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Re: ER on less than 600K ?
Old 05-20-2006, 08:00 PM   #41
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Re: ER on less than 600K ?

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Originally Posted by d
the essense of the bucket approach is that you are in control of the rebalancing ... when it suits your needs. with the target funds, the rebalancing is automatic and might not suit your needs. that said, i'm not sure one is better than the other.
OK I understand that part (buckets of one category funds like bonds, value stocks etc)
ferco was proposing buckets of funds already rebalanced.
I was questioning whether this add more safety (or fun)
or just complicate things
and possibly make it slightly more expensive since those funds have a slightly higher expense ratios than the pure index funds. If you own Target 2035 or STAR, Vanguard is doing the work for you.
IMHO if you want several buckets it might be better to buy the components of those funds instead.
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Re: ER on less than 600K ?
Old 05-20-2006, 08:10 PM   #42
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Re: ER on less than 600K ?

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it might be better to buy the components
i'd place some emphasis on "might".* the added expense of the target and star funds might be worth it; as you note, they do the work for you (and might do it better)
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Re: ER on less than 600K ?
Old 05-20-2006, 09:08 PM   #43
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Re: ER on less than 600K ?

Well, with insurance premiums at more than $12,000 a year, and about $150 a month in drug copays, I wouldn't retire with $600,000. Even if I was perfectly healthy I wouldn't retire young with only $600,000. Too many things can happen in the next 30-40 years.

I know plenty of people who live on $20-$25000 a year. But that is not the same thing as having a portfolio generate the income. Those making $20,000 a year might have employer subsidized insurance. If things go bad, they have little to lose. File bankruptcy and keep working.

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Re: ER on less than 600K ?
Old 05-20-2006, 09:47 PM   #44
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Re: ER on less than 600K ?

Well, right now, I could easily live on under $13k.
Of course, the fact I'm staying with my elderly father and not paying any rent, phone, electric, gas, or cable, kinda helps. But I don't think I could do this for more than a few months or I might have to add another $20k in medical expenses for 2 to 3 psychiatric sessions a week.
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Re: ER on less than 600K ?
Old 05-20-2006, 09:51 PM   #45
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Re: ER on less than 600K ?

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Originally Posted by vagabond
Well, right now, I could easily live on under $13k.
Of course, the fact I'm staying with my elderly father and not paying any rent, phone, electric, gas, or cable, kinda helps. But I don't think I could do this for more than a few months or I might have to add another $20k in medical expenses for 2 to 3 psychiatric sessions a week.
In the summer we hire high school students to scan files and do other assorted clean up duties. We joke about how they are the richest of us all. All their money seems to go to cars, clothes, and dates. Everything else is covered by mommy and daddy.
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Re: ER on less than 600K ?
Old 05-21-2006, 03:34 AM   #46
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Re: ER on less than 600K ?

I do agree that $600K might be lean, but it's within the realm of being able to begin to wind down one's career, maybe go part time, start working those consulting contacts, etc. You've already done the heavy lifting.

Regarding health coverage, I think the younger among us have an advantage. I'm 32 and expect that there's a good chance that at least the uncertainty of health coverage will be "solved" in the next 20 years. We'll be flying to India or Thailand for surgeries, seeing foreign doctors via webcam, etc.

I also predict that we'll see a government mandated, universal risk pool. 20 years is a long time - and health care is a problem that "everyone" wants fixed. Small companies, large corporations, individuals, etc.

I'm also not sure that working another 5 years so you can afford better care is necessarily the "healthier" choice. 5 years to a 55 year old represents perhaps 25% of their remaining mobile, vital life. You might be better off spending 40 hours a week for those 5 years at the gym and yoga center.

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Re: ER on less than 600K ?
Old 05-21-2006, 03:59 AM   #47
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Re: ER on less than 600K ?

It's interesting that so many on this board are paranoid of outliving their money when they're in their 80s or 90s. That's the "upside" of the actuarial table.

The downside is that many of us will die in our 60s or heaven forbid, our late 50s. Read the obits sometime. To me, eating ramen at 90 is less scary than a life unlived.

One can bump life expectancy up somewhat not smoking or stuffing the face. But, as they say, they bury joggers too.

The older I get, the more I realize that memories made young are worth more than memories made when old. You have longer to savor them and they're made when the mind is plyable and willing to cement them in a non-cynical light.

