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Gut Check for 2013 Fire!
Old 01-05-2013, 10:03 PM   #1
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Gut Check for 2013 Fire!

I'm planning on firing in 2013 (October 1, 2013). I think I'm there but want to make sure I'm not missing something. Any advice appreciated!!!

Just hit $3.5M and should be at $3.8-4.1M by 10/1/13. Expenses are about $90K per year so I won't even need to w/draw 3%. We have had private health insurance through BC/BS for us and our employees for the last 3 years, so my wife and I can just continue paying our private health insurance. My son (14 yrs old) is also on our private insurance and can stay on it until 28 at which time he can continue his own private policy Without and underwriting (i.e. no physical exam). Good deal.

I have over 200K put away for son's college, house is paid off and we have no debt (credit cards paid off every month). 2 cars paid off, both with fairly low mileage (under 50K miles). My wife and I will be turning 45 in 2013. We have about 80% in stocks (75% US Stock Index Fund / 25% Int'l Stock Index), 25% in bonds (65% munis, 25% Vanguard Total Bond Fund and 10% REITS).

About 75% of my holdings (i.e. 2.5M now and $2.9M or so in 9 months) are outside of 401k/IRAs, so the taxes have already been paid and the capital gains are about 100K, but not terribly significant (as I also have 70K in capital losses that can be used against the gains). 25% is in 401K and IRA which we don't intend to touch until 65 or so.

I think I'm good to go. Thoughts? Comments? Suggestions? Thanks all!!!
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Old 01-05-2013, 10:12 PM   #2
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You aren't just "good to go" you're "good to have been gone long ago". What the heck are you waiting for?
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Old 01-05-2013, 10:29 PM   #3
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Looks like you'll be withdrawing less than 2.5% of your portfolio. Sounds good to me!
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Old 01-05-2013, 10:34 PM   #4
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Looks good to go. Are you comfortable having 80% of your portfolio in stocks? How would you feel if we had another 2008?
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Old 01-05-2013, 11:23 PM   #5
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I'm okay with the 80% in stocks.

By October 1, 2013 (end date) I will have approximately 800K in Munis which I will draw off of 1st. So if there is a stock market crash, I will have almost 10 years of expenses I can draw from.

Also, I could be wrong (probably am) but Bonds have had a helluva run and I think inflation is inevitable. In fact, I've pondered the idea of buying some physical gold to further diversify, but haven't gone down this road yet. I think people who rely on bonds for safety are going to find out they are not so safe. But like I said, just my opinion.
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Old 01-05-2013, 11:55 PM   #6
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Also, my biggest concern is that we are retiring fairly early. My withdrawal rate seems reasonable but a heckuva lot can happen over what I hope is the next 40 years or so of living
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Old 01-06-2013, 12:12 AM   #7
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Yes - you are good to go. I know that making the jump is not easy - same here.
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Old 01-06-2013, 06:22 AM   #8
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Also, my biggest concern is that we are retiring fairly early. My withdrawal rate seems reasonable but a heckuva lot can happen over what I hope is the next 40 years or so of living
Things can go wrong. See this thread for examples FIRECalc The important question is not what can go wrong, or change. Of all the potential catastrophes that await us, how does staying at work help minimize the consequences or make your plan better? If it is good enough now, how much better can it get? Only you can determine what another year at work means.
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Old 01-06-2013, 07:13 AM   #9
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IMO you are good to go. The only caveat: you must remain ever vigilent with 80% in stocks. Also, I would not encourage buying gold at this time. I happen to be overweighted in a gold mutual fund and am torn whether to cut my losses or hang in there for a rebound.
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Old 01-06-2013, 07:21 AM   #10
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Wish I had 80% in stocks & 25% in bonds.
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Old 01-06-2013, 07:24 AM   #11
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Wish I had 80% in stocks & 25% in bonds.
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Old 01-06-2013, 07:32 AM   #12
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BTW, there have been a handfull or so of -80% market crashes in the last 200 years. With 80% in stocks, can you handle a -64% capital loss?
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Old 01-06-2013, 08:44 AM   #13
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BTW, there have been a handfull or so of -80% market crashes in the last 200 years. With 80% in stocks, can you handle a -64% capital loss?
In the US?
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Old 01-06-2013, 11:57 AM   #14
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In the US?
According to wiki

