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Old 11-08-2014, 08:00 AM   #41
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What I need is different from what I spend.
What I need is what I spend on DW and myself, then what I spend includes charitable contributions, kids/grand kids educations, "nice" annual gifts to kids/grandkids. And, my benchmark is my dividend and interest checks each month. So, I'm lucky, share a little and get a lot of enjoyment watching my family appreciate the gifts. It's a low 6 figure amount, we don't live "high on the hog" but we don't live cheaply either.
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Old 11-08-2014, 08:06 AM   #42
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People obsess so much on here about having enough money. Run simulations, worry if their 2% SWR is too aggressive, then they have a doctor's visit and find out they have about 3 years to live.

Just retire. Adjust your spending if we have a downer market. You can't buy life.
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Old 11-08-2014, 09:02 AM   #43
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Originally Posted by RetireAge50 View Post
The intent here was NOT to get a gauge on if one feels safe at their own spending levels. It was to get an idea of retirement income levels at various ages.

For example:

Income, Age, Retirement Status

$67,000, Age 47, Not Retired

Or since this is gauche maybe:
$100k+, Age 53, Retired


We could all then take a look at the answers and say:
-I'm right about where most everyone else is
-oh my goodness I need to retire already
- or maybe I'll hold off on retiring a little bit more.
$84,000, Age 53, Recently Retired.

What isn't mentioned there - family of 4, no mortgage or debt, 529 funding coming from a different source. Trip-of-a-lifetime(TM) next year is coming from a set aside of $ not included in the annual budget. Some planned home improvements also have set asides.

That's my actual budget. Firecalc puts it over $90k for 100%. Firecalc uses the SS numbers I put in, as well as small pension and rental income I put in - so the WR is smaller than it would otherwise appear.
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Old 11-08-2014, 09:49 AM   #44
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It is a insidious disease called OMY syndrome. You continue to find reasons to continue working until you die or get so sick that you can't work any longer.

At least some understand their choices...Now on the other hand my friends...as they near retirement which are pension based, they comment on how much more their pension is if they stay one or two more years like it's free money...then I simply explain the opportunity costs involved such as closer to dying and foregoing the pension income that could have been received but is lost by continuing to work. They look at me like I decoded the Rosetta Stone.


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Old 11-08-2014, 10:22 AM   #45
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Just based on spending and assets, FIRECalc gives me a 1.8% chance of success.

Adding my Military pension gets me to 72.8% chance of success.

Selecting Bernicke's Reality Spending gets me to 100%

Good thing I'm a realist.
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Old 11-08-2014, 11:14 AM   #46
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Originally Posted by Fermion View Post
People obsess so much on here about having enough money. Run simulations, worry if their 2% SWR is too aggressive, then they have a doctor's visit and find out they have about 3 years to live.

Just retire. Adjust your spending if we have a downer market. You can't buy life.
As one of the worriers, I think there is a lot of wisdom in your comment.

Interesting, the drivers of my obsession about income and withdrawal rates actually aren't lifestyle driven.

One is a sense of obligation to the world around me -- for all my blessings, shame on me if I hang it up too early and the become a burden on those around me (family or society).

The other is a sense of obligation to myself and DW -- after 20 years of busting my hump in corporate life, I will be really pissed if i mis-judge and leave too early. At this stage I put away in a year what used to take 5 years.
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Old 11-08-2014, 11:47 AM   #47
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At least some understand their choices...Now on the other hand my friends...as they near retirement which are pension based, they comment on how much more their pension is if they stay one or two more years like it's free money...then I simply explain the opportunity costs involved such as closer to dying and foregoing the pension income that could have been received but is lost by continuing to work. They look at me like I decoded the Rosetta Stone.
Between pensions, much lower income taxes, tax credits, qualifying for financial aid, no longer having to save for retirement, hobby jobs, having time for more DIY and price shopping - we are still kind of in shock we can live the same basic lifestyle only not have to work full time any longer. I'm sorry I didn't run the numbers in this detail years sooner. We saved a lot on unnecessary expenses that really didn't add to our quality of life just by having more free time to review and analyze the budget. Our pensions aren't super huge but with lower expenses they cover a much bigger chunk of our spending than we initially thought they would.
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Old 11-08-2014, 12:01 PM   #48
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Firecalc@100%: $191,000

That's using Firecalc at its default settings.
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Old 11-08-2014, 12:15 PM   #49
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Originally Posted by RetireAge50 View Post
If you retire TODAY (or are already retired) what income would give you 100% success in FIRECalc?