If you've got $600K and you're 55, you have to look at those obituaries and ask yourself, "if that 64 year old was me, was my decision to work until I was 60 worth it"? You've got a better chance of dying at 64 than living to 90.

Morbid stuff, but crucial for those of us who are realistically able to ask ourselves if we want to spend our prime years under the sun or under flourescant lights.

Jon
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Re: ER on less than 600K ?
Old 05-21-2006, 10:28 AM   #48
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Re: ER on less than 600K ?

Quote:
Originally Posted by PortlandDiehard
I'm also not sure that working another 5 years so you can afford better care is necessarily the "healthier" choice. 5 years to a 55 year old represents perhaps 25% of their remaining mobile, vital life. You might be better off spending 40 hours a week for those 5 years at the gym and yoga center.
the flaw in that line of thinking is that spending such time getting in optimal shape likely blows your 25% time frame. so when planning to spend all the money early, the congruous path leads to a pub, not a spa.
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Re: ER on less than 600K ?
Old 05-21-2006, 10:46 AM   #49
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Re: ER on less than 600K ?

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Originally Posted by PortlandDiehard
It's interesting that so many on this board are paranoid of outliving their money when they're in their 80s or 90s.* That's the "upside" of the actuarial table.
Interesting thought....

Last week, my DW /I spent 2+ hours at the Philadelphia branch of Fidelity to go over our retirement plan (we have about 66% with Fidelity, 33% with Vanguard, and 1% with Chase under a 403B).

Anyway, going in, I did the retirement projections against several "tools" (including FireCalc, Quicken, Fidelity Net Benefits, and Financial Engines <offered through Vanguard>)

I knew that Fidelity was very "conservative" in their approach (based upon several other folks at work who, like me, are approaching retirement). That being the case, I "plugged in" a date of 100yrs to both me and DW into our plan (I've been using Fidelity's "planning tool" for the last 2+ years).

When we started our review of the plan, Fidelity said that I was "overly consertative" in our plan, both from an expense and also a longetivey (I'll keep the response to the expense item for another thread).

Anyway, he reduced our 100yr "hope" to a 92/94 year "possible", resulting in a plan that among other things, says that DW/me can retire - today if we wish (at 100% of current income).

Yes - this opens up a lot of questions for DW/me at this time, but my intent is not to start a "discussion" - rather than just answer the original "thought" related to "longevity".

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Re: ER on less than 600K ?
Old 05-21-2006, 11:00 AM   #50
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Re: ER on less than 600K ?

Jon:
Quote:
Regarding health coverage, I think the younger among us have an advantage. I'm 32 and expect that there's a good chance that at least the uncertainty of health coverage will be "solved" in the next 20 years. We'll be flying to India or Thailand for surgeries, seeing foreign doctors via webcam, etc.
I think you have a valid point, Jon. I know of someone who is putting together a website now -- interactive with doctors and patients. He lives in NYC. We have only just started with possible answers on this fascinating pathway. The difference is some are filled with negativity and fear, and others offer creative solutions and hope filled possibilities. I'm happy to hear that you, at 32, are filled with the latter.

Thank God for fresh minds willing to look at 'old' problems.

Jon:
Quote:
I'm also not sure that working another 5 years so you can afford better care is necessarily the "healthier" choice. ..You might be better off spending 40 hours a week for those 5 years at the gym and yoga center.
I agree here as well. Stress is a big factor in tearing down the immune system, forcing us to utilize medical services. Staying in a job we dislike, or 'having' to work, - with little time for our own personal pursuits that support us -- *can eat away at our optimism, flexibility, willingness to take a chance or ability to change our perceptions. This is a high cost indeed.

Jon:
Quote:
It's interesting that so many on this board are paranoid of outliving their money when they're in their 80s or 90s. That's the "upside" of the actuarial table.

The downside is that many of us will die in our 60s or heaven forbid, our late 50s. Read the obits sometime. To me, eating ramen at 90 is less scary than a life unlived.
Once again, we are on the same page.

Everyone must choose what is the working balance for themselves - Didn't Jimmy Buffet say "I'd rather die while I'm living than live while I'm dead?"

Jon:
Quote:
You have longer to savor them and they're made when the mind is plyable and willing to cement them in a non-cynical light...You've got a better chance of dying at 64 than living to 90...Morbid stuff, but crucial for those of us who are realistically able to ask ourselves if we want to spend our prime years under the sun or under flourescant lights.
I don't think this is morbid. I think it shows awareness of things as they really are, and it makes common sense. (At least to me.) I also see that it shows personal courage - again in my opinion, for what that's worth.

