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"Benchmark" Poll Question
Old 08-12-2004, 04:01 AM   #1
 
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"Benchmark" Poll Question

Assuming these sort of "benchmark" parameters, at what age would you retire (or semi-retire)?

Same-age one-earner couple

$100K job income

$1M financial assets

Paid-off house

SS/Medicare only - no other retirement benefits or potential sources of income such as inheritance

So if this was your situation at age 50, would you ER or SR? At 55? At 60?
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Re: "Benchmark" Poll Question
Old 08-12-2004, 04:15 AM   #2
 
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Re: "Benchmark" Poll Question

If you are sure you really want to my answer is ER,
today.

John Galt
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Re: "Benchmark" Poll Question
Old 08-12-2004, 05:13 AM   #3
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Re: "Benchmark" Poll Question

YESTERDAY
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Re: "Benchmark" Poll Question
Old 08-12-2004, 05:23 AM   #4
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Re: "Benchmark" Poll Question

1993 - age 49

300k financial assets(hers included) plus 50k duplex.

small defined (pension due at 55) non - cola.

paid up fish cammp.

As they say down here - I was a "gone pecan". She retired a year later.

No guts, no glory.
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Re: "Benchmark" Poll Question
Old 08-12-2004, 05:33 AM   #5
 
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Re: "Benchmark" Poll Question

So if I understand correctly, you guys are saying you would fully retire at whatever age you reach that situation, even in your 20's? (realizing that you would then have little or no SS/Medicare coverage)

I have a sense of many of your retirement parameters and I'm not asking to rehash that. Everyone's situation is different and my question is purely hypothetical.

Thanks...
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Re: "Benchmark" Poll Question
Old 08-12-2004, 05:42 AM   #6
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Re: "Benchmark" Poll Question

Quote:
Assuming these sort of "benchmark" parameters, at what age would you retire (or semi-retire)?

Same-age one-earner couple

$100K job income

$1M financial assets

Paid-off house

SS/Medicare only - no other retirement benefits or potential sources of income such as inheritance

So if this was your situation at age 50, would you ER or SR? At 55? At 60?
cc(guest):
Answering your post because I was 49 in 1987 when I bailed out.
My situation at that time was pretty darn close to yours.
My income was a little higher, but net worth about the same. (Plugging in inflation).
My wife stayed home with kids during our entire marriage, and we also had no company retirement, company health ins. and had never received an inheritence, and would never receive one.
If you have built your net worth with only your income with no outside help, it appears you have sacraficed, and lived below your means to be in the position you are in.
As far as whether to retire, that's a question that you are going to have to figure out. (As far as your assets, it appears to me you would be better off than most folks that are motivated to retire early.)
Make sure that both you and your wife have enough outside interests to occupy the considerable extra time that you will have. (In my case, I have always been involved in sports at one capacity or another.) I set as a goal to get my golf handicap in the single didgets, and spend a little more time fly-fishing).
To sum up, in my opinion, you have shown the ability by having the net worth you do to be able to retire whenever you want to. (Just make sure you're running to something, rather than running from something).
Good luck, Jarhead
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Re: "Benchmark" Poll Question
Old 08-12-2004, 06:01 AM   #7
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Re: "Benchmark" Poll Question

Quote:
So if I understand correctly, you guys are saying you would fully retire at whatever age you reach that situation, even in your 20's? (realizing that you would then have little or no SS/Medicare coverage)

I have a sense of many of your retirement parameters and I'm not asking to rehash that. Everyone's situation is different and my question is purely hypothetical.

Thanks...
Hypothetical? Thanks a lot cc (guest).
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Re: "Benchmark" Poll Question
Old 08-12-2004, 06:31 AM   #8
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Re: "Benchmark" Poll Question

I haven't had any stinking heathcare coverage of any kind for eleven years. Stay healthy or pay cash. Better yet, get a passport and have your travel agent keep track periodically on airfare to Thailand.

The most likely - carry uninsured motorist - if you most. If you get 'really sick' a million dollars ain't gonna make you feel better.

