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10-02-2015, 11:34 AM
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#21
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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Quote:
Originally Posted by ERD50
Good point as well. I'm still looking for that family with 2.6 kids!
-ERD50
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With two teen boys - I think they add up to 2.6 from a fiscal point of view.... Man, can they eat!!!
Friends with daughters don't have the same grocery bills.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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10-02-2015, 11:37 AM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by rodi
With two teen boys - I think they add up to 2.6 from a fiscal point of view.... Man, can they eat!!!
Friends with daughters don't have the same grocery bills.
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My brother grew 13" in 8th grade, back in the mid-1950's. I still remember how much he ate that year. One night my mother gave him an entire dinner plate of spaghetti and meatballs, piled as high as she could. He cleaned that up and asked for another! He finished the second plate full too. And that wasn't even that uncommon.
Gosh, it must be amazing to be able to eat like that.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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10-02-2015, 11:41 AM
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#23
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by MichaelB
Right, and agree not obvious. It does lead to an interesting discussion regarding what our expectations are (and shy) if we think the 4% withdrawal is still safe.
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Yes, and at minimum it makes me even more appreciative of my pension. The info is all on how it effects your retirement. For me, I am considered top 25% (via the pension), or pauper based on assets!
Sent from my iPad using Tapatalk
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10-02-2015, 11:54 AM
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#24
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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Quote:
Originally Posted by W2R
My brother grew 13" in 8th grade, back in the mid-1950's. I still remember how much he ate that year. One night my mother gave him an entire dinner plate of spaghetti and meatballs, piled as high as she could. He cleaned that up and asked for another! He finished the second plate full too. And that wasn't even that uncommon.
Gosh, it must be amazing to be able to eat like that.
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That's the stage we're at. Older son grew about 9" last year... at last measure at least.... I am glad I buy pants long and hem them... that way I can just let them out. But he's reached the point I can't let them out anymore and I'm going to have to start buying at big & tall stores (he's thin - but over 6'1" at age 14).
Don't get me started on outgrowing shoes... I'm already finding it a challenge to find sneakers for him.
Younger son "only" grew 5" last year... but he's still shorter than me. (I'm pretty tall.)
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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10-02-2015, 12:19 PM
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#25
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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The good news is that they can't grow like that forever!
The bad news is that by the time they hit middle age, they have to fight weight gain just like all the rest of us. At least my brother Bob is having that problem just like me. Having seen what the 8th grade Bob could put away while staying skinny as a rail, it's hard to believe he could ever have to diet.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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10-02-2015, 12:24 PM
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#26
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Full time employment: Posting here.
Join Date: Apr 2015
Posts: 903
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Quote:
Originally Posted by Mulligan
Yes, and at minimum it makes me even more appreciative of my pension. The info is all on how it effects your retirement. For me, I am considered top 25% (via the pension), or pauper based on assets!
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If pension is already $77,234 or higher, then your magic number for assets required is $0.
You'll note the article does show assets required for both 4% withdrawal rate ($1,930,850) and 4% withdrawal rate with SS making up the other 40% ($1,158,510).
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10-02-2015, 12:27 PM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,303
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Quote:
Originally Posted by ERD50
And my point is/was - if a writer can't come up with the significant and relevant data, then it is pointless to publish numbers down to the dollar ( $77,234), and not stress the caveats. As I said, it is just typical journalistic meaningless babble.
Did he mention pension in the article? Did he mention how this might affect the numbers? And his only comment about ' I’d like to say I was scientific about it, but I wasn’t. ' seemed to be more geared towards the human nature aspect of what % we need to obtain to feel comfortably 'above the rest'.
So can I turn it around the other way? What value do you see in these numbers? What can it say about whether I'm better off than 3/4 of the public if it is AGI alone (if that is even what it is?)? No mention of wealth, debt, age, etc. If I have a steady $100,000 coming in for the next 30 years, I might be better off than the $1M a year athlete who might only make that for 5 years. Yet, his/her AGI is higher than mine for 5 years.
