Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-06-2017, 07:25 PM   #21
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,405
Sounds like a really nice house! :-)

Regarding your last paragraph:

If I put myself in your shoes and found myself making decisions as you are, I would ascribe it to wanting to ensure that I could really fund my family's lifestyle going forward - not greed or score-keeping. It's a little surreal and scary to step through the looking glass from looking at some spreadsheet output that says 4% and actually not go to work and see that the bills still are getting paid.

How conservative or aggressive to be is a pretty personal choice. Personally I waited until I was at 4% then stayed about another two years until some toxicity in my workplace and my Mom's illness shifted the balance. I tend to think that people can recognize when the time is right for them - it is usually when their language switches from focusing on the fears and risks and minimizing the benefits to all the options and opportunities and minimizing the risks. The data is the same, it's the perspective that changes.
__________________

__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-06-2017, 07:36 PM   #22
Recycles dryer sheets
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 223
Quote:
Originally Posted by StuckinCT View Post
Wow, you got me to 100%!!! Actually, I made two changes: In "your portfolio" I changed it from the default allocation to 81% equities as my portfolio is allocated now and in "other income spending" I reduced spending in 2030 when last kid off to college by 10% with a pension of 10% of today's spending w inflation!

I am feeling even better than I did before!
A couple of thoughts.

IMO you are over-funded for college expenses. I think I recall a previous post where you were planning for funding grad school (?) so this may not be applicable, but. I overdid the 529 savings, with help from grandma, and am facing trying to get remaining funds out without paying the 10% penalty (first world problem). Probably going to let it ride for the grandkids (if they come). This happened because I fully funded 4 years of private college for DS1 and DS2. DS1 graduated a $60K/yr private school, but got a $15K/yr merit scholarship. DS2 is currently at an out-of-state public school at ~$40K, but is on a partial ROTC scholarship so only costs me $20K.

Point is I could have put half as much in 529s and funded the difference out of cash flow - I suspect you are in the same regime, even in ER if your spend is $240K. If any of your kids get any kind of merit scholarship, go to less expensive schools, don't go to college, etc.; some of that reserved money comes right back into your portfolio.

Don't forget SS in your FIRECalc runs. Assuming you are on the high end of SS benefits you are looking at $50K or so a year, maybe $40K with a 23% haircut. That in itself knocks your post-SS withdrawal rate down, in your case by ~20%. So your 4% starting SWR becomes 3.2% after SS. I call this the "SS 2-step SWR", which is rarely acknowledged in most SWR discussions. Anyway, FIRECalc models it well.
__________________

__________________
Semi-ER March 24, 2017
USGrant1962
USGrant1962 is online now   Reply With Quote
Old 12-06-2017, 07:49 PM   #23
Recycles dryer sheets
 
Join Date: Oct 2015
Location: Fairfield
Posts: 114
Yes, we are lucky to have such a nice home- our kids really love all the space, the privacy and the yard. My wife grew up poor in Oregon and for her it is her barbie dream house. For me it has been stressful but I’ve always known we could scale back at some point if need be and we sort of toughed it out.

What you said on perspective really makes a lot of sense. There have been some things at work that have happened recently too, and tomorrow i actually have a job interview! I’ll spare you the details but I am sort of leaving it in fates hands at this point.

Maybe I have one more push in me, but what is difficult is I have all the material things I want for the most part so I would be working to pad myself further and maybe save for a third home down south so I can keep the expensive home that stresses me out? It kind of alll doesn’t make sense does it. That may be what is happening, my perspective is changing.
__________________
StuckinCT is offline   Reply With Quote
Old 12-06-2017, 08:11 PM   #24
Recycles dryer sheets
 
Join Date: Oct 2015
Location: Fairfield
Posts: 114
Quote:
Originally Posted by USGrant1962 View Post
A couple of thoughts.

IMO you are over-funded for college expenses. I think I recall a previous post where you were planning for funding grad school (?) so this may not be applicable, but. I overdid the 529 savings, with help from grandma, and am facing trying to get remaining funds out without paying the 10% penalty (first world problem). Probably going to let it ride for the grandkids (if they come). This happened because I fully funded 4 years of private college for DS1 and DS2. DS1 graduated a $60K/yr private school, but got a $15K/yr merit scholarship. DS2 is currently at an out-of-state public school at ~$40K, but is on a partial ROTC scholarship so only costs me $20K.

Point is I could have put half as much in 529s and funded the difference out of cash flow - I suspect you are in the same regime, even in ER if your spend is $240K. If any of your kids get any kind of merit scholarship, go to less expensive schools, don't go to college, etc.; some of that reserved money comes right back into your portfolio.