Everyone must choose for themselves. That is what life is all about.

Best,
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Re: ER on less than 600K ?
Old 05-21-2006, 11:25 AM   #51
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Re: ER on less than 600K ?

Jon,

I agree with the gist of what you're saying.

It might be easier for me because even though I've had some social perks from being a lawyer, I have never in my life spent over 24k in a year, even with owning my own house and paying cash for cars. (Got one car before the house, and got the other when it was paid off.) I don't even try. Hiking in the Adirondacks, my favorite activity, is free. Tomorrow I'm leaving for my parents' vacation place in the mountains in Vermont. I walk most places I go, because I like to. Some years I skipped health insurance because it didn't seem reasonable, but I found a good deal.

I think it helps too, never having spent any time around engineers or used a spreadsheet, or learned all the ways to be fearful and cautious.

I have "buckets", as some people favor, but one is called "travel" and the other is "maintenance/emergencies". My everyday expenses are a pittance, no matter what you hear about New York.

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Re: ER on less than 600K ?
Old 05-21-2006, 12:13 PM   #52
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Re: ER on less than 600K ?

Quote:
Originally Posted by rs0460a
Anyway, he reduced our 100yr "hope" to a 92/94 year "possible", resulting in a plan that among other things, says that DW/me can retire - today if we wish (at 100% of current income).
Yes - this opens up a lot of questions for DW/me at this time, but my intent is not to start a "discussion" - rather than just answer the original "thought" related to "longevity".
Sometimes, we need not plan for “forever”?
How wonderful it must be to have the self-confidence to knock down your clients' lifespans based on your knowledge of actuarial statistics.

It's like buying a stock because half of the other stocks in the market are going up. Hopefully yours does too!

Clients have to balance the possibility of outliving assets against the stress of continuing work in a toxic/stressful environment. So far the board's compromise position seems to be to escape bad situations with the possibility of part-time work until the portfolio has some slack in it.
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Re: ER on less than 600K ?
Old 05-21-2006, 12:37 PM   #53
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Re: ER on less than 600K ?

most of my ancestors of recent generations lived active lives well into their 80s & 90s. i have one bloodline (mom, her father, his mother) who died in their mid/late 70s from alzheimer's disease. and supposedly one cousin got hit by a bus in her 50s but i'm pretty sure she was a lesbian killing herself back when that so-called lifestyle wasn't in fashion.

so, yeah, i might get hit by a bus in my 50s: can't plan for that. i might die in my 70's and leave some happy niece/nephews behind or i can look foward to active living through my 80s and maybe even 90s if i'm lucky.

sleeping well also goes a long way towards reducing stress.
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Re: ER on less than 600K ?
Old 05-21-2006, 03:41 PM   #54
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Re: ER on less than 600K ?

A neighbor, the most friendly type of person you could ever imagine, retired early. He and his wife regularly headed out in their huge house on wheels. A couple months ago, he knew he was sick, two thousand miles away from home, and went to the ER, thinking it was the flu. Instead, it was lungs full of tumors. (He didn't smoke.) He died a week ago, two months later, at home. I miss him. It's really sad. But I imagine it's good he retired early.
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Re: ER on less than 600K ?
Old 05-21-2006, 04:33 PM   #55
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Re: ER on less than 600K ?

i just read that one of the highest age groups to have alot of deaths is the 50's...odds are if you make it to 60 your going on to well past the age of 79.5 or so thats the supposed average life span...but thats average ....many did earlier and if not live alot longer
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Re: ER on less than 600K ?
Old 05-22-2006, 02:54 PM   #56
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Re: ER on less than 600K ?

Quote:
Originally Posted by PortlandDiehard
It's interesting that so many on this board are paranoid of outliving their money when they're in their 80s or 90s.* That's the "upside" of the actuarial table.

The downside is that many of us will die in our 60s or heaven forbid, our late 50s.* Read the obits sometime.* To me, eating ramen at 90 is less scary than a life unlived.

One can bump life expectancy up somewhat not smoking or stuffing the face.* But, as they say, they bury joggers too.

The older I get, the more I realize that memories made young are worth more than memories made when old.* You have longer to savor them and they're made when the mind is plyable and willing to cement them in a non-cynical light.

