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Old 01-23-2010, 10:16 AM   #21
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Audrey? Re; Just using the rule of 72..and using a 3% Inflation rate.. I always error on the high side of planning expenses..and thus forces me to have to save more ..and plan for higher expenses..if they don't, great..
3/72 = doubles 24 yrs.
12 yrs = +50% more.

another is just using 3% apy and every 5 yrs = +16% every 5 yrs and at 35 yrs?
starting yr +31, cost 110% more. 35th yr = +143% more.

I've personally seen alot of Seniors expenses going way up in their last 10-15 yrs and this past couple of yrs is just the tip of the iceberg..of what's comming,., Gas, Real Estate taxes, Home /Auto Ins., LT nursing Care Ins., Food, Health Care.. & Cost of a Car is already up over 15% past 3 yrs! expecting 7-10% apy from now on..to be Greener and More Profitable to apy the Auto Workers..and With Fewer Dealers will be Less competiton..

even my Friends at the Deli I go to , telling me business is way down.. meat is up over 10% already..& (tic) The Black Bean Salad is Up over 15%! and the Italian Beef is up +16%! High Fiber Bread is now $3 a Loaf? French Bread is Up 21%!

One neighbor recently had to have Paramedics come, ( Heart Attack) 3 different one's came and they Airlifted him to a Hospital.. Medicare didn't cover alot of it and got stuck with over $1,800 and Now has to pay out $235/day for a Private Nursing home Rehab care = $7 grand a mo..! he's only 68..

Then going to hire a Live In Companion..cost $900 wk /$3,600 mo..

They knew he had Both Medicare and supp Ins.. & He was Wealthy.. So everyone took full advantage of it..and then some..

and I also expect our medicare will Double in cost in the next 5 yrs..with Less Coverage..espeically for those with above poverty level incomes.. targeting the Middle and Upper class to pay more..

Private Health Ins. for Early Retirees? Under Medicare age? Try expecting 10-15% increases a yr for awhile is comming.. and it iwll also increase 7-10% yr for every yr older as well.. before one can get into Medicare ( age 66 ) and they are working on increasing the age to age 68-70 to get into Medicare.

Expect and plan for the worse, not the best..
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Old 01-23-2010, 05:40 PM   #22
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Quote:
Originally Posted by Dennis View Post
IMO? Retiring at age 65? sure, but Earlier at age 52? I doubt it..
Your 2.8% WR now is one thing, but double it in 20 yrs and then add 50% to that in 10 yr later..
not to mention so many bad things can and usually do haappen for such a long lenght of time ( 52- 95 = 43 yrs potential) if you're real lucky.. (tic)
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Originally Posted by Dennis View Post
Audrey? Re; Just using the rule of 72..and using a 3% Inflation rate.. I always error on the high side of planning expenses..and thus forces me to have to save more ..and plan for higher expenses..if they don't, great..
3/72 = doubles 24 yrs.
12 yrs = +50% more.

another is just using 3% apy and every 5 yrs = +16% every 5 yrs and at 35 yrs?
starting yr +31, cost 110% more. 35th yr = +143% more.

robls, dont let dennis scare you, he obviously hasnt read my post http://www.early-retirement.org/forums/f28/variation-on-25-times-expenses-question-48318.html#post895696 and doesnt understand the meaning of "real dollars". since all the dollars used in my post are real, his inflationary concerns are accounted for (unless you distrust the CPI numbers). even the 2.87% WR is an inflation adjusted money flow as most people on this board already know and, as audrey pointed out, is a very safe WR (per FIRECalc).


Quote:
Originally Posted by Dennis View Post

I've personally seen alot of Seniors expenses going way up in their last 10-15 yrs and this past couple of yrs is just the tip of the iceberg..of what's comming,., Gas, Real Estate taxes, Home /Auto Ins., LT nursing Care Ins., Food, Health Care.. & Cost of a Car is already up over 15% past 3 yrs! expecting 7-10% apy from now on..to be Greener and More Profitable to apy the Auto Workers..and With Fewer Dealers will be Less competiton..

even my Friends at the Deli I go to , telling me business is way down.. meat is up over 10% already..& (tic) The Black Bean Salad is Up over 15%! and the Italian Beef is up +16%! High Fiber Bread is now $3 a Loaf? French Bread is Up 21%!

