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What is enough
Old 04-28-2004, 06:18 AM   #1
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What is enough

Is it enough for ER ? i.e How much over do ya need to feel comfortable ?

Setup a comfortable budget, we have a relatively new house, and no dept. Have $50K to 75K for extras and unknowns.

Income:
Investments, 401K, IRA, pension and planning on 75% of Social Securty. (The 50 to 75K above not included)

Using 6% rate of return w/ 3% inflation we would have around $4,000 over our $45K budget (after taxes).
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Re: What is enough
Old 04-28-2004, 01:07 PM   #2
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Re: What is enough

Bobbee25, I'd be comfortable with what you have laid out, as long as you're using FIRECalc to test your assumptions and not relying on a fixed return/inflation rate.

That being said, "comfortable" is a relative term. In my situation, at age 51 a number of things have converged to create a perfect storm; it is time for me to leave the job whether I'm comfortable with that decision or not, because staying a few more years for the sake of security would come at a price that's just too high. If I waited until I was totally comfortable, I'd never leave.
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Re: What is enough
Old 04-29-2004, 10:34 AM   #3
 
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Re: What is enough

My husband and I got kicked out of jobs last year. We saw this possibly coming and paid off everything except our van (the only new vehicle we ever bought, didn't know unemployment was coming so soon). I am tutoring part-time and my husband is bartending for a caterer part-time. With a lowered pension, which fortunately includes health insurance at slightly over group rate, and the pt work, we are doing OK at around $43000. When the van is paid off at the end of this year, we are hoping to be quite comfortable and not have to take any investment income until we are older (57 and 59 now). This should give the money we franticly stashed away in the last few years a chance to grow.
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Re: What is enough
Old 04-29-2004, 12:33 PM   #4
 
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Re: What is enough

Hello skay! Losing your jobs may turn out to be one of
the best things that ever happened to you. You two
are about the same ages as we are (59-55). Our taxable income is way below yours and we are not
suffering a bit. No debts, no drawing on the IRA as yet and SS coming in 2 years, 4 months and 11 days, but who's
counting?

John Galt
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Re: What is enough
Old 04-29-2004, 05:25 PM   #5
 
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Re: What is enough

Hi GDER and all. In my case I knew absolutely
when it was time. No studies, no quizzes, no analysis,
no late night gut-wrenching pondering of my future. Just up and quit in true "John Galt" fashion.

John Galt
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Re: What is enough
Old 05-01-2004, 02:59 PM   #6
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Re: What is enough

I can almost guarantee you that, if I lose my current job, I will not seek another one. From everything I have read on this board as well as ING's retirement calulator (as Quicken, as well) I think my wife and I could survive.

I am 48. I set a goal in 1991 to retire in 2009. I am going to stick to that date.
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Re:  Just out of curiosity, Merlin...
Old 05-02-2004, 09:20 AM   #7
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Re:  Just out of curiosity, Merlin...

... if you have the financial capability to ER now, what keeps you working for another five years? Is the job that good?
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Re: What is enough
Old 05-02-2004, 10:08 AM   #8
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Re: What is enough

Good question, Nords.

I mentioned that we could "survive." If I stick to the original plan (2009), we should be in a much better position to maintain most of our present lifestyle. The job pretty much sucks, but it is a position that I worked most of my working life to attain--plus it pays pretty good.

But I've got to be honest and say that the more I read this board, the more I question how important it is that we maintain lifestyle. Who knows, you may be reading a post from me saying Merlin decided to bail out earlier than 2009.
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Re: What is enough
Old 05-02-2004, 06:34 PM   #9
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Re: What is enough

If merlin is also counting on a discounted lump sum as part of a DB pension plan, then it makes quite a difference financially to go too soon. Obviously it is a balance of having enough fun working to continue to do so and balancing financial needs.

