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View Poll Results: Net worth/Annual expenses ration when you retired?
less than 10 4 3.92%
10-15 3 2.94%
16-20 8 7.84%
21-25 10 9.80%
26-30 19 18.63%
31-35 16 15.69%
Over 35 42 41.18%
Voters: 102. You may not vote on this poll

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Old 05-31-2014, 04:42 PM   #21
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Ours is quite high (over 35) because our tax bill post-retirement is quite low. I suspect the ratio will drop quite a bit at age 70.5, even with SS and pension because the RMDs are going to really spike our taxes.
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Old 05-31-2014, 08:16 PM   #22
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I was at 40-1 when I ERed in late 2008 when the markets were crashing. Now I am at 60-1.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

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Old 05-31-2014, 08:43 PM   #23
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Answering the poll was really not possible for me because any answer would be misleading. That is, our early expenses after DH retired and I semi-retired were much higher than our later expenses would be. Even now, 4 years later, our NW versus current years expenses would be a scary number, particularly if I used total expenses and not net expenses (after DH's SS). I personally think only net expenses after SS are of any relevance though.

But, we have 2 kids in college so this year's spending doesn't bear a whole of relevance to what our spending will be once the kids are totally gone.

To put in perspective, if I took our spending this year (not doing it net after SS) and compared it to net worth, on your poll, I would choose less than 10!

On the other hand, if I look at our projected spending, say, 4 years from now and make it net after SS and I project what I conservatively think our net worth would be then, I would answer your poll at over 35!
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Old 06-02-2014, 10:47 AM   #24
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Planning on retiring in 2 years. If I ER'd today, our retirement funds/expenses would be 33. Our NW/expenses would be 44.
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Old 06-02-2014, 12:01 PM   #25
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My current ratio is 1/0.031 = 32. If I simplified my life further by getting rid of the 2nd home, and stopping RV'ing and travel, the reduced expenses would bring the WR down to 2% or a ratio of investable assets/WR = 50.

Oh wait. The home equity converted to cash would be added to the total, and the ratio would be even higher. Holy Moly! And when I get SS and Medicare, what would I do with all the money, when the pessimist in me doubts that I will last beyond another 15 to 20 years, if that?

I will need to diversify between the attic and the basement. Would you suggest 50/50, or 70% in basement and 30% in the attic? If you do not know what the above AA is all about, see this.
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Old 06-03-2014, 07:05 AM   #26
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My portfolio ratio was 36 when I retired 2 months ago. I've been giving a lot of thought lately as to the ratio and how that number should weigh in establishing one's AA. It seems to me that the higher the ratio the less volatile of a portfolio one should have. I don't want to call this market timing, but it seems to me that more equities should be converted to cash, etc as the ratio climbs. I think going forward I'll adjust my AA using my age and ratio as guidelines.
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Old 06-03-2014, 08:31 AM   #27
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Wow, so many people are over 35! I feel like I am doomed to retirement poverty (J/K) I did a quick guesstimate, and was about 25. So I selected 21-25.

Actually my ER just really cost me the dream (and hassle possibly) of owning summer and winter homes.

I have reasonable non-Cola'ed pension and SS coming soon. Neither of those I factored in. So I guess I'm OK (or so says Firecalc, other calculators, and Vanguard's FinacialPlan results).
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Old 06-03-2014, 10:13 AM   #28
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My portfolio ratio was 36 when I retired 2 months ago. I've been giving a lot of thought lately as to the ratio and how that number should weigh in establishing one's AA. It seems to me that the higher the ratio the less volatile of a portfolio one should have. I don't want to call this market timing, but it seems to me that more equities should be converted to cash, etc as the ratio climbs. I think going forward I'll adjust my AA using my age and ratio as guidelines.
We decided we are good with capital preservation, or a return of 0 - 1 real, going forward. Our pensions and SS should be more than enough to live a nice life, so why take chances with the rest. Plus we both have part time work I don't include in the plan.

The Fidelity RIP shows us at age 100 with a decent nest egg using our current AA / conservative portfolio, yet they still recommended much more equities. When I looked at the worst year performance of their recommended growth portfolio, based on historical returns, we could lose 52.93% of our portfolio in a single year early on in retirement, or over half our life savings. I don't really see any advantage to us in taking on that level of risk.

