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Old 06-13-2014, 10:07 AM   #21
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Though I am older than the OP hence closer to SS eligibility, I have been using SS as a reserve, in addition to spending at a low WR. I recently decided to download the SS calculator, then to enter in our income records to see for once what SS we will get.

And then, out of curiosity I tweaked the WR in FIRECalc to see what I could spend before going broke in 30 years. FIRECalc told me I could withdraw $65K/year more than I am doing now.

That was worth a chuckle. I have enough now, and am not craving for anything like a fast car or a 3rd house. And I still do not want to pay for a business class air ticket. And I really do not think I will last another 30 years, but if I do the chance is high that I will become a decamillionaire.

I am not telling my children any of the above. They would want to stop work and go straight into ER along with us. Nope, I do not have enough for them to ER now, nor do I want them too. They will have to earn their keep.
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Old 06-13-2014, 10:08 AM   #22
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Originally Posted by RetireAge50 View Post
I am 47 years old and spend about $60,000/year for all living expenses for a family of 4. This excludes mortgage and education expenses (as these I view as temporary) but otherwise includes all other expenses (food, vacations, maintenance, cars, insurance, utilities, entertainment, everything). Any remaining money is saved for retirement.
This spending level has been fairly constant over the years (adjusted for inflation).
In about 3 years (at age 50) we plan to retire. Conservative estimates put our available budget at about $90,000 for the rest of our life. So much for a constant spending level.
What do you think?
1. We messed up and should have retired earlier
2. We messed up and should have spent more while working
3. Good planning as it is better to have 1.5 times spending to enjoy retirement to the fullest
4. You may need this money for the unexpected irregular expenses that do not affect you some years but arise during other years, an extreme example being your present educational expenses. You may also need it for replacement costs.

Examples might be a new roof, a new car, a daughter's wedding, a funeral, disaster damage unreimbursed the the insurance company, dental implants, a new HVAC system, and so on. Some years there is nothing. Other years are worse.
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Old 06-13-2014, 10:16 AM   #23
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What do you think?
1. We messed up and should have retired earlier
2. We messed up and should have spent more while working
3. Good planning as it is better to have 1.5 times spending to enjoy retirement to the fullest
I don't think it's a mistake. You're still retiring earlier than 90% or more, and you're going to have too much money. Not a problem, in my book. Go buy a Porsche (treat yourself however you feel you can!).
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Old 06-13-2014, 10:56 AM   #24
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I feel like whatever we don't spend can help support the kids so they can live not lavish but at least not financially stressed out lives and the rest can go to the food bank or an elephant sanctuary.

When I look at purchases now even though technically I don't have to pinch pennies I still like to get bargains. What is left over after we die and the kids won't need can go to a sanctuary for abused circus and zoo elephants. So I don't feel we oversaved. There is financial security in having enough plus any excess can go to charity.
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Old 06-13-2014, 11:27 AM   #25
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Thanks for the replies. This forum has a lot of smart and down to earth folks.
I think the power of compounding is one of the major reasons NOT to keep spending balanced over time. The sum of constant spending over a lifetime is LESS THAN the sum of delayed spending (so I leaned toward delayed spending).
Also there are things demanding our money now like mortgages and college educations so keeping our spending down and working a few extra years will allow our investments to continue to grow.
As for our lifestyle we spend money on vacations, sporting equipment, dining, electronics, art supplies, Honda automobiles, and last year’s thing. And (for now) we generally do not spend money on fashion, jewelry, fine dining, BMW’s, or the latest thing.
But I plan to spend (or give) the money during my lifetime so assuming I live into my 90’s it will be gone (otherwise I guess it will go to the elephants).
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Old 06-13-2014, 01:29 PM   #26
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Just take what you consider surplus and blow it on a luxury tour. If you have made a mistake by spending too little, this is easily fixed. Or perhaps buy a 2nd tier painting from some no longer popular era. I know a guy who deals in 2nd tier French impressionists, maybe I could get you a deal.

Poof! Surplus over.

Ha
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Old 06-13-2014, 01:38 PM   #27
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I am planning on 200%+ of spending level.

You need after tax money, not pre-tax. Spending is after tax money.

Maybe you get a new car, and them you have payments that you do not now.
Maybe health insurance is much more expensive after you quit a job.
Maybe kids (which I do not have) expenses, like college, eat up money.
Maybe you want to buy an RV and travel, or just travel.
Maybe you have a situation that no RE planner has ever encountered, and you need more.
Maybe a significant legal, medical, or homeowner insurance items comes up. Hose falls off a cliff, flood, sink hole that is not covered, etc.

You do not want your finances to come to a catastrophic end, because of an unforeseen event.
Don't forget the ASTEROID!
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Old 06-13-2014, 03:51 PM   #28
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You never know what might happen...

There are a lot of people that are a long ways away from a river, like 5 miles, and they get flooded out. A creek swells and washes away the banks of the river and takes your home. Mud slide, etc.

Or a few homes near a cliff, where the cliff falls. Insurance doesn't cover everything. Even more likely, a lapsed premium payment due to degraded memory, and a subsequent fire, would cause a major loss.

Not to mention the obvious. Higher inflation with a low stock market. Higher medical bills. Even a condition that is covered by insurance, but having the extra $$ makes your life better.

And if the price of strippers and beer goes any higher, you will need more for sure.
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Old 06-13-2014, 04:14 PM   #29
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I think I will add keep wife and drink water to the plan
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Old 06-13-2014, 04:28 PM   #30
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Originally Posted by RetireAge50 View Post
1. We messed up and should have retired earlier
2. We messed up and should have spent more while working
3. Good planning as it is better to have 1.5 times spending to enjoy retirement to the fullest
I don't see a mistake. Good planning, congrats! Good buffer.
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Old 06-13-2014, 04:29 PM   #31
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No matter what sooner or later you're going to have to take the plunge. Safe spending levels are only what we know today. However, take the odds and run with it. Meanwhile I'll continue to do whatever it is that they at Megacorp are paying me to do in the field.
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Old 06-13-2014, 05:34 PM   #32
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Number 3 is where we are now, spending mucho bucks on margaritas in the West.
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Old 06-14-2014, 02:22 PM   #33
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+2 0n #3. We are "suffering" in our mid-70's at well over 3X - beats anything less!
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Old 06-14-2014, 04:01 PM   #34
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#3 would be my opinion, too. I'm pretty conservative (or paranoid) though.
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Old 06-14-2014, 06:39 PM   #35
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What do you think?
1. We messed up and should have retired earlier
2. We messed up and should have spent more while working
3. Good planning as it is better to have 1.5 times spending to enjoy retirement to the fullest
I think you're in a great position! Better to plan slightly conservatively and retire with more peace of mind. Congrats
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Old 06-14-2014, 09:22 PM   #36
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Old 06-14-2014, 10:30 PM   #37
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Am I the only one thinking #1? If the residual mortgage was small enough, the OP could probably retire right now and have a 20% buffer, which would be plenty enough contingency for me.
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