Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: What do you consider an acceptable success %
Old 02-10-2007, 03:57 PM   #41
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Re: What do you consider an acceptable success %

Quote:
Originally Posted by Cb
Why not just defer "long-cycle" discretionary expenditures such as auto replacements or remodeling projects during down years? Or dial it back a few notches on vacation outlays? I don't think 5-10% swings in our annual draw will be all that painful.

Sure beats working. 8)

Cb
I guess this is a danger for the LBYM types who have squeezed every possible penny in their budget. It helped to build the portfolio, but it may be worth considering that all 4% withdrawal schemes are not created equally.
__________________

__________________
Retired early, traveling perpetually.
Gone4Good 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!

Re: What do you consider an acceptable success %
Old 02-10-2007, 06:54 PM   #42
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: What do you consider an acceptable success %

Quote:
Originally Posted by tui_xiu
all these resourceful, financially saavy, disciplined posters? Nahhh I suspect most would easily adjust and do fine if they rolled the 10% dice on the 90% safety.
So, our fictional financially savvy early-retiree retires in 1966 with $30K expenses and $750K in 75/25 stocks/bonds.

If he sticks to the 4% SWR and maintains the discipline to stay at 75/25, he's on a course to run out of money in 22 years.

What does our hero do? Does he cut back spending each year? Does he change his allocation once his nest egg is cut in half at year 9? Does he go back to work after a decade of being out of the rat race?

What is *your* savvy disciplined plan B?
__________________

__________________
wabmester is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 07:03 PM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: What do you consider an acceptable success %

5k in 1966 on a 8.3k income - single and rich.

Throttle back to 12k/yr in the early 90's for a 'thrifty yr' and a lot of 18-24k high on the hog years in da ole Louisiana swamp.

heh heh heh heh heh - after a few years of cheap bastardhood and the history of the 90's have the nose bleed problem of spending too much - 5% variable while young at heart.

remember the Bear - agile, mobile and hostile. Really cheap is a labor of love.
__________________
unclemick is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 07:25 PM   #44
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: What do you consider an acceptable success %

Quote:
Originally Posted by unclemick2
agile, mobile and hostile. Really cheap is a labor of love.
Yup. I think I could easily cut my expenses in half if it were just me. Not sure the wife and kid would be thrilled with the idea, though.

BTW, the guy who retired in 1966 had a 100% historical success rate at the time. Bad luck for him that the first failure sequence started in 1966.
__________________
wabmester is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 07:38 PM   #45
Thinks s/he gets paid by the post
 
Join Date: Apr 2006
Posts: 1,487
Re: What do you consider an acceptable success %

one's ability to absorb the risk of lower success %s is clearly related to the amount of slack in one's budget.
__________________
d is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 07:44 PM   #46
Full time employment: Posting here.
 
Join Date: Apr 2004
Posts: 802
Re: What do you consider an acceptable success %

~ 85%.
__________________
Zipper is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 08:13 PM   #47
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 322
Re: What do you consider an acceptable success %

So if it says 85% do you think about cutting costs and living on less moola or do you continue to work and save ?

__________________
spideyrdpd is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 09:05 PM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: What do you consider an acceptable success %

Chickenheartedness - a seldom used investment term - I adopted from a Bill Cosby monolog(the monster that devoured Cleveland) back when he was young.

In pukker time aka a market downturn of significance - the Norwegian widow likes current yield of your nest egg. I include pension or any other income stream.

Chickenheartedness < or = current yield.

heh heh heh - this under some circumstances could be less than FireCalc or not - depending on your asset mix.
__________________
unclemick is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 09:14 PM   #49
Moderator Emeritus
Khan's Avatar
 
Join Date: Aug 2006
Location: Pine Island, Florida
Posts: 6,868
Send a message via AIM to Khan
Re: What do you consider an acceptable success %

Quote:
Chickenheartedness - a seldom used investment term - I adopted from a Bill Cosby monolog(the monster that devoured Cleveland) back when he was young.
"Smoke and fire and Jello will protect us from the Chicken Heart."
__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 09:18 PM   #50
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: What do you consider an acceptable success %

Yep

Someone else remembers.

heh heh heh
__________________
unclemick is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-10-2007, 10:17 PM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,385
Re: What do you consider an acceptable success %

Quote:
Originally Posted by d
one's ability to absorb the risk of lower success %s is clearly related to the amount of slack in one's budget.
Penetrating insight.

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
Re: What do you consider an acceptable success %
Old 02-11-2007, 01:25 AM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: What do you consider an acceptable success %

Quote:
Originally Posted by Cb
I don't think 5-10% swings in our annual draw will be all that painful.

Sure beats working. 8)

Cb
I don't think 5-10% swings in annual withdrawal would be painful either. Too bad short term 5-10% swings wouldn't have a material impact on portfolio survival.

You're right regarding working....... FIRE beats it a zillions times over and I'm enjoying the hell out of it!

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-11-2007, 08:30 AM   #53
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
Re: What do you consider an acceptable success %

Quote:
Originally Posted by Cb
Why not just defer "long-cycle" discretionary expenditures such as auto replacements or remodeling projects during down years? Or dial it back a few notches on vacation outlays? I don't think 5-10% swings in our annual draw will be all that painful.

Sure beats working. 8)

Cb
Hear! hear!

And the LYBM types can probably adjust most easily and sensibly to fluctuations in portfolio income.

I have a feeling that the "LYBM types" are also doing same after retirement. I know we are!

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-11-2007, 08:58 AM   #54
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,889
Re: What do you consider an acceptable success %

Quote:
Originally Posted by audreyh1
I have a feeling that the "LYBM types" are also doing same after retirement. I know we are!
I know that I'm building a "fudge factor" into my budget, that I will invest most of the time. It's tentatively about 1/3-1/2 of my post-retirement budget.