One neighbor recently had to have Paramedics come, ( Heart Attack) 3 different one's came and they Airlifted him to a Hospital.. Medicare didn't cover alot of it and got stuck with over $1,800 and Now has to pay out $235/day for a Private Nursing home Rehab care = $7 grand a mo..! he's only 68..

Then going to hire a Live In Companion..cost $900 wk /$3,600 mo..

They knew he had Both Medicare and supp Ins.. & He was Wealthy.. So everyone took full advantage of it..and then some..

and I also expect our medicare will Double in cost in the next 5 yrs..with Less Coverage..espeically for those with above poverty level incomes.. targeting the Middle and Upper class to pay more..

Private Health Ins. for Early Retirees? Under Medicare age? Try expecting 10-15% increases a yr for awhile is comming.. and it iwll also increase 7-10% yr for every yr older as well.. before one can get into Medicare ( age 66 ) and they are working on increasing the age to age 68-70 to get into Medicare.

Expect and plan for the worse, not the best..
as for you dennis, you have a great deal of concerns so by all means you keep working. and like i said firedreamer was right http://www.early-retirement.org/foru...tml#post893486
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Old 01-25-2010, 12:44 PM   #23
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Originally Posted by audreyh1 View Post
Where do you get the idea that the WR will double in 20 years and 50% in another 10. Withdrawal rates that low mean that your portfolio should have little problem keeping with up with inflation over that time period as long as you are not 100% fixed income.

Audrey
Dennis seems to be having troubles with the most important part of retirement... do it now or you may not be able to later... there is a lot of paralysis thru analysis on this board... one can over think every situation... as for me I think I have enought to retire next year and if I mis-figured or don't because of an unforeseen circumstance... I will deal with it - if and when the time comes...
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Old 01-25-2010, 12:55 PM   #24
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Originally Posted by REWahoo View Post
robl, you would expect to have a higher initial withdrawal rate prior to SS kicking in. The 4% SWR/25x is a rule of thumb, so having to pull out a larger % the first few years should not be an issue (based on history) if you entered all your information correctly into FIRECalc and it gives you a thumbs up.
In addition to this comment (a very good point), another way to look at this is your biggest risk is what the 950k does the 3 years prior to you collecting SS.

For example if your portfolio has to supply 120k of income those 3 years, and then loses 50% of its value as well, you are up a creek. What you might want to plan for is having a higher cash allocation those first 3 years until SS kicks in to supplement income.
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Old 01-25-2010, 06:01 PM   #25
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In addition to this comment (a very good point), another way to look at this is your biggest risk is what the 950k does the 3 years prior to you collecting SS.

For example if your portfolio has to supply 120k of income those 3 years, and then loses 50% of its value as well, you are up a creek. What you might want to plan for is having a higher cash allocation those first 3 years until SS kicks in to supplement income.
or you could take it all out of stocks and put it into TIPS, per my earlier post, and minimize your risk
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Old 01-25-2010, 07:14 PM   #26
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Originally Posted by heyduke View Post
Dennis seems to be having troubles with the most important part of retirement... do it now or you may not be able to later... there is a lot of paralysis thru analysis on this board... one can over think every situation... as for me I think I have enought to retire next year and if I mis-figured or don't because of an unforeseen circumstance... I will deal with it - if and when the time comes...
I think he just forgot that these safe withdrawal rate portfolio models are designed to handle inflation over the long time periods. So you don't have to expect to apply any Rule of 72 or whatever.

Now, if you think your personal inflation rate will be twice the CPI in your future, you do have some future challenges.

But still, sub-3% withdrawal rates are extremely conservative.

Audrey
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