2) US Nasdaq 2000-2002: -82%
The second biggest collapse came from the technology-rich US Nasdaq index, which fell by 82% following the bursting of the dot.com bubble in 2000

1) Wall Street 1929-32: -89%
The Wall Street Crash that preceded the Great Depression heads the list, with the US stock market falling by 89% between 1929 and 1932. The bursting of the speculative bubble led to further selling as people who had borrowed money to buy shares had to cash them in in a hurry when their loans were called in.

And from a different source...though most folks probably thought the NASDAQ was overheated to varying degrees in 2000. I owned good chunks of MSFT, INTC & CSCO at the time and I knew the multiples were completely nuts before the "dotcom bubble crash"...
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Old 01-06-2013, 02:21 PM   #15
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Whoops, I meant 80% Stocks and 20% (Bonds/REITS). Thanks for the heads up on the math
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Old 01-06-2013, 02:28 PM   #16
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And thanks MichaelB: "If it is good enough now, how much better can it get?"

That puts things in perspective. I think I'm good now, I will be better (but not by much) on October 1, 2013. And things would only get incrementally better after that. (i.e. my expenses will likely remain the same whether I have $3M, 4$M, $5M or $6M, so the extra $$$ only add to peace of mind, not standard of living).

So there really is no point in working beyond that date. And life is finite. Weighing the risks, I have decided not to move my deadline any further. So I will be an official 2013 FIRE!!!

Thanks for the advice. I may up my bond/reit portion of the portfolio based on the comments here. At least to 70/30. Thanks!
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Old 01-06-2013, 04:19 PM   #17
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I think a slight shift of the AA to a more conservative slant would be a good idea. It seems as if your portfolio is of a sufficient size to comfortably fulfill your needs so there is no real reason to swing for the fences when singles and doubles will do the trick without the additional risk. The 70/30 seems reasonable now and then maybe 60/40 five to ten years from now.

And the best of luck and realized plans to you!
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Old 01-06-2013, 05:13 PM   #18
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Congratulations!!! Numbers look real good to me. For me I'm struggling with when to pull the trigger...just turned 49. My numbers are good but I'm just not quite ready to throw in the towel......maybe another 6 months to a year.
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Old 01-06-2013, 05:25 PM   #19
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#humblebrag

I won't weigh in on your plan, but let me just say how impressed I am with your financial independence at such a young age, and also that I am



Way to go for you & yours!
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Old 01-06-2013, 05:47 PM   #20
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Originally Posted by Hiredgun View Post
I'm planning on firing in 2013 (October 1, 2013). I think I'm there but want to make sure I'm not missing something. Any advice appreciated!!!

Just hit $3.5M and should be at $3.8-4.1M by 10/1/13. Expenses are about $90K per year so I won't even need to w/draw 3%. We have had private health insurance through BC/BS for us and our employees for the last 3 years, so my wife and I can just continue paying our private health insurance. My son (14 yrs old) is also on our private insurance and can stay on it until 28 at which time he can continue his own private policy Without and underwriting (i.e. no physical exam). Good deal.

I have over 200K put away for son's college, house is paid off and we have no debt (credit cards paid off every month). 2 cars paid off, both with fairly low mileage (under 50K miles). My wife and I will be turning 45 in 2013. We have about 80% in stocks (75% US Stock Index Fund / 25% Int'l Stock Index), 25% in bonds (65% munis, 25% Vanguard Total Bond Fund and 10% REITS).

About 75% of my holdings (i.e. 2.5M now and $2.9M or so in 9 months) are outside of 401k/IRAs, so the taxes have already been paid and the capital gains are about 100K, but not terribly significant (as I also have 70K in capital losses that can be used against the gains). 25% is in 401K and IRA which we don't intend to touch until 65 or so.

I think I'm good to go. Thoughts? Comments? Suggestions? Thanks all!!!
instead of you asking us we should be asking you
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