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Old 01-28-2013, 06:49 PM   #41
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Let me see if I understand. You like to have

4% WR = Pension + SS
Pension + SS = 130% expenses

Therefore, WR + Pension + SS = 260% expenses!

Golly, your net worth should grow like wild weed! But if you already have excess from Pension+SS, why withdraw anything? Perhaps you are talking about a very generous charity donation?
Your math is correct. My thinking is that pensions and social security can disappear, and I'd want to have enough saved so that the loss would not change our lives. A belt and suspenders approach, as it were.

I expect we may want to travel on a whim or, as you suggest, increase our charitable contributions. But maybe it will just grow and, once we shuffle off this mortal coil, make some of our nephews very happy.
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Old 01-28-2013, 07:02 PM   #42
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Yes twice. Once pre-divorce and once after.
Ouch!
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Old 01-28-2013, 07:18 PM   #43
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We hadn't set a goal. Only retired after a health scare. Bass ackward. We were "there", just had to check the finances to see if it would work out. Thankfully it did. The decision was not made on the basis of financial acumen.

Not recommended, but... even a blind squirrel can find an acorn.
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Old 01-28-2013, 07:45 PM   #44
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Originally Posted by NW-Bound

Some people do not share my joy of "counting money".

See, once I decided to live on 3.5%WR (or maybe even 4%), then if my stash grows, I will be happy to credit that to my investing skills. Then, as I aim to spend 4% of current portfolio, if my stash grows, that should be enough let me climb up the hedonic ladder, meaning spending 4% of a bigger stash (er, do not know how that would reconcile with my Bernicke's model).

Anyway, for someone as scroogy as me, there's pleasure in seeing your stash grow, and you do not have to spend all of it.
I think my Dad would enjoy you as a friend, NW! When the stock market swooned four years ago, or so, he had me worried he would run out of money. What he neglected to tell me was it could have gone to zero and he still would have lived fine off his pension and their 2 SS checks. Even now pushing towards 80 he is very disappointed if he doesn't save at least a $1000 a month. Has over 3/4 million with no debt despite never making $50k once in his life. I have given up trying to convince him to spend any of it on himself.
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Old 01-28-2013, 07:52 PM   #45
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I think my Dad would enjoy you as a friend, NW! When the stock market swooned four years ago, or so, he had me worried he would run out of money. What he neglected to tell me was it could have gone to zero and he still would have lived fine off his pension and their 2 SS checks. Even now pushing towards 80 he is very disappointed if he doesn't save at least a $1000 a month. Has over 3/4 million with no debt despite never making $50k once in his life. I have given up trying to convince him to spend any of it on himself.
Sounds like my dad. Yeah, he goes on regular junkets to New Orleans and Vegas, but he still goes fishing in the boat that is as old as I am and since hanging up his spurs has not drawn on his portfolio for a dime (its all be a cash hoard and SS). The guy has a heart condition and is 73, you cannot take it with you. But he seems happy enough, so it is what it is.
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Old 01-28-2013, 07:57 PM   #46
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... My thinking is that pensions and social security can disappear, and I'd want to have enough saved so that the loss would not change our lives...
I have no pension, but worry a bit about SS too. Yet, it would disappear first for rich people, and as I am not rich, should my 3.5%WR deplete my stash, they will let me have some. So, having a lot of money may make SS disappearance a self-fulfilling prophecy for people with money to spare.

Well, it's not like I do not want so much more money such that SS becomes small change, but I've got to think positive about the situation I am in.

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I think my Dad would enjoy you as a friend, NW!

... Has over 3/4 million with no debt despite never making $50k once in his life. I have given up trying to convince him to spend any of it on himself.
I dunno. I am scroogey all right, but if scaled up from the income and stash amount you quoted above, I should have more than what I have now.

Oh wait, I am not 80 yet. Didn't I tell you that FIRECalc said that in the best case, I might become a decamillionaire, and long before the age of 80 too.

How about that?
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Old 01-28-2013, 08:02 PM   #47
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Sounds like my dad. Yeah, he goes on regular junkets to New Orleans and Vegas, but he still goes fishing in the boat that is as old as I am ...
Nothing wrong with enjoying life's simple pleasure, and fishing in a beautiful peaceful lake on a sunny day may be one. Beside, fillets of freshly caught fish are beyond delicious!!
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Old 01-28-2013, 08:13 PM   #48
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I have no pension, but worry a bit about SS too. Yet, it would disappear first for rich people first, and as I am not rich, should my 3.5%WR deplete my stash, they will let me have some. So, having a lot of money may make SS disappearance a self-fulfilling prophecy for people with money to spare.

Well, it's not like I do not want more money such that SS becomes small change, but I've got to think positive about the situation I am in.

I dunno. I am scroogey all right, but if scaled up from the income and stash amount you quoted above, I should have more than what I have now.

Oh wait, I am not 80 yet. Didn't I tell you that FIRECalc said that in the best case, I might become a decamillionaire, and long before the age of 80 too.

How about that?
Take comfort in knowing I am sure you have more entertaining hobbies than my dad has. His idea of a entertainment is driving to the store and buying cases of food on sale. When I was doing some house work for him a few months ago, I bet I pulled out over a years supply of canned vegetables from the area I was working on. His answer was food prices are going through the roof. He said he bought it now before the prices go up again.
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Old 01-28-2013, 08:31 PM   #49
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Take comfort in knowing I am sure you have more entertaining hobbies than my dad has...
Right now, yes. When I get to 80, not so sure.
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Old 01-28-2013, 10:45 PM   #50
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I think you are doing just fine with your situation, congratulations.
What I was wondering was whether people tend to think of ER as the distribution phase of their lives, and want to enjoy what they have, and not too into leaving a substantial "legacy" to their children? Or is it easy for the FIRED group to get away from the mind set of accumulation, even in retirement, and growing the net worth is not just a happy happenstance, but something they are still actively working on?

