012, 10:10 AM   #172
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So, it didn't work out that I'll get a lot of "pension" benefits, but that was beneficial to me in other ways, vis a vis a higher salary and higher match. In reality, I've created my own pension, and I'm managing it, and pocketing the expense and management fees.

How is buying an annuity is not "investing", since you're counting on TIAA to invest for you, so they can continue paying your benefit? You still have a SWR, based on the annuity payment vs. the money you traded for that monthly benefit.

Don't really care, buy why would you shortchange yourself by investing a lot of money you never intend to spend?
Sure the TIAA is invested, but I'm one step removed from the market and it's lowest annual return over the past 27 years has been 3%. My main point is that I have diversified my retirement income sources throughout my working life so that I can support my retirement without the need to spend my IRA, 403b and 457 etc. I put money into taxable and tax deferred index funds, but I also bought TIAA-Traditional early on, paid off my mortgage so that my 2 family pays net income and made voluntary contributions to the UK SS system when many would have just spent that money.

I invested money in 401k, 403b, ROTH, 457etc to get the tax advantages and to have a portfolio I can use in case of emergencies......or for that Porsche. I have a very nice lifestyle, I described it as frugal because I buy the compact car rather than the big sedan and will bake an apple pie rather than buy one. Saving or investing money rather than spending it isn't "short-changing" yourself when you have all you want or need. The portfolio is insurance and the taxable part is a bridge to when the SS checks start and for that I'll be using a 4% WR
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Old 11-07-2012, 08:32 PM   #173
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Don't really care, buy why would you shortchange yourself by investing a lot of money you never intend to spend?
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Sure the TIAA is invested, but I'm one step removed from the market and it's lowest annual return over the past 27 years has been 3%. My main point is that I have diversified my retirement income sources throughout my working life so that I can support my retirement without the need to spend my IRA, 403b and 457 etc. I put money into taxable and tax deferred index funds, but I also bought TIAA-Traditional early on, paid off my mortgage so that my 2 family pays net income and made voluntary contributions to the UK SS system when many would have just spent that money.

I invested money in 401k, 403b, ROTH, 457etc to get the tax advantages and to have a portfolio I can use in case of emergencies......or for that Porsche. I have a very nice lifestyle, I described it as frugal because I buy the compact car rather than the big sedan and will bake an apple pie rather than buy one. Saving or investing money rather than spending it isn't "short-changing" yourself when you have all you want or need. The portfolio is insurance and the taxable part is a bridge to when the SS checks start and for that I'll be using a 4% WR
You're in an excellent position. But, I think the question is 'Why not retire now?"
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Old 11-07-2012, 10:29 PM   #174
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You're in an excellent position. But, I think the question is 'Why not retire now?"
Main reason is health care....I'm 51 and at 55 I can retire and keep my health insurance and pay the same premium as when I was w*rking. I also want a bit more in after tax savings to bridge the 55 to 65 gap. Plus I quite like my w*rk.
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