Don't forget SS in your FIRECalc runs. Assuming you are on the high end of SS benefits you are looking at $50K or so a year, maybe $40K with a 23% haircut. That in itself knocks your post-SS withdrawal rate down, in your case by ~20%. So your 4% starting SWR becomes 3.2% after SS. I call this the "SS 2-step SWR", which is rarely acknowledged in most SWR discussions. Anyway, FIRECalc models it well.
I agree we are likely overfunded but again in the northeast, I know people that just finished paying for four years of Georgetown and it totaled $325k.

In all likelihood we will have one get some merit based help, one at state school- my motto is it is either UConn or Yale- and one we will pay full boat. My strategy for the 529s is to have $250k each which will be the cost of a state school or half of private school in future dollars and not tell them about the other money and actually have them take out loans for the difference, i.e. skin in the game.

The plan would be to see how they do and then either pay off their loan if they do well or let them struggle a little if they are having motivation problems.

If they do go to state school, then they will likely want a graduate degree and if they donít use all the money they can use it for a down payment on a home start a business etc. I want to give them every advantage without spoiling them and it could be well over $500k each. Wish I knew what they will cost!
__________________
StuckinCT is offline   Reply With Quote
Old 12-06-2017, 08:40 PM   #25
Recycles dryer sheets
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 223
As long as you are not tying up all of your "college funds" in 529s it is 100% fungible, so you are good. So the remaining question is how much do you reserve from your FIRECalc inputs. Conservatisms, as I call them, are good as long as you consciously decide to include them and understand you are doing so.

Regarding skin in the game, DS1 has the basic federal loans, meaning he owes $26K on a mechanical engineer's salary so he's good. DS2 will owe 4 years in the Air Force working in cyber-defense (or offense?), so he's good too.
__________________
Semi-ER March 24, 2017
USGrant1962
USGrant1962 is online now   Reply With Quote
Old 12-06-2017, 09:59 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,470
100% on FIRECalc is nice but anything over 95% is sufficient IMO.

I didn't bother with 529 and am glad that I did... when DD went to college she got a merit scholarship that lowered her college costs to where I could fund it from cash flow and there was no need to tap the taxable account funds that I had earmarked for college and DS has so far decided not to go but I have funds earmarked if he changes his mind. If I had $$$$ in 529s I would have been royally screwed and scrambling around to figure out how to find a scheme to use those funds without penalty.

DD is grateful that she graduated college with no student loans which is quite different from many of her peers, including DSIL.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 12-06-2017, 11:37 PM   #27
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,405
As an aside, one can take penalty-free withdrawals from 529s in the amount of any scholarships. The earnings portion of the withdrawal counts as taxable income:

"In the case of a scholarship, non-qualified withdrawals up to the amount of the tax-free scholarship can be taken out penalty-free, but you'll have to pay income tax on the earnings. As Savingforcollege.com founder Joe Hurley likes to say, 'he scholarships have turned your tax-free 529 investment into a tax-deferred 529 investment'."

from The Truth About Scholarships and 529 Plans

(I am not sure if it is too late for USGrant1962 to make a scholarship-related withdrawal. Usually one is expected to make the withdrawals in the same year as the expense, so I assume the same thing applies to scholarships.)
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 12-06-2017, 11:38 PM   #28
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,405
Quote:
Originally Posted by StuckinCT View Post
Maybe I have one more push in me, but what is difficult is I have all the material things I want for the most part so I would be working to pad myself further and maybe save for a third home down south so I can keep the expensive home that stresses me out? It kind of alll doesnít make sense does it. That may be what is happening, my perspective is changing.
Heh, my evil plan is working.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 12-07-2017, 09:01 AM   #29
Recycles dryer sheets
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 223
Quote:
Originally Posted by SecondCor521 View Post
(I am not sure if it is too late for USGrant1962 to make a scholarship-related withdrawal. Usually one is expected to make the withdrawals in the same year as the expense, so I assume the same thing applies to scholarships.)
Yes, I've been doing that and will still have money left in the accounts. But that is like an IRA, the gains come out as ordinary income rather than cap gains so it is not ideal.
__________________

__________________
Semi-ER March 24, 2017
USGrant1962
USGrant1962 is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
fire calc vs other calculators // checking your account daily !!! wstu32 FIRE and Money 7 01-09-2007 01:55 PM
pension and fire calc ricthemic Hi, I am... 3 10-24-2006 09:31 AM
Fire Calc Results modhatter FIRE and Money 2 08-12-2006 12:56 PM
FIRE Calc vs TRowe Calc lbymfire FIRE and Money 12 06-13-2006 11:52 AM
How do you use Pension money in the Fire Calc? newguy88 FIRE and Money 4 05-31-2006 10:34 AM

 

 
All times are GMT -6. The time now is 11:53 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.