Blogger Joe Udo says 25x expenses not enough for early-retirees

[thefinancebuff]

When my husband reached age 62 and chose to not work anymore... and even let his architectural license lapse - did he not retire? (Because I was still working?)

The test is if the two of you separate right then and there without one supporting another, whether the one not working can stay not working and still live more or less the same lifestyle. Most stay-at-home parents can't pass this test. Therefore they are not retired. Your husband can. Therefore he's retired.

Word has meanings. It's not all semantics or what anybody thinks or makes up.

 

[rodi]

The test is if the two of you separate right then and there without one supporting another, whether the one not working can stay not working and still live more or less the same lifestyle. Most stay-at-home parents can't pass this test. Therefore they are not retired. Your husband can. Therefore he's retired.

Word has meanings. It's not all semantics or what anybody thinks or makes up.

Like many - if we divorced we would NOT be able to live the same lifestyle. Assets would be divided and costs would be doubled.

That said - even though I'm younger, I'd be in much better shape than him since I saved more aggressively prior to our (rather late) marriage. I have a tiny pension coming online this year that is about 1/2 of his SS... so with my premarital and inherited (never co-mingled) assets - I'm in better shape. But we'd both have a lifestyle decline... and we both could stay retired if we appropriately downsized our lifestyle.

No plans to divorce any time soon. He's the funniest, wittiest guy I've ever met.... and for some reason he likes me too.

 

[thefinancebuff]

Like many - if we divorced we would NOT be able to live the same lifestyle. Assets would be divided and costs would be doubled.

I wasn't talking about economy of scale. If you want a housemate you can always get one. With adequate savings someone can not rely on the working spouse's income. Others can't. That makes the difference between retired and having a working spouse and stay-at-home parent having a working spouse.

 

[ExFlyBoy5]

No plans to divorce any time soon. He's the funniest, wittiest guy I've ever met.... and for some reason he likes me too.

I didn't know my DW posted on here... Hi Honey!


Sent via mobile device. Please excuse any grammatical errors.

 

[rodi]

I wasn't talking about economy of scale. If you want a housemate you can always get one. With adequate savings someone can not rely on the working spouse's income. Others can't. That makes the difference between retired and having a working spouse and stay-at-home parent having a working spouse.

I see your point, but I think you're missing mine. Divorce can devastate one's finances and financial plans... especially if it's close to retirement age (or post retirement) so there isn't the time/means to recover.

A housemate addresses the costs - but doesn't address the division of assets.

We both have income streams that contribute to our retirement. I'm going to call us both retired.

 

[nun]

I don't understand that. Even with NO return at all 4%SWR will last 25 years. Add a yield from a bond fund and 30 years should be easy.

You need to consider losing years and inflation. The initial 4% SWR (ie a retirement fund amount that is 25x income) will give you a 95% chance of generating inflation linked income for 30 years using a 50/50 portfolio and historical bond and equity returns. If the bond returns are lower than historical averages then the 4% will be too high a withdrawal.

 

[zesty]

My ER goal is about 50x basic expenses, or 33x desired expenses. I'll pare down spending or do some side jobs if needed.

 

[bclover]

According to 2015 Annual Net Worth Update - Retire by 40
his net worth was 2M at YE2015. He reports monthly expenses at the start of each month and they fluctuate quite a bit but seem to average about 5K, so their effective WR would be around 3% without his wife's earned income, assuming his reported online income of ~1K/mon covers their taxes once she stops working.

FWIW if I were earning income from writing regular blog posts, I wouldn't call myself retired.

Bingo! and that is one of the big problems with these "professional" bloggers. they are writers in a different forum.

A while back there was thread about some couple that was "supposedly" retired, slept int he back of their car and make a nice little sum blogging.

pretty much I use these "blogs" as interesting reads and nothing more, simply because there are way too many variables.
"lifestyle" creep? maybe because I'm not a techie, I don't have all the toys he mentioned. so yes I can imagine retiring without a new big screen tv. in fact Ive been slowly getting rid of stuff. cut the cable, don't have a smart phone

 

[Aerides]

A small side gig while retired can still be retired. It's if you DEPEND on that gig for income and spend hours approaching a full time job... then it's harder to call yourself retired.

 

[daylatedollarshort]

I don't understand that. Even with NO return at all 4%SWR will last 25 years. Add a yield from a bond fund and 30 years should be easy.

2.5% works with a no real return after inflation (1 / 25 = .04) , like in an all TIPS / I bond ladder portfolio, but not with a zero nominal return or a real return of less than zero.

