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Old 05-10-2008, 08:18 PM   #41
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I'm just about in the same situation. Single, 56 and 600K. It is not where I wanted to be financially when I retired, but life got in the way a couple of years ago and that cost me a good portion of my assets.

However, even though I cannot spend what I used to on the frivolties of life, I would rather go out into the garage and hang myself than go back to my old job. I turned down a chance to contract back to them solely based on the value I place on my sanity. I may have to find a part time job at some point, but it will be for the relief of not watching my nest egg dwindle in a down market, rather than thinking I really have to. I need $1400 a month to make it, I have been spending about $1800 average due to travel and having started to date.

Be aware that should you find someone you wish to partner with, it can quickly impact your monthly expenditures. I used to buy a tank of gas every couple of months, now it is two or three time a month. I have been retired 14 months.
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Old 05-10-2008, 09:06 PM   #42
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Spending $9K/month sounds like work! I think when your housing cost goes down you will be surprised at how quickly the money piles up. Housing in my neighborhood in suburban New Orleans is going for about $125-$130/sq. ft.
The condo I just bought is $50/ sq. ft. and everyone has been saying how much they like it. $2000/mo would be a raise for me even with health ins. costs and a mortgage.
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Old 05-10-2008, 09:19 PM   #43
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RockOn,

Your annuity IRR was for living beyond the actuarial tables for a 53 year old man. I didn't look it up but I think a 53 year has a life expectancy of the mid 70's not the mid 80's. You're giving yourself an extra ten years of average life and then your return is at best marginal.
I agree but both parents and almost all relatives have made it to mid-80's so I don't think it's unreasonable. What do you use in your calcs? I think most planners would say to use mid-80's. A few longevity websites gave me a 79 last time I looked. I didn't recalc it for 79, but it would be less than 6%, maybe 5.65% or so. A 6% IRR is pretty decent I think, because it includes a lot of years. Many older people go to CD's in their 70's or 80's, 6% might not be available there. If the insurance company doesn't get in trouble (which is big), one can sleep pretty well at night if one chooses a steady COLA'd income. It is similar to a government pension except it has insurer risk. I haven't bought a SPIA but I think it makes pretty good sense for maybe 1/2 to 1/3 of my money, maybe at age 60, with inflation protection and 100% survivorship.
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Old 05-10-2008, 10:50 PM   #44
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The condo I just bought is $50/ sq. ft. and everyone has been saying how much they like it. $2000/mo would be a raise for me even with health ins. costs and a mortgage.
I'm glad your new condo is working out for you!! I remember when you were posting that you were thinking of getting it.

$50/sq. ft. is very nice. I am hoping to ER to southern Missouri, where housing is cheaper, too.

Your insurance will probably become more expensive once you are over 50. But as I recall, you are young. By then maybe we will have some sort of nationalized health care.
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Old 05-11-2008, 07:35 AM   #45
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What do you use in your calcs? I think most planners would say to use mid-80's. A few longevity websites gave me a 79 last time I looked. I didn't recalc it for 79, but it would be less than 6%, maybe 5.65% or so. A 6% IRR is pretty decent I think, because it includes a lot of years.
You seem pretty much sold on an annuity so go for it. When I do IRR calcs I just plug them into my HP-12C (almost an antique). I said I didn't look anything up in the mortality tables and 79 seems reasonable. Your relatives may have lived longer so it may be reasonable to use mid-80s. Mind didn't so I won't. It's been my experience that the typical financial planner will tell you almost anything to keep you putting money into your account. Once you really retire, they know you will suddenly be shocked at how much money they are charging you for almost nothing. I'm referring to planners that "only take a small fee from your account for their services."

I don't think a 6%, sorta indexed for inflation, locked in return with your flexibility and capital gone to be all that good. I don't think it is a fair comparison to say "it's more that the 4% SWR." With the 4% SWR, your capital is always there for you to deplete for LTC or gifting prior to death. Any left is a benefit to your heirs.

If you are willing to take the credit risk of a single insurance company, you can still get the 7 to 12% available in preferreds and your capital is still available.
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Old 05-11-2008, 07:45 AM   #46
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Hi, would like very much your thoughts. I'm 50, single, no kids, no debt except $14K on mortgage. Have $600,000 in savings in the form of my 401(k). Wondering if it's feasible to retire and live off these funds.My overhead is low, just need around $2,000 month,which takes care of apartment maintenance, utilities, healthcare insurance. Thanks for your advice.
RockOn and I have pretty much had our own running hijack of your thread and I'm sorry. I'll come back on topic.

