Brother incredulous to early retirement

[JustCurious]

It is difficult for the average person to retire early, but it is not too difficult for the average person to retire at 65. The average life span is about 80, so someone who retires at 65 only has to finance 15 years of retirement, on average. The average family spends about 50k a year, and the average person collects about 12k a year in social security benefits. So, the average couple might collect 24k in social security benefits, and would only need to replace about 26k in spending for 15 years. That's not too hard. If a couple had $300k in savings earning 5% a year, they could withdraw 26k a year for 15 years.

 

[albundyz]

I have no siblings to discuss retirement with, but I have observed many discussions with friends.

For me, it was easy to say "I will retire early at 56, and accept a more frugal retirement lifestyle"

I call it my Buy-A-New-Toyota-Corolla-Every-5-Years lifestyle.

Many people want to continue their Porsche lifestyle. They may scoff at my decision, but I'm happy......and I hope that they're happy working on Monday morning.

Don't be bothered by your brother's reaction, he's just got a different perspective

 

[skyvue]

You may just need to acknowledge that his concern is legit, but that Firecalc and Financial Engines factor that into their projections in calculating portfolio survivability. Actually, 25x (4% SWR) should do, and 30x would be conservative.

So if I expect to have expenses of $50,000 per year, I should shoot to have (50,000 x 30) $1.5 million in assets? Does it matter if that is gross or net? For instance, the bulk of my assets would be in 401k accounts that I would pay tax on when I withdraw the money.

 

[REWahoo]

So if I expect to have expenses of $50,000 per year, I should shoot to have (50,000 x 30) $1.5 million in assets? Does it matter if that is gross or net? For instance, the bulk of my assets would be in 401k accounts that I would pay tax on when I withdraw the money.

Gross. Taxes are expenses. You should include in that $50k figure whatever taxes you expect to pay.

 

[skyvue]

Gross. Taxes are expenses. You should include in that $50k figure whatever taxes you expect to pay.

Ok thanks. I have seen many of you list "taxes" in your expense itemization but I guess just never looked at it that way. I sort of track what I "take home" versus what I "spend" after taxes. Thought being I can't control the taxes so there is no decision to spend.

 

[REWahoo]

Thought being I can't control the taxes so there is no decision to spend.

I think it is just the opposite - you can't control the taxes so there is no decision not to spend (pay them). If you don't build tax expenses into your plan you will be forced to cut back somewhere else to find the money.

 

[haha]

This tax issue also shows a vulnerability in planning. W know what taxes are now, how could be know what they will be?

Personally I would be very careful of what assumptions you make. What most of want to plan is a lifestyle, not a dollar amount. So if elements of that lifestyle get much more expensive, and our income does not change in real terms, our lifestyle gets dialed down, even if we can more or less maintain CPI parity- which itself is a bigger trick than seems to be commonly assumed.

Ha

 

[Rustward]

This has been a very good thread. As the youngest of four siblings, who are 5, 9, and 13 years older, from their perspective I could not possibly be worth anything or know more than they do, but am probably in the best shape of the four, except for possibly the oldest who will have a pension from academia (don't know COLA or not) and her DH who retired as probably a GS-12 or 13.

But I had that Scarlet O'hara experience 30+ years ago that showed me a place to which I knew I never wanted to return . The others did not have that experience, and I doubt that they realize the extent to which it affected me.

 

[crispus]

Over Christmas my DW and I were having dinner over my sister-in-laws home. The conversation came up about when I would be looking for another job. I currently work about 5 hours a week servicing my long time customers. I told my sister-in-law that I did not intend on working again and that I considered myself semi-retired. She was exasperated. I reminded her that her husband retired at 55, and she said but he had a pension. I said that it was not her business but I have saved all my life and was prepared for this. I think there is a jealousy factor within the family dynamic. We also talked about our plans to move out of state when DW retires. Warmer climate, lower taxes, and lower cost of living. That also was a shocker.

My sister claims that I am abandoning the family and don't love them, and that she will be responsible for everyone. She makes a great living around 300k. She helps pay for her son's condo, her deadbeat husband's race horses, her daughter at 29 still lives at home (soon to be joined by her fiancé from Israel), and finally she gives my parents $200 per month. She does spread herself thin, but that is her life not mine.

 

[Nords]

My sister claims that I am abandoning the family and don't love them, and that she will be responsible for everyone.

That sounds like "If you really loved me then you'd stay here near me and be as miserable as I've made myself"...

 

[NW-Bound]

My sister claims that I am abandoning the family and don't love them, and that she will be responsible for everyone. She makes a great living around 300k.

At 300K, surely she could afford to bribe you so you will stay. Did she make you an offer?

 

[crispus]

I have not gotten one of my brother-in-laws horses head in my bed yet, if that's what you mean.

 

[BLS53]

I think this is par for the course. My brother nearest to me in age, and I, have been very money conscious our entire lives. We also both planned to exit work early if we could. On the other hand, a younger brother and my sister have been feckless spendthrifts and have essentially no savings. What security there was came from pension expectations- in brother's case his own teacher's pension, in sister's case her husband's pension. I am closer to BIL than I am to her, and it is clear that he would gone in a moment but that she would then become an even more expensive liability than she already is.

Another former city worker I know is in the same position. He feels that half of his pension plus his SS would not be enough for him. Also, without a lot of luck in the courts he would lose his paid off house.

Some people are locked to jobs by a big carrot-golden handcuffs. Others are locked to a spouse by a big stick-what they may perceive as economic ruin that a split-up would bring.

