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Old 08-06-2015, 12:56 PM   #21
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To be comfortable with anything close to a 4% WDR (at 53) I would need an iron clad agreement with DW AND myself that we WOULD cut back in the face of a significant drop in assets (assuming due to a bear market.) Imagine retiring in 1999 or 2000 and living through 2007, etc. While it's possible you would survive, it would be white knuckle to say the least unless significant cut backs were made along the way. Naturally, YMMV.

Muir, strictly out of curiosity, what one thing would you be willing and able to cut back on if need be? Would it be travel, eating out, other "non-essentials" or would it be more of an "across the board" cut back? No need to answer - except to yourself.
In answer to your question. I'm allowing $15K for vacation expenses annually. $4500 for entertainment expenses. A bunch for dining. These 3 areas are major categories we could cut back some as needed. It would not be easy (for us) but I do believe we could get expenses down closer to $110K annually if we had to do so. That is much closer to a 3% SWR. I expect longer term this is exactly what will happen. But for the first few years I'm anticipating higher expenses. Not the most comfortable way to do it, but I think it reflects reality in our case.

It's interesting. I totaled my responses so far. Comes out basically 50/50. Half of people who've replied to this thread think I'm good to go. About half think I'm probably not. Not a resounding signal either way as I might have hoped. Still, I'm grateful for the replies and it has been a helpful thought exercise for me. FWIW, I'm still pretty solidly leaning to pulling the trigger end of March.

As has been said. At some point whenever you go...it's a leap of faith. I generally lean to being a conservative guy. But I'm really ready to take that leap.

Muir
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Old 08-06-2015, 01:06 PM   #22
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This is a very conservative forum. If 50% of the members say you're good to go, I would take that as a very positive sign.
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Old 08-06-2015, 02:15 PM   #23
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You could also try forgoing your inflation raises as well


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Old 08-06-2015, 03:10 PM   #24
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Me too. Think you answered your own question here.
Enjoy!


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Good to go.
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Old 08-06-2015, 09:13 PM   #25
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Hey MuirWannabe,

I'd say hit the trail, the PCT that is!! Your plan looks plausible, even probable, for long term success. Even if you did nothing to trim expenses, I suspect that kind of money would last decades. Of course, someone like you who has saved so well is likely to take defensive measures well before financial Armageddon. So have faith!

Do you have a minimum estate that you would like to leave? Makes a big difference in the odds of success.

Don't forget that you are balancing financial risk against health risk. How long will you and DW will be healthy enough to live your dreams?? The goal of hiking the PCT is no small dream.

I used to backpack about 10 years ago, before I married my DW. I married my DW because she was athletic and very outdoor-oriented. Well, she developed serious back issues and my dreams of backpacking with her in the High Sierra may have gone forever. I greatly miss sleeping beneath the stars in the backcountry. You just don't know what 10 years will bring, let alone a couple of decades.

You're close enough to go for it, then figure out the rest along the way. I look forward to hearing of your PCT exploits.

FreeBear (missing Bear Paw Meadows, backpacking the High Sierra)
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Old 08-06-2015, 11:21 PM   #26
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Personally, I like a big cushion / margin for error. It is was me, I would cut expenses and retire tomorrow. Our expenses were higher than yours when we were both working full time. We've been able to lower them quite a bit now that we have more free time to analyze and optimize the budget without really changing our basic lifestyle. If I had things to do over I would have paid more attention to expenses along the way and we both could have left full time work years sooner than we did.
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Old 08-07-2015, 12:00 AM   #27
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I'm a little older at 57, with a similar but smaller spending level (about 100k) --that's with considerable luxury spending so a lot of fat to cut, like travel if necessary, and a considerably smaller investment hoard. I would feel go ahead at 4% or less withdrawal level, realizing that SS is coming down the pike. And particularly if you are willing to adjust downward without travel/etc or downsize, if necessary.
DW is still working and I am semi-retired, perhaps for just a year. DW (younger) will probably pull the plug in 3-4 years or go to part-time, so it's not exactly the same.
I see SS at 62 as an option on the market; I'll take it if necessary and let DW go past FR since she is the higher earner.
There are a lot of very accomplished FIRE on the board, but I think withdrawal levels of 3 or below are taking conservatism to the extreme. But posters should do what they feel appropriate. I don't feel the need to leave my assets or perhaps two-four times them to my DS's, however much I love them. And that's likely at a below 3 withdrawal level.
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Old 08-07-2015, 09:26 AM   #28
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I was in your exact situation 3 years ago - same investment amount and allocation with the same expenses. The only difference is that I will get a small, non-cola, pension whenever I choose to start taking it.

