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Old 01-31-2012, 05:42 PM   #21
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But I try to keep in mind running out of money happens nearer the end of plan, at age 70...
If our plan ends at 70 we've got only five or six years to spend a bunch of money. Maybe that '58 Vette really IS a possibility!
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Old 01-31-2012, 05:45 PM   #22
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6 years into FIRE and in my early 60's, I'm finding that I'm less concerned about what I'm doing/spending (within reason) and the risk of running out of money than with what I'm not doing/spending and the risk of leaving currently doable bucket list items unfulfilled.
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+1

Life is a crapshoot balancing act.
I think I have had an epiphany. After reading these two posts, I have decided that I don't have a bucket list after all.

Are you sure you would be this distressed about not doing these bucket list items, and not simply distressed because you are that many years closer to death? I sure don't want to die, and if immortality were for sale I'd be the first one in line. Each day is a renewal of the fabulous gift of time. Each day is the experience of a lifetime, full of opportunities to fully enjoy and experience each moment. But the other side of that coin is that each year I am distressed because I am one year closer to the end of the great story, so to speak.

But bucket list items? Pffft. I thought going to the Smithsonian was tops on my bucket list, but either now or in the years to come I am sure I would be able to find online tours of various parts of the Smithsonian. That would be a perfectly fine substitute IMO. No big deal (for me).
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Old 01-31-2012, 05:49 PM   #23
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I approach it about the way Youbet described. At the bottom of the recession a Firecalc run would propose a significantly smaller withdrawal amount than it did just before. But it also seemed likely that equities would bounce back up significantly. After the recovery Firecalc was back telling me to spend. I simply stay conservative and figure that, in ten years or so, if things are looking I can relax and spend more if I want or gift if I want. If the worst of the forecasts proves correct I will undoubtedly have already curtailed my spending accordingly.
Is it just me or is everyone getting a little bit too conservative? Somehow I have this picture of all of us trying to board those planes to Europe to spend all those dollars before giving it to our heirs. Only we're now a lot older and travel is even harder.

P.S. Don, I don't mean to pick on you ... just that too maybe many of us (including yours truly) are thinking the same way.
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Old 01-31-2012, 05:52 PM   #24
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I think I have had an epiphany. After reading these two posts, I have decided that I don't have a bucket list after all.

Are you sure you would be this distressed about not doing these bucket list items, and not simply distressed because you are that many years closer to death? I sure don't want to die, and if immortality were for sale I'd be the first one in line.
...
I'm selling it, if your buying it.
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Old 01-31-2012, 05:55 PM   #25
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Is it just me or is everyone getting a little bit too conservative? Somehow I have this picture of all of us trying to board those planes to Europe to spend all those dollars before giving it to our heirs. Only we're now a lot older and travel is even harder.
I promise you, I won't be lining up to get on those planes when I'm elderly and infirm.

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I'm selling it, if your buying it.
Um, er, uh.....
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Old 01-31-2012, 05:56 PM   #26
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W2R, I don't actually have a bucket list, but I do have a bucket and I have concerns about what happens between now and the time I kick it.

I don't want to have regrets x years from now that I was too concerned about running out of money to do something I can physically no longer do. I'm not talking about spending $75K on a two-month round-the-world trip, I'm talking about far more reasonable RV trips, an Alaskan cruise, or attending the 2012 Punkin Chunkin World Championship.

Gotta chunk while I'm still punk...
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Old 01-31-2012, 05:57 PM   #27
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Thanks for all the good suggestions - no magic bullet but hey where would the fun be if everything was always black and white. I had forgotten the Otar book, I have a PDF copy and will take a look at it.

Thanks again for all comments.

Bob
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Old 01-31-2012, 05:59 PM   #28
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Anyone with a decent plan will be successful for the first 20 years or so...
I think by "successful" in your statement you mean that your portfolio will not run dry. I agree. That should be a piece of cake for 20 years or so if the future somewhat reflects the past and given a solid starting position.

Six years into FIRE, the concept I'm struggling with is whether I'm making some spending decisions that are too conservative and will likely wind up regretting not doing some things while they were age appropriate. Laying in my bed at the nursing home reminising about the Alaskan fishing trip DW and I decided not to take won't be a good thing. Especially if the most probable event is that my portfolio will survive.

Put another way, I'm feeling confident in watching my portfolio and determining that my spend rate is not putting me at risk of running out of money before I die. I'm feeling much less confident that I'm making good decisions about levels of spending so that later in life I don't have regrets about activities not done.

I understand that my 50/50 (SS/pension vs WR) income situation is likely causing this dilemma. If my situation was 90% - 100% funded by my FIRE portfolio, I'd probably still be entirely focused on portfolio preservation. And I certainly didn't have these feelings the first couple years of RE or during the recession. They've just popped up during the past year or so as the recovery has slowly moved along and as the idea of "not working" has become less novel.
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Old 01-31-2012, 06:37 PM   #29
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After reading these two posts, I have decided that I don't have a bucket list after all.
I'm kinda sorry I threw that term out there. I don't really have a formal "bucket list" either. I guess a bucket list is a list of activities you want to get checked off as done. We're not into that. But DW and I do have some things we've loved to do all our lives and would like to do a little more of while we're on this side of the sod. And generally they're things that we're right on the edge of not being able to do anymore.

