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Old 08-29-2011, 03:45 PM   #41
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Maybe I'm paranoid but I get a call from Fido shortly after I update my data and rerun the numbers.
It's not paranoia if everyone really is out to get their hand in your pocket you.
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Old 08-29-2011, 05:47 PM   #42
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The problem I see with the OP's question is that with a 65% allocation to stocks he's got a lot more volatility to deal with than someone who's maybe 40% stocks.
So the more volatile your portfolio, the higher your trigger number needs to be...
I don't agree. He's doing equities at 110-age, which is not at all out of line. That's why I asked if he was going to adjust it as he got older. Since they are in their 40s they've got time to overcome a downturn, and I think it's smart to go for the potentially higher returns on stocks.
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Old 08-29-2011, 05:52 PM   #43
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Maybe I'm paranoid but I get a call from Fido shortly after I update my data and rerun the numbers.
I get e-mails from Fidelity after an update, but more importantly the stock market always drops by 15% or so the week after I do an update.
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Old 08-29-2011, 06:49 PM   #44
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The problem I see with the OP's question is that with a 65% allocation to stocks he's got a lot more volatility to deal with than someone who's maybe 40% stocks.
So the more volatile your portfolio, the higher your trigger number needs to be...
No NO NO

If they are going to retire in their mid 40s, they have a 45 or 50 year planning horizon. A 65% allocation to stock is a floor not a ceiling. At 80K they are probably ok no matter what there AA is. However, if we raise the spending modestly to 100K and you run FIRECalc you'll see that failures increase once AA drop to below 60% and actually hit a troubling 15% failure rate at 35/65 AA.

The current yield on Total Bond Market is 3.25% and inflation is 3.6%. Since they will have to pay say 30% taxes on interest income, they are actually losing roughly $1300 in purchasing power each year per 100K they have invested in bonds.

Given the current fixed income situation I'd be in no hurry to move his AA away from the current 80/20. Although when interest rates raises to more normal levels in the future and he wants to switch to 65/35 that maybe prudent.
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Old 08-29-2011, 08:21 PM   #45
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That's the same deal you get with an FA, right?
Hey, as soon as Vanguard offers that deal, I'll be the next one to do it too.........
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Old 08-29-2011, 09:53 PM   #46
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I expect we will have around $3,000,000 by retirement and the Firecalc looks good. Just getting nervous and before pulling the plug would like to have additional affirmation, I guess. Also, I should have 2 years of expenses put away, so won't have to dip into the 3M until then. The only other wrinkle is about 2M will be outside of 401K and 1M will be stuck in 401K until we are the right age.
As is my custom, let me change the subject a few degrees. I wouldn't worry too much about not being able to get to the 401(k) money for a while. Sounds like you have plenty in savings and also in your taxable accounts to tide you over to age 59 1/2. BUT - My suggestion would be to consider your 401(k) or IRA's (if any) as smaller than their nominal value. IOW, you will have to pay taxes on all withdrawals. You may be able to titrate these withdrawals to keep the taxes low (or even non-existent if you will not be living in a tax-hell state). But, for purposes of planning, you might calculate your expected tax bite up front and adjust the numbers accordingly. If your total state/fed tax bite will be 20%, then I would think of the 401(k) as being worth only $800K.

Just a suggestion. YMMV.

Sounds like you have things well in hand. You are that individual I think of when I hear the term "Early Retirement". I didn't ER until 58. Arguably, that is early. But 43/44 is DEFINITELY early. Congrats and good luck!
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Old 08-29-2011, 10:31 PM   #47
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Here are a few other things a good FA should ask about (other than your "number"). Are you and your wife capable of cutting back should there be a prolonged downturn in the markets? Do you live beneath your means, and enjoy doing so? Can you go back to work if necessary? Do you have a plan for health insurance? Have you considered taxes in your $80,000 of annual spend? And finally, at your youthful age - have you considered what you would do if you don't enjoy ER as much as you think (blasphemy here, I know, but you still have to consider this)?

Good luck!
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Old 08-29-2011, 11:20 PM   #48
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Thanks for all the thoughtful responses. And yes, we have health care covered. We each have private policies through BC/BS, we bought these for all of our employees. That way, the employees can take them with them when they go to another job (or they can just stop paying for them and they will expire, we currently pay them for the employees). Once we retire, we can just keep our private policies in effect until medicare kicks in.

And yes, we currently live below our means and I expect we can cut back fairly significantly once my son (now 13) goes off to college. House is paid off and we have fairly inexpensive hobbies (library, movies, Eurpoean board games, garage sales, some travel, cooking at home). Work is stressful enough that it'll be nice to just get off the wheel for a while and figure out what to do.
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Old 08-30-2011, 02:11 PM   #49
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It sounds like you have a well thought out plan. Financially, you should be good to go. Enjoy the ride
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