You haven't posted anything about any FIRECalc runs you might have made. If you have I must have missed them. A decent run will tell you your probability of success.

As others have posted, there are people living on far less than $2K/month. I have no doubt that without DW I could be satisfied with that amount of money if I was so limited. My youngest child just got out of college and she was spending about $14K/year and that included about $8K in college tuition and fees. She had a ratty car. I covered her medical but that was all. Even if she had to buy her own medical it still wouldn't have run her cost above $24K/year.

You can certainly do it but you may have lifestyle choices to make you otherwise might not like. That's where FIRECalc comes in. Really chew on your budget. Give yourself some room to have some free cash. Consider periodic low stress, part-time gigs for a little extra cash. If you are so inclined, some companies will give part-timers medical coverage with as little time as 20 hrs/wk.
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Old 05-11-2008, 07:52 AM   #47
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I'm glad your new condo is working out for you!! I remember when you were posting that you were thinking of getting it.

$50/sq. ft. is very nice. I am hoping to ER to southern Missouri, where housing is cheaper, too.

Your insurance will probably become more expensive once you are over 50. But as I recall, you are young. By then maybe we will have some sort of nationalized health care.
I looked at a condo outside of Branson that was about $60/sq ft. There are cheaper ones. I'm still thinking I'll rent for awhile.

Shelter is typically the largest budget item. That would include the rent or mortgage or lost opportunity cost if paid for in cash. Utilities, taxes, maintenance are also there. Right now our "shelter" costs are over half of our basic living expenses.
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Old 05-11-2008, 08:20 AM   #48
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I looked at a condo outside of Branson that was about $60/sq ft. There are cheaper ones. I'm still thinking I'll rent for awhile.
That is an excellent plan. It seems the housing market in some parts of southern Missouri is very slow and it can take a long time to sell. I would imagine real estate is moving a little more briskly near Branson, but still it might really pay to rent for a while until one is sure about the area.

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Shelter is typically the largest budget item. That would include the rent or mortgage or lost opportunity cost if paid for in cash. Utilities, taxes, maintenance are also there. Right now our "shelter" costs are over half of our basic living expenses.
Ooof!!! That's pretty steep and I think you will find that you are spending considerably less on shelter in Missouri.

I know that I will be spending less on shelter in Missouri than I am presently spending on it. I am not sure what I will do with the excess, though - - :confused: I am used to living the way I live. I suppose that something will come to mind.
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Old 05-11-2008, 08:45 AM   #49
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For clarification, the $1400 I need per month does not include taxes, and I do have medical insurance paid. My mortgage is $729. If I spend a little above the $1400 per month, and then figure in taxes, I am right at your $2000 limit.

As things are today, in 6 years, I'll be mortgage free and able to pick up SS if I need it. My big panic is that the house may need to be refinanced. The ex's name is still on the low interest rate mortgage. I am fixing it up to sell, and I hope the equity will allow me to purchase a home in a different location mortgage free. If I cannot get the amount out of it I want, I will stay.

This is doable, but you have to value your freedom over new cars, nights out, etc..
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Old 05-11-2008, 09:44 AM   #50
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Here's an extreme opinion, but an honest one nonetheless:

I think that within the next few years we will see in this country a significant move toward a socialistic economy. In my view, such a trend is inevitable because the vast majority of individuals approaching retirement have done nothing at all to plan for their future, and the relatively small proportion that have are woefully short in terms of what would realistically be needed to maintain even a modest standard of living in retirement. In my view, the move toward socialism is also inevitable because although the younger generation may proclaim their opposition to paying anything toward the support of the "boomers," they--above all--are constitutionally unfit to function in anything less than a socialistic environment, having been coddled and supported all their lives. So although in principle I continue to believe in the virtue of self-responsibility, on a purely practical level I'm not sure there's a lot of benefit to amassing several million in assets that most likely will be taxed away in the interest of providing something for everyone. So the purely utilitarian answer, in my view, is to aim for the mean.
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Old 05-11-2008, 10:01 AM   #51
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...the vast majority of individuals approaching retirement have done nothing at all to plan for their future, and the relatively small proportion that have are woefully short in terms of what would realistically be needed to maintain even a modest standard of living in retirement.

