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View Poll Results: What pre-tax, real return do you assume in your own plans
0% or less 1 0.93%
1% 2 1.85%
2% 18 16.67%
3% 18 16.67%
4% 24 22.22%
5% 24 22.22%
6% 12 11.11%
7% or more 9 8.33%
Voters: 108. You may not vote on this poll

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Old 01-29-2012, 12:20 PM   #41
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Originally Posted by Alan View Post
I'll be 57 in 2 weeks, and DW is 56. I plan on collecting SS at 100%.
Happy early Birthday Alan! Is your plan to collect at 62?
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Old 01-29-2012, 12:23 PM   #42
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Originally Posted by W2R View Post
Not only that, but the cost of Medicare Part B might go up (effectively reducing SS after Medicare has been deducted). Also I assume that 100% of SS will be taxed, and then there is means testing.

So, although I have one tentative plan based on 100%, I guess that really I'm expecting maybe 50%? I have an alternate plan by which I can live if SS completely craters and I get 0%. Meanwhile, I am whistling in the dark and planning to take SS sometime between now and age 70. My original plan was 66, but I'll play it by ear.
Conservative as everything is subject to change is my take away.
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Old 01-29-2012, 01:04 PM   #43
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Originally Posted by Aiming_4_55 View Post
For those not collecting SS yet, do you figure benefit at 100%, 75%, ? My guess it'll depend on your timing for qualifying. Since I won't be 62 until 2031, I'm factoring 50% without spouse benefit.
We're guessing we'll have 70% or better, but all our plans are also based on 50%. Like others here, with a 40 year window, we'd rather underestimate and be pleasantly surprised than to be bullish and end up scrambling when we're old(er) geezers with few options. I'm afraid there may be more and more 70-80+ olds looking for work decades from now, I don't want to be one of them.
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Old 01-29-2012, 02:11 PM   #44
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I retired Jan 1 2008 and since then my liquid net worth (doesn't include house, cars, other stuff in the house) has increased 12.8% in a little over 4 years. So my real return has been approx 3% over a pretty crappy time in history. I'm keeping my fingers crossed for this to continue ! Not the crappy economy part, the return part.
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Old 01-29-2012, 02:42 PM   #45
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My model assumes 10.7% nominal for stocks and 3% inflation, so that roughly works out to 7.7% real return.

My model, though, has at least 20 different variables. For each of them I try to pick what I consider the most reasonable number, which is the longest-term statistic from a reliable source that I think applies to my situation.

Overall I use the model to pick my FIRE date. As the years have gone by, the actual performance of those 20 different variables have individually not equaled my reasonable number. However, my overall predicted FIRE date remains fairly stable, so I conclude from this that my aggregate assumptions are reasonable.

I also do some crude sensitivity analyses every once in a while and I know which variables most affect the outcomes, and I tend to watch those more closely. For example, I assume 3% for a personal CPI, but for the past four years it's been closer to zero.

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Old 01-29-2012, 03:01 PM   #46
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Great thread and great responses.

I have been using 3% inflation and 2.9% return above inflation for my model. I guess I am in the middle of this pack.
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Old 01-29-2012, 06:35 PM   #47
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Originally Posted by REWahoo View Post
Since my model is FIRECalc, my rate of return is that of the worst 30 year period over the past 139 years. Not sure what that is, so I'm not sure how to respond to the poll.

"Hope for the best, plan for the worst"
+1 I voted 4% but that was just guesstimating based on the common wisdom that things are worse now.
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Old 01-29-2012, 06:48 PM   #48
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Originally Posted by Aiming_4_55 View Post
Happy early Birthday Alan! Is your plan to collect at 62?
Thank you

Our plan is for DW to start collecting at 62 and for me to wait until 70. She is a year younger than me and has no pension, 50% survivor on mine. We have insurance on my life through to age 70, and if all goes to plan and we both live to 70 then the extra SS will give her sufficient cover should I pop my clogs well before her.
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Old 01-29-2012, 09:05 PM   #49
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... should I pop my clogs well before her.
I look forward to the wiki that you could write to translate British English idom into American English idiom... and then we could have REWahoo! and the rest of the Texans contribute their version.

You could sell a country-specific edition on each side of the Atlantic!
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Old 01-29-2012, 09:20 PM   #50
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Like many others here, I assume no specific annual return. Instead, I use Fido RIP and FireCalc and look for high (>90%) success rates.
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Old 01-29-2012, 09:33 PM   #51
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I look forward to the wiki that you could write to translate British English idom into American English idiom... and then we could have REWahoo! and the rest of the Texans contribute their version.

You could sell a country-specific edition on each side of the Atlantic!


At least here I only use the 'clean' phrases, otherwise I'd have to moderate myself.
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Old 01-29-2012, 09:38 PM   #52
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At least here I only use the 'clean' phrases, otherwise I'd have to moderate myself.
All things in moderation, even moderation.
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Old 01-30-2012, 12:20 AM   #53
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Best case: Hmm... This one is a bit tougher. MH has cargo carrying capacity of 2,600 lbs. Subtract out 1,600 lbs for real cargo, that leaves 1,000 lbs to hide Krugerrands. At the price of $1,600/oz, that's $25.6M that would fit! No problem!
Uh-oh, better cut back on expenses a bit
You assumed the Avoirdupois ounce, but precious metals use the Troy ounce. 1 Troy ounce = 1.097143 Avoirdupois ounces. So your precious metal payload will be worth only $23.3 M

Eons ago, I worked at an industrial job that dealt with precious metals. Absolutely everything was weighed in/out including reels, spools, paper, labels, etc. If any part of a base metal or plastic reel or spool or holder was broken in use, the broken piece had to be found and weighed. All to .001 Troy Oz. Never heard of an inside theft... probably because the police might eventually be notified, but the for-profit "collectors" would be immediately notified.
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Old 01-30-2012, 12:26 AM   #54
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I use 3% real in my spreadsheet, FWIW. I have inflation and nominal returns as variables, so can easily spin off to never-land with choices. In 2002 I was putting in double-digit negative nominal return % for 2003, high single negatives for 2004, low single negative for 2005, then slight positive for 2006, etc. Glad none of that came to pass then!
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