If you've got $600K and you're 55, you have to look at those obituaries and ask yourself, "if that 64 year old was me, was my decision to work until I was 60 worth it"?* You've got a better chance of dying at 64 than living to 90.

Morbid stuff, but crucial for those of us who are realistically able to ask ourselves if we want to spend our prime years under the sun or under flourescant lights.

Jon
I agree with your outlook. I went in for a double hernia operation last week. While this isn't life threating, it does make me realize I'm mortal and mortals have life expectancies.

I'm retiring in about a year at 59, not exactly early retirement. I've made the choice to live large the first few years at the risk of eating noodles at 85 if I happen to make it that long. I couldn't agree more with your logic.
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Re: ER on less than 600K ?
Old 05-22-2006, 05:26 PM   #57
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Re: ER on less than 600K ?

This is my first post, but I had to reply to this thread.

I think it is doable, for me at least.* *I am 53, single, house paid for, major medical insurance in effect.* *I quit work 10 monthes ago.* I had intended not to work, but a job came along that I have always wanted to try my hand at, so 2 monthes ago I started working 3 days/week.*

I have tracked my spending for a long time, am pretty frugal in areas that do not matter to me, but spend in areas that do matter.* *I live quite comfortably and consistantly on about 13k a month.* *That is below the 4% rule, but I figure that allows for things like "when the roof needs to be replaced..."* I really can not say I lack anything.* *I am enjoying this job, so will continue as long as it is fun.
If the day comes that it isn't -I'm out of there.

I think only you can answer whether that is enough money.* *How much do you spend?* Is your life fullfilling enough with that amount.* There are lots of things I like to do that spend no, or very little money.

If you don't already spend some time reading the Simple Living boards.



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Re: ER on less than 600K ?
Old 05-22-2006, 05:28 PM   #58
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Re: ER on less than 600K ?

I wonder if you get different answers to this question if you ask it in 1999 or early 2006 vs late 2000-2002..
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Re: ER on less than 600K ?
Old 05-22-2006, 06:44 PM   #59
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Re: ER on less than 600K ?

This might be another thread, but it would be interesting what 20-25k/yr buys you for folks that plan on this kind of retirement. Obviously with a paid off house and health insurance, your expenses will be lower. Also, how do people factor in home repairs and improvements (I guess that I have seen some fixed income folks that simply dont update their house and some let the house fall apart into old age :P).
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Re: ER on less than 600K ?
Old 05-23-2006, 12:55 PM   #60
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Re: ER on less than 600K ?

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Quote:
Clients have to balance the possibility of outliving assets against the stress of continuing work in a toxic/stressful environment. So far the board's compromise position seems to be to escape bad situations with the possibility of part-time work until the portfolio has some slack in it.
Working part time is not a 4 letter word nor is it something to be looked at like a 'failure' ... Most people, after the initial euphoria of ER, find that they want to do something productive or with social interaction.*

We know plenty of people who actively and happily supplement their income with money received from their hobbies or part time employment. One man 'updates' computers for those who are not computer savvy. Easy for him, and it provides a service.* It's a win-win.

Another blows the leaves off lawns, flushes the toilets and watches Snowbird residences for problems after storms. He has a whole 'paper route' of these places, for* the staggering fee of $10 monthly. Gives him a reason to wake up in the morning, his 'clients' feel safe and secure, and it isn't tough labor. Brings him thousands of $$ a year.*

Still, another man loves to build. He puts in utility rooms, bathrooms, closets, or what have you for folks... brings in dependable supplemental income every single year. He's happy, out of his wife's hair and they travel to foreign countries on that money and buy their grandkid's gifts, etc. It's a great life. Great exercise for him too.

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Quote:
I agree with your outlook. I went in for a double hernia operation last week. While this isn't life threating, it does make me realize I'm mortal and mortals have life expectancies.
I agree with this as well. Billy and I are active retirees and yet, with all this running around the world, we see ourselves slowing down. It is shocking.* How is it that we will see all the countries we still want to if we slow down? Even recovering from the flu takes longer - it's a fact of life.

We are both happy we retired when we did...* * we can't imagine just starting out at this age. Our 'requirements' would have to be higher and we couldn't have done all the camping, jumping into the backs of trucks, taking small boats, hiking and white water rafting, seeing hilltribes in the middle of nowhere, etc. that we have already done if we were just starting out... I realize that this is our perspective, however. 8)

Akaisha
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