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Old 06-23-2015, 03:56 PM   #41
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You make a very good point, and if I were a very young retiree that would be my main worry. But money isn't everything, and after you're dead it isn't anything. I did put some thought into the comment. I think it would be pretty hard for me to actually "run out of money", with my paid off house, no debts, and SS enough to sustain me if I really had nothing else. I might have to cut back a lot, and would certainly do that long before running out. I do fear a big crash that would not let me do all I want but it is not what I fear most.

Having just been to my high school reunion planning meeting, it is scary how many of my old friends have passed away, some once vibrant ones now sickly and confined to wheelchairs. It would be very easy for me to be so frugal as to not want to spend anything. Live on the bare minimum until I am too old and feeble to do anything. So actually I find it harder for me to spend money, and take on the adventures that I would enjoy and that might benefit others.

It is very easy to put off things, and keep putting off until it is too late. On the selfish side we have a lot of travel we want to do, old friends and relatives we want to spend time with, and new things we want to do and to learn. On the less selfish (okay still selfish but in a different way) we will helping to start a school in a 3rd world country, try to be friendlier to people, neighbors). It is easy for me to procrastinate and just watch my portfolio grow (or decline whatever it wants to do), but in some ways it is harder to realize the reality that procrastination has a cost too. So if things get bad, we will cut back, way back, we wont run out of money. But eventually we WILL run out of time. So until then I will try to force myself to think less about the portfolio and more about the maximizing the time remaining. But hey, I will still spend under 4%, just in case I stay healthy and live a long time, and let the good times roll on, if it is in the cards.
Had to bump this thread because there were so many good replies.
I was looking for a thread to bump to add the future of work article to. I will probably start another thread.

To answer the OPs question, no I did not fail financially and I am still retired but I did receive a scare in 2008.

I am thankful every day that I am still financially independent.
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Old 06-23-2015, 04:05 PM   #42
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An interesting article (also rather long) that tries to answer the question of what the work world will look like in the future for the USA.


Quote:
The end-of-work argument has often been dismissed as the “Luddite fallacy,” an allusion to the 19th-century British brutes who smashed textile-making machines at the dawn of the industrial revolution, fearing the machines would put hand-weavers out of work. But some of the most sober economists are beginning to worry that the Luddites weren’t wrong, just premature.

Quote:
The transition from labor force to leisure force would likely be particularly hard on Americans, the worker bees of the rich world: Between 1950 and 2012, annual hours worked per worker fell significantly throughout Europe—by about 40 percent in Germany and the Netherlands—but by only 10 percent in the United States. Richer, college-educated Americans are working more than they did 30 years ago, particularly when you count time working and answering e-mail at home.

A World Without Work - The Atlantic
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Old 06-23-2015, 04:18 PM   #43
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I like to bump threads, if I run across one that is on the same subject.

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Just curious. I imagine those that did figure out they were undercapitalized might be busy working and not posting at ER dot org.

I'd be curious about anyone you know that retired then had to go back to work for financial reasons.

For those interested in picking a nit, "going back to work for financial reasons" means at least 75% of the reason for returning to work was the need or want of more cash.

As for defining "work", I'll leave that up to your creativity.
And I want you to define "failure", because it depends on what the meaning of the word failure is.

If a person runs short financially, but manages to scrape by on just SS but does not go back to work, does he still fail? If a person does not need money, but wants to work for fun, is it OK?

So, let's define retirement failure as something that happens when one's retirement does not work out as one plans. Sounds fair? This is broader FAILURE, and it is not necessarily about money.

Heck, there are people like me who do not have a written down plan. I do not have a bucket list that if not fulfilled would qualify me for failure. I do not know if I will die a decamillionaire like my most fortunate FIRECalc runs, or become a thousandaire like the FIRECalc cases that skim the zero line like an Exocet missile. I do think that if I end up under a bridge, then I definitely have failed. But it's not failure if I end up in my RV, parked under the open sky of New Mexico on a state campground. That's always my plan C.

And there are more ways that my retirement may not work out like my broad plan. If I croak tomorrow, that's FAIL. But what if I succumb to a disease at an early age of 70? That's probably partial failure. How about 75, or 80? What if I live long, but in pain and misery?

