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Asset Value at ER
Old 12-13-2015, 11:18 PM   #1
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Asset Value at ER

For those that did their ER at age 60 or before, what was your total asset value? (Excluding your home)


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Old 12-14-2015, 04:34 AM   #2
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Originally Posted by jhbstp View Post
For those that did their ER at age 60 or before, what was your total asset value? (Excluding your home)
I began withdrawals at age 47 and at that time, IIRC, my annual draw was about 2.4% of my portfolio. 5 years later, the dollar amount of the draw is the same, but now represents about 2% of the portfolio value, thanks to the performance of the market over the last few years.
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Old 12-14-2015, 07:30 AM   #3
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For those that did their ER at age 60 or before, what was your total asset value? (Excluding your home)...
You're obviously new here. It is unlikely that you will get responses to a question for absolute numbers. Also, what you need depends on how much you spend... if your lifestyle cost $20k a you only need 1/5 of what someone whose lifestyle costs $100k a year needs.... but people will be more willing to share withdrawals rates.

As for me, when we retired in our mid 50s our core expenses were about 3% of our retirement assets but we generally spend about 4% but once our pension and SS come on-line then our WR will likely decline to less than 3%.
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Old 12-14-2015, 07:34 AM   #4
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Age 59, retired 3 years,
I've been averaging withdrawals in the low to mid 2% range. This year we hit 2.9% because we decided on a big family vacation in January and I had some room in the 15% bracket so I used it.
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Old 12-14-2015, 07:38 AM   #5
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Why exclude house value? I recently paid over $100K to retire my mortgage. Does that mean my net worth decreased by that amount?

One could make a similar point about pensions/annuities. One can pay into these out of ordinary assets to increase one's monthly pay out. Does doing so mean one's NW has decreased?

Depending on what you count my NW varies by over 50%.
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Old 12-14-2015, 07:40 AM   #6
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at 43, I'm at 2.1% WR, splitting costs 50/50 with my BF.
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Old 12-14-2015, 07:42 AM   #7
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A gazillion dollars. That's because I have a priceless collection of matchbox cars that I can sell if the market has an extended downturn. That and the priceless at work my kids produced that is proudly displayed on the fridge.

Oh.... You mean investable assets in the form of cash, bonds, stocks, mutual funds, reits, etc. Not something I want to share. You go first. What's your asset value?
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Old 12-14-2015, 07:43 AM   #8
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I have seen posts where people have $8M+ in assets and they need $200K+ to live on. Other posts less than $1M. I will be 56 when I retire and have a NW ~$3M.

If you have a pension and SS, and that provides enough to live on, you need less assets than someone who doesn't.

In my case, I have rental property, but those assets cannot be taken to the bank or spent. The rental income is great though.

My retirement budget will be ~$80K after I retire, and that will be an increase about 3x, as to what I spend now. My rentals produce twice that. And I could have about a 3.5% withdrawal rate of my investment account that would also provide me what I would need to live on. Worse case, I have SS and a small pension that could provide a bare minimum subsistence living situation. With all three income streams, I should be more than set.

I do plan on selling the rentals in 5-7 years and then not have to worry about them anymore. I may 1031 them or sell outright.

It's not an easy decision to retire when you have the choice and a good job. There is never a number large enough to make you feel 100% secure. Not even me, in my situation.
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Old 12-14-2015, 07:46 AM   #9
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Why exclude house value? I recently paid over $100K to retire my mortgage. Does that mean my net worth decreased by that amount?...
House value is typically excluded because you can't eat your house. You've probably heard of the term "house rich, cash poor" before, right?

IOW, unless you plan to sell your house and rent, or downsize and add part of the proceeds from the sale of a larger house to your retirement nestegg, then that house doesn't provide any cash flow to pay for groceries, health care etc.

When you paid your mortgage then you new worth did not change... your assets went down and liabilities went down by the same amount but NW is less relevant to being retired than retirement assets.

IOW, using an extreme example, if someone has a $500k house and $2 million in retirement assets they are better positioned to retire than someone with a $2 million house and $500k in retirement assets yet they both have a $2.5 million net worth.
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Old 12-14-2015, 07:55 AM   #10
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Ok - less snarky answer now. (It's early here on the west coast and I hadn't had coffee yet.)

