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Re: ER on less than 600K ?
Old 05-23-2006, 03:31 PM   #61
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Re: ER on less than 600K ?

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am pretty frugal ... live quite comfortably ... on about 13k a month
imagine i too could live quite comfortably on 13k a month, but that doesn't seem too frugal. (is there a decimal missing?)
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Re: ER on less than 600K ?
Old 05-23-2006, 03:48 PM   #62
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Re: ER on less than 600K ?

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Originally Posted by d
imagine i too could live quite comfortably on 13k a month, but that doesn't seem too frugal. (is there a decimal missing?)
Hmmm.. $156k per year would be a nice income to live on. Not filthy rich but enough to do most of what anybody could want until you get too old to do it anymore.

I'll take it!
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Re: ER on less than 600K ?
Old 05-23-2006, 04:16 PM   #63
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Re: ER on less than 600K ?

I just ran FIRECalc using the Bernicke "Reality Retirement Plan" and a $600k portfolio for a 55yo running 35yrs and the 95% successful W/D is $34,110/yr.* Interesting!
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Re: ER on less than 600K ?
Old 05-23-2006, 04:23 PM   #64
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Re: ER on less than 600K ?

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W/D is $34,110/yr
but do note that in 20yrs the withdrawal is then only about 20k
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Re: ER on less than 600K ?
Old 05-23-2006, 04:35 PM   #65
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Re: ER on less than 600K ?

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Originally Posted by d
but do note that in 20yrs the withdrawal is then only about 20k
I guess it comes down to whether you believe the study that backs the Bernicke "Reality Retirement Plan".* (Do remember that the future dollar amounts are adjusted for inflation so that you are comparing current year dollars to current year dollars.)* If you do then the 20k (in today's dollars) in 20yrs will be enough if the 34k (in today's dollars) is enough at 55yo.
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Re: ER on less than 600K ?
Old 05-23-2006, 04:48 PM   #66
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Re: ER on less than 600K ?

I finally get brave enough to post, and I blow it on my first post :! As you probably guess it was suppose to be 1300, not 13k.
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Re: ER on less than 600K ?
Old 05-23-2006, 05:28 PM   #67
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Re: ER on less than 600K ?

Hey Andy, we were all just groovin" on that $13,000 a month, wondering what to buy next.

Ha
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Re: ER on less than 600K ?
Old 05-23-2006, 05:29 PM   #68
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Re: ER on less than 600K ?

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Originally Posted by Andy
I finally get brave enough to post, and I blow it on my first post :!* As you probably guess it was suppose to be 1300, not 13k.*
No problem... the sharks here hardly noticed. *

Welcome to the board. *Feel free to do a formal intro. in the Hi I AM board. *

Looking forward to hearing more from you. *Good luck in your journey to FIRE.
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Re: ER on less than 600K ?
Old 05-23-2006, 06:31 PM   #69
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Re: ER on less than 600K ?

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If you do then the 20k (in today's dollars) in 20yrs will be enough if the 34k (in today's dollars) is enough at 55yo.
with only two letters, IF is a mighty big word ... indeed, if Bernicke is correct (and he might be, or he might not be), then a 40% cut in expenditures might indeed be sufficient.
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Re: ER on less than 600K ?
Old 05-23-2006, 07:29 PM   #70
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Re: ER on less than 600K ?

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Originally Posted by HaHa
It would for me. Where do I find these 4-plexes @$200K each, in a neighborhood where I won't get my throat cut?

I would even be happy collecting my own rents.

Ha
Well here is a real world example of this from some properties we just looked at in suburban Atlanta.

2 condo style 4plexes @ 300 k each

Rents 700 per unit

Gross operating income $64,000
total operating expenses $20,000

Net operating income $44,000

This includes among other expenses

Repairs 3000
Management Fee 6945.1
Landscaping 1830
5% vacancy.

So if you managed the property and did the lawns and some maintenance yourself you coulld increase your income. Of course if you lived in one unit you would lose $8400 in income but then you could have your pick of the units. Also much of your income would be protected from taxes because of the depreciation.

So can you live on $44k a year in Marietta?

I would think you could live quite well and as costs go up rents go up. The units are 2 bed 2 bath 1350 sqft with a screened porch surrounded by woods in a reasonably nice quiet residential neighborhood.

It is not Wysteria Lane but those people don't seem all that happy anyway.

So based on that I think if you were okay with living in a condo and living a simple life you would be fine.
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Re: ER on less than 600K ?
Old 05-26-2006, 05:55 PM   #71
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Re: ER on less than 600K ?

