View Poll Results: What pre-tax, real return do you assume in your own plans
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0% or less
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1 |
0.93% |
1%
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2 |
1.85% |
2%
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18 |
16.67% |
3%
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18 |
16.67% |
4%
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24 |
22.22% |
5%
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24 |
22.22% |
6%
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12 |
11.11% |
7% or more
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9 |
8.33% |
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01-29-2012, 11:20 AM
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#41
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Thinks s/he gets paid by the post
Join Date: Dec 2010
Location: USA
Posts: 1,050
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Quote:
Originally Posted by Alan
I'll be 57 in 2 weeks, and DW is 56. I plan on collecting SS at 100%.
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Happy early Birthday Alan! Is your plan to collect at 62?
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01-29-2012, 11:23 AM
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#42
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Thinks s/he gets paid by the post
Join Date: Dec 2010
Location: USA
Posts: 1,050
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Quote:
Originally Posted by W2R
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.
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Conservative as everything is subject to change is my take away.
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01-29-2012, 12:04 PM
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#43
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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: 21,305
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Quote:
Originally Posted by Aiming_4_55
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.
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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.
__________________
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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01-29-2012, 01:11 PM
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#44
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Recycles dryer sheets
Join Date: Jan 2012
Location: Colorado
Posts: 254
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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.
__________________
Don't you know that dynamite always blows down ? --- Moe to Curly
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01-29-2012, 01:42 PM
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#45
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,882
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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.
2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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01-29-2012, 02:01 PM
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#46
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Thinks s/he gets paid by the post
Join Date: May 2011
Location: South Eastern USA
Posts: 1,068
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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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01-29-2012, 05:35 PM
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#47
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2006
Location: Washington, DC
Posts: 11,331
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Quote:
Originally Posted by REWahoo
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"
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+1 I voted 4% but that was just guesstimating based on the common wisdom that things are worse now.
__________________
Idleness is fatal only to the mediocre -- Albert Camus
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01-29-2012, 05:48 PM
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#48
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,130
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Quote:
Originally Posted by Aiming_4_55
Happy early Birthday Alan! Is your plan to collect at 62?
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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.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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01-29-2012, 08:05 PM
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#49
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Quote:
Originally Posted by Alan
... should I pop my clogs well before her.
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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!
__________________
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Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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01-29-2012, 08:20 PM
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#50
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,736
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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.
__________________
You may be whatever you resolve to be.
100% x 10% > 10% x 100%
Small pensions & SS cover essentials
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01-29-2012, 08:33 PM
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#51
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,130
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Quote:
Originally Posted by Nords
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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At least here I only use the 'clean' phrases, otherwise I'd have to moderate myself.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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01-29-2012, 08:38 PM
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#52
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,736
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All things in moderation, even moderation.
__________________
You may be whatever you resolve to be.
100% x 10% > 10% x 100%
Small pensions & SS cover essentials
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01-29-2012, 11:20 PM
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#53
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Thinks s/he gets paid by the post
Join Date: Feb 2003
Posts: 2,395
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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.
__________________
-- Telly, the D-I-Y guy --
Two fools dancing on the hands of time
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01-29-2012, 11:26 PM
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#54
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Thinks s/he gets paid by the post
Join Date: Feb 2003
Posts: 2,395
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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!
__________________
-- Telly, the D-I-Y guy --
Two fools dancing on the hands of time
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