Oh - BTY - We live in hurricane alley and haven't carried home insurance of any kind for twenty five years - two hits and a tornado thrown in = about 50k out of pocket $, although some % could be classed as improvement.
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Re: "Benchmark" Poll Question
Old 08-12-2004, 06:32 AM   #9
 
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Re: "Benchmark" Poll Question

If hypothetical questions are offensive here then I withdraw the question with apologies. I just thought it would be interesting to see the range of answers based on a generic, oversimplified scenario constructed with round numbers that I perceive as the ballpark where many people would start seriously considering ER. (My own situation differs from this in several respects)

BTW, I suppose I should give my own answer, which is semi-retire at 58. I'm expect that to be viewed as very conservative but that's part of the equation - I really like my job and when I'm working from home on my own schedule it doesn't seem much like work at all to me.
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Re: "Benchmark" Poll Question
Old 08-12-2004, 06:40 AM   #10
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Re: "Benchmark" Poll Question

Hypothetical questions are fun - but expect - heh, heh - strong opinions all over the map. Just when I think I've read every different way someone has figured out how to ER - a new one gets posted.
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Re: "Benchmark" Poll Question
Old 08-12-2004, 06:45 AM   #11
 
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Re: "Benchmark" Poll Question

Hey cc. Be cool. If hypothetical (or foolish, dumb,
inane, off the topic, silly, or just plain insensitive)
questions were "offensive", we have all been "offended"
bunches of times. I suspect I have inflicted my share
. Anyway, it keeps things from getting too dry what with all the talk about SWR, ROI, P/E ratios, GNMA, FNMA, NAV, etc etc.

John Galt
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Re: "Benchmark" Poll Question
Old 08-12-2004, 06:51 AM   #12
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Re: "Benchmark" Poll Question

Quote:
If hypothetical questions are offensive here then I withdraw the question with apologies. I just thought it would be interesting to see the range of answers based on a generic, oversimplified scenario constructed with round numbers that I perceive as the ballpark where many people would start seriously considering ER. (My own situation differs from this in several respects)

BTW, I suppose I should give my own answer, which is semi-retire at 58. I'm expect that to be viewed as very conservative but that's part of the equation - I really like my job and when I'm working from home on my own schedule it doesn't seem much like work at all to me.
Your original post said nothing about hypothetical. I, like other posters, figured you were seriously considering retiring at age 50.
Only after receiving answers did you state it was hypothetical. Hypothetical questions are answered all the time. If i had known it was hypothetical, I damn sure wouldn't have went into as much detail as I did.
Hypothetical is alright, but common sense is even better.
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Re: "Benchmark" Poll Question
Old 08-12-2004, 07:34 AM   #13
 
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Re: "Benchmark" Poll Question

"Hypothetical is alright, but common sense is even better. "

Well then I apologize for lacking the common sense to ask the question more clearly. I'm a very apologetic person today!
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Re: "Benchmark" Poll Question
Old 08-12-2004, 08:42 AM   #14
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Re: "Benchmark" Poll Question

cc - single with a bit more money than in your scenario -
Planning to give my notice in May of '05.
I liked your question and the answers - it confims my plans
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Re: "Benchmark" Poll Question
Old 08-12-2004, 03:43 PM   #15
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Re: "Benchmark" Poll Question

Quote:
So if I understand correctly, you guys are saying you would fully retire at whatever age you reach that situation, even in your 20's? ..
I would have retired after my first week of working full time in my career at the age of 22 if I had the money to do so. It took me only a full week to realize that working sucks! I'm nearing 40 and will be RE within 2 or 3 years.

Brad
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Re: "Benchmark" Poll Question
Old 08-13-2004, 10:33 AM   #16
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Re: "Benchmark" Poll Question

Quote:
I really like my job and when I'm working from home on my own schedule it doesn't seem much like work at all to me.
cc,

That sounds like a very desirable situation.

Are you in IT? I am very interested in the telecommuting
positions and am wondering if you are in a job that is different from the software jobs that are typically home based.

If you are not in SW then please do share (whatever you want to) a little more about the nature of the work, since it is difficult to find people these days with high levels of job satisfaction.

I fit the profile you crafted but am not 100% sure about RE. You can see my posts here as well on that subject.

Dante
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Re: "Benchmark" Poll Question
Old 08-14-2004, 08:45 AM   #17
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Re: "Benchmark" Poll Question

Quote:
Assuming these sort of "benchmark" parameters, at what age would you retire (or semi-retire)?

Same-age one-earner couple

$100K job income

$1M financial assets

Paid-off house

SS/Medicare only - no other retirement benefits or potential sources of income such as inheritance

So if this was your situation at age 50, would you ER or SR? At 55? At 60?
CC -- hypothetical or not, this question is unanswerable if you don't know your expenses! Some couples live on 20k a year, some on 10 times that amount or more, all of them in ER. If you could put a figure to the spending (including your depreciation on you cars, amortized house repair/major maintenance, costs of all taxes, insurances and asset management/brokerage fees), then we could run with it.