...the younger generation may proclaim their opposition to paying anything toward the support of the "boomers," they--above all--are constitutionally unfit to function in anything less than a socialistic environment, having been coddled and supported all their lives.
Congratulations, you've passed the qualifying exam with one of the highest scores ever recorded!

Your Official Curmudgeon Certificate is hereby awarded and will be forwarded to you shortly.
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Old 05-11-2008, 10:21 AM   #52
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If I bribe the judges, you think I could get me one of them there certificates?
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Old 05-11-2008, 10:50 AM   #53
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If I bribe the judges, you think I could get me one of them there certificates?
I'm sorry, but if you insist on posting this sort of thing... http://www.early-retirement.org/foru...ime-35565.html ...you will never meet the exacting standards of the awards committee.
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Old 05-11-2008, 11:01 AM   #54
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You know what? Emilylynn said what I've been thinking regarding the socialist economy business for a mightly long time. And, it very nearly scares the daylights out of me. I pray that America doesn't end up that way. I still believe in personal responsibility and consequences/reaping what we sow. As a nation, if we say we believe in personal responsibility, then we have to be strong enough to accept watching some (maybe ourselves) fall through the cracks. Are we that strong (am I?)? Don't know, but expect to find out within the next few years because a point will come when the folks talented enough or bright enough or lucky enough to make a really good living are going to get tired of having to support those who couldn't/wouldn't/didn't prepare. I know this sounds all gloom and doom; maybe I got up on the wrong side of the bed this morning. Or maybe it's because a friend from childhood who is always unemployed (one excuse or another) and married to a janitor was just complaining about their meager standard of living. Now if an unemployment check and cleaning up an office building is all you aspire to, why would you expect to enjoy a very comfortable lifestyle? Why should I (or anyone) work night and day to fund someone else's expenses? Okay, getting off soapbox now...sorry for the rant.
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Old 05-11-2008, 11:03 AM   #55
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I'm sorry, but if you insist on posting this sort of thing... http://www.early-retirement.org/foru...ime-35565.html ...you will never meet the exacting standards of the awards committee.
But I also posted this: http://www.early-retirement.org/foru...&postcount=231

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Old 05-11-2008, 11:08 AM   #56
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But I also posted this:
Obvious signs of bipolarity is an automatic disqualifier.
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Old 05-11-2008, 11:19 AM   #57
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Here's an extreme opinion, but an honest one nonetheless:

I think that within the next few years we will see in this country a significant move toward a socialistic economy..........So although in principle I continue to believe in the virtue of self-responsibility, on a purely practical level I'm not sure there's a lot of benefit to amassing several million in assets that most likely will be taxed away in the interest of providing something for everyone. So the purely utilitarian answer, in my view, is to aim for the mean.
This probably could be an entire thread and BTW congrats on earning your certificate...there is and probably always will be an advantage of being slightly destitute or ultra-rich....I guess I only have a chance at one...
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Old 05-11-2008, 05:45 PM   #58
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and having started to date.

Be aware that should you find someone you wish to partner with, it can quickly impact your monthly expenditures. I used to buy a tank of gas every couple of months, now it is two or three time a month. I have been retired 14 months.

Maybe I'm naive but in this day and age I really don't think dating should cost a lot . I traditionally think the guy should still pay for the first date or two but after that it should be 50 /50 . So even if the woman feels odd paying for dinner she should invite the guy over for a cooked dinner or if she doesn't cook chinese take out is always good . . Dating should be fun and not financially troublesome .
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Old 05-11-2008, 06:06 PM   #59
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This probably could be an entire thread and BTW congrats on earning your certificate...there is and probably always will be an advantage of being slightly destitute or ultra-rich....I guess I only have a chance at one...
Dang! My calculations show that I'll probably end up richly destitute
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Old 05-11-2008, 06:11 PM   #60
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Maybe I'm naive but in this day and age I really don't think dating should cost a lot . I traditionally think the guy should still pay for the first date or two but after that it should be 50 /50 . So even if the woman feels odd paying for dinner she should invite the guy over for a cooked dinner or if she doesn't cook chinese take out is always good . . Dating should be fun and not financially troublesome .
I like the new way of thinking. So far, none of my dates have ever paid -- not even DW.
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