What is Bernicke's "Reality Retirement Plan"?
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Re: ER on less than 600K ?
Old 05-26-2006, 06:01 PM   #72
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Re: ER on less than 600K ?

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Originally Posted by ferco
What is Bernicke's "Reality Retirement Plan"?
From the description in FIRECalc:

Ty Bernicke's "Reality Retirement Planning: A New Paradigm for an Old Science" describes extensive research showing that most people see significant reductions in spending with age (not related to reduced assets or income). If selected, this option will reduce your current dollar withdrawals from your nest egg (based on your initial Annual Spending setting, but not other adjustments) by 2-3% per year starting at age 56, and then stabilizing at age 76 to keep up with inflation. You should read his article for details if you plan to use this option.

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Re: ER on less than 600K ?
Old 05-27-2006, 12:15 PM   #73
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Re: ER on less than 600K ?

Good find on those 4plexes bearkeley. Here in the Bay Area $300k gets you a very small studio condo that rents for maybe $900/mo. If $300k can get you $2800 in rents you're pretty golden.
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Re: ER on less than 600K ?
Old 05-27-2006, 01:07 PM   #74
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Re: ER on less than 600K ?

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Originally Posted by Maddy the Turbo Beagle
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).
Hi there. I don't really plan on improvements, after I get my house sided and windows replaced, replace the back deck, and fix the front steps, things I'll be doing the next 12 months..... I will take care of regular maintenance, replace applicances, roof etc as needed. I'm funding the next 12 months with a pot I built up for that work. Ongoing maintenance is part of my regular budgeting. I also have a separate travel pot but will always add to it. Every day expenses just don't amount to much, and I have never had to try hard at that. Just three bills to pay next month and I already scheduled automatic payment.....
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Re: ER on less than 600K ?
Old 05-29-2006, 09:40 PM   #75
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Re: ER on less than 600K ?

Hi Everyone--

I think the $600,000 is pretty-open-ended and leaves way too much unanswered.

I will be retiring with $500,000. But...I am 59. I have a small DB (with a 1% cola). I'll draw a fair sized Social Security check at 62. My home has been paid for for several years. My kids are adults--college and weddings paid for. I owe nothing on two relatively new cars (03 and 05 ). I pay credit card in full every month. My home is nice, while not grand. It has 2,000 sq ft and a no frills pool. In fact, everything about me is no frills. I have been replacing things around the house before I retire.

In a past life I spent lavishly and was in debt up to my eyeballs. My job demanded a certain lifestyle and I was always more than happy to oblige. I'm pleased to say that today that is not the case. My epiphany came during a financial planning seminar by an old guy in a parrot green blazer and white pants and white loafers. The program was called "How to be a Greedy Geezer". Lots of misinformation to be sure, but it put me in the right frame to get out early.

Just my two cents on what it takes.


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Re: ER on less than 600K ?
Old 05-29-2006, 10:29 PM   #76
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Re: ER on less than 600K ?

So Professor if you don't mind providing some financial details to help us understand the role your 500K portfolio will play in your retrement; what are your planned expenses for retirement, how much of that will be covered by the pension, how much will you be getting from SS at 62?* In your planning what life expectancy do you use?* All important considerations when planning a retirement.
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Re: ER on less than 600K ?
Old 05-30-2006, 01:15 AM   #77
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Re: ER on less than 600K ?

Absolutely.

I have run my numbers with a 4% SWR and a life expectancy of 85. *I also have cash set aside for 3 years and will not touch the accounts which right now are doing extremely well.
My DB pension and SS at 62 will give me more than enough income without touching my portfolio--at least in the forseeable future. *Expenses? *1500-2000 per month on average. *And my insurance is such that I will pay a small percentage which was one of the perks of the job. *And that was the deal maker for me!!!!

I won't live a glamorous existence, but I won't be dumpster-diving either. *And the ability to call my own shots: *priceless.

Professor
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Re: ER on less than 600K ?
Old 05-30-2006, 10:51 AM   #78
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Re: ER on less than 600K ?

Looks like you're all set, congrats!* It is great what a DBP will do for a person's retirement planning.* They are another valuable asset in your portfolio.* In fact, in your case every dollar your DBP currently produces monthly is worth $213.39 in assets and every dollar your SS (taken when you are 62) produces monthly will be worth $179.84.* And boy are you right about the health insurance, what a plus.

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