Who's got the least?

[Lsbcal]

I've seen a few winners who have the least. Seem to populate the libraries during the day and who knows where they go at night.

Not for me.

 

[haha]

I've seen a few winners who have the least. Seem to populate the libraries during the day and who knows where they go at night.

Not for me.

Sunday morning I walked downtown to drop off some books at the library. Hadn't opened, and a lot of leasty looking individuals were hanging out at the door. They must hate Sunday, as the opening is later than usual.

Ha

 

[FANOFJESUS]

I know there are some pensions on this forum in which I would need $0 saved. It all depends on your situation. With no pension you might need to be a good saver.

 

[Aspire]

I think the risks have to be weighed up - the risk of running out of money versus the risk of working longer than necessary. It isn't easy. I don't think I will ever get to a position where there is zero risk. I don't mind living on a low budget, but I always want to have money for anything I feel I need for my health. I have already (aged 44) had back problems, expenses for which included an electric recliner chair (which I wouldn't be without), and skin problems, as a result of which I need supplements on a permanent basis (which are working very well).
On the other hand, I think I will be able to take better care of my health if I'm not working.
I am very nearly ready to retire. Most of my money is invested in US real estate, although I'm not in the US myself. I use managing agents.

 

[OAG]

I applaud those who RE on a shoestring. I couldn't of done it, though. I enjoy creature comforts and a sense of financial security.

I think the ideal is to maximize the following:

Portfolio at retirement / Age at retirement

Some would say Max Port/MINIMUM age or else one may never retire - the crux of the OMY (one more year) syndrome.

 

[AnIntentionalRoad]

Some would say Max Port/MINIMUM age or else one may never retire - the crux of the OMY (one more year) syndrome.

Portfolio at retirement divided by Age at Retirement implies that, given the same portfolio size, the older you are on the day of retirement, the less successful.

Two examples:

$1MM portfolio / 65 years old = a "score" of 15,385

vs

$1MM portfolio / 45 years old = a "score" of 22,222

So this formula rewards people who retire with the biggest portfolio at the youngest age, and somewhere between the extremes there is an optimum that each person must determine is right for them, given that most of us have to trade years of work for increases in portfolio size (IE, OMY syndrome).

 

[daylatedollarshort]

Portfolio at retirement divided by Age at Retirement implies that, given the same portfolio size, the older you are on the day of retirement, the less successful.

Two examples:

$1MM portfolio / 65 years old = a "score" of 15,385

vs

$1MM portfolio / 45 years old = a "score" of 22,222

So this formula rewards people who retire with the biggest portfolio at the youngest age, and somewhere between the extremes there is an optimum that each person must determine is right for them, given that most of us have to trade years of work for increases in portfolio size (IE, OMY syndrome).

Years of working aside, the 65 year old with $1M is likely to be in much better financial shape going forward because they will likely have accrued higher SS benefits and maybe pension benefits plus they have less years to bridge before collecting SS benefits, and are eligible for Medicare for health insurance. They may also have their house paid off and kids off the payroll, so expenses are lower.

 

[HFWR]

I'm probably not the lowest, but definitely in the lower echelon. Sometimes it's hard to relate to all the angst and OMY thinking from folks with multiples, sometimes many multiples, of what I'll be retiring with.

 

[NW-Bound]

I applaud those who RE on a shoestring. I couldn't of done it, though. I enjoy creature comforts and a sense of financial security.

I think the ideal is to maximize the following:

Portfolio at retirement / Age at retirement

I understand the logic of "retiring early with less" being equal to "retiring later with more". One is trading off wealth or the purchasing power against his time.

The simple formula does not weight the loss of time enough though, I think. Suppose a person has $1M at the age of 40. We know that the 2nd million will come a lot easier, so this person will likely get to $2M at 50 or even earlier.

Using your formula, he will keep doing OMY because he can double his stash in less time than doubling his age.

 

[OAG]

Portfolio at retirement divided by Age at Retirement implies that, given the same portfolio size, the older you are on the day of retirement, the less successful.

Two examples:

$1MM portfolio / 65 years old = a "score" of 15,385

vs

$1MM portfolio / 45 years old = a "score" of 22,222

So this formula rewards people who retire with the biggest portfolio at the youngest age, and somewhere between the extremes there is an optimum that each person must determine is right for them, given that most of us have to trade years of work for increases in portfolio size (IE, OMY syndrome).

