Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-17-2010, 09:57 PM   #61
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Location: North of Montana
Posts: 2,753
Quote:
Originally Posted by Gone4Good View Post
In most of those instances it wouldn't have really mattered if you were retired or not. Almost everyone ended up in the soup. So if I'm impoverished in all of those situations regardless of what I do, why even consider that data in my decision making process?

In fact, if you really think one of those situations is in store for us, one of the silliest things you could do is save money. Might as well go out and blow it on whatever floats your boat before it's all rendered worthless.
That's the point I was getting at. Why do you think that one of these things won't happen to you? Bernstein's comment that any probability > 80% being meaningless applies. If 80% is good enough, why try for 99%.
__________________

__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
kumquat is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-17-2010, 10:11 PM   #62
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
I doubt there is anyone on this site who doesn't understand exactly what OP is talking about, and also realize that in outline it is a valid criticism. But so what? Most of us have retired or will retire anyway, not because we think it will necessarily work out, but because we are getting tired of working or have already gotten tired of working. Most young people still get married, not because they are sure it will work out, but because they are tired of being single or they are in love or both.

I do believe that one who is actively working with certain skills will always be in demand, and always be able to support herself or himself. Doctors, dentists, abortionists and midwives, money lenders/pawnbrokers, skilled traders of goods in demand, pimps and prostitutes, soldiers, fishermen, farmers, cops (some of whom may become robbers)-these people and many others were ok in most political and economic cataclysms. Retired is a relatively weak position, but I don't think that should be a huge revelation to anyone here.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 10-17-2010, 11:37 PM   #63
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by Gumby View Post
smjsl has convinced me that the future is quite hopeless and that I should just slit my wrists now, so at least that was useful.
Quote:
Originally Posted by Gumby View Post
You really should take a step back and listen to yourself. You sound like Chicken Little, notwithstanding your disclaimer that you are merely pointing out uncertainty, not doom.
So there it is -- either retire or don't, it makes no difference to me. But for God's sake please stop whining.
This reminds me of when Bongo2 went off the rails to tell us all that we should get back to work and make a useful contribution to society...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 10-18-2010, 04:37 AM   #64
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
OP,

There are no guarantees. These types of tools only offer insight into the problem. That is as good as it gets!

The way I intend to handle the risk is to use conservative mechanisms to create a base income that protects our basic lifestyle.

My general approach will be:

Base Income
  1. Near term (next 5-7 years) - Bucket of high grade bonds and cash to provide income. Longer term
  2. I have a Non-COLA Pension that DW has survivor rights.
  3. DW SS at 62.
  4. Delay my SS till FRA or 70 (whatever makes sense at the time)
  5. Use part of our Nest Egg to buy other secure income (TBD) for the long-term:
    1. Annuity if rates are attractive.
    2. US Govt Bond Ladder (possibly split between TIPs and Reg Treasuries)
    3. Perhaps Bond Mutual Fund
Other (with remaining assets)
  1. Use conservative (and diversified) stock and bond mutual funds. Divide the assets up into allocations for different periods during our life expectancy. But will use the assets as needed and make adjustments that makes sense at the time...
Our (DW and I) goal is to secure our lifestyle first. Investment growth is secondary. We will invest in the market, but do so conservatively to maintain purchasing power (guard against inflation). We will assume some stock market risk in hopes of getting a better return. But the base income will be as close as it can to a guarantee.

Money only means something if I can spend it... not just look at the account balance and admire it or shriek in horror!


I intend to make this as simple as possible for DW in case she survives me. I do not want to put her in a position to make mistakes or have to rely on some "Adviser".... worse case some insurance agent and their BS story (a rant for another time).


__________________
chinaco is offline   Reply With Quote
Old 10-18-2010, 06:00 AM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,983
Quote:
Originally Posted by Gumby View Post
You really should take a step back and listen to yourself. You sound like Chicken Little, notwithstanding your disclaimer that you are merely pointing out uncertainty, not doom.

The simple fact is that all models are wrong; some models are useful. To me, and I suspect many others, FIRECALC is useful. Is it infallible? No. Is it the only thing upon which we do or should rely? No. It is a tool, one among many, nothing more and nothing less.

You have pointed out what you believe to be a flaw in FIRECALC. But Nords' question remains -- what are you going to do about it? At some point, you either need to take that step off the ledge, or not. If you want 100% certainty about the road ahead, you will never get it.

So there it is -- either retire or don't, it makes no difference to me. But for God's sake please stop whining.
Amen!