Added -
When I use RIP I use a flat annual expenses in today's dollars, keeping in mind what normal people actually spend based on the Consumer Expenditure Survey, and not Fidelity's much higher projected expenses.
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Old 06-03-2014, 10:30 AM   #29
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We were planning for 33x (3% w.r.) but ended up overshooting and are at 47x. This is based on projected expenses as we are still in the first year. Putting on my analytical cap, I think 47x is too high and we should increase some spending, but I think at least initially we'll keep it low until we feel comfortable.
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Old 06-03-2014, 11:37 AM   #30
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with 2 years of semi-retirement to go before full ER we are at 11 excluding an annuity, (i know that is a dirty word to most!), and projected SS.

When Annuity and SS streams kick in, (even cutting SS by 25% in 2032), our WR will be less than zero.
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Old 06-03-2014, 11:42 AM   #31
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I have reasonable non-Cola'ed pension and SS coming soon. Neither of those I factored in...
The poll could have asked about the WR that retirees use to supplement whatever retirement income they have.

Many people like myself are still a few years from SS, but chose not to account for it. When we get there, it's like getting a lot of extra gravy. Hope I will last a few years to enjoy it.
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Old 06-03-2014, 01:18 PM   #32
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Here's my story.

No spreadsheet, no expense projections for me. Expense tracking with Quicken, after the fact mind you, shows that my expenses were 3.5% of invested accounts, dropping to 3.1% in the last 12 month periods. So far so good.

What if the market tumbles and crashes? If it persists and my WR stays consistently high and my accounts suffer significant shrinkage, I will make major lifestyle changes.

Isn't the whole point of the 3.1% WR that you would be able to weather market fluctuations and that you could continue to take the same "buying power" and make it to end of retirement ?
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Old 06-03-2014, 01:25 PM   #33
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These poll results are feeding my TMY (two more years !) syndrome. Assuming the market is flat until March 2015 which I plan to ER I'd be at 28 if I assume no income, 32 if I assume DHs part time income / social security.
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Old 06-03-2014, 01:42 PM   #34
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These poll results are feeding my TMY (two more years !) syndrome. Assuming the market is flat until March 2015 which I plan to ER I'd be at 28 if I assume no income, 32 if I assume DHs part time income / social security.

Ditto. If I RE now, I will be in 16 - 20 camp. Still, FireCalc with Berneki box checked, I get 95% success result. TMY will bump me to 20+ crowd and will get 100% Firecalc result. I am a bit undecided on what to do (OMY, TMY, or RE now).
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Old 06-03-2014, 01:56 PM   #35
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Yes, results so far are not really encouraging for us in the gray zone and doubting what to do.

Am at x27 roughly right now with current lifestyle in a western country. Bit too nervous to jump straight off the cliff towards no income.

Then again, moving to Nepal would last me 70+ years.

Choices, inertia, and too much thinking ..

Oh well, back to house of cards season II
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Old 06-03-2014, 01:58 PM   #36
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at x25 or greater before SS i would have jumped immediately - firecalc gives me a 100% success ratio at much less than that
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Old 06-03-2014, 01:59 PM   #37
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Isn't the whole point of the 3.1% WR that you would be able to weather market fluctuations and that you could continue to take the same "buying power" and make it to end of retirement ?
Yes, but you are talking to a perennial pessimist here.

What if an asteroid falls, not hitting my area (which would be the end of my life and worry), but the other side of the earth and causes a cataclysmic decline of worldwide economy?
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Old 06-03-2014, 02:07 PM   #38
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at x25 or greater before SS i would have jumped immediately - firecalc gives me a 100% success ratio at much less than that
Have a hopefully very long horizon at 34 years old, and quite worried about the current valuation levels in the stock market.

I am self-employed and taking it more slowly though. Might slip into retirement implicitly. Many variables too: might meet someone, have kids, get an inheritance doubling my assets or be disowned, ..

One thing I do know for certain: once I quit working in earnest I do not want to be forced back in a low level occupation.
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Old 06-03-2014, 02:10 PM   #39
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What if an asteroid falls, not hitting my area (which would be the end of my life and worry), but the other side of the earth and causes a cataclysmic decline of worldwide economy?
That uncertainty can better be hedged by building an underground shelter with 30+ years of food supply and marrying someone with field experience as an emergency medic
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Old 06-03-2014, 02:20 PM   #40
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One has to draw the line somewhere.

I chose to draw my line at 3.5% or less without SS, and by mental preparation of how to deal with catastrophes, by living in a motorhome parked in the forest and such (I have been taking notes of several limb chicken recipes posted here).
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