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Old 08-09-2017, 12:07 PM   #21
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Being a burden on my kids would never happen. We are spending quite a lot on eating out, entertainment and travel so would cut out those items. I am still working p.t. because I enjoy it and have no plans to quit unless my mind fails so I can't teach online. If need be I would take my SS before 66 although it is going to be very tiny. If necessary we could take a reverse mortgage or sell our home and buy a small condo.
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Old 08-09-2017, 12:10 PM   #22
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Well, my mil pension is "kind of" the backup. If that were to go away I don't know that I would want to hang around the US anymore since things will have gotten VERY bad at that point. At any rate, if it did go away, I would sell the primary home and rental home and live in an RV.

We still save a good amount of $, so I don't envision getting to a "spending it all" mentality anytime soon.
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Old 08-09-2017, 12:39 PM   #23
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We've always watched expenses so I'll go straight to plan B, C etc . Plan B sell the lake house. Plan C use Roth accounts. Plan D reverse mortgage on the big house. In any event I'm not too worried about the finances.
It's the other big picture stuff, health, happiness and world affairs that have my attention. Perhaps we focus on finances because its the easiest.
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Old 08-09-2017, 01:16 PM   #24
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My OP asks about considerations before retirement.

For all the responses that I read so far, using 3% rule instead of the 4% rule, i.e., working for a few more years to build a larger portfolio (before ER) seems to be the best one.

After retirement, downsizing and cutting down expenses seem to be feasible.
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Old 08-09-2017, 01:33 PM   #25
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Originally Posted by travelover View Post
My back up plan to to get a job as a porn star. May have to dye my hair and suck in my gut.
Sounds to me as if you might starve if that's your only backup plan.
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Old 08-09-2017, 01:52 PM   #26
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8th year of retirement and inflation has been good to us as the main income in our retirement has been from my non-COLA pensions. My backups for the long run include;

1. SS and UK SS for myself and my wife as we have simultaneously paid into both systems

2. Fully paid off house in a low cost area

3. All IRA money rolled into Roth to minimize taxes

4. Moved to a place with minimal healthcare costs.
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Old 08-09-2017, 02:02 PM   #27
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Our safety nets.

- 3% WR W/O SS or pensions
- Budget could be cut significantly if needed
- Paid for house not included in NW
- Moderate non-cola pensions in the future
- Two SS payments in the future
- Several years of cash/near cash
- Knowledge that, on average, as you age you tend to spend less
- Likely inheritance (normally don't count this)

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Old 08-09-2017, 02:19 PM   #28
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As many have mentioned - look at spending reductions in the case of a downturn.

Like pb4uski mentioned - SS is part of the plan (at least in our case)... especially since DH is already on it. (I have 7 years till I'll qualify for early SS... and probably w
on't take it till FRA or age 70.)

Our backup plan is our primary home. We live in an expensive real estate market, but out house is paid for... so that equity could be tapped if things turn icky. Options assume kids are grown and flown (so at least 5 years from now). Option 1: Move to the granny flat behind our house (currently providing rental income) and rent the main house for more rent. Option 2: stay in the main house - but rent out spare rooms to university students. We've had two neighbors work this plan for their retirement years... more than enough income to supplement the SS and live a comfortable lifestyle.
Both ended up with PhD candidates as renters who stayed many years. It helps that we're close to UCSD so there's a never ending supply of grad students. Option 3 (our LTC option): Sell the house, buy a much smaller condo. Use the cashed out equity to pay the bills for whichever spouse is in a nursing home. If both of us need assistance - skip the condo purchase and just move to the continuing care community.

Our current withdrawal rate is <3%... My SS is still ahead of us. No inheritances in our future. Kids will be launched someday dropping our expenses... I think our safety nets are covered.
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Old 08-09-2017, 02:21 PM   #29
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-DB pension with some vision/dental, and catastrophic medical coverage (drugs)
-social security type pension
-own our house
-universal medicare coverage-no premiums required
-drug coverage-pension and government
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Old 08-09-2017, 02:22 PM   #30
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Safety valves, in varying seriousness of options:
  • Move to lower cost area
  • Move to lower cost country (near family)
  • Move to really low cost country part-time
  • Reduce spending on food by cooking myself more
  • Try a few high-paying consulting gigs (only available a few more years at most)
  • Do a fun activity that also pays a bit (sort of what I'm doing now)
  • Work part-time in a low paying job
  • Start travel/work (e.g. help out in a hostel for free accommodation)
  • Move to home country, work for a day, get unemployment benefits; rinse & repeat every 20 months
  • Inheritance

And the lottery. Not in the planning: find a female with money and seduce her. That's just too much work Or do the blog thing? Seems to work for some.