I dunno. I don't know how to define failure, nor success.
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Old 06-23-2015, 04:29 PM   #44
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And I want you to define "failure", because it depends on what the meaning of the word failure is.
ER failure is defined as "going back to work for financial reasons" where at least 75% of the reason for returning to work was the need or want of more cash.

Per my OP.

I'm sure many early and traditional retirees occasionally want more money. My question is really concerned with whether they actually go back to work to get more money (15 hrs/wk as a walmart greet or returning to FT work in their old careers or whatever).
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Old 06-23-2015, 04:33 PM   #45
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I understood your question, actually.

I was just trying to divert the attention to other kinds of failure that may be more important than monetary kinds. Sorry for the subtle thread hijack.
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Old 06-23-2015, 04:42 PM   #46
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I remember a thread a while back where the OP talked about going back to work for monetary reasons. It was during the market crash of 2008-2009. I don't know I can find that thread anymore. He provided quite a bit of details.

And then, all of us remember Lazybum. There were also some other frequent posters who disappeared, but not before lamenting about fund shortage. And then, there are many infrequent posters who dropped out but we would not know as they were passive forum readers.

So, it would not surprise me that there are quite a few to meet the criteria, but it is not easy to get an accurate count.
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Old 06-23-2015, 07:43 PM   #47
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My brother-in-law failed twice. He took of with 2 fraternity brothers on a sailboat at about the age of 30 taking my 21 year old sister with him. The trip was wonderful adventure of 3 years. When the got back to the states he tried to keep from working by trading stocks from his remaining saving and most sized inheritance. That lasted about 2-3 years before he got an engineering job.

They retired to Hawaii when was about 53 and that last for 5 years till the bear markets of 2000,2001 got him and he we back to work. He finally retired for good at 65.
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Old 06-23-2015, 08:15 PM   #48
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I'm not sure that I'd say we failed, but we attempted RE back in 2007 with a much smaller portfolio. We were 38 and 40, both with toxic jobs. We had 1M portfolio and a paid off house and annual spending of about $24k. One very small pension that had already started, and two slightly larger ones to start at 65. Maybe it could have been done, but about 6 months in I realized that was way too tight for my comfort. This was also before the ACA. We would have committed ourselves to a very small budget with no wiggle room for any big unexpected expenses. We also probably didn't put enough thought into how we would access those funds - did we really have enough in taxable funds to tide us over?

So I went back to work first and DH followed the following year. In 2014 we retired for good with a SWR of 1% and fewer years to fund. So maybe it was a close call. I'm glad we sorted things out right away while we were still employable in our fields.
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Have you failed (financially) at ER and returned to work?
Old 06-23-2015, 08:44 PM   #49
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Have you failed (financially) at ER and returned to work?

I "failed" in that I went back to work when a low stress gig fell into my lap that's just a few miles from where I live.

I decided it would be worth working a couple xtra years to boost my travel budget. No regrets so far but I don't think I'll go beyond my TMY (two more year) plan


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Old 06-23-2015, 08:54 PM   #50
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My brother-in-law failed twice. He took of with 2 fraternity brothers on a sailboat at about the age of 30 taking my 21 year old sister with him. The trip was wonderful adventure of 3 years. When the got back to the states he tried to keep from working by trading stocks from his remaining saving and most sized inheritance. That lasted about 2-3 years before he got an engineering job.

They retired to Hawaii when was about 53 and that last for 5 years till the bear markets of 2000,2001 got him and he we back to work. He finally retired for good at 65.

All in all a good run still. An employable skill definitely can mitigate a premature or unfortunate ER.


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Old 06-23-2015, 09:02 PM   #51
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Our plan was always to retire in a low to average cost of living area with a large surplus. We ended up retiring in a high cost of living area with much less room for error. So look out next time the market corrects! Actually, since we are trying to live on the interests and dividends generated by our assets, it would take interest rates going much lower than they already are and wide cuts to equity dividends to really get us in trouble. So expenses increasing faster than our budget allows is a more likely source of "failure". Of course, we'd move to a cheaper location (pretty much anywhere else in the world) well before the point of actual failure.
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Old 06-23-2015, 09:15 PM   #52
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A former co-worker retired from a software career in early 2008 at age ~54. In 2010 I ran into her at Home Depot wearing an orange apron. She told me her husband, who had planned to continue working for a while, was laid off during the crash. She continued working at HD for about 2 years before retiring again.
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Old 06-23-2015, 11:24 PM   #53
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I would call many of those posted here "false starts" rather than out and out failures.