There is a tendency for people to want to boil down a complex scenario into a single number. That's great when it is meaningful, but often it just makes things worse. I saw it in my career, and you can see it in product reviews. For example, is a 17" screen 'better' than an 11" screen on a laptop? Depends, is viewing more important to you than portability. One number, but it doesn't tell us anything about the suitability/applicability of that number.
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You must be having a bad day, but I hope not.
- I doubt most people who have read Scott Burns over the years would lump him among (the many) financial writers who put out 'typical journalistic meaningless babble' - but suit yourself.
- There's certainly not a 'single number,' there's a whole table & article that show:
- A short history of S&P 500
- History of 5-yr treasury yields
- History of a 50/50 portfolio of same
- History of the 25% income threshold
and
- History of the nest egg required to retire using portfolio income only (principal untouched)
- History of nest egg required to retire using a 4% WR (consuming principal)
- History of nest egg required to retire same plus Soc Sec
The last three also show the relative value of portfolio income, principal and Soc Sec.
I suspect most readers would know that a pension would change the nest egg required. And many people don't/won't have a traditional pension, for them the table/data may be a little more representative.
I respect Scott Burns and thought it was mildly interesting, thought others might as well. I gather you don't, no problem, just ignore the thread.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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10-02-2015, 12:33 PM
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#28
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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Yikes, over $4M just to be able to be in the upper 25%?
I will argue though that retirees can have a $77K lifestyle for much less. Most households get their income through work. They need to save part of that $77K income for retirement and they have to pay FICA taxes. They are also likely to still be paying a mortgage and have kids at home. So a retired couple with a paid-for home, no kiddos, and a $50K income might have more disposable income than the average household making $77K. And for me disposable income is what matters.
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10-02-2015, 12:39 PM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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So, it takes a stash of $4,363,503 to generate a dividend income of $77,234, which is the income of the top 25% of US household.
Darn! The $77K is gross income, while I have been spending more than that, and my stash is nowhere that big (and it has been shrinking too!). Good thing I still have that modest class C RV as housing of last resort.
Tell you the truth, I have been hoping more that I will be among the top 25% longest living people (and I mean good living, not being bedridden and hooked up to tubes).
Money cannot buy health. Look what good it did for Steve Jobs and countless other people with 100's of millions.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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10-02-2015, 12:43 PM
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#30
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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That magic number of $4+Million assumes not touching the principal.
Fortunately, I have no problem spending down as I age.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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10-02-2015, 12:48 PM
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#31
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by Midpack
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That's a withdrawal rate of 1.77%. No wonder you need so much! If you are going to try to live off of the yield on the S&P500 and govt bonds alone, you're stuck with a tiny withdrawal and needing a huge nest egg.
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Retired since summer 1999.
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10-02-2015, 12:53 PM
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#32
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by fritz
Interesting logic to say the least.
Scott Burn's (article's journalist and creater of the Couch Potato Portfolio) conclusion that the independently wealthy need $4,363,503.00 (50/50 stock/bonds) to join the upper 25% income bracket - actually requires you to be in the 1% of US household net worth (used two people for an early retired couple). I posted the Wealthometer link where I plugged in the required $4,363,503.00 household net worth for the required $77,234 annual (1.75% dividend only) income per Scott's article.
Wealthometer: USA
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Yep - I figured something like that. Ironic.
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Retired since summer 1999.
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10-02-2015, 01:05 PM
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#33
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,303
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Quote:
Originally Posted by fritz
Interesting logic to say the least.
Scott Burn's (article's journalist and creater of the Couch Potato Portfolio) conclusion that the independently wealthy need $4,363,503.00 (50/50 stock/bonds) to join the upper 25% income bracket - actually requires you to be in the 1% of US household net worth (used two people for an early retired couple). I posted the Wealthometer link where I plugged in the required $4,363,503.00 household net worth for the required $77,234 annual (1.75% dividend only) income per Scott's article.
Wealthometer: USA
Quote:
Originally Posted by audreyh1
Yep - I figured something like that. Ironic.
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I'm not sure how the Wealthometer link, based on the FRB: Survey of Consumer Finances which includes households of all ages, would pertain to families of retirement age. That database includes a lot of folks from ages 21 (or whatever the lower age threshold is) through retirement age who have understandably not yet amassed a net worth adequate to retire. Wouldn't % of retirement age households net worth be a better measure?