For example, we love to canoe-camp in Quetico Provincial Park. As youngsters, it was a cheap trip relatively speaking. To go today, we'd have to take a guide to do the heavy lifting. I just couldn't carry a canoe and a pack over a rough 600 rod portage anymore. Not even close. That makes the trip expensive and with the other stuff we have on the agenda for this year, we'd be pushing our planned WR a tad.

When we first RE'd (DW in 2002, me in 2006), going conservative on the activities list was easy. We could justify not doing things by simply saying we'd do them later when we had more confidence about "not running out of money." But as the age-appropriateness of some activities begins to stare us in the face, it's getting a little harder. Not doing some things and then later having the portfolio be just fine, maybe even with excess, will probably irk me. Especially now that I'm thinking about it a lot.

There's no right or wrong here. And in terms of life's priorities, these are all small potatoes. Recently, I'm just stuck on the issue of successful FIRE spending and realizing that, for us, it's possible to spend too little and well as too much.
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Old 01-31-2012, 06:43 PM   #30
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OP - Bob, besides the success rate %, what age did you assume with the 30 years of planned retirement?

Sometimes when I use the various retirement tools and it has a default age of 95 or 100, I feel that's extremely conservative for me as no one in my family ever lived to reach such an age. Of course, I would hate to be 94 and run out of money. For me, I experiment with "what if" I target for 80 or 85 vs 95 or 100.
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Old 01-31-2012, 06:49 PM   #31
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I think by "successful" in your statement you mean that your portfolio will not run dry. I agree. That should be a piece of cake for 20 years or so if the future somewhat reflects the past and given a solid starting position.

I understand that my 50/50 (SS/pension vs WR) income situation is likely causing this dilemma. If my situation was 90% - 100% funded by my FIRE portfolio, I'd probably still be entirely focused on portfolio preservation.
Glad you pointed that out. I don't have a pension or any retiree health care aside from Medicare (which is underfunded already). Not complaining, not something I didn't know going in. And I just retired 7 months ago, so I am being cautious here at the outset, I am sure I'll mellow (generational term).

And I have an actual written bucket list started when I was in my 30's (before the term came into popular use), 68 complete, 50 yet to be. And it's always been a dynamic list, not a 'must do' list. Works for me, but not essential. Life's a journey for all of us...
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Old 01-31-2012, 06:49 PM   #32
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Recently, I'm just stuck on the issue of successful FIRE spending and realizing that, for us, it's possible to spend too little and well as too much.
We are definitely in agreement on that one. Might as well have some fun now, if our portfolio is rock solid for the duration and if that fun doesn't endanger our final years due to insufficient funds for what we need later on. After all, we can't take it with us.
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Old 01-31-2012, 06:57 PM   #33
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W2R, I don't actually have a bucket list, but I do have a bucket and I have concerns about what happens between now and the time I kick it.

I don't want to have regrets x years from now that I was too concerned about running out of money to do something I can physically no longer do. I'm not talking about spending $75K on a two-month round-the-world trip, I'm talking about far more reasonable RV trips, an Alaskan cruise, or attending the 2012 Punkin Chunkin World Championship.

Gotta chunk while I'm still punk...
I think I'll skip that one, thanks.....

I know that I am a nerd a little different about some things. I won't have any regrets x years from now, because then (as now) I will be too busy looking forward to all the great, exciting stuff I am doing and can do in the future. I can't help it, I was born this way.

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Old 01-31-2012, 07:15 PM   #34
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There's an interesting "Game Over, get an annuity" study in the first post of this thread:
New thoughts on the draw down phase

You might also enjoy Wade Pfau's musings on sustainable & variable withdrawal rates:
Pensions, Retirement Planning, and Economics Blog: Safe Withdrawal Rates: Have I been barking up the wrong tree?
Pensions, Retirement Planning, and Economics Blog: How Much is Too Much? (Wall Street Journal)

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Some may find increasing post-retirement income to levels well above pre-retirement income a rewarding endeavor.
Only if that can be accomplished without paid employment. And maybe without even working for it...

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If our plan ends at 70 we've got only five or six years to spend a bunch of money. Maybe that '58 Vette really IS a possibility!
I think you'd need a really long stretch of highway runway to get to V1 & V2 on that baby, and even then the wingspan doesn't seem very big...
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Old 01-31-2012, 07:37 PM   #35
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Is it just me or is everyone getting a little bit too conservative? Somehow I have this picture of all of us trying to board those planes to Europe to spend all those dollars before giving it to our heirs. Only we're now a lot older and travel is even harder.