I don't follow how he would loose his paid off house.

 

[chinaco]

Over Christmas my DW and I were having dinner over my sister-in-laws home. The conversation came up about when I would be looking for another job. I currently work about 5 hours a week servicing my long time customers. I told my sister-in-law that I did not intend on working again and that I considered myself semi-retired. She was exasperated. I reminded her that her husband retired at 55, and she said but he had a pension. I said that it was not her business but I have saved all my life and was prepared for this. I think there is a jealousy factor within the family dynamic. We also talked about our plans to move out of state when DW retires. Warmer climate, lower taxes, and lower cost of living. That also was a shocker.
...

She probably interprets your ESR as not pulling the load and helping your DW (who is still working).... lazy BIL! Who knows... she may be using you as a whipping boy for her frustration with her husband (who is ERd).

...
My sister claims that I am abandoning the family and don't love them, and that she will be responsible for everyone. She makes a great living around 300k. She helps pay for her son's condo, her deadbeat husband's race horses, her daughter at 29 still lives at home (soon to be joined by her fiancé from Israel), and finally she gives my parents $200 per month. She does spread herself thin, but that is her life not mine.

Sounds like your sister has become an enabler.

I would not let a siblings feelings affect my decision.

However, there may come a day when your parents need help because of health issues. That type of situation is the one where siblings' help is most needed. If you are so inclined... you might reassure your sister that (if that day comes and you are able)... you will help.

 

[Mill]

I have not gotten one of my brother-in-laws horses head in my bed yet, if that's what you mean.

Crispus,

Off topic, but Im dying to know what decision you made about your daughters wedding. Please will you resurrect that old thread. Thx.

 

[RetirementColdHardTruth]

My parents were what we call Aussie Battlers. Basically eaking out an existence on the lowest run of the middle class in Australia. Growing up was tough and I could tell from a young age that money was important for having a low stress life. Now they put everything into some farm land and from about 10 years of age I lived there until coming to America in the technical field in 1994.

As soon as I left my parents decided to take early retirement. They used their funds to pay off the mortgage and buy a couple new cars that have so far lasted forever due to the low travel lifestyle they live.

They grow some vegetables to keep the food bills down and live a very simple existence with mo debt. My aunts and uncles always put my parents down for living the simple farming life. They bought big houses on canals, expensive 4 wheel drive cars every few years and boats for the weekend on their very own 70k dock.

The funny thing is all the aunts and uncles are still working and still paying off debt. They can't afford to use the boat because gas is at $6 a gallon and the boat burns about 10 gallons an hour. So it sits there while they are off to work to pay for it.

My last trip down under I had the conversation with them about retirement. They all said they will have to work until they die. Funny how a frugal lifestyle is frowned upon, yet who really has enjoyment in life.

Relatives are funny beasts. I have found that everyone is on their own path and should live the way they want too. I didn't bring up the fact that I would be retiring in a few years myself, as it would have been super uncomfortable to say such a non-accepted thing.

I let it slip once in early 2009 that people had no right being 100% in the market at 60 if they had any chance of retiring. That was a really bad thing to say as they all stated I knew nothing and that they too had lost significant savings in the market. It was at that time I realized it is time to live and let live. I am glad for this site as it allows me to express my frugal lifestyle and savings plans with ridicule.

Thanks for everyones openness. I think I have found my true family right here. Pity you can't pick who your family is.

 

[youbet]

I've never really shared my ER plans with family until visiting my brother and family over Christmas.

Gosh, all that time of doing the right thing and not sharing ER plans with family and you blew it while visiting your brother and family at Christmas. Sigh....... Everyone has to learn the hard way I guess.

What did you possibly think there was to be gained by bringing up finances, life style choices, and so on? Maybe next time try something easy to talk about like religion or politics!

 

[youbet]

My sister claims that I am abandoning the family and don't love them, and that she will be responsible for everyone. She makes a great living around 300k.

Sis needs to make it clear that she isn't going to be responsible for your parents alone, cut off the $200/mo she currently gives them and suggest that if you or any other sibs are concerned, a family meeting should occur to work out how expenses will be split. Just because Sis does what it takes to make big bux is no reason she should shoulder any more of a share of parental responsibilities.

If Sis winds up being "responsible for everyone," it's her own fault for simply failing to make the decision to walk away. And walking away is indeed what she needs to do.

 

[crispus]

Sis needs to make it clear that she isn't going to be responsible for your parents alone, cut off the $200/mo she currently gives them and suggest that if you or any other sibs are concerned, a family meeting should occur to work out how expenses will be split. Just because Sis does what it takes to make big bux is no reason she should shoulder any more of a share of parental responsibilities.

If Sis winds up being "responsible for everyone," it's her own fault for simply failing to make the decision to walk away. And walking away is indeed what she needs to do.

That is her choice. My parents asked both of us to give them money. If it had been an emergency my DW and I would have helped, but they live a big life. We have always been frugal, choosing to retire early rather then work. My parents live large and have a very active social life even though they are in their 80's. My sister was already paying for season tickets to the theatre, and now the extra $200 helps them keep up golf and restaurant activities. Look as you said its her choice. When one of my parents dies, then the reduced SS will make living in their condo unaffordable. We will have to make some hard choices then. One choice could be letting the surviving parent to live with us. My sister and I will have to have a meeting if and when this happens. Hopefully not for another decade. Longevity runs in my family.