 

[purplesky]

I see your point, but I think you're missing mine. Divorce can devastate one's finances and financial plans... especially if it's close to retirement age (or post retirement) so there isn't the time/means to recover.

A housemate addresses the costs - but doesn't address the division of assets.

We both have income streams that contribute to our retirement. I'm going to call us both retired.

Mrs. Retireby40 definitely allows mr retire by 40 to call himself retired by bringing her money and health insurance to the table.

A divorce would require mr retire by40 to go back to the corporate world again.

Together their numbers look pretty good.

 

[bclover]

A small side gig while retired can still be retired. It's if you DEPEND on that gig for income and spend hours approaching a full time job... then it's harder to call yourself retired.

Very true but I think that's part of my point. many of these blogs have such wildly (IMO) conditions that I wouldn't qualify them as retired (although I'm not expert). As another poster mentioned, I've read blogs giving "retirement" advice while the blogger admits that the spouses income is needed and they need her job for medical benefits.
Call me a skeptic but that's not retired, that's simply a one salary household. If it were that simply I could claim the years I was a stay at home mom, I was retired.

 

[Toocold]

Before being too judgmental and being overly critical here, you should read this link about the genesis of Joe's blog. He started the blog to answer the question to himself about whether he could retire by 40, not as a "how to" for others, but to document his personal journey. I read his blog and like it, as I figure out my personal path.

About Retire By 40

 

[FUEGO]

Before being too judgmental and being overly critical here, you should read this link about the genesis of Joe's blog. He started the blog to answer the question to himself about whether he could retire by 40, not as a "how to" for others, but to document his personal journey. I read his blog and like it, as I figure out my personal path.

About Retire By 40

Yeah, but it's easier to criticize others and bring them down (in spite of getting the details wrong!) than to actually understand what someone else is talking about or doing. Where's the fun in that?

 

[ExFlyBoy5]

Yeah, but it's easier to criticize others and bring them down (in spite of getting the details wrong!) than to actually understand what someone else is talking about or doing. Where's the fun in that?

Preach it!

I have a few folks who have asked why I don't do a blog. Well, I have a number of reasons; but being judged incessantly by people I don't know is at the top of the list. And hey, I would like to *stay* retired, and obviously if I have a blog, then I am in NO WAY RETIRED!

So...Fuego...shouldn't you be getting BACK TO W*RK!?!?

 

[tmm99]

Although I try to keep my spending below 4% (and I am 57, so I am closer to the full retirement age compared to someone in the 40's...), I never understood this 4% SWR fully. Does that factor in social security benefits or it doesn't? I am thinking it doesn't include social security, since Firecalc (where I include my future social security, although I only include 77% of what they said I would get) tells me I can spend way over 4%. (Actually all planners I have used tell me I can spend more than 4%).

 

[W2R]

Although I try to keep my spending below 4% (and I am 57, so I am closer to the full retirement age compared to someone in the 40's...), I never understood this 4% SWR fully. Does that factor in social security benefits or it doesn't? I am thinking it doesn't include social security, since Firecalc (where I include my future social security, although I only include 77% of what they said I would get) tells me I can spend way over 4%. (Actually all planners I have used tell me I can spend more than 4%).

Your SS is irrelevant; it is only taking your portfolio and withdrawals into consideration. Plus, your portfolio is to be invested with a specified AA and so on; here is more information.

I'd run like the wind from those planners, personally. If you run out of money when you are old, where will they be? Probably wealthy and retired in a gated community somewhere out of reach. Unfortunately nobody cares as much about our financial situation as we do.

 

[W2R]

I have a few folks who have asked why I don't do a blog. Well, I have a number of reasons; but being judged incessantly by people I don't know is at the top of the list. And hey, I would like to *stay* retired, and obviously if I have a blog, then I am in NO WAY RETIRED!

Even posting on a forum we are judged incessantly by people who don't know us, and yes it does get tiresome at times. Still, I love the exchange of ideas here because I regard the ER Forum as one of the most intelligent groups of people I have encountered online in recent years. I know, "go figure".

As for not being retired due to having a blog, I hope you are joking! What if you have a blog with no ads on it that makes zero money for you? It's just writing in the English language (usually), that's all. I would write a blog except that (1) nobody would read it, and (2) it might cost money for the server space. I do love to write, though. Guess that is no big secret.

 

[ExFlyBoy5]

Even posting on a forum we are judged incessantly by people who don't know us, and yes it does get tiresome at times. Still, I love the exchange of ideas here because I regard the ER Forum as one of the most intelligent groups of people I have encountered online in recent years. I know, "go figure".