Next you have the issue of getting to Social Security. If the SS makes up a big percentage of your annual spending, then the analysis needs to get full attention. If the SS will be only a small percentage of total spending, you can almost ignore it as 'safety margin" and do your calculations based on a 4% SWR from your financial assets only.

In the former case, though, roughly speaking, I would look at your ER analysis as a bridge to Social Security (15 -17years) then a second period from SS onwards (say age 65 or 67 for argument's sake). Work backwards. What assets do you need at 67, combined with your SS, to live on? Then you can withdraw (probably an an 'unsafe withdrawal rate') for the next 17 years to draw your assets down near that level. We don't have a lot of info on where your assets will end up over 17 years if you draw them down at an unsafe rate, (lots of variation in the possible outcomes!) so most people would not sail this close to the rocks and would just stick with a 4% max withdrawal and whatever extra you end up with, if any, is just gravy for your 67+ years.

That's how I'd think about it, anyway...

To put numbers to it: If your fully loaded expenses were 50k a year, then you'd be in that middle ground. Do you withdraw 5% or 50k for the next 15-17 years from your 1M of assets, hoping that you don't fall down? If you are going to get an inflation adjusted 15k of SS, then you'd need to make a 35k withdrawal from the remaining principal for possibly very many years. What would that require in assets at a safe rate? (35 x 25 - reciprocal of 4% = 875k in today's dollars). The bet then becomes that you can go 17 years and not have your 1m fall to 875k in inflation-adjusted dollars, taking out 50k a year (adjusting it for inflation, too).

And that assumes you have a static lifestyle/standard of living. Most people say yes to that when they are making their models, but don't really expect to live that way. It's pretty much ingrained in us that things get a little better every year. Cutting fat can only get you so far.

Selling the house and downgrading that is probably the one ace in the hole for a couple like this. The other, of course, is to have lousy genes and die inside of 15 eyars or so following SS. I think that is a lousy bet -- with the advances in medical care and health consciousness, most of us in ER now, under age 60, should plan to live to at least a hundred or risk going on the Purina diet This is not just scaremongering; I have seen plenty of elderly become 'financially embarrassed' as they start outliving their assets and it isn't pretty.

ESRBob
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Re: "Benchmark" Poll Question
Old 08-14-2004, 11:07 AM   #18
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Re: "Benchmark" Poll Question

Quote:

I would have retired after my first week of working full time in my career at the age of 22 if I had the money to do so. *It took me only a full week to realize that working sucks! I'm nearing 40 and will be RE within 2 or 3 years.

Brad
Absolute Ditto.

It was the first day of work that I walked down to my office 20 years ago and realized on that day, this is not for me. How could anyone in their right mind go from sunrise to sunset to satisfy a living wage?

I always thought the craziness of a monkey that would, in the wonderful world that they were born into, wake up in the morning and give up the entire day of swinging from the trees, hanging out, exploring, and socializing and just ... well being a monkey - just for a living wage.


How did we got to the point were we either work at least 5 days a week, with only the weekend to recoup and a couple weeks of for pseudo-life (vacation) when all we really need is a couple days work a week. So... in the wisdom not given to the crazy monkey, save the other 3 days a weeks works wages and retire at half life ... otherwise known as 40 (plus or minus a couple years).

notTwain
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Re: "Benchmark" Poll Question
Old 08-14-2004, 05:45 PM   #19
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Re: "Benchmark" Poll Question

NotTwain,
That post is so true! The answer to the question, whether hypothetical or otherwise, is to quit when you have enough to retire and live on the rest of your life (I realize that amount is different for everybody), unless you absolutely love the work that you do.

It has always amazed me the number of people that continue to work and save for retirement until they die! Then their children squander away the money in a couple of years.

The beachbum

These dryer sheets are really confusing
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Re: "Benchmark" Poll Question
Old 08-14-2004, 10:01 PM   #20
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Re: "Benchmark" Poll Question

CC, it is not an offensive question. I'm hoping you'll understand my response. I cannot give you a set number of years. I would retire once I had enough quarters to be eligible for Medicare as I don't plan on getting healthcare overseas -- my kids and grandsons all live within 40 minutes, siblings all within an hour. But then I tend to be rather conservative ... I planned to retire as soon as I was eligible for lifetime medical through employer ... held on an additional 2 yrs to recoup the stock market losses. I was 52 at the time (Feb '04)

In your scenario, the person would have to be willing to scale back on the money they spent and would hopefully realize that for many the most enjoyable things in life do not have a dollar sign attached to them.
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