Until the OP proposes something better, and he's been asked several times in this thread, he's just another useless whiner...
__________________
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: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-18-2010, 09:30 AM   #66
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by haha View Post
I doubt there is anyone on this site who doesn't understand exactly what OP is talking about, and also realize that in outline it is a valid criticism. But so what? Most of us have retired or will retire anyway, not because we think it will necessarily work out, but because we are getting tired of working or have already gotten tired of working. Most young people still get married, not because they are sure it will work out, but because they are tired of being single or they are in love or both.

I do believe that one who is actively working with certain skills will always be in demand, and always be able to support herself or himself. Doctors, dentists, abortionists and midwives, money lenders/pawnbrokers, skilled traders of goods in demand, pimps and prostitutes, soldiers, fishermen, farmers, cops (some of whom may become robbers)-these people and many others were ok in most political and economic cataclysms. Retired is a relatively weak position, but I don't think that should be a huge revelation to anyone here.

Ha
Once again, Ha drops anchor on runaway nonsense.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-18-2010, 10:02 AM   #67
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by haha View Post
I doubt there is anyone on this site who doesn't understand exactly what OP is talking about, and also realize that in outline it is a valid criticism.
In "outline", as I understand it, he's saying that consulting 130 years of economic history to help inform future decisions is identical to consulting horoscopes. That's a form of nihilism that I think reaches too far, even in "outline."
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 10-18-2010, 10:06 AM   #68
Thinks s/he gets paid by the post
Gotadimple's Avatar
 
Join Date: Feb 2007
Posts: 1,764
Quote:
Originally Posted by Gone4Good View Post
In "outline", as I understand it, he's saying that consulting 130 years of economic history to help inform future decisions is identical to consulting horoscopes. That's a form of nihilism that I think reaches too far, even in "outline."
Yes, or past performance is no guarantee of future results.

So, it's a risk.

But, then, so is stepping out your front door. Every day we deal with life as it presents itself to us. We can plan, but some unknown event can cause us to take a different path.

Do the best you can and move forward. If you don't feel the statistics provide comfort, then develop a different plan. Just be aware that fate/fortune/luck/kismet/(fill in the blank) will interrupt your best laid plans.

-- Rita
__________________
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Old 10-18-2010, 10:17 AM   #69
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Retiring is risky. If you are not ready to deal with such risk, then the conservative course of action is to keep working for as long as you can and keep saving as much money as you can. You'll have more options if/when the SHTF... To me, FIREcalc is like a shot of whisky before jumping off an airplane. It gives me a bit of confidence and courage but it won't save me if the parachute fails to deploy.
__________________
FIREd is offline   Reply With Quote
Old 10-18-2010, 10:51 AM   #70
Recycles dryer sheets
 
Join Date: Sep 2009
Posts: 353
Quote:
Originally Posted by haha
I doubt there is anyone on this site who doesn't understand exactly what OP is talking about
Well, judging by the latest batch of responses, sounds like many don't. The question of whether firecalc and other research is all that useful given the length of the plan period gets oversimplified and misinterpreted as me whining about the sky falling somehow.

I'd like to thank martyp and traineeinvestor for interesting responses.

Since the number of useless responses is becoming too great though, not much point in continuing this thread. Sounds like I also touched a nerve with some forum members. Wrong crowd I guess...
__________________
smjsl is offline   Reply With Quote
Old 10-18-2010, 11:00 AM   #71
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by smjsl View Post
Since the number of useless responses is becoming too great though, not much point in continuing this thread. Sounds like I also touched a nerve with some forum members. Wrong crowd I guess...
I'm guessing there's not going to be more constructive suggestions than "stay flexible" and "periodic reminders"?

If you're looking for the "right" crowd then maybe you could strike up a collaboration with Rodmail over at Raddr's board on this thread:
Raddr's Early Retirement and Financial Strategy Board :: View topic - In one convenient place, a life's supply of Doom and Gloom
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 10-18-2010, 12:36 PM   #72
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,149
Quote:
Originally Posted by smjsl View Post
Since the number of useless responses is becoming too great...
GIGO in action...
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 10-19-2010, 09:36 PM   #73
Recycles dryer sheets
 
Join Date: Mar 2006
Posts: 247
Quote:
Originally Posted by smjsl View Post
Well, judging by the latest batch of responses, sounds like many don't. The question of whether firecalc and other research is all that useful given the length of the plan period gets oversimplified and misinterpreted as me whining about the sky falling somehow.

I'd like to thank martyp and traineeinvestor for interesting responses.

