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Calling it quits when you're a little bit short
Old 04-12-2013, 11:55 AM   #1
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Calling it quits when you're a little bit short

Hey all, I feel like I've been crunching numbers every weekend because I'm so ready to go. Has anyone cut the cord when they were a bit short according to FIRECalc? I would say I'm about $500/month short, maybe even less, but I honestly can't stand working in my field anymore. 24 years is a long time doing something you hate, and it's taken its emotional toll. I've tried working in different companies, different environments, different capacities, full-time, and part-time, but when the subject matter is the problem, job changes can only help so much. I'm tired of stuffing my brain learning stuff I have no desire to learn (like Excel VBA programming) when there's so much other stuff I DO want to learn.

I don't plan on doing nothing in retirement because I do like to keep busy and tackling challenges. For example, I'd like to focus on my writing and see where that gets me (I've made some money, but not much because I'm so sporadic about it). I'm also researching health insurance options right now because that's my biggest concern.

Your thoughts? Thank you so much for being such a great resource.
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Old 04-12-2013, 12:42 PM   #2
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What is your plan to cover the shortfall? As much as I came to hate w*rk, I hated the idea of running out of money later in life when I'd have very few chances of making more money. I figured working another year or two at a job I didn't like was better than having to take a job I'd be sure to hate at Walmart 15 year later.

In fact I made sure I had some padding on what FireCalc called safe, to protect against underestimating expenses and inflation and overestimating my returns. If you're just now researching health insurance, I'd say you don't really know if you're $500/mo short or more.

Maybe your writing can provide some income. I'd just be realistic about it. If it's something like technical writing where someone pays you to write a manual or article, but if you're trying to write the Great American Novel, I wouldn't count on it.
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Old 04-12-2013, 01:16 PM   #3
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Its hard to say unless we know what $500 short per month means. Is that $500/month short of necessary expenses ? or does it mean your $1k / month travel budget has to go down to $500 / month ?

What success rate does FIRECalc give you ?

FIRECalc and FIDOs RIP tool give me somewhere around 85%-90% success to age 90 but I''m excluding 400k in "one time expenses" from my portfolio calculations plus I have 29k / year budgeted for healthcare plus I have 3k / year for "one time expenses" in my budget. I know my budget is overkill so I'm ok with the "lower" success rate.
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Old 04-12-2013, 01:23 PM   #4
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Its hard to say unless we know what $500 short per month means. Is that $500/month short of necessary expenses ? or does it mean your $1k / month travel budget has to go down to $500 / month ?

What success rate does FIRECalc give you ?

FIRECalc and FIDOs RIP tool give me somewhere around 85%-90% success to age 90 but I''m excluding 400k in "one time expenses" from my portfolio calculations plus I have 29k / year budgeted for healthcare plus I have 3k / year for "one time expenses" in my budget. I know my budget is overkill so I'm ok with the "lower" success rate.
Out of the $500, I'd say $250 is short in "fun money." FIRECalc is giving me anywhere from 93% to 98% success depending on various spending scenarios. I'm excluding my tiny pension (about $270/month) and my one year cash cushion, and I'm assuming that I'll make no money from writing.

I do need to shore up numbers for health insurance and home maintenance. I wouldn't mind taking a light part-time job or (shudders) doing contract work for my current employer, which could bring in around $900 for a week's work. I've talked to HR about this already, and it's probably my best option for now.
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Old 04-12-2013, 01:45 PM   #5
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I retired with Firecalc giving a 100% success rate ...but with a tight budget. Like you, I was so absolutely past needing to retire. And I was definitely past my heyday as a passionate, kind and inspiring educator. Nothing I tried would re ignite the spark.

Within 6 months after retiring, health insurance increased by $200 /mo and property taxes went up. That had to come out of the fun fund....cause I didn't budget much padding.

Another couple years working would have been wise and allowed for more fun. There is no way I could have made it two more. I hope you can find that needed 500/month someway somehow. My experience: you will need more than you think you will.
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Old 04-12-2013, 01:51 PM   #6
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I retired at 59.5 with firecalcs showing 75% success, ie breakeven at 30 years.

For a professional cheapskate, that's me, that was good enough. 5 years in now, still good.
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Old 04-12-2013, 01:52 PM   #7
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I retired with Firecalc giving a 100% success rate ...but with a tight budget. Like you, I was so absolutely past needing to retire. And I was definitely past my heyday as a passionate, kind and inspiring educator. Nothing I tried would re ignite the spark.

Within 6 months after retiring, health insurance increased by $200 /mo and property taxes went up. That had to come out of the fun fund....cause I didn't budget much padding.

Another couple years working would have been wise and allowed for more fun. There is no way I could have made it two more. I hope you can find that needed 500/month someway somehow. My experience: you will need more than you think you will.
Thanks for the cautionary tale. It looks like I will need to do some more brainstorming on the money side. I never had the spark in my profession, which is why I feel I have to quit now. Swinging between indifference and hate is no way to spend most of my waking hours. The sad(?) part is that I'm very good at what I do, so I'm rewarded with even more work I don't like. Yay.
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Old 04-12-2013, 02:01 PM   #8
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To be honest I would not make the jump if the margin of error is $500. I would wait longer to save more.
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Your thoughts? Thank you so much for being such a great resource.
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Old 04-12-2013, 02:03 PM   #9
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I know there are lots of pitfalls, but there are also plenty of successful blogs online that could easily replace that kind of shortfall from home. The cost to start a blog in any niche you have interest in is so small (a couple of dollars a month), you should give it a try while you are working and see if it holds any potential.
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Old 04-12-2013, 02:09 PM   #10
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I've tried blogging and it's too much work! I admire people who manage to monetize their blogs. I prefer to write fiction. Right now, I have one outlet that reliably buys my stories for $150-$200 each, and they take about a week to write. Not great money, but it's something. I guess I could consider cobbling together something to have several small income streams. Yes, it's still w*rk, but more tolerable than what I have now. Hmmm, lots to think about.