As for not being retired due to having a blog, I hope you are joking! What if you have a blog with no ads on it that makes zero money for you? It's just writing in the English language (usually), that's all. I would write a blog except that (1) nobody would read it, and (2) it might cost money for the server space. I do love to write, though. Guess that is no big secret.

There is a little judgement here (on ER.org, not your post), but it's pretty minimal in my opinion. I also have learned more from this forum than all the retirement blogs combined...by far. Blogs tend to be one sided and outside of the comments that might disagree or show a falacy, (which I do not read) when there are issues (or they are flat out wrong) you may not know that. Here, if you say something that isn't accurate, well, you are corrected immediately.

As to my comment where blogging=w*rking (not retired); it was indeed meant to be sarcastic in nature. I am a firm believer that retirement is defined on an individual basis. By all normal indicators and definitions, I am indeed retired, but I can guaranteed that out in the real world, most folks would not accept that assertion since I am obviously way too young to be retired (more sarcasm).

 

[tmm99]

Your SS is irrelevant; it is only taking your portfolio and withdrawals into consideration. Plus, your portfolio is to be invested with a specified AA and so on; here is more information.

I'd run like the wind from those planners, personally. If you run out of money when you are old, where will they be? Probably wealthy and retired in a gated community somewhere out of reach. Unfortunately nobody cares as much about our financial situation as we do.

I meant "online planners" like FIDO RIP, i-orp, flexible planner, Firecalc, etc. I didn't mean the live, greedy kind

 

[W2R]

I meant "online planners" like FIDO RIP, i-orp, flexible planner, Firecalc, etc. I didn't mean the live, greedy kind

Oh good! I'm glad.

 

[purplesky]

Before being too judgmental and being overly critical here, you should read this link about the genesis of Joe's blog. He started the blog to answer the question to himself about whether he could retire by 40, not as a "how to" for others, but to document his personal journey. I read his blog and like it, as I figure out my personal path.

About Retire By 40

The retire by 40 blog is definitely informative and entertaining. Joe seems cool.

But looking at his numbers it's very clear that joe is relying on his wife's. Income and health insurance to be a stay at home dad. They are still in the accumulation phase.

Joe is just throwing his life journey out there on a blog and sharing. But joe is a smart guy and producing income from web traffic was part of the plan.
Nothing wrong with that.

 

[Major Tom]

I would write a blog except that (1) nobody would read it, and (2) it might cost money for the server space. I do love to write, though. Guess that is no big secret.

There are number of blogging sites that are free to the user. Wordpress.com is the first one that comes to mind. I've had a blog there since 2009, about my hobby of ham radio. It hasn't cost me a penny.

As to your first point that nobody would read it, you might be surprised. I started my blog with the intention of simply keeping an online journal of my radio activities. There was no expectation - I simply wanted to enjoy the process of writing about, and documenting, my personal journey in the hobby. My first surprise was when I made some comment about maybe taking a break from blogging, and a popular and noted blogger in our world commented on it in his blog, "Seems like Tom is taking a break from blogging. We hope he'll come back soon" or something like that. "Holy cow!" I thought, "People who are actually somebody in this little hobby world of ours are reading my blog!" Slowly, my traffic grew, and I noticed that posts would get re-posted and blogged about on other sites too, some of them quite notable, such as the Make site, and Hackaday. I didn't ask for any of this attention - I just blogged.

So I guess what I'm saying is that as you obviously like to write, there is nothing stopping you from starting a (free) blog. Do it for the fun of it, and you might get some followers. Even if you don't get that many (but you probably will) it's still fun.

PS - there are lots of us here who will read it!

 

[purplesky]

Preach it!

I have a few folks who have asked why I don't do a blog. Well, I have a number of reasons; but being judged incessantly by people I don't know is at the top of the list. And hey, I would like to *stay* retired, and obviously if I have a blog, then I am in NO WAY RETIRED!

So...Fuego...shouldn't you be getting BACK TO W*RK!?!?

Apparently you don't need the income from blog traffic to keep the lights on.

The mr money mustache business model calls for extreme frugality and web traffic income. From a blog.

There are many people trying to make a living copying mr money mustache and there is nothing wrong with that.

click. Click. Click.

 

[FUEGO]

So...Fuego...shouldn't you be getting BACK TO W*RK!?!?

Well, I do plan on squeezing in a couple hours of "work" to write an article to come out Tuesday morning. If I can squeeze it in between hanging out with friends/family, napping, strolling through the park, playing video games, netflixing, reading, researching our summer 2017 Europe trip, and playing with the kids, that is.

A guy gets pretty busy you know. Hard to squeeze in this "work" you talk about. I wish I could retire one day. I hear it's pretty awesome.