P.S. Don, I don't mean to pick on you ... just that too maybe many of us (including yours truly) are thinking the same way.
After retiring at the start of the big drop I did scale back my spending especially travel but now I have returned to spending more on travel . I would rather have less stuff and more experiences now when I can enjoy them . No real bucket list just places I would like to see before I die . I have to disagree with the idea that an online video of a place equals seeing the place . When I think back on all the spur of the moment things that we saw on our trips no video does that justice .Rewahoo , go for that Alaskan cruise . It's a great trip and will not break the bank !
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Old 01-31-2012, 10:08 PM   #36
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There is the very valid 'age related activity' point that youbet made, and it is one we should probably all think about. However, there is a pure 'numbers' aspect of the OP scenario that I don't think anyone addressed:

Quote:
My initial though was to run FIRECalc each year using the then current portfolio data and current inflation adjusted WD for that year. Instead of a 30 year term, I would adjust the term using a countdown number (30, 29, 28, etc.)

Does this make sense,...
It makes sense, but.... there can be a 'gotcha' in the numbers.

Keep in mind that the FIRECALC failures are (obviously) due to the worst sequences in time. In some of the cases that just barely survive, the line dips, and then recovers.

Now imagine that a hypothetical person who was 'living' that dipping line decided to re-run FIRECALC. They would, at this low point of their portfolio, subject themselves to analysis of hitting the worst sequence of events AGAIN. The model would be telling them they are doomed, while in (our rear-view mirror view of) reality, their portfolio was just about to recover, and maybe even grow beyond where they started in buying power.

It's a little like asking a guy if he has the energy to run a marathon. He might be confident that he can. And then you ask him again when he is near the finish line if he has the energy to run a half-marathon one right after this one. You can't expect the same answer twice!

Yes, I know you are adjusting the time frame down as you go, but the worst hurting sequences are in the first few years (drawing down a portfolio that must last) - so those still get tacked on twice. Maybe your portfolio could survive the Great Depression, but it can't survive two sequential ones.

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Old 02-01-2012, 06:53 AM   #37
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Is it just me or is everyone getting a little bit too conservative? Somehow I have this picture of all of us trying to board those planes to Europe to spend all those dollars before giving it to our heirs. Only we're now a lot older and travel is even harder.

P.S. Don, I don't mean to pick on you ... just that too maybe many of us (including yours truly) are thinking the same way.
No problem. Conservative for me is leaving for Kenya and Tanzania next week, San Diego to Healdsburg in April, a week at the beach in June, and the Caymans in November. Travel is a big part of our budget. We delayed ER until that part was assured.
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Old 02-01-2012, 08:56 AM   #38
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No problem. Conservative for me is leaving for Kenya and Tanzania next week, San Diego to Healdsburg in April, a week at the beach in June, and the Caymans in November. Travel is a big part of our budget. We delayed ER until that part was assured.
Not going to feel sorry for you anymore . We'll be in San Diego in May to see DS graduate from college. Then more dollars for DW and I when he gets a real job .

BTW, if you are in Healdsburg you might stop by Vingettes in the square there (south side of square). DW has her paintings there. She signs her paintings C. Swann. PM me if you are in need of local travel suggestions.
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Old 02-01-2012, 09:00 AM   #39
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Keep in mind that the FIRECALC failures are (obviously) due to the worst sequences in time. In some of the cases that just barely survive, the line dips, and then recovers.

Now imagine that a hypothetical person who was 'living' that dipping line decided to re-run FIRECALC. They would, at this low point of their portfolio, subject themselves to analysis of hitting the worst sequence of events AGAIN. The model would be telling them they are doomed, while in (our rear-view mirror view of) reality, their portfolio was just about to recover, and maybe even grow beyond where they started in buying power.
I agree with what you say, but wouldn't this be true for the retiree just starting out (with a 30 year horizon) as well? Firecalc would tell him a X% WR would have a Y% success rate, when, in fact, according to what you say it would probably be higher, maybe significantly so.
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Old 02-01-2012, 09:19 AM   #40
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Keep in mind that the FIRECALC failures are (obviously) due to the worst sequences in time. In some of the cases that just barely survive, the line dips, and then recovers.

Now imagine that a hypothetical person who was 'living' that dipping line decided to re-run FIRECALC. They would, at this low point of their portfolio, subject themselves to analysis of hitting the worst sequence of events AGAIN. The model would be telling them they are doomed, while in (our rear-view mirror view of) reality, their portfolio was just about to recover, and maybe even grow beyond where they started in buying power.
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I agree with what you say, but wouldn't this be true for the retiree just starting out (with a 30 year horizon) as well? Firecalc would tell him a X% WR would have a Y% success rate, when, in fact, according to what you say it would probably be higher, maybe significantly so.
In most cases it would appear so. I would expect the failures in FIRECALC to be the profiles where the retiree came off a market peak and into a trough. So if the individual isn't actually starting retirement at/near a peak in the market, the FIRECALC results should be relatively more conservative.

It gets back to the 'value' of the market in the year you retire - and FIRECALC does not take that into account (just as well - it would get really messy), it treats a $1M starting portfolio as $1M, whether we are near a market peak, or in a trough. But as we can see now, a $1M portfolio at the end of 2002 was worth more than $1M at the end of 2000.

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