For our family it would be $67,000 age 47 (Not Retired)

FIRECalc Settings:
Constant Spending
CPI Inflation
Total Market 60/40
Investigate Tab Set to 100% by Changing Spending Level
Without including SS in 15 years @ age 70 and an AA of 65/35, FireCalc tells me I'm 100% with a 3.65% withdrawal rate - an amount just about equal to the amount of SS that I should receive. If I eliminate the Great Depression by starting the analysis at 1940 and do not inflation adjust anything by withdrawing a true constant amount, FireCalc then tells me I'm 100% with a 7.08% withdrawal rate.

Given both cases provide ample income for me to live on, I think I'm good.
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Old 11-08-2014, 12:34 PM   #50
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We could all then take a look at the answers and say:
-I'm right about where most everyone else is
-oh my goodness I need to retire already
- or maybe I'll hold off on retiring a little bit more.
It would seem to me that the annual $ amount from FIRECalc, age, and if you're retired or not is less than what you would need...you'd also need what your current burn rate is.

100k, 55, recently retired means something different if my current (or post retirement) burn rate is 50k versus $150k, right? I see all of these people in the bay area with huge mortgages (but fewer square feet to live in than I do), huge taxes, etc.

To me, what you really want to know is the spending multiple.

One way to calculate it would be to get a current value on future income streams (social security, pensions, etc). You'd have to agree to all use the same discount factor, otherwise the results would be all over the place. And we'd all have to use the actuarial tables to keep apples-to-apples. So then you'd add the present value of your income streams to your spendable assets. (I'm not going to use the "N" word ["NW"] or people freak out with their own definitions). But you take that total of spendable plus present value of future streams, and you divide it by your current or projected annual expenditure.

I did a little googling, but couldn't find a calculator that would give one the present value of social security payments. I figure it must be out there, but I just didn't see it. I wouldn't need to be social security, per se, it just has to let you put in how many years in the future the payments will start, and how long. And also allow for inflation and discount percent input (this is important because there's time between now and when the payments start).

But rough numbers, I'm totally underspending (but I knew that)...When I add in a quickie present value of SS to my nest egg and divide that total by my current burn rate, I can get myself to over 100 years of age.

So although we lose the FIRECalc "market" aspect and fall back to assuming the portfolio will keep up with inflation, I think this calculation is a better yardstick to measure if you are behind, equal, or ahead of others in your quest to RE.

Quote:
Calculate the present value of your future cash flows, add that to your nest egg, divide the total by your projected annual spending, then add that to your current age. Is that number higher than the actuarial table for you?
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Old 11-08-2014, 01:03 PM   #51
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Income If You Retire Today

Here are the 5 results so far:

$67,000 Age 47 Not Retired
$539,000,na,na
$100k+ Age 58 Retired
$84k Age 53 Retired
$191k Age 35 Retired

No sense in listing the SWR answers as this can be generated from a computer for any given age. Actual income levels people attain and desire is what I thought this group might find interesting (although gauche).

I wanted to keep the spending out of the equation for this exercise although I agree it is very valid.
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Old 11-08-2014, 02:07 PM   #52
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You are so gauche, RetireAge50!

I didn't understand LOL!'s original comment, unless it was a joke that went way over my head. Not everyone here wants to fully disclose dollar amounts, preferring to talk in terms of percentages, but there are plenty here who do. Many have commented that this is one of the few places they actually can talk candidly about money because such conversations, if had with their real-life acquaintances and friends, are usually considered "gauche".

