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Old 09-14-2015, 05:57 PM   #21
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How much do you need to live on? Ignoring your penson and SS, you have $6.5m. At a 3-4% WR that is $195-$260k a year and you can increase those withdrawals for inflation each year. Add in your pension and SS and you can spend even more.

Have you run your situation through Firecalc?

Forget about income investing and not invading principal... total return is a better way to go IMO. See https://personal.vanguard.com/pdf/s557.pdf
I personally like this line of thinking.

Don't chase yield. You don't need to do that. Make sure you read the link he provided on total return. I know it sounds nice and clean to live off the dividends, never touching the principle, but a balanced portfolio will be safer and over time outperform an income oriented approach.
And, yes, I like the idea of adding bonds to the mix. They will provide income and help temper any big down turns in the market.

Good luck and congrats and your success.
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Old 09-14-2015, 06:09 PM   #22
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Easy enough to just ignore the 'are you kidding crowd.' Whether or not you have enough is the same question for all of us. If you're withdrawing 6% of your nest egg per year, unless you have floor income from somewhere else, you're tempting failure whether you spend $40K/yr or $400K/yr...

The 'are you kidding crowd' is trying to turn the discussion to another question largely unrelated to retirement income planning...that we can all simply choose to ignore. There will always be someone much better off, and much worse off - no matter who you are (unless your a .01%er). ..

Your suggestion that I'm trying to turn the 'discussion' is both ridiculous and without merit. I sensed the OP doesn't have a handle on what the $5MM will produce in income. I offered up some figures as a sanity check.. I suggested that the op enjoy the money and not worry. Which all sounds pretty prudent to me. The op is an adult - if they were offended they can speak up..

Not sure what your agenda is but it isn't helpful at all...






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Old 09-14-2015, 06:49 PM   #23
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Your suggestion that I'm trying to turn the 'discussion' is both ridiculous and without merit. I sensed the OP doesn't have a handle on what the $5MM will produce in income. I offered up some figures as a sanity check.. I suggested that the op enjoy the money and not worry. Which all sounds pretty prudent to me. The op is an adult - if they were offended they can speak up..

Not sure what your agenda is but it isn't helpful at all...
Agenda? You're kidding right? Just as members can ignore your judgements, they can ignore my POV, no skin off my nose.

Even though you quoted me, evidently you don't grasp this point:
Quote:
Originally Posted by Midpack
Whether or not you have enough is the same question for all of us. If you're withdrawing 6% of your nest egg per year, unless you have floor income from somewhere else, you're tempting failure whether you spend $40K/yr or $400K/yr...
What the OP chooses to spend has little to do with what anyone else thinks is reasonable or doable. You compare his assets to what the "average American retires with" - and what you think is reasonable. And then go on suggest he read Dave Ramsey's ideas on spending? Seriously?

Our role is to assess whether a families assets will support their spending. Not to judge what they choose to spend.

You might have also noticed several other members found your judgements beside the point if not unwelcome...but it's really not worth getting worked up over. Relax...
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You have 6.5 million of investible assets and you are worried about having enough? Your kidding right? If you put it in DVY, IDV and a couple of other dividend funds and get 3.3% that's $33k per million or $214,500 per year dividend income. That by the way is more then the average American retires with in total! Keep in mind unlike a paycheck there's no social security, or any of the other paycheck deductions most of us see and a lower tax rate on dividends.

People have different life styles to be sure - many people make that much or more and still manage to not have enough. However a prudent person could easily have a winter and summer homes, a club membership (no not the y) a boat and drive very nice cars on that amount .. You could also afford to be generous too...

Watch some Dave Ramsey episodes and see what other people manage on. You really are blessed, relax have fun and retire...

Oh and your portfolio of dividend funds will continue grow over time...


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Old 09-14-2015, 07:25 PM   #24
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Easy enough to just ignore the 'are you kidding crowd.' Whether or not you have enough is the same question for all of us. If you're withdrawing 6% of your nest egg per year, unless you have floor income from somewhere else, you're tempting failure whether you spend $40K/yr or $400K/yr...