In my case, I am 55 and eligible for a 25% discounted DB pension. If I stay another year, the discount is 20%, another 2 years, the discount is 15%. I will not stay until 60 to get fully undiscounted pension, but somewhere between now and then, the fun factor curve will drop below the piss off factor curve. When that happens, I will know then that I'm ready to go.
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Re: What is enough
Old 05-02-2004, 09:53 PM   #10
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Re: What is enough

Quote:
...
But I've got to be honest and say that the more I read this board, the more I question how important it is that we maintain lifestyle. ...
I've suggested this to others, and it has been pointed out that it is not always practical, but here it is anyway. If you think you can live with a lifestyle change that cuts expenses, try everything you can do to do so before retirement. Sometimes lifestyle is tied to the job, but often you have choices. Cutting back on expenses before retirement has a double benefit of increasing savings and makes reaching savings goals easier, and you have some idea on your reaction to it.

Think of it as a LBYM strategy.

Wayne
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Re: What is enough
Old 05-03-2004, 04:10 AM   #11
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Re: What is enough

Wayne,

I couldn't agree with you more.
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Re: What is enough
Old 05-03-2004, 09:32 AM   #12
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Re: What is enough

For me, when I hear people use phrases like "quality of life" associated with spending a lot of money to live, I translate that roughly to "activities that make me feel 'better' about myself and make me look 'better' to other people".

Once I figured out that this was really what the whole thing was about, I decided that I felt fine about myself and didnt care even a little about how I looked to other people.

Made a huge difference in my life once I was able to lock in on and realize the real value of my life. Which had nothing at all to do with the size of my car, my house, my wardrobe, or a country club membership.

Oh yeah, it also enabled ER without concerns about running out of money.
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Re: What is enough
Old 05-03-2004, 11:30 AM   #13
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Re: What is enough

"For me, when I hear people use phrases like "quality of life" associated with spending a lot of money to live, I translate that roughly to "activities that make me feel 'better' about myself and make me look 'better' to other people". "

TH,

I'm happy that you have yourself figured out, and translate others desire of "quality of life" as you will, but I tend to disagree that you have fingered THE answer firmly for everyone.

There are some expensive things in life that folks might enjoy in retirement. To say that someone has a character flaw for wanting something that is expensive takes some nerve in my opinion.

Chris
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Re: What is enough
Old 05-03-2004, 12:06 PM   #14
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Re: What is enough

Hmm, I didnt see anything criticizing anyones character flaws in what I said, nor did I make any suggestion that my comment implied any application to anyone other than myself.

Perhaps I was too brief. On the other hand, there appears to be a developing trend around here for people to put words in my mouth and then criticize me for them, or to suggest that I put undesirable words in their mouths when there is no evidence of that having happened. Any way you slice it, I find I'm not really enjoying this place much anymore.

However, to actually put words into my own mouth and in further explanation...

I dont see anything at all wrong with spending a lot of money on things that brings you joy and pleasure. I certainly have some toys of my own.

Its just that 90-something percent of the time when I see someone spending a lot on something, or a lot more on something than a better value, its usually not because the item itself is supplying the joy. Its the perception one gets that one is "improved" by having spent extra in buying something, or that ones perception by others is "improved" in the expense.

If thats your motivation in pulling out the wallet, then I think thats something that you might want to look at and consider. I had all the nerve in the world to look at my own motivations and change my lifestyle. I doubt I'd have the nerve to suggest that its the answer for everyone, nor did I do so.

A major point in my recent post of what america was like 100 years ago was that the average well to do people of that time lived approximately at what we today consider the poverty level in terms of income and lifestyle. What exactly have we bought with our excesses of spending and "quality of life"?

My implication is that people who have the intention of living an ER life of 'excess' should (answering this threads original question) have a shitload of money. If on analysis you find you dont need to live alone in a 5000 square foot house, own several $100k cars and wear $500 outfits to impress your friends and neighbors, you can get by on a lot less. And theres a good chance you'll enjoy this "getting by" a lot more than your former "high quality life".