I won't add to the data pool in this thread though, as I have spent a little too much time in previous threads telling the other members how little I have and besides - my results would bring the average waaay down That would be terribly gauche of me (good grief, I'm getting fed-up with that word!)
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Old 11-08-2014, 03:30 PM   #53
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Originally Posted by RetireAge50 View Post
Here are the 5 results so far:

$67,000 Age 47 Not Retired
$539,000,na,na
$100k+ Age 58 Retired
$84k Age 53 Retired
$191k Age 35 Retired

No sense in listing the SWR answers as this can be generated from a computer for any given age. Actual income levels people attain and desire is what I thought this group might find interesting (although gauche).

I wanted to keep the spending out of the equation for this exercise although I agree it is very valid.
The Consumer Expenditure Survey has income by age, area, etc. as well as expenses. I guess I am not sure how anything people post here would be more helpful as a benchmark.
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Old 11-08-2014, 03:51 PM   #54
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Originally Posted by RetireAge50 View Post
Here are the 5 results so far:

$67,000 Age 47 Not Retired
$539,000,na,na
$100k+ Age 58 Retired
$84k Age 53 Retired
$191k Age 35 Retired

No sense in listing the SWR answers as this can be generated from a computer for any given age. Actual income levels people attain and desire is what I thought this group might find interesting (although gauche).

I wanted to keep the spending out of the equation for this exercise although I agree it is very valid.
I have a hard time to believe 539k. For my allocation type (equities only) it would require 15 Million dollars.

And even if you mix in some bonds you will need over 10 million. (I did not play with FIRECalc to get exact number)
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Old 11-08-2014, 05:12 PM   #55
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Apparently, many people still are not aware that LOL's secret to riches has been spilled for everybody to follow in his free Market Timing Newsletter published on this very Web site: LOL!'s Market Timing Newsletter.

Yes, you too can spend $539K/yr, if you have the guts.


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So set up an anonymizing poll.

And I wasn't joking about $539K as I clearly stated in that post.
OK, enough kidding. LOL was not joking as much as lying, as he stated in his initial post.

Quote:
Originally Posted by LOL! View Post
It is generally considered gauche to try to make comparisons like this … even on an anonymous message board.

So I will just lie about it: $539,000.
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Old 11-08-2014, 07:39 PM   #56
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The Consumer Expenditure Survey has income by age but that has nothing to do with the expected income for the rest of your life. Someone may have a $200,000 income but whenever they quit their job their income will be zero.

This poll/thread is to see how much income people here expect to average in retirement.
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Old 11-08-2014, 07:47 PM   #57
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This poll/thread is to see how much income people here expect to average in retirement.
So, if all of my expenditures in retirement are to be paid by withdrawals from savings, do you count that as zero income or income in the amount of the withdrawal. Or is my income the interest the account earns, whether I spend it or not. I don't understand the question.
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Old 11-08-2014, 08:14 PM   #58
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Income If You Retire Today

Income meaning how much they have to live on EACH YEAR on average for the rest of their life.

For example someone age 70 and expected to die at 90, $20,000 in social security and a portfolio of $300,000. Their yearly income would be $35,000 (computed as $300,000/20 years +$20,000 SS=$35,000

This would be a conservative income only expecting investments to keep up with inflation. Or something like FIRECalc or other tools will give an estimate.

So they would list:
$35,000 Age 70 Retired
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Old 11-08-2014, 08:21 PM   #59
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The Consumer Expenditure Survey has income by age but that has nothing to do with the expected income for the rest of your life. Someone may have a $200,000 income but whenever they quit their job their income will be zero.

This poll/thread is to see how much income people here expect to average in retirement.
I am not following. My income isn't zero. We have pension income, investment income, hobby job income and of course my Bing rewards income for another whopping $4.50 a month. The CES has sources of income and personal taxes grouped by age of reference person:
http://www.bls.gov/cex/2013/combined/age.pdf

Here is a summary of a survey on retirement income Vanguard did this year:
Social Security and Pensions: Even Wealthy Retirees Depend on Them.

There is also the Survey of Consumer Finances:
http://www.federalreserve.gov/pubs/b.../pdf/scf14.pdf
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Old 11-08-2014, 08:38 PM   #60
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Income If You Retire Today

Again not referring to income as defined by accountants or for tax purposes. I'm talking about (nest egg + total of all future streams of cash)/life expectancy.

Someone on the CE survey may have a high income but zero net worth.
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