I retired at 54, but DH was 62 when he retired. We have income from rent and from his SS. That makes our withdrawal rate smaller. Our WR for 2015 (first full calendar year of retirement so easier to calculate) is 2.7%. That's in part because I took more out in 2014 to pre-position money for a huge one time trip and for some remodeling projects. 2014 was a 5% WR for the 6 months of retirement.

I expect us to stay at 3-3.5% in the coming years... then it will drop when the kids move out, my small pension comes online, and I start SS.

As far as since of nest egg... More than $1M, less than $2M... that does not include our rental property since that's a detached granny flat on the same lot as our primary home and is not assessed separately and not mortgaged separately (or at all). Our budget, all in - including taxes, for a family of 4, is less than $90k. But some of that is covered by SS and rental income.

The key is to understand your spending. Then look at income streams that might help (pension, SS, rental, hobby income, etc) then calculate WR on the remainder.

My ER dream started being serious when I realized there were some simple cuts to my budget that didn't impact my lifestyle but produced a better WR.
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Old 12-14-2015, 08:00 AM   #11
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Fair enough, but by that standard I could max out my debt and have very high assets (as well as liabilities) but the amount of those assets stated apart from liabilities would be a poor indicator of one's financial situation.
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Old 12-14-2015, 08:24 AM   #12
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What do you mean "by that standard" ... what standard?

The OP asked "what was your total asset value? (Excluding your home)".

Most people do not have debt on assets other than their home so I'm not sure what your point is.
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Old 12-14-2015, 08:28 AM   #13
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My point is that using "assets" apart from liabilities isn't a particularly good index of retirement readiness - and in any case no better than net worth.
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Asset Value at ER
Old 12-14-2015, 08:53 AM   #14
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Asset Value at ER

I could probably make a $2 million house plus $500k portfolio work.

Step 1: Sell house
Step 2: Live happily ever after
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Old 12-14-2015, 08:54 AM   #15
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Most retirees don't have significant liabilities other than perhaps a mortgage so if your home is excluded so your point doesn't apply in most cases.

Besides, the OP's use of the term assets could be viewed as gross assets or net assets since the OP wasn't specific.

But whatever.
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Old 12-14-2015, 09:01 AM   #16
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I retired at 62. My asset value was 10 times my annual expenses, not counting taxes. Now if we put some numbers to that formula, you would have say $50,000 annual expenses and $500,000 in assets, excluding house. Well on the service that does not seem to work.

Well a paid off house at $400,000 and COLA pensions at $60,000 and SS in five years paints a completely different picture.

So it would come down to "What is the OP really trying to solve with the question". If it is just idle curiosity, then a poll with hard numbers might be better, allowing for some form of privacy. If he is trying to figure out where he is in relation to others on the board, his question may be two narrow, as his expenses, pensions, SS expectations, other debt, etc. may be quite different.
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Old 12-14-2015, 09:02 AM   #17
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More than enough to live quite comfortably. Tanks for asking!
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Old 12-14-2015, 09:03 AM   #18
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It is not how much you have at the time of your ER but rather your spending / WR vs what you have and approximate time to live on it. Some people could live happily on $25K while other afraid that $200K per year is not going to be enough.
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Old 12-14-2015, 09:03 AM   #19
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Quote:
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You go first. What's your asset value?
+1

Why should our membership reveal their asset values upon retiring, to someone who is apparently unwilling to reveal the same information?

Quote:
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Ok - less snarky answer now. (It's early here on the west coast and I hadn't had coffee yet.)
I liked your first answer better.


But, in the spirit of being less snarky and the spirit of the season, I'd suggest that jhbstp should try using our retirement calculator FIRECalc (link at the bottom of each page). FIRECalc results will at least give you a good start on figuring out what you need to retire.
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Old 12-14-2015, 09:36 AM   #20
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4% in the first 6 months. I have other $ which will come in over the next few years, and SSI in 6-14 years. Then an annuity in 20 years. Overall wd of 2%, just front loaded. Long way to say everyone is going on a different path and their results, though interesting, are only good for them.

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