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Old 03-30-2011, 06:02 PM   #41
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I'm sorta with you. If I screw up, will you help?
If I'm still around, I'll consider it.
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Old 03-30-2011, 06:07 PM   #42
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Originally Posted by Jay_Gatsby View Post
He's lived a very long life because he ate small meals...
The statistics all say that this is a key point. You see lots of little old ladies, but not many big old ladies. Maybe the obesity epidemic will save SS...
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Old 03-30-2011, 06:14 PM   #43
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Seriously now, I believe that I have misled you there. I have since removed that line from my post.

What the chart shows is that if you make it to 85 years old then your mean life expectancy is less than 10 years.

Sorry for the confusion.

Looking at another source (Actuarial Life Table) it shows that for men around 30% of the population will make it to 85. For women 45 % make it to 85.

From that same source only 1% of men and ~3 % of woman will make it to 99. Similarly ~15% of men and 26% of woman will make it to 90.
The data linked above plotted for your entertainment.

Mean Probability of Living Versus Age (Men in Blue curve, Women in red)

The vertical dashed line is the 85 year old mark.

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2006 data for the Social Security area population is comprised of (i) residents of the 50 States and the District of Columbia (adjusted for net census under­count); (ii) civilian residents of Puerto Rico, the Virgin Islands, Guam, American Samoa and the Northern Mariana Islands; (iii) Federal civilian employees and persons in the U.S. Armed Forces abroad and their dependents; (iv) crew members of merchant vessels; and (v) all other U.S. citizens abroad.
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File Type: png Probability_of_living1.png (4.9 KB, 9 views)
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Old 03-30-2011, 06:23 PM   #44
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Statistics, Shmatistics!
Here's something else to consider:

Firstborn of young mothers live longer

I'm the firstborn of a young mother, but my parents died in their 50's, so I have no clue when I'll die
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Old 03-30-2011, 06:34 PM   #45
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This whole age of death issue along with future investment returns, and future inflation rates, and future tax rates, and SS and Medicare status make this whole retirement planning thing a big crapshoot.

So that's why I dont plan my SWR to the second decimal point.
+1

I have run FIRECalc only a few times, just to get the ball park. And I just left the default duration at 30 years. Yet, as I am 54 now, I do not think I even last till 84. And more, I want to keep my SWR low, something like 3%, even if I do not think SS will go away. Why the contradiction of a low SWR when I do not expect to live a long time? Let me explain. It's actually really simple.

All my life, I am accustomed to seeing my net worth increasing each year. FIRECalc says that at 3%, it is not guaranteed, but highly likely that I will continue to have more each year, or at least maintain my stash. I like that. Just because I am getting older, it does not mean that I will get tired of counting my money.

So, at 3% SWR + SS, it makes no difference whether it is for 30 years or longer. It either lasts me a long time, if I live to 100. And if some calamities strike, or some seismic changes happen in the world, and the US economy goes down the tube, what difference does it make to plan for 45 years or 30 years?

Come on people. It's just a ball park guesstimate. Just because a computer program spits something out, the future does not have to unfold exactly like that.
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Old 03-30-2011, 07:00 PM   #46
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I am 45, intend to retire in 2017, and my plans go up to age 95.
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Old 03-30-2011, 07:28 PM   #47
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I use 50 years as our retirement duration - the difference between 50 years and infinity isn't meangingful. That implies an average age of 94 for us.
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Old 03-30-2011, 07:32 PM   #48
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Methusalah lived 969 years. To plan on less would not be prudent.
+1
And that is a great argument for delaying SS. 100 seems pretty old to me though, so that's what I'm using for planning purposes.
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Old 03-30-2011, 08:13 PM   #49
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I plan to kick the bucket (after ticking off everything on the bucket list) at 75. I'll announce it on the forum so you can all come to the party.