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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10-02-2015, 01:19 PM
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#34
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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What if we forward this article to members of Congress, showing them that even a stash of $4.4M generates only a meager $77K gross income, which is hardly rich?
The point is to tell them that most ERs do not even have a stash this big; so it means that we should be entitled to lots of goodies, e.g. free healthcare, and subsidies of all kinds.
Oh, what if they tell us "Go back to work"?
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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10-02-2015, 01:23 PM
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#35
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by hnzw_rui
If pension is already $77,234 or higher, then your magic number for assets required is $0.
You'll note the article does show assets required for both 4% withdrawal rate ($1,930,850) and 4% withdrawal rate with SS making up the other 40% ($1,158,510).
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Either of the cited numbers would put me to shame. If my pension was taken from me, then back to the coal mines I would go!
Sent from my iPad using Tapatalk
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10-02-2015, 02:05 PM
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#36
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Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,340
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Quote:
Originally Posted by W2R
At least my brother Bob is having that problem just like me. Having seen what the 8th grade Bob could put away while staying skinny as a rail, it's hard to believe he could ever have to diet.
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That's what I told my sisters, who have had trouble keeping weight off since shortly after high school. Now it's caught up to me starting in early 60's. I'm not overweight but I catch any gains early because I get on a scale every day. No longer can I eat all the ice cream I want to....
__________________
When I was a kid I wanted to be older. This is not what I expected.
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10-02-2015, 02:24 PM
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#37
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Full time employment: Posting here.
Join Date: Apr 2015
Posts: 903
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Quote:
Originally Posted by Mulligan
Either of the cited numbers would put me to shame. If my pension was taken from me, then back to the coal mines I would go!
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Lol, first thing my aunt told me when we migrated to the US was get a government job. She actually suggested I go into law enforcement. I followed the advice on the government job, not so much on the law enforcement part. Pension will pave the way for ER at 55 even if I hadn't started seriously saving until now (at 30).
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10-02-2015, 03:29 PM
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#38
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
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I wish someone had shown me the net present value of a government pension when I was 21. I think when looking at job offers I was often comparing apples to oranges without understanding the true value of those kinds of pensions. Though we did luck out and have some jobs over the years with pensions, even if they weren't the top of the line kind.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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10-02-2015, 03:34 PM
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#39
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
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Quote:
Originally Posted by audreyh1
That's a withdrawal rate of 1.77%. No wonder you need so much! If you are going to try to live off of the yield on the S&P500 and govt bonds alone, you're stuck with a tiny withdrawal and needing a huge nest egg.
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Low overhead and other income sources might also factor in, like saving on expenses that do not lower quality of life (cutting the cable channel, energy efficient house, low flow toilets and shower heads, price shopping insurance).
I think at least some retired couples could live a $75K+ fulltime working couple lifestyle for less, with having 80+ hours plus commute time freed up for more DIY and price shopping, and expense reviews, like renegotiating the cable bill and comparing cell phone plans. We've saved a lot on food alone just by having more time to shop and cook.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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10-02-2015, 03:45 PM
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#40
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Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,340
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Quote:
Originally Posted by daylatedollarshort
I wish someone had shown me the net present value of a government pension when I was 21.
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Same here. I did get a government job with a COLA'd pension, but it was with a county, not federal govt. It would have been much better with a CSRS pension. Still, we're relatively well off compared to lots of people so no complaints. Next year when SS starts we'll even be in the top 25% of income mentioned in the other thread.
I wanted to do law enforcement and a U.S. Border Patrol guy was at the college one day and I talked to him a bit. I thought about it, but since it wasn't really what I considered LE at the time I didn't apply.
Dummy. My new next door neighbor is a Border Patrol agent, I think he's an instructor at the new academy nearby. I mentioned that I'd had an airplane once in my 20's. He said that back in the '70's they were hurting for pilots and would have paid for my flight instruction and put me in an airplane right out of initial training if I expressed an interest. That would have been an absolute Dream Job for me at the time! And it probably would have paid better too.
Ahh, to know then what I know now....
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When I was a kid I wanted to be older. This is not what I expected.
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