10 years ago I ran a plan in Microsoft Money, which we hit recently. I didn't think to distinguish between portfolio value and net worth. Back then, I was assuming retirement at 65 or so with Social Security. I've upped it another 35-40%, which at our savings rate is do-able in 2-3 years (with a bull market).
We don't plan to leave money to the boys; that was the point of sending them to school. Also planning on spending at a higher rate until Social Security kicks in, then choking back the withdrawals to 3.5-4%. The new argument to recalculate withdrawal rate each year based on life expectancy and portfolio is an interesting approach, however, particularly if leaving a big estate isn't a goal.
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Old 01-29-2013, 12:36 AM   #51
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Most people are goal setter. Did you have a net worth goal in mind ? Did you achieve that before you decided to take ER? Is retirement a stage for drawing down and you want to spend most of your time enjoying life, and be happy to have a stable nest egg and just let it rides , or you still working on growing your net worth as you are going forth? And if you are the grower group, what percentage of net worth increase do you hope for in 10 to 12 years?
Yes, I have a net worth goal in mind. Paid off house, Investments * .035 = Expenses.

Not there yet.....

Upon retirement, I'll be happy if we maintain our nest egg in line with inflation.

I don't specific growth goals, because I don't see the point. I figure all I can do is maximize contributions and follow a good strategy, the market will do what it will do.

Interesting thread!

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Old 01-29-2013, 12:41 AM   #52
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Until last year I was following the Financial Advisor's advice and shooting for a specific goal. Then we met the next year and he increased it. After that I decided to set my own goal. It's not a number, but in a spreadsheet calculating FI. By the way my investments are doing better than the ones he is managing :-)
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Old 01-29-2013, 01:04 AM   #53
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Did you have a net worth goal in mind?
Yes.

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Did you achieve that before you decided to take ER?
Yes. But DW wasn't ready for us to ER when we reached the goal, so we have kept w*rking. Late last year we reached 2x the goal, and it looks like we will be around 2.5x the goal when we ER in 2015 or 2016.

I don't particularly care whether our networth grows or shrinks in retirement. I just want it to be >0 when we both have reached the end of the line. Our parents/grandparents died at 71-97 years old, so it's a pretty wide retirement window we're potentially looking at!
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Old 01-29-2013, 04:44 AM   #54
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I had a net worth goal, then we reached it, and then I raised it, and then the market tanked, and now we're close again. I'm pulling the plug in 58 days, DW who knows.
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Old 01-29-2013, 06:48 AM   #55
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It seems to me that many people here worked or plan to work far longer than they have to. They plan to live off their portfolio instead of spend down their portfolio. Their children will be very well taken care of.
This was pretty much us. Being secure & not needing to worry, even wonder, about income & spending was our mindset. Job was interesting & a good corporate culture, so wasn't fighting to get out. But at a point the balance between needing to do something for someone else vs. doing what we wanted tilted in favor of the latter. Net, taking 3% out + SS still lets us do was we want & NW grow on average. Life is good.
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Old 01-29-2013, 07:49 AM   #56
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I had a net worth goal, then we reached it, and then I raised it, and then the market tanked, and now we're close again. I'm pulling the plug in 58 days, DW who knows.
We hit a rather major milestone last month. We're currently about 3% over that milestone, at least with respect to the assets we include. But we are sufficiently due for a market correction that I'm not expecting to stay above it all the time -- at least not for a while...
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Old 01-29-2013, 10:10 AM   #57
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Sounds like my dad. Yeah, he goes on regular junkets to New Orleans and Vegas, but he still goes fishing in the boat that is as old as I am and since hanging up his spurs has not drawn on his portfolio for a dime (its all be a cash hoard and SS). The guy has a heart condition and is 73, you cannot take it with you. But he seems happy enough, so it is what it is.
That is the most important thing IMO...

My 93YO mom has a LOT of money when compared to her spending... (not a lot by some standards here, but by her standards)... and we can not get her to spend it... but she is happy..

One of the things she does spend it on now is a yearly cruise with 'the girls'... a total of 6 women on a week cruise... this is the third or forth year where she pays for the cruise, but the girls have to pay for everything else.... they love it, and so does my mom.... that is where DW is right now...
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Old 01-29-2013, 10:58 AM   #58
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Yes I had a Net Worth Goal. Very conservative and no dependency on Social Security.

No I did not reach it due to housing and stock market crash.

My portfolio has increased $350K since retiring in August 2009. No problems here!
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Old 01-29-2013, 11:26 AM   #59
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Yes I had a Net Worth Goal. Very conservative and no dependency on Social Security.

No I did not reach it due to housing and stock market crash.

My portfolio has increased $350K since retiring in August 2009. No problems here!
Well, at least you had the benefit of the last 3+ years of stock market gains since the low in 2009.
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Old 01-29-2013, 11:31 AM   #60
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Yes, I have a NW goal (excluding home equity) before ER. I can ER now and have 4 SWR but I want to work until I can have a 3% SWR before ER.

Yes, I would like to see my NW increasing a little bit in ER but that won't be a major goal. It would be a bit scary to see my portfolio vanishing as I age but if FIRECALC gives me a 100% success rate then I think I should just relax and enjoy ER when I finally get to do so. Like other Forum members, I have worked long and hard and saved judiciously and LBYM all these years so I plan to enjoy ER and not making growing my portfolio a priority.

I live frugally anyway so at 3% SWR I still will not feel deprived. I read a lot. Walk my dogs. Volunteer with homeless animals. And do a lot of yoga. None of these things requires much money. What I will treasure in ER is all that free time. Can't wait for 2014.

Very interesting thread, thanks to OP!
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