While I was comfortable with the prospect of total ER I decided to consult PT. 3 years later I have slightly more in my investment portfolio and enough clients to work as much or as little as I want. Typically I average 2 days/week throughout the year but more in winter than summer. Not sure if this is an option for you but it worked well for me.

I think that you are financially ready to ER. With SS on the horizon I would think that you have plenty.
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Old 08-07-2015, 02:38 PM   #29
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As previously noted, this bunch leans fiscally conservative, but your replies indicate a high comfort level with specific points made (SWR, reducing discretionary spending, etc.), so I see no reason for you to w*rk any longer than you really want to at this point. Get that countdown calendar started and avoid OMY!
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Old 08-08-2015, 05:07 PM   #30
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As previously noted, this bunch leans fiscally conservative, but your replies indicate a high comfort level with specific points made (SWR, reducing discretionary spending, etc.), so I see no reason for you to w*rk any longer than you really want to at this point. Get that countdown calendar started and avoid OMY!

Thanks MBAustin. I'm planning on it. Got the calendar countdown going for sure. Hope I don't chicken out. I'm actually thinking about requesting a 7 month leave of absence to allow me to thru hike the PCT. Then when i return I'd have 8 months more of work before hitting 55 and official retirement. I doubt a 7 month LOA is possible but I don't see a down side in asking.

Muir


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Old 08-10-2015, 03:26 PM   #31
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Sounds like you are fine. Like someone else mentioned both my hubby & I do p.t. consulting in our fields since retiring.
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Old 10-21-2016, 10:31 AM   #32
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An update on my ER situation.


I decided to wait until 55. I'm now getting fairly close. So I waited OMY. My plan is to leave at end of March 2017. I can use vacation to finish me out until my actual 55th birthday in June.


My financial picture has changed only a little. Instead of a $3.5 million nest egg it is now around $3.7. Expenses of $125-130 are still expected fully loaded. With some discretionary flexibility if needed. This year we have completed significant home remodeling which is nice to also get off our radar.


There will be no OMY for me. I'm leaving. I've already told my boss.


I know this is not as conservative as many folks here. I wish my plan was. I wish I had a nice pension rather than solely relying on distributions from the egg. But it's where I'm at.


I'm happy to listen to any further advice offered. Or just well wishes.


Thanks.


Muir
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Old 10-21-2016, 11:03 AM   #33
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Congrats on your decision and good luck in retirement!
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Old 10-21-2016, 11:23 AM   #34
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An update on my ER situation.


I decided to wait until 55. I'm now getting fairly close. So I waited OMY. My plan is to leave at end of March 2017. I can use vacation to finish me out until my actual 55th birthday in June.


My financial picture has changed only a little. Instead of a $3.5 million nest egg it is now around $3.7. Expenses of $125-130 are still expected fully loaded. With some discretionary flexibility if needed. This year we have completed significant home remodeling which is nice to also get off our radar.


There will be no OMY for me. I'm leaving. I've already told my boss.


I know this is not as conservative as many folks here. I wish my plan was. I wish I had a nice pension rather than solely relying on distributions from the egg. But it's where I'm at.


I'm happy to listen to any further advice offered. Or just well wishes.


Thanks.


Muir
Muir-

Congrats!

Sounds like a well thought out decision. I wish I had seen this thread last year but, I will go ahead and add my thoughts, hoping some of them are useful. I think our situation is similar enough to yours for these to be worth considering.

1. For context, we use a variable WDR approach (Guyton-Klinger) with the option to partially annuitize if absolutely necessary (using Otar's zone concept). So, we have two adjustment mechanisms to exercise if required.

2. Develop a written backup plan which includes adjustment mechanisms like those above (or whatever you feel comfortable with), as well as budget adjustments along the lines described below, in case things don't go well financially.
A. Planned (current) budget, which includes all essential & discretionary spending.
B. 'Plan B' budget if you have to cut back, which includes all essential and some discretionary spending.
C. 'Bare Bones' budget if necessary, which includes only essential spending.