This accomplishes several goals. If all goes smoothly, I'll continue to increase my nest egg so my 3.5% will get larger and larger as I age. I will be better able to survive various possible financial catastrophes, should they occur (such as if social security craters, if we experience utterly horrendous inflation for a decade, or if my house burns down, and so on). It will also allow me to decrease my withdrawals during bear markets. By considering my "fudge factor" money as a separate pot of money, I will be able to take somewhat greater investment risks with it if I want to. It won't be necessary for my ER income.

As for Firecalc success %, I consider between 90-95% to be adequate, BUT - - I only use Firecalc to validate decisions that I have already come to on my own. If my own common sense and computations say that a withdrawal amount is reasonable, then I run Firecalc as a double-check. So really, all I am getting from it is a sort of veto power which then sends me "back to the drawing board", so to speak.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-11-2007, 09:03 AM   #55
Full time employment: Posting here.
 
Join Date: Feb 2006
Posts: 987
Re: What do you consider an acceptable success %

Quote:
Originally Posted by testtubes
After running your numbers through Firecalc, what do you think is an acceptable chance for success?
For DW/me, our goal is 100% success rate (against a target of 100% current net income, to age 100, at 3% inflation)

Since DW/me suffer from the bag lady/man syndrome, we tend to be "uber conserative" in our finances. I guess you can say our mantra is "we don't worry about dying with money (we'll never know!), but we don't want to live without it"...

- Ron
__________________
rs0460a is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-11-2007, 09:51 AM   #56
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: What do you consider an acceptable success %

Quote:
Originally Posted by tui_xiu
If someone lucked into a lottery or inheritance windfall retirement despite having never saved a dime I'd lean more towards the 100% safety, but all these resourceful, financially saavy, disciplined posters? Nahhh I suspect most would easily adjust and do fine if they rolled the 10% dice on the 90% safety.
Agreed. BTW, what's the meaning of "tui_xiu"?
__________________
Sam is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-11-2007, 09:53 AM   #57
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: What do you consider an acceptable success %

Plan B is cut spending in bad years, and since we're spending fairly loosely over the last few good years, that makes sense. Plan B1 is employ my handyman skills to do odd jobs, mow lawns, replace water heaters, change peoples oil or whatever gets a little cash flow going. Hell, maybe even fix someones computer, develop a marketing/advertising plan and bring in some real money.

Budget wise, I think we're spinning out something in the mid 40's right now. We can trim that back to about 24k without feeling any serious hardship and still living a nice middle class-ish sort of life. Just drop the non-essential spending, turn down the thermostat, go back to the basic satellite package, drop the king crab and filet mignon and champagne from the diet.

In a serious situation, we can drop to 12k or so for a year, maybe two, but thats more severe. Drop non-mandated insurance, very basic, inexpensive but palatable diet, drop the satellite tv and cable internet. Certainly not panhandling/bag lady level, but pretty minimalistic.

Shoot, we might even find that we like simple living

Not to bang the same drum over and over again, but its these scenarios where having limited or no debt really gives you a lot of flexibility.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-11-2007, 09:57 AM   #58
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: What do you consider an acceptable success %

Quote:
Originally Posted by Cute Fuzzy Bunny
In a serious situation, we can drop to 12k or so for a year, maybe two, but thats more severe. Drop non-mandated insurance, very basic, inexpensive but palatable diet, drop the satellite tv and cable internet. Certainly not panhandling/bag lady level, but pretty minimalistic.
That's way too severe, imo. 12K for a family with a young child, in the US? What would your budget look like at that level.
__________________
Sam is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-11-2007, 10:09 AM   #59
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: What do you consider an acceptable success %

All the food we could eat of the chicken/pasta/vegetable variety, a nice home, riding in a lexus, watching tv from an antenna, using the local coffee shop or supermarket for occasional internet access, being a bit bare on insurance (except health care), no discretionary spending of any kind.

Looking at about $200 a month for food, $50 for gas (we dont have to drive far), $250 a month for all utilities, $150 for supplemental medical, the rest miscellaneous necessary items.

Pretty tight, but for a year, maybe two...pretty doable. Remember, no car payments, no mortgage, no credit card debt.

Two keys are no debt and being able to make very tasty low cost (and probably healthier) meals at home.

I see a lot of low income people at the supermarket with a cart full of chips, ice cream, hamburger helper and frozen pizzas. My cart would be full of fresh vegetables, beans, rice, pasta and a little chicken or pork.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: What do you consider an acceptable success %
Old 02-11-2007, 02:12 PM   #60
Recycles dryer sheets
 
Join Date: Nov 2005
Posts: 355
Re: What do you consider an acceptable success %

What got us to ER, will also get us past hard times in ER. Read "The Millionaire Next Door" for instructions about LBYM.
I second what CFB said about substituting time for convenience in the kitchen. Many tasty dishes (some from other cultures) are started from scratch with fresh, cheap, seasonal ingredients added to legumes and grains.
Spenders will make unwise choices at the grocery store, too. Modern anthropologists found that richer homes had cheaper brand beer cans in the trash. The poorer folks were more susceptible to the lure of premium beer advertising.
__________________

__________________
heyyou 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
FireCalc =5% 40 years with 97.4% success rate Hydroman FIRE and Money 16 08-21-2006 02:56 PM
100% success at 7% initial withdrawal rate Sam FIRE and Money 30 03-20-2006 10:02 PM
Firecalc success rate. PJ03 FIRE and Money 20 12-15-2005 09:45 PM
Success - What goes around comes around..... Cut-Throat Other topics 1 01-25-2004 02:51 AM

 

 
All times are GMT -6. The time now is 12:47 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.