Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 04-22-2014, 06:47 PM   #21
Thinks s/he gets paid by the post
walkinwood's Avatar
Join Date: Jul 2006
Location: Denver
Posts: 2,433
To the OP - You're all over the map! First it was 16 time salary, then when someone suggested 25x expenses, you came back with 50 times expenses.. and now you're down to 40 times expenses.

You need to read the literature and understand what the assumptions behind the 4% rule are (or 25x expenses), and what the drawdown plan is. Bengen's original paper is a good start. Also read Guyton's paper on flexible spending. Kitces, who has been mentioned, also has great information.

There used to be a site that had all the information on withdrawal plans with links to the original doc. I can't find it today - maybe someone else can post it.

Take a deep breath & start the slow education process. We've all gone through it. Knowing the ins & outs will help you stay on track when times are rough.

All the best.

walkinwood 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 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!

Old 04-22-2014, 08:20 PM   #22
Dryer sheet aficionado
lazysundays's Avatar
Join Date: Apr 2014
Posts: 25
Thanks Walk. I'm so lacking in info that I thought the answer would be straightforward.

lazysundays is offline   Reply With Quote
Old 04-22-2014, 08:46 PM   #23
Thinks s/he gets paid by the post
RunningBum's Avatar
Join Date: Jun 2007
Posts: 3,723
It is tough to estimate future expenses, but if you start trying now, you've got a number of years to refine it. Meantime, try to keep your current expenses reasonable so you can sock away as much as you can, and invest wisely. While it's nice to know exactly what your goal is, not knowing for sure doesn't prevent you from saving as much as you can in the meantime.

Focusing on a multiplier on expenses rather than salary is not only going to be the correct metric for retirement, but it will also give you more incentive to keep your expenses down, which is a good habit that will help you all the way through.
RunningBum is offline   Reply With Quote
Old 04-22-2014, 10:02 PM   #24
Thinks s/he gets paid by the post
Join Date: Nov 2009
Posts: 3,126
The "times salary" metric never meant anything to me because I twice reduced my salary in the 7 years before I ERed. Which salary should I have used? Should it have been my full-time salary, my first part-time salary, or my final (smaller) part-time salary?

Only expenses matter. Using the "times expnses" metric, I began my ER at about 37 x expenses in my investments although that was in late 2008 when the markets were crashing. In the last 5+ years, that multiple has grown to about 57 x expenses. If I were to use only the non-IRA part of my investments (which is what is readily accessible for the next 9 years), it is up to 37 x expenses.
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 04-23-2014, 04:23 AM   #25
Full time employment: Posting here.
jollystomper's Avatar
Join Date: Apr 2012
Posts: 881
I agree with those who say focus more on your expenses. My annual salary can range 35% due to the pay structure, but we manage our expenses fairly consistently

While have only saved about 16x our planned expenses, having a pension means we only need to draw less than a third of those expenses from our savings, so it is like having saved 48x of our expenses. When SS kicks in we can draw less from our savings, if we so desire.
Current target FIRE date: June 2017 or +50K to the portfolio, whichever comes first
jollystomper is offline   Reply With Quote
Old 04-23-2014, 06:45 AM   #26
Full time employment: Posting here.
Join Date: Nov 2008
Posts: 728
I really don't look at Xtimes expenses. My goal was a combination of SS along with dividend mutual funds and bond interest that cover all my expenses. Since SS and dividend funds increase most years I feel I have inflation covered. Now, I'll be leaving a bunch of money but I have a younger DW, a good CPA and great kids. When I'm not around DW can start drawing down if she needs to and won't have to worry. I don't mind helping kids as long as I have enough to enjoy life while I"m here. I'm lucky, saved enough and have a great family.
jerome len is offline   Reply With Quote
Old 04-23-2014, 06:59 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
Join Date: May 2009
Posts: 6,627
Having a pension fortunately for me, negated any need to worry about assets. I just simply retired when I could live on 60% of my take home part of my pension.

Sent from my iPad using Tapatalk
Mulligan is offline   Reply With Quote
Old 04-23-2014, 07:11 PM   #28
Dryer sheet aficionado
lazysundays's Avatar
Join Date: Apr 2014
Posts: 25
I just read Bengen's 4% rule article using historical data. That article is great. Easy to read. I am curious what critics have to say about this article, so will research that. I am curious if they can dispute the statistics.

I tried reading kitces. Too much lingo I don't understand. Way over my head. Damn it Jim I'm a pharmacist not an investor!

Have yet to look through other suggestions.
lazysundays is offline   Reply With Quote
Old 04-23-2014, 09:20 PM   #29
Thinks s/he gets paid by the post
Join Date: May 2008
Posts: 2,731
Originally Posted by pb4uski View Post
I think 40x is probably a bit conservative for a 60-65 year old. A 3.5% WR would be reasonably prudent for that age especially since if need be vacations could be dialed back and are a high % of the total expenses. That would equate to ~$2.5m in today's $.

If you haven't already done so you may want to get a copy of Quicken Deluxe or higher and run your situation through the Lifetime Planner.
I noticed tho that if you give QLP an annual budget, it calculates withdraws at some higher figure. I guess that's based on the anticipated tax rate you give it so if you say $100k, it will withdraw $125k.

IIRC, the Fidelity planner also did something similar.

So would it be 25x your budget or the withdrawal that various calculators come up with to meet the given budget?
explanade is offline   Reply With Quote
Old 04-26-2014, 07:08 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 13,197
Originally Posted by explanade View Post
.....So would it be 25x your budget or the withdrawal that various calculators come up with to meet the given budget?
Neither. I look at survivability using 5 to 10 different tools. In my case they all pointed to ER to different degrees.

Then I withdraw what we need to live.

If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
pb4uski is offline   Reply With Quote

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
Poll REVISED: How many times do you eat out per week? Midpack Health and Early Retirement 27 06-26-2012 04:56 PM
How many times have you moved? aaronc879 Other topics 58 06-20-2010 10:15 AM
It was the best of times, it was the worst of times... freebird5825 Other topics 32 12-27-2008 09:22 PM
How many times have you broken a bone? LOL! Health and Early Retirement 31 04-27-2008 09:36 AM
You probably need 25 to 30 times your current salary saved to retire?????? nun FIRE and Money 28 04-19-2007 08:21 PM


All times are GMT -6. The time now is 01:09 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.