Thanks for giving me more stuff to ponder!
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Old 04-12-2013, 02:17 PM   #11
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Out of the $500, I'd say $250 is short in "fun money." FIRECalc is giving me anywhere from 93% to 98% success depending on various spending scenarios. I'm excluding my tiny pension (about $270/month) and my one year cash cushion, and I'm assuming that I'll make no money from writing.

I do need to shore up numbers for health insurance and home maintenance. I wouldn't mind taking a light part-time job or (shudders) doing contract work for my current employer, which could bring in around $900 for a week's work. I've talked to HR about this already, and it's probably my best option for now.
I track my actual spending by expense type and have been for several years. My retirement budget is based upon my current spend plus and minus known changes (ie: less mortgage which is now paid off, plus healthcare from the open market vs employer subsidized). I've also added $2k / year for travel and a little more "spending cash" (maybe $1k more each). Those will be easy for me to pull back on if I need to. For Social Security I use 67% of what the estimate from SSA.

If you're not tracking your actual expenses I would start doing that immediately. Its amazing how much money you waste "one dollar at a time" if you're not watching carefully.
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Old 04-12-2013, 02:26 PM   #12
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I've been tracking my expenses more carefully since January, and it's been eye-opening for sure. I've added a bit of incentive by using a proposed monthly FIRE draw as the starting balance and making it a goal to stay under it each month. So far, I have. It's like a game.
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Old 04-12-2013, 02:38 PM   #13
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I think it depends. There are a couple of issues I think as I've wrestled with this myself. The other day I ran Firecalc and had an 84.7% success rate. This was based upon spending that had quite a bit of discretionary amounts in it. I showed it to DH (he is retired, I am semi-retired working part-time). As far as he is concerned that was fine. He doesn't feel you can meaningfully distinguish much between 85% and 95%, for example. There are two many variables.

I wanted 95% so I tweaked some things. I dropped our final projected spending by $1,000 a year (we have high expenses for about 3 years due to kid's in college). That raised it some. Then I went through the expense and thought about what I was willing to cut, particularly over the next 3 years when the expenses are high. I found places to cut.

Then I went and cut the expenses that I can in real life (some can't be cut while I'm still working). For example we were spending about $3k a year to have someone clean our house twice a week. DH and I talked about it and we are looking for ways to add activity to our lives so we decided to drop the cleaning. We decided to adjust our cable TV choices. We decided to stop buying bottled waters and soft drinks for the house and instead bought a water dispenser with a filter. We made a few other changes and ultimately cut expenses by about $6k a year.

Then I ran Firecalc again based upon the new numbers and now we were at 95%. Of course, that isn't 100%. But DH and I both agree that before our portfolio failed we could make a mid-course correction. I looked at the year by year balances on Firecalc focusing on the ones that failed. It was always clear years before failure that things were going on the wrong track and in real life people could adjust. DH and I talked about what we would do in the event of something really negative occurring. And we know where we could make adjustments.
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Old 04-12-2013, 02:59 PM   #14
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I retired at 59.5 with firecalcs showing 75% success, ie breakeven at 30 years.

For a professional cheapskate, that's me, that was good enough. 5 years in now, still good.
I'm reminded of the story of the guy who jumps out of a 30 story building, and someone sticks their head out of a 25th story window and asks him how it's going, and he yells back "So far, so good!"

Not quite the same I know, since Firecalc was saying that 3/4 of the time the market will do well enough for you to succeed, but still, 5 years in is pretty early to declare victory.
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Old 04-12-2013, 03:24 PM   #15
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I've been tracking my expenses more carefully since January, and it's been eye-opening for sure. I've added a bit of incentive by using a proposed monthly FIRE draw as the starting balance and making it a goal to stay under it each month. So far, I have. It's like a game.
It will feel like fun and / or a game for a few months ... think about doing that for the rest of your life.
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Old 04-12-2013, 03:34 PM   #16
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I retired at 59.5 with firecalcs showing 75% success, ie breakeven at 30 years.

For a professional cheapskate, that's me, that was good enough. 5 years in now, still good.
Bull markets are our friends ! If you re-ran firecalc today what success rate do you get ?
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Old 04-12-2013, 03:48 PM   #17
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Too soon to ER, but can't you find something you'd like to do for a couple years? Tutoring?
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Old 04-12-2013, 03:51 PM   #18
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Too soon to ER, but can't you find something you'd like to do for a couple years? Tutoring?
That's something I'm considering too. Like I said, I enjoy finding ways to make money just for the challenge. So I guess I don't plan to truly retire in the strict definition of the word, at least not right now.
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Old 04-12-2013, 03:52 PM   #19
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I think I could find a part time job to cover $500/mo that wouldn't be too stressful. Should have plenty of time to do writing too. And you may find you don't need it after a couple of years.
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Old 04-12-2013, 04:12 PM   #20
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Bull markets are our friends ! If you re-ran firecalc today what success rate do you get ?

Heh, heh, good till age 105 at 90% success rate.
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