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Old 08-11-2017, 02:02 PM   #81
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That means something very serious, i.e., changing an early retiree to a regular retiree by working a few more years.

By the time we have satisfied the 3% rule, we would find that we just need the 4% rule (being older), LOL.
You got it. That can take quite a few years for many to achieve. 3% isn't a given requirement. 3.5% may be fine. 4% certainly could be fine too, though it's not as certain, especially if you don't have too much slack in your budget. You have to make your own decision. I think you have to ask yourself if the stuff hits the fan, especially early in your retirement, are you okay with eating out less (or not at all), simpler vacations (or not at all), etc, or is it worth working longer to make sure you don't face that? Some people want to get out, no matter what. Others don't want to be faced with a Spartan retirement.

I quoted 3% as what I did, not as a recommendation. I had other reasons for retiring when I did, wasn't just holding out for 3%. But I don't think you should blindly look at 4% as golden, especially if it's a minimalist plan.
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Old 08-12-2017, 12:59 PM   #82
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Like many here, we have some safety nets. How conservative one wants to be vs how soon one wants to retire is a balancing act. We ER'd at 56 & 57.

In our case:
- Short-term bonds & cash plus dividend & interest income that will carry us for at least 3 years with no principal reduction
- HELOC at below 4% rate that we can draw on in poor market conditions if need be
- Modest pension that we can start anytime but it continues to grow if we hold off.
- Social Security - not sure when we will start it, don't need to decide now
- Lots of equity in home (seven figures) so this is our LTC insurance
- About 45% of our spending is fully discretionary and could be eliminated or reduced temporarily.
- Worst case, we could relocate to lower COL area or less expensive home in same area, just not oceanfront.

For us, the biggest uncertainty is healthcare costs. We have a pre-ACA grandfathered plan that may not last till we can go on Medicare. We're both very healthy now but who knows what the future will bring? If our healthcare costs skyrocket because one of us is seriously ill, presumably we'd be cutting down on travel, wine & entertainment so those cuts would help fund the higher healthcare costs, at least we hope so!
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Old 08-12-2017, 02:38 PM   #83
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1. Part-time work
2. Downsize and cut other expenses
3. Move to a lower cost area
4. Return to full-time work
5 Take Social Security at or shortly after 62
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Old 08-12-2017, 02:50 PM   #84
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Well, if my portfolio crashed to zero (it once started there), I have a few years in cash to weather the storm.

Plus, we both collect SS and that would cover about 2/3 our current expenses.

We have a paid for house which could be converted into cash that would supply about 15+ years of rent expense.

Then there is the willing and able daughter to take care of us (hey, 1 out of 4 is OK).

Then there is Medicaid.
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Old 08-12-2017, 02:53 PM   #85
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Did I read that right? You have 99x your expenses? Wow. Belt, suspenders, and super glue. Lol.
People who do not have $5M to live on $50K/yr need to think outside the box.

Lost your belt and have no suspenders? Join a nudist camp.
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Old 08-12-2017, 03:24 PM   #86
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Did I read that right? You have 99x your expenses? Wow. Belt, suspenders, and super glue. Lol.
Yes but it's based on my past-decade average living expenses which have been very low and may rise once I stop working. Plus it's hard to predict long term healthcare costs, both my own and from possible filial responsibility. So far I've been lucky, one of my in-laws is seeing this scenario unfold right now.

FWIW I think I'd use crossing 25x in a stressful job to try to negotiate changes that may slow down reaching 33x but make it more pleasant. May not happen in a strict up or out culture, but management was surprisingly receptive where I work. This may be why it's not so easy/urgent for me to up and quit now.
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Old 08-14-2017, 09:28 PM   #87
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I have read all the comments. For me, I think I will see what will be my exact situation when I am 55 in two years. It seems working one or two more years may be the easiest safety net.
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Old 08-14-2017, 09:36 PM   #88
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I have a surplus of income, plus free healthcare. I spend quite a lot, and can cut back if needed.

I still have SS and a small pension (monthly $1262.01) to draw at some point. Plus dividends.

In the meantime, I still do my own rental management and maintenance to build capital. At some point, I want to buy a waterfront home.
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Old 08-15-2017, 01:48 AM   #89
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Originally Posted by Out of Steam View Post
1. Part-time work
2. Downsize and cut other expenses
3. Move to a lower cost area
4. Return to full-time work
5 Take Social Security at or shortly after 62
+1.
Well stated: classic re-wording of increase income (1, 4, 5) and cut expenses (2,3). KISS.
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Old 08-15-2017, 10:16 AM   #90
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Simply, I'm saving more than I need and can adjust spend.
My savings & investment target is to be able to support the missus and I travelling 6 months per year.
Fallback 1 is my wife's income/nest egg.
Fallback 2 are government benefits.
Fallback 3 is to travel less than 6 months per year.
Fallback 4 is our home equity.
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Old 08-15-2017, 01:55 PM   #91
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Most of these back-up plans will not help in the really bad situations. Economic Collapse, Government Collapse, Zombie Apocalypse etc.
This is where your metals portfolio kicks in. Mine is invested in lead. Mostly 9MM and .357 magnum.
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Old 08-15-2017, 09:09 PM   #92
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This is where your metals portfolio kicks in. Mine is invested in lead. Mostly 9MM and .357 magnum.
I was thinking the other day if medical insurance gets too expensive, these things could be useful.
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