3. Consider holding a 'cash' buffer. We hold 3-4 yrs in a CD/Bond ladder.

4. Set things up so that you can do some part time w*rk if necessary; perhaps with your former company or in that industry. I'm only 2 yrs FIREd and am still doing ~300hrs/yr of consulting work.

5. Complete (or set aside the $ for) all the standard $-eating things before you FIRE (house repairs, medical checkups/procedures, automobiles, tuition, etc.)

FWIW, we've followed our plan for 2 yrs and are doing well; NW > than on FIRE day. Best of luck (from someone who lives 10 mins from Muir Woods), and let us know how it goes for you after March 2017.
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Old 10-21-2016, 05:41 PM   #35
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Well it sounds like you are already set so this won't have much bearing I think but I thought from your OP that you would be fine. I think when you are not working depending on your habits you may find it's harder to spend than you think. But YMMV

Good luck
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Old 10-22-2016, 04:45 AM   #36
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I think you hit the perfect compromise - a firm OMY to get everything settled in your minds and a financial situation that honestly would have let you pull the plug at the time of your original post.

I'm 56 and my own WR has hovered around 3.4% during my four years so far. I do a bit of consulting and I know we could cut back on the spending - so I'd feel as comfortable with your numbers as I do with mine.

Good luck! And enjoy the final months as a working man
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Old 10-22-2016, 06:17 AM   #37
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Good advice on this thread... as expected.

My 2 cents... I can appreciate your desire/plan to have a higher level of spending as my plan is almost twice what you have planned. Clearly, you/I don't "need" to spend that much, but prefer to based on choice... 1st world problems. My guess is you are living at a similar standard of living now a prefer to keep it... nothing wrong with that if you can do it. I'm 52 and my goal is to launch RE at 55 similar to you... if I don't chicken out. Like you (I think you implied this), I have no pensions (SS in future if it's around) generating RE income so my investments and me are it (DW has been a SAHM for 26 yrs). Maybe I missed it, but not sure if I heard if you had kids and ages? In my case, I have 4 with last 2 in college, 2 off the payroll, 1 married, however, 3 of them are girls which means 2 more girl weddings $$$$$! In my case, I want to get all the "heavy lifting" out of the way before I cut the cord. Yes, there is no requirement for me to pay for a wedding or their college costs, but I choose to. While I have always admired the ER folks who launch in their 40's & early 50's with younger kids, my experience is those little boogers cost some dough and I want that line item removed before I set sail!

Good luck and keep us posted!
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Old 10-22-2016, 10:03 AM   #38
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Good advice on this thread... as expected.

My 2 cents... I can appreciate your desire/plan to have a higher level of spending as my plan is almost twice what you have planned. Clearly, you/I don't "need" to spend that much, but prefer to based on choice... 1st world problems. My guess is you are living at a similar standard of living now a prefer to keep it... nothing wrong with that if you can do it. I'm 52 and my goal is to launch RE at 55 similar to you... if I don't chicken out. Like you (I think you implied this), I have no pensions (SS in future if it's around) generating RE income so my investments and me are it (DW has been a SAHM for 26 yrs). Maybe I missed it, but not sure if I heard if you had kids and ages? In my case, I have 4 with last 2 in college, 2 off the payroll, 1 married, however, 3 of them are girls which means 2 more girl weddings $$$$$! In my case, I want to get all the "heavy lifting" out of the way before I cut the cord. Yes, there is no requirement for me to pay for a wedding or their college costs, but I choose to. While I have always admired the ER folks who launch in their 40's & early 50's with younger kids, my experience is those little boogers cost some dough and I want that line item removed before I set sail!

Good luck and keep us posted!
Yes, DawgMan. I have 3 kids. My 2 daughters are 27, married, and on their own financially. I've paid those two weddings already. My son is 21 and should be done with his junior year of college by my retirement date. Not sure how quickly he will land on his feet after college. Right now just praying he can somehow successfully finish his degree. And best of all, I have a 10 month old granddaughter!


I intend to see my son through school and initial startup for him. So, that is factored in. My granddaughter on the other hand will be a source of spending for DW and I for many years to come.


Thanks for your post.


Muir
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