Darn I read it as a either or thing and missed the math formula - my apologies.

Also have to study that a bit more as I have been using a way more complicated method. Yours may be a lot easier to use.

 

[NW-Bound]

I applaud those who RE on a shoestring. I couldn't of done it, though. I enjoy creature comforts and a sense of financial security.

I think the ideal is to maximize the following:

Portfolio at retirement / Age at retirement

I understand the logic of "retiring early with less" being equal to "retiring later with more". One is trading off wealth or the purchasing power against his time.

The simple formula does not weight the loss of time enough though, I think. Suppose a person has $1M at the age of 40. We know that the 2nd million will come a lot easier, so this person will likely get to $2M at 50 or even earlier.

Using your formula, he will keep doing OMY because he can double his stash in less time than doubling his age.

So, thinking a bit more, and borrowing from your idea, I suggest the following formula.

First, let's set a minimum stash that our retiree needs before he even thinks of retiring. This level of course varies with each person, but for now assume that we can get very basic comfort with $750K. Below this level, we do not even think about ER, nor visit this forum. No, scratch that last idea.

Next, how much time do we have on earth? There's no point in doing OMY up to 79, if we only have 80 to work with. OK, we do not really know how much time we have, but let's use a life expectancy of 80 for now, or perhaps even lower it to 70 to allow time for our retiree to be healthy to enjoy that world cruise.

Then, what we want to maximize is (Stash - $750K) x ( 70 - Age).

The idea is to get an excess amount above that basic $750K, but not to the point of running out of time to enjoy that excess amount. In other words, we try to maximize "Leisure Money x Remaining Time".

You can see that below $750K, the excess stash amount is negative. Fail!
And as you approach 70, or whatever you set your age limit, your time is running out. Fail!

Suppose you're nowhere near $750K, and you are in your 60s and your time is running out? Ah hah, you will need to see what SS is worth that you are now eligible. Bingo! That quantity of "$ times remaining years" is now positive, and you now have something to optimize.

 

[imoldernu]

Would love to post something intelligent, but instead of looking forward, find it easier to count "back" instead... ie. it has to last me 8 more years... seven more years... six more years, etc.

Much easier!

 

[ziggy29]

Who around these parts had the guts to retire on the least amount of money? Would love to hear yhose stories.

While saving up a couple mill and retiring is impressive, i think the person who maximizes time over money wins. Thats a gamble of course as you try to cut it razor thin to being a pauper.

The problem with this question is that someone who retires with $50K in the bank and a $60K COLA'd pension probably has more security than someone with $2 million invested and no pension.

The other question is the definition of "money". Someone with (say) $2 million in rental real estate may have little money, but they have substantial assets, and probably a pretty significant income stream.

 

[AnIntentionalRoad]

So, thinking a bit more, and borrowing from your idea, I suggest the following formula.

First, let's set a minimum stash that our retiree needs before he even thinks of retiring. This level of course varies with each person, but for now assume that we can get very basic comfort with $750K. Below this level, we do not even think about ER, nor visit this forum. No, scratch that last idea.

Next, how much time do we have on earth? There's no point in doing OMY up to 79, if we only have 80 to work with. OK, we do not really know how much time we have, but let's use a life expectancy of 80 for now, or perhaps even lower it to 70 to allow time for our retiree to be healthy to enjoy that world cruise.

Then, what we want to maximize is (Stash - $750K) x ( 70 - Age).

The idea is to get an excess amount above that basic $750K, but not to the point of running out of time to enjoy that excess amount. In other words, we try to maximize "Leisure Money x Remaining Time".

You can see that below $750K, the excess stash amount is negative. Fail!
And as you approach 70, or whatever you set your age limit, your time is running out. Fail!

Suppose you're nowhere near $750K, and you are in your 60s and your time is running out? Ah hah, you will need to see what SS is worth that you are now eligible. Bingo! That quantity of "$ times remaining years" is now positive, and you now have something to optimize.

I like it! Still a simple formula to understand but it gets to the heart of the " money x years left" sweet spot.

It would be nice to not have absolute values ($750k and 70 years), as these are fairly arbitrary and everyone will have their own opinion about what numbers are "correct."

 

[FIREd]

While saving up a couple mill and retiring is impressive, i think the person who maximizes time over money wins.

Sounds good on paper. But until people expire, there is no telling who the winners are.