You will see some real retirement failures in the next decade - primarily from those dependent on SS entirely and/or very little retirement savings.

Broke at 60 or 70 or 80 and no hope of donning an orange HD apron or a posting at the entrance to a box retailer like Wal-lyworld ...

The sad fact is that when they "fail" we will all get stuck to foot their bill one way or the other.

Fuego, do you consider your case success or failure having to rely on blog (and spouse income ) at this stage ?

Can you manage without the blog income indefinitely given kids ages and inflationary cost of higher education , risk of ACA subsidy disappearing, etc? Your specific case always intrigues me !
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Old 06-23-2015, 11:31 PM   #54
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I always watch to see the ages of the people who work in retail stores, such as Walmart. Many are clearly in their late 60's and working in positions such as cashiers, that require long periods of standing. At the same time, they are obviously there because of need. Men and women who had been in positions of much greater responsibility in their younger years, but for whatever reason... health or financial reverses, must supplement their SS or Pension income with part time work. In most cases they could not go back to their previous profession... in any position.

It is very easy to categorize people who cannot retire as poor planners or being financially irresponsible, except to note that the US median income has dropped 8% since the year 2007. A person who was 58 years old in 2007 and is now at a 65 year retirement age, has not had an increase in wages, during a time when the cost of living has risen by 12%. An empirical observation, but an indication of the times.

We consider ourselves very fortunate to have come through the past 25 years without suffering a financial disaster due to health, investment losses, or the necessity of providing for the care and sole support of loved ones.

Planning is important, but no amount of planning can foresee the vicarious twists of fate.

Very well said.
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Old 06-23-2015, 11:44 PM   #55
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I'm not sure that I'd say we failed, but we attempted RE back in 2007 with a much smaller portfolio. We were 38 and 40, both with toxic jobs. We had 1M portfolio and a paid off house and annual spending of about $24k. One very small pension that had already started, and two slightly larger ones to start at 65. Maybe it could have been done, but about 6 months in I realized that was way too tight for my comfort. This was also before the ACA. We would have committed ourselves to a very small budget with no wiggle room for any big unexpected expenses. We also probably didn't put enough thought into how we would access those funds - did we really have enough in taxable funds to tide us over?

So I went back to work first and DH followed the following year. In 2014 we retired for good with a SWR of 1% and fewer years to fund. So maybe it was a close call. I'm glad we sorted things out right away while we were still employable in our fields.
2.4% SWR, three pensions, and you decided to go back to work?

Well, I can understand the ACA making the difference though. Healthcare could change a 2.5% SWR to a 4% or higher SWR in a heartbeat (without ACA).

If ACA gets totally destroyed along with the pre-existing condition exclusion coming back, then we also may need to return to work. I do not think I would be comfortable paying $3000 a month for healthcare on our portfolio if one of us developed a serious condition that made us practically uninsurable.
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Old 06-24-2015, 12:37 AM   #56
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Fuego, do you consider your case success or failure having to rely on blog (and spouse income ) at this stage ?

Can you manage without the blog income indefinitely given kids ages and inflationary cost of higher education , risk of ACA subsidy disappearing, etc? Your specific case always intrigues me !
Certainly successful so far.

I never planned on the blog income and I don't rely on it to any extent today. Icing on the cake, so to speak. Last year it was about 40% of our budgeted ER expenses, but I dumped all of the blog earnings into a solo 401k (didn't need it; didn't want to pay tax on it).

This year it will be maybe 50-65% of our ER budget, so we are in the ridiculous and uncontemplated position of not needing to touch our portfolio a whole lot if the income remains constant going forward.

I may also get bored with the blog and drop it all together. I never expected to make much more than the hosting fees, but it turns out I was very wrong on the income potential. If blog and freelance writing income dropped to zero tomorrow and the market dropped 30%, I'd still be feeling okay (but a little shocked!).

