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Re: Before RE; did you belive the numbers?
Old 10-05-2005, 05:03 PM   #21
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Re: Before RE; did you belive the numbers?

Quote:
Originally Posted by TromboneAl
Sorry, does "after taxes" mean "excluding taxes" or "including taxes?"
Excludes taxes - I've taken account of taxes in investment growth rate assumption -
6.5% before taxes; 5% after taxes investment return.

Sound reasonable?
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Re: Before RE; did you belive the numbers?
Old 10-05-2005, 08:11 PM   #22
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Re: Before RE; did you belive the numbers?

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Originally Posted by TargaDave
isn't 84 a pretty young age by today's standards* for estimating* when you check* out?
No, it's actually a late age. I think the average lifespan is late 70's. But even if you make it to 84, chances are your annual budget will be totally different and a lot less than when you are 44.
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Re: Before RE; did you belive the numbers?
Old 10-05-2005, 08:33 PM   #23
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Re: Before RE; did you belive the numbers?

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Originally Posted by Cut-Throat
When you're dead a net worth of 2 cents or 2 Billion is exactly the same. Death is the great equalizer.

Ideal Financial Planning is the check to the undertaker bounces.
My uncle loved to spend money, almost as much as he loved to tell people how much he spent. Big car, fancy cloths, Rolex watches, etc. etc.

He died of a massive heart attack when he was 44. Car and apartment were leased. Debt up to his eye balls. Significantly negative net worth.

I always thought he did it just about right.

God help him, though, if instead he had lived to 98.
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Re: Before RE; did you belive the numbers?
Old 10-05-2005, 09:00 PM   #24
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Re: Before RE; did you belive the numbers?

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Originally Posted by TargaDave
Dex, I'm assuming somebody didn't already cover this; isn't 84 a pretty young age by today's standards for estimating when you check out?
84 just feel right to me. Don't ask me why I don't have an answer.
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Re: Before RE; did you belive the numbers?
Old 10-05-2005, 09:54 PM   #25
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Re: Before RE; did you belive the numbers?

Quote:
Originally Posted by dex
84 just feel right to me. Don't ask me why I don't have an answer.
Long as it's not .45 or .38 or .22 ...
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Re: Before RE; did you belive the numbers?
Old 10-05-2005, 10:48 PM   #26
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Re: Before RE; did you belive the numbers?

Dex,
I think a 24% (?) tax rate is too high -- you should be able to keep your taxes lower because of
a) low brackets (10% and 15% federal brackets)
b) personal exemptions
c) deductions (prop taxes, charitable donations, sales taxes paid)
d) no more social security FICA, Medicare payroll taxes
e) virtually no capgains distributions or capgains accumulated in your assets
d) some of your funds are no doubt in retirement accounts not taxed

Having said that, I don't think your estimate for 5% return after tax is so high, given that you want to be in all fixed income.

I also think you should assume, (since you are still in your 40s?) that you'll live even longer than 84, and instead of thinking you'll draw down your $, instead think of trying to maintain the real value of your portfolio over time. If nothing else, it will give you an added sense of security.

You'll move yourself away from the spreadsheet (too static, not enough of the whipsaw of real world market returns) and into the realm of FireCalc and the stress testing of historical ups and downs and patterns of returns/withdrawals.

When all is said and done, though, I think you'll find yourself in pretty good shape. Especially if you can bring yourself to move, over time, into equities and other asset classes -- Commercial Real Estate,Commodities, Oil & Gas, Private investments.

Congrats on getting to 'your number'
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Re: Before RE; did you belive the numbers?
Old 10-06-2005, 06:10 AM   #27
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Re: Before RE; did you belive the numbers?

ESRBob,
Thanks for th input. I've been looking at my finances from every angle I can think of. I will be 51 when I leave work so I'm estimating 33 years in retirement.

I will be looking at my allocation of investments. I may average into stock mutual funds. Right now I think stocks are overpriced and will be down next year.


Thanks everyone for the comments. It is helpful to get other's point of view.
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Re: Before RE; did you belive the numbers?
Old 10-06-2005, 06:58 AM   #28
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Re: Before RE; did you belive the numbers?

For a married couple retiring at 62, I think the life expectancy given in the IRS tables is age 92 (50% chance one of them is still alive).
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Re: Before RE; did you belive the numbers?
Old 10-06-2005, 08:11 AM   #29
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Re: Before RE; did you belive the numbers?

Quote:
Originally Posted by rmark
For a married couple retiring at 62, I think the life expectancy given in the IRS tables is age 92 (50% chance one of them is still alive).
Good point -- the way these life expectancy tables run is that the 'headline' number tends to be expectancy for someone born today. If you are already 40 or 50 or 60 then your life expectancy is longer, since you've already dodged infant mortality, teen car crashes etc.

Also those life expectancies are medians -- 50% do better than that. And this is all with today's health technology.
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