Speaking of bucket, do you have a bucket list?
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Old 03-30-2011, 08:14 PM   #50
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5, 4, 3, 2, 1 Days, month, years, decades? I don't know. Guaranteed, will not escape alive.
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Old 03-30-2011, 08:38 PM   #51
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Thanks for all the good posts. I have been really looking at what the nest egg needs to be for me to retire. I wasn't really thinking about the other side of the equation as some of you have pointed out. Withdrawal rates. I ran some additional numbers just dropping the withdrawal rate from 4% to 3.9, 3.7, 3.5 etc.

This also makes the numbers look better for an early retirement date. I think it is best to cover your basics for living costs, then use a slightly higher rate during exceptional years in the gain of the net worth and pull back on those where returns are lower. The closer you get to the end the less you obviously need in the net worth bucket.

If I were to eak out a light footprint meager lifestyle I am guessing I could retire as early as 2014, given a 6% increase in my net worth. This gives me a lot of options seeing I would only be 42. I am mentally putting that marker in the sand and will adjust as necessary based on my returns.

If my retirement funds keep on track, I might just take an easier job than the one I have now. I am very thankful for all your experience out there, from those who are really doing it. I am constantly learning to look at things from new angles, and am surprised at how much I don't really know. Thanks again...
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Old 03-30-2011, 09:02 PM   #52
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I used 92 for myself and 94 for DW as recommended in the Fidelity Income planner. Our parents died at 81, 85, 84, 84. With the advances in medicine, I think our estimate is ball park safe. If we outlive the money...not sure we care
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longevity calculators
Old 03-30-2011, 09:14 PM   #53
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longevity calculators

If you google longevity calculators, there are quite a few of them. I entered my family info into many of them and got a range from 69-79. Some of them are quite in depth. Depending on your risk factors, and family history, probabilities can be estimated. Insurance companies do this all the time.

So I picked 85 for my firecalc runs, to be conservative. I doubt that I will live beyond that.
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Old 03-30-2011, 09:44 PM   #54
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Come on people. It's just a ball park guesstimate. Just because a computer program spits something out, the future does not have to unfold exactly like that.
Great, NOW you tell me!

But I do agree, at best it is a guess. Things could go great, they could go sideways. I have good health right now but will I in the future? I view it as I have a number I hope to be able to withdraw each year in the future, but I can easily live off much less. I would just need to scale back if I need to. I don't include SS or the pension my wife will get in 3 1/2 years but I know they both will be there. So all you can do is find somewhere on that spectrum where you are comfortable, but I agree there are no guarantees.
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Old 03-31-2011, 02:08 AM   #55
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Apologies for the typo - please read "2012" instead of "2017" in my post below.

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I am 45, intend to retire in 2017, and my plans go up to age 95.
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Old 03-31-2011, 02:16 AM   #56
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How about looking for a retirement account that pays a good interest rate, and simply living off the interest? I have an annuity that pays 7%. When I reach retirement age, I'm eligible to withdraw 5% a year; that gives me a lifetime of income with 2% pay increases every year. In this way, it doesn't matter how long you live, you'll always have money.
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Old 03-31-2011, 06:31 AM   #57
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Apologies for the typo - please read "2012" instead of "2017" in my post below.
Wait a second. Does your signature tell us you are a doctor? And you are planning to retire in your 40s? I didn't think that combination existed
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Old 03-31-2011, 06:33 AM   #58
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I have an annuity that pays 7%.
7%?

Are you including the return of principal, which would tend to push up your "return"?
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Old 03-31-2011, 07:04 AM   #59
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I use age 100 for my calculations. I certainly do not expect o live that long myself, but DW is Japanese, with a family history of longevity in it's women. That said, I've been toying with calculations that allow for inflation increases up to age 70 to 75, with diet cola increases after that. Our budget has a lot of hobby and travel money in it, and beyond 70-75, I'm imagining that I probably will be less likely to spend heavily on travel and hobbies. By that point, I'll probably only be "half-fast" so it will take me twice as long to accomplish hobby projects...thus using half the money.

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Old 03-31-2011, 07:12 AM   #60
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Hello Donheff - many clinicians retire in their 50s or even 40s if they can afford early retirement...

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Wait a second. Does your signature tell us you are a doctor? And you are planning to retire in your 40s? I didn't think that combination existed
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