It's basically like imolderu mentions: your health and age is a safety net.
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Old 08-09-2017, 02:30 PM   #31
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(3) Back to work. I am an academics. There is no way to go back to work with a comparable salary once I quit. I cannot think of being a Walmart greeter in my late 70s, even if Walmart has not be replaced by Amazon by then.
Certainly if you are "an academics" you can find suitable work other than being a Walmart greeter. Perhaps not at a comparable salary, but why must it be comparable?

I know that I'm a smart, capable, sufficiently physically fit individual. I know that I could find a part-time job if/when it ever comes to that. I could likely consult within my field if I wanted to. Even if I couldn't, I would not consider any job to be beneath me if I needed the money.

I know that I could cut back on some expenses in retirement if necessary. We all have discretionary expenses.

I'm not worried about needing any of this. My wife and I have spent a long time saving and planning so that we won't have to worry.

If it worries you this much, it might be a sign that you need to keep working a while until the worry goes away.
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Old 08-09-2017, 02:49 PM   #32
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I don't rely on 4% rule.
+1
Quote:
My first safety net is realizing that 4% is not a rule at all, but a finding in a study that historically has worked over a 30 year period. It may or may not work in the future, over longer periods. So I had no plans to ER at 4%.

I'm around 3%
Quote:
I think 3.5% or 3% WR target is better than 4%.
+1

Quote:
Reduce expenses, sell some real estate, inheritance, cash balances.
I believe that historical returns will not be maintained going forward. The economic growth elements are spent. Use 3% or less.
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Old 08-09-2017, 02:50 PM   #33
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I was an academic too, but to consult in ER, I would have had to spend a lot of money maintaining licences, insurance and continuing education. It would not have been worth it unless I worked at least half time, which I didn't want to do.

My backup plans include:
Eliminating travel expenses if SHTF
Universal health care
Long term care insurance
Critical illness insurance
Rental properties (future income streams and/or sales)
Cash buffer

I already live in a moderate cost area, in a modest home.
No family around to depend on.
Already got the inheritance, which enabled RE.
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Old 08-09-2017, 03:54 PM   #34
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My back up plan to to get a job as a porn star. May have to dye my hair and suck in my gut.
If I thought I could succeed in that career, I'd never retire.
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Old 08-09-2017, 03:56 PM   #35
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I have a very simple approach.

Base expenses are c. 40k
Holiday and fun money is c. 30k
My budget is based on 90k

So, in theory, we have a 50% spending buffer.

Oh, and I don't include c. 500k in our plan

we should be ok
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Old 08-09-2017, 04:14 PM   #36
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No kid, no pensions.

1) We use a WR below what FIRECalc allows.
2) Our FIRE plan is based only on our stock/bond portfolio. It does not include social security, real estate, bank account balances, inheritances, etc... so all of those are backups
3) There is plenty of fat in our budget which could be trimmed back
4) Our house is too big for our needs and we could downsize
5) We have the option to move to Europe to reduce healthcare costs (our largest expense by far)
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Old 08-09-2017, 04:23 PM   #37
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Ouch, please tell your kids you were just joking and that they should never think of that again. Don't want them to have that burden in mind for the next 40 years...

Back up plans are take slack out of expenses, and I have a side gig small business i started on the side while still working. Covers about 25% of our expenses currently on a very casual basis.
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Old 08-09-2017, 04:55 PM   #38
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Ouch, please tell your kids you were just joking and that they should never think of that again. Don't want them to have that burden in mind for the next 40 years...

Back up plans are take slack out of expenses, and I have a side gig small business i started on the side while still working. Covers about 25% of our expenses currently on a very casual basis.
I was not serious to talk to my kids when they were in high school and middle school.
However, my parents retired at 50 and 60 respectively and rely on their pension for their frugal living. They never asked me for any money, but I give them a small amount of money every year and pay their (large) medical bills.
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Old 08-09-2017, 05:09 PM   #39
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1. Cruise Ship Giglio.
2. SS at 70 covers enough plus some.
3. Daughters townhouse has a basement.
4. Switch back to cheap beer.

In that order.
Not knowing what #1 "Cruise Ship Giglio" meant I Googled it. The answer from Google is all related to the Costa Concordia Ship disaster. I must admit to extreme befuddlement. #'s 2-4 I can relate to.
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Old 08-09-2017, 05:21 PM   #40
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Safety nets? We don't need no stinkin' nets! Got my modest 25' motorhome to move into, for full-time living under the blue sky of New Mexico, where an annual camping permit is only a bit more than $200.

Just kidding.

I do not know how old the OP is, but we will be eligible for early SS soon (which we do not plan to claim right away), plus a few more years to Medicare. So, the SS will keep us housed, clothed, and fed. Have the 2nd home to sell, and that reduces the expenses as well as bring in some cash.

Quote:
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My back up plan to to get a job as a porn star. May have to dye my hair and suck in my gut.
Quote:
Originally Posted by Car-Guy View Post
Sounds to me as if you might starve if that's your only backup plan.
But if Travelover starves first, he will not have to suck in his gut. He will be lean and mean, and that enhances the appeal.
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