Perhaps a recent discussion got me amped about this. My parents live in a retirement community they moved into about 3 years ago. As part and parcel of the community, there are assets such as a golf course, restaurant, clubhouse, swimming pools, etc. A recent sweeping movement has been made by the better heeled half of the community to upgrade and improve many of these assets. The only problem is that spending $120k updating a restaurant that sits empty most of the time, and $25k to start heating both the indoor AND outdoor pools that nobody swims in has caused a doubling of the monthly fees. When challenged on this by the not so well heeled half of the community, the board suggested that these improvements are crucial to the residents quality of life and that if people come to be unable to afford to live there, they should pack up and move.

In this case "quality of life" translates into a few hundred of the thousands of residents enjoying taking their occasional guests on a tour of the unused assets to show off just how frickin cool the place they live in is.

Damn the folks who are spending their last dollars and who cares if they have to abandon the homes that retain low property tax values (via proposition 13) and force them to move from their homes.

Sometimes quality of life is indeed qualitative. Sometimes its part of a mass social delusion crafted by marketing and advertising, playing on our emotional need to improve ourselves.

Figure out which is which, for yourself of course, and enjoy your lives.

Adios.
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Re: What is enough
Old 05-03-2004, 12:11 PM   #15
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Re: What is enough

On the subject of spending money on "things". Things, especially "nice" things, can be life-enhancing. For instance, many of us appreciate a lovely piece of artwork, a finely crafted piece of furniture, even a high quality pair of shoes. Things built to last that for me are worth spending the money on.

I think the problem is succumbing to the tyranny of things. Having too many things; too much "stuff". Perhaps a few of you in this forum have practiced "retail therapy"--feeling down and spending money on something new to feel better. Sometimes it works, but often it's only a temporary fix.

What's worth spending money on? That is such a personal decision and if we put ten of us in a room together chances are we wouldn't agree. :-)

One person's trash is another's treasure.
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Re: What is enough
Old 05-03-2004, 05:40 PM   #16
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Re: What is enough

Quote:
Hmm, I didnt see anything criticizing anyones character flaws in what I said, nor did I make any suggestion that my comment implied any application to anyone other than myself.
TH, I think your original post in this thread was straightforward, honest, and on the mark. There's a lot of wisdom in what you said. No explanation is necessary; the post speaks for itself and was well done, in my opinion. I like to hear what people honestly believe, what they have experienced personally, and what they think might be of interest to others. Keep posting TH! I don't always reply, but I enjoy your posts. I'll stop learning if people are reluctant to post what they really think.
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Re: What is enough
Old 05-03-2004, 05:46 PM   #17
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Re: What is enough

? One person's trash is another's treasure? Separate checking accounts, his and her toys/trash? from individual 'mad money' funds. No voting on each others selections. 28 yrs and counting.
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Re: What is enough
Old 05-03-2004, 07:01 PM   #18
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Re: What is enough

TH,

You are one of the persons I enjoy reading the most.
even when I think you are full of B.S.

This forum would miss your funny, articulate and astute
epistles greatly. So kick back, Bro, have a brew and
keep firing away.

Cheers,

Charlie
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Re: What is enough
Old 05-03-2004, 09:21 PM   #19
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Re: What is enough

I'm normally a tight-wad, but I've occasionally splurged. I've usually enjoyed whatever it was I splurged on, and I've never missed the money. In fact, it's sort of a perverse law of the universe that some of the most expensive stuff holds its value much better than the "bargains."
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Re: What is enough
Old 05-03-2004, 11:34 PM   #20
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Re: What is enough

Chuck - I'm full of BS all of the time...remember, I'm one of those marketing guys? Although I was in engineering for a long time too, and management. In other words, who knows

Bob - I gather much wisdom from everyone here as well. In fact, if I ever say anything useful, it was probably something someone else said here first. Its certainly been a learning experience.

I'm just a little touchy right now. I'll get over it.
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