Since the number of useless responses is becoming too great though, not much point in continuing this thread. Sounds like I also touched a nerve with some forum members. Wrong crowd I guess...
It just seems your arguments were a bit confrontational. Many posters agreed that the future is not the past. Hopefully all of us know that. FireCalc can tells us that, *in the past*, a certain strategy had an x% chance of succeeding. As Berstein says, there are so many political/environmental/cataclysmic events that could occur that frankly, the first assumption is that the world economy and situation goes on fairly similarly as before. And THAT is a big gamble. But as many posters asked, what suggestions might you have to change it? I think we should all agree that FireCalc saying a scenario as a 95% chance of success is not a predictor of the future. It is a statement about a strategy, backtested.
__________________
Surfdaddy is offline   Reply With Quote
Old 10-19-2010, 10:44 PM   #74
Recycles dryer sheets
 
Join Date: May 2010
Posts: 131
Relying on investments for income is risky, but so is relying on a job.

I think there's a danger of SWR studies to instill a false sense of confidence; much like a lot of other math as applied to the markets have instilled a false sense of confidence. Investing is not physics; it's not science, because it's not inductive. Its statistical treatment is an approximation.

I basically see SWR studies as a way of getting within the right range of numbers, that is, to ensure people are thinking 3-4% rather than the 10% or worse that get newbie FIRE dreamers all excited.

Pulling the trigger at the maximum SWR is certainly risky.

Personally, I put my faith in that historical interest rates regardless of what one invests in have been around 3% real return throughout most of human history (see A History of Interest Rates --- yeah, it's several hundred pages of riveting reading :-P ). My job then is to get 2.5-3% real returns out of my portfolio for the next 60+ years. In that regard, I consider myself a capitalist, not a retiree on mathematical autopilot.
__________________
FI@30, ERE@33.
jacob is offline   Reply With Quote
Old 10-19-2010, 11:05 PM   #75
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by jacob View Post
Personally, I put my faith in that historical interest rates regardless of what one invests in have been around 3% real return throughout most of human history (see A History of Interest Rates --- yeah, it's several hundred pages of riveting reading :-P ). My job then is to get 2.5-3% real returns out of my portfolio for the next 60+ years. In that regard, I consider myself a capitalist, not a retiree on mathematical autopilot.
This stikes me as a realistic way to look at it. However, it is not how retirees most commonly do frame it, at least it appears that way from my reading here.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 10-20-2010, 07:03 AM   #76
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Hey, investing is risky and retiring on the basis of your portfolio is risky. If you want safety, get a feddle gubmint type job and stay there for 30+ years. Its frigging paradise, I can assure you.

Otherwise, I think this is a case of "nut up or shut up."
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-20-2010, 07:55 AM   #77
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by brewer12345 View Post
Hey, investing is risky and retiring on the basis of your portfolio is risky. If you want safety, get a feddle gubmint type job and stay there for 30+ years. Its frigging paradise, I can assure you.
But, but, but, government is going to have to cut back and last month actually had a net reduction in payroll. Can we really look at the past 200 years of government employment statistics to forecast a 40 year retirement? After all, it's only 5 non-overlapping periods. We really have no information to make a decision.

Governments come and governments go over such a long time frame. Won't government employees be specifically targeted during the next revolution? Maybe I'm better off staying at home with my nest egg. If only I had some data to help me decide.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 10-20-2010, 07:57 AM   #78
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,446
Quote:
Originally Posted by REWahoo View Post
Maybe a Valium would help?
Meds baby. Got me through the last crash.
__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 is offline   Reply With Quote
Old 10-20-2010, 08:09 AM   #79
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Gone4Good View Post
But, but, but, government is going to have to cut back and last month actually had a net reduction in payroll. Can we really look at the past 200 years of government employment statistics to forecast a 40 year retirement? After all, it's only 5 non-overlapping periods. We really have no information to make a decision.

Governments come and governments go over such a long time frame. Won't government employees be specifically targeted during the next revolution? Maybe I'm better off staying at home with my nest egg. If only I had some data to help me decide.
Then I will have to get me some more MREs, a shotgun, lots of ammo, and a plot of land, and some seeds, and a horse, and...
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-20-2010, 08:18 AM   #80
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by brewer12345 View Post
Then I will have to get me some more MREs, a shotgun, lots of ammo, and a plot of land, and some seeds, and a horse, and...
Good idea. Do you know where I can get 1,000 years worth of data on the success rate of people who have no farming skills successfully transitioning to subsistence farming? Thanks in advance.
__________________

__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Retirement planning help Homebrew FIRE and Money 10 01-17-2008 01:04 PM
New here. Help me start my retirement planning. GoRed Hi, I am... 10 06-28-2007 09:12 AM
Planning for retirement mizzou22 Young Dreamers 14 04-07-2006 11:52 AM
Retirement-planning roadblocks Nords FIRE and Money 18 05-31-2005 07:03 PM

 

 
All times are GMT -6. The time now is 11:45 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.