If ACA subsidies go away completely across the whole nation, I'm not sure what I would do. The easiest for the family would be to go back to work and stay in Raleigh. DW is still technically working (on a paid sabbatical till August), so she might keep working longer. She could go to half time and still cover all of our expenses too.

Moving overseas is also an option to take care of health care issues. We're in our 30's with zero major health issues for us or the kids. If I was 50 or 60 I would be more concerned about health care.

To summarize, our moat is pretty deep. But going back to pre-ACA health insurance markets with zero subsidies would stymie our plan somewhat. I figure there will be a fix or a Republican alternative that might not leave us sitting quite as pretty but will still allow us to stay early retired. Though I won't hesitate to hustle and make money somehow if we need it. In that case, I would declare myself to have suffered an ER failure due to financial reasons.

If I ever ramp up my blog and freelance writing efforts to the point where it becomes real work and do so primarily because I need the money, that'll also be a failure of my ER financial plan. Right now I spend very little time on freelancing and just a bit more time on the blog (posting photos, trip summaries, and interesting tidbits from our Mexico trip for the next couple months probably ).

In the future, I give myself a significant chance of doing something that pays at some point in my life. Probably after the kids are out of the house. I have no clue what that might be and it may never happen. Definitely won't be a regular 9-5 job unless it's incredibly interesting to me or I really need the money.
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Old 06-24-2015, 02:45 AM   #57
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Great insight Fuego!

Agree Overseas living for the sake of affordable healthcare is indeed an option - (typing this from a quick vacation in Thailand myself). It's not for everyone though and my 25 years of intl experience tells me that it may not always work into the future... Cheap places are becoming expensive as the rest of the world and emerging markets develop.

I have FIREd this year but I always had a backup plan of sorts. Plan a is to do some teaching at USA university this fall. Also like to start a blog about my global life journey.

My plan has been to find something that covers half or two thirds of our expenses for approx 10 years, just for sake of a financial cushion and to occupy our brains. The financial Buffer to ensure kids launch etc etc

Before jumping back in I have taken advice and been totally off for approx 6 months post-FIRE and find I am becoming a real human again.

I actually think early retirement is not an all or none situation. I think for early retirees in their 40's or younger, we all have to be flexible and respond to the environment - be it an interesting opportunity, a market setback, etc etc. For me, foolish to say I will stay on this path for the rest of my life. Historically speaking, I adapted and changed circumstantially along the way... Expect to continue to do so
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Old 06-24-2015, 07:21 AM   #58
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The late 50's / early 60's secretary at my former j*b took an early retirement package during a downsizing that occurred a couple of years after I left. She probably had only about 10 years at the company the time, so neither the base pension nor the incentive would have added up to anywhere near income replacement.

<snip>Within a year or so after the layoffs, I heard she was sniffing around about getting rehired.
I was at a sub of the Prudential in the late 1980s when they started offering early retirement incentives. I was surprised at the number of people in their late 50s with modest jobs who took the offer and announced plans to travel and spend time with grandchildren, and wondered how many would be back. Worse, I wondered how many would realize in 20 years that they should have worked longer.

One actuary I know retired to do day trading and after a market downturn he came back part-time. He did that for years so maybe the balance of part-time work and day trading worked for him.

I retired a year ago and don't see myself going back. We're just about to move to a smaller house so many of our fixed costs will decrease and that's been my plan. Withdrawal rate will be less than 4% this year (hopefully 3%) but that's with a pretty relaxed spending style. In a market downturn we could cut out major travel and save a bundle right there. Our charitable giving is a bigger line item than our mortgage so that's also discretionary. If we're totally desperate I could file for SS but I'm 62 and hope to hold off, at least till I can get Spousal at 66. In the meantime, DH's SS and my $10K/year pension would cover bare necessities.
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Old 06-24-2015, 08:40 AM   #59
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If an individual has unusually high long term care costs, and ends up on Medicaid, is that "failure"?

If so, I'd say there are a lot of "failed" retirements, but they don't result in people going back to work.
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Old 06-24-2015, 09:13 AM   #60
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If an individual has unusually high long term care costs, and ends up on Medicaid, is that "failure"?
I believe that's the "plan" for covering long-term care expenses for a majority of the population.
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