 

[NW-Bound]

I like it! Still a simple formula to understand but it gets to the heart of the " money x years left" sweet spot.

It would be nice to not have absolute values ($750k and 70 years), as these are fairly arbitrary and everyone will have their own opinion about what numbers are "correct."

I am glad you like it, though you had the original idea.

I do not know how one can get around some subjective values in the criteria. People have different needs and expectations.

 

[Theseus]

Would love to post something intelligent, but instead of looking forward, find it easier to count "back" instead... ie. it has to last me 8 more years... seven more years... six more years, etc.
Much easier!

Me, being of not near as sound of a body as my younger self was, and state of mind that some might consider questionable simply came to grips with the fact that the equation could not be solved, given that assigning a numerical value to remaining length of life span is just an educated guess at best. What I do have some control over is the quality of remaining life span, however long that might be. And I have chosen to improve the quality of my life sooner rather than later - by ER while using assumed values for length of remaining life span (IRS actuarial tables) for firecalc & etc. calculations.

Who has the most, or the least numerical indicator is meaningless. Being satisfied you have done the best with what cards life has dealt you to achieve an acceptable quality of life is everything.

 

[Nords]

Who around these parts had the guts to retire on the least amount of money? Would love to hear yhose stories.

While saving up a couple mill and retiring is impressive, i think the person who maximizes time over money wins. Thats a gamble of course as you try to cut it razor thin to being a pauper.

Here's a previous version of this thread from 2006, including the winning post:
http://www.early-retirement.org/forums/f27/least-amount-someone-has-erd-with-20927.html#post387081

And from 2004:
http://www.early-retirement.org/forums/f29/retire-on-500-a-14426.html#post265550

 

[dallas27]

Sounds good on paper. But until people expire, there is no telling who the winners are.

How maccabre


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[Major Tom]

You first, Amigo.

+1

This thread was started 5 days ago and the OP has only just found the time to post again - and only very briefly.

I don't know, call me weird, or just plain old grumpy, but I'd feel a lot more inclined to share information with someone who has demonstrated willingness to share a little about himself/herself first. Judging by most of the other posts in this thread, a lot of others don't feel this way.

Gotta love the internet

 

[dallas27]

+1



This thread was started 5 days ago and the OP has only just found the time to post again - and only very briefly.



I don't know, call me weird, or just plain old grumpy, but I'd feel a lot more inclined to share information with someone who has demonstrated willingness to share a little about himself/herself first. Judging by most of the other posts in this thread, a lot of others don't feel this way.



Gotta love the internet

You may find my information in my first post, somewhere in the hi i am section.


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[Major Tom]

Then I guess I'm just a grumpy old fart.

It's OK - I can live with that.

 

[dallas27]

I've been called worse, no worries. Honestly one of my reasons to obsess on retirement is that i have an grumpy ( ok, i'm an ignorant ******* often) disposition. At retirement i really want the freedom to spend life improving myself, helping others. Im not a give away money type, im a roll up my sleeves and teach a man to fish type. But working endlessly means i help no one but myself and, arguably, my wife.


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[FIREd]

How macabre

This idea of maximizing time over money is similar to the concept of paying the undertaker with your last dollar (a classic around here).

The time component in your equation is directly related to life span. Since this is an unknown for all of us, there is no way to answer your question... until life span is finally revealed. Therefore, the prudent way to plan for the future is to prepare for a long life span, which usually means a suboptimal use of time over money.

 

[ESRwannabe]

Who around these parts had the guts to retire on the least amount of money? Would love to hear yhose stories.

While saving up a couple mill and retiring is impressive, i think the person who maximizes time over money wins. Thats a gamble of course as you try to cut it razor thin to being a pauper.


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I'm not retired yet but I have read many examples of people who "retired" on various low amounts. Some travel around in third world countries living in a tent, youth hostels and other cheap accommodation. I've read about others who continue to live in the US by lowering their cost of living. Some built their own house (wood cabins, yurts, tiny houses, houses made of cargo containers, etc). Some chose to live out of their vehicle i.e. camper, van ,car, boat, etc. Some chose to live in a commune and others moved to a trailer park.

A huge percentage of the world population live on just $1 a day. So if you are willing to live like 2/3 of the world population (or whatever it is) or for that matter live like 99% of all previous generations, then I'd say a few thousand is probably plenty to retire on.