The 'are you kidding crowd' is trying to turn the discussion to another question largely unrelated to retirement income planning...that we can all simply choose to ignore. There will always be someone much better off, and much worse off - no matter who you are (unless your a .01%er).

No need to refrain from participating in discussions. Just answer in percentages instead of $, more useful to more members anyway...
True to a point, except the person spending $400k per year at a 6% withdrawal rate can probably cut back a serious amount while still maintaining an above average lifestyle. Cutting back to $200k in an extreme market slide might hurt, but is still likely possible.

If you are spending $20k per year and that is a 6% withdrawal rate, you are probably screwed if you need to cut back to $10k a year.

$6.5 mil is a lot, but I think we could have achieved that if we worked until 58 or 60 instead of retiring at 45. The pension is pretty jaw dropping though.

There is a limit to how patient most on here will be with high net worth individuals. If someone comes on stating they have $120 million and want to know if they can retire early, I think I won't be able to respond seriously.
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Old 09-14-2015, 07:43 PM   #25
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Just saying

I really enjoy this forum and many of the posts, as I also do White Coat Investor, and some threads on Bogleheads. And, I try to understand and respect all opinions when politely pitched. However, I frequently caution upper snack-bracket posters privately that unless they are dealing with responders who are living in or close to their reality, the advice must be taken with a healthy dose of salt.

While much of the advice on these types of forums is well intentioned and generically useful, "average responders" really have little insight into the psychology of the .1-1% wealthy and what we want or need. It just doesn't fit and it isn't highly relevant. It is typically nothing or little to do with money and much to do with everything in personal history, how you got to this place in life financially, and money psychology. And I would say the converse is true too, even if you came from "nothing" and are now "something" financially you've forgotten what it is like on the financial margin or at average. You are just working in a different path.

Living this now with many contemporaries and a range of similar circumstances lending credence to this opinion. Note, this OP has many millions of dollars and is coming to an Internet forum blindly for the MOST BASIC advice, eliciting a wide range of responses from many perspectives.
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Old 09-14-2015, 09:33 PM   #26
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Good post Timemoveson. Personally, I may be a bit different but I love the opposing opinions and perspectives on a particular issue such as this. I never searched for the "right" or "wrong" answer, but used most to either challenge my own view or question why they agree.
You definitely have to not only select the most suitable method, but also believe in it also, or you will bail at the wrong time.
I was in search for a suitable method and found one through a forum member. Although it was too aggressive for my personal tastes, I researched deeper to take the essence of the idea and mold it into something I am comfortable with.


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Your approach to 3-4% income with 3% withdrawal and 15 year plus horizon?
Old 09-15-2015, 05:41 AM   #27
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Your approach to 3-4% income with 3% withdrawal and 15 year plus horizon?

Quote:
Originally Posted by Midpack View Post
What the OP chooses to spend has little to do with what anyone else thinks is reasonable or doable. You compare his assets to what the "average American retires with" - and what you think is reasonable. And then go on suggest he read Dave Ramsey's ideas on spending? Seriously?
1. If you post on a retirement blog that you have 6.5 million and are worried about retirement it is likely you elicit responses 'hey your kidding - right' to think otherwise is ignore human nature and a bit silly.
2. I suggested that the op visit Dave's site as a further reminder of just how fortunate he is. I actually find the success stories a joy to watch- food for the soul so to speak.
3. Yes I reminded the op just how fortunate he is to be able to earn in a year more then the average American retires with - again nothing wrong with that.

"Our role is to assess whether a families assets will support theirspending. Not to judge what they choose to spend. "

1) Who defines our role here You? There is nothing wrong with pointing out that one can live quite a good life on $200k a year. (Our OP expressed a concern about running depleting his funds.) I missed it - did anyone say anything about overspending?
2) the dismissive nature of your post "ignore the your kidding crowd" says it all. You want your POV respected but you don't grant the same courtesy to others... That's a point "you fail to grasp."

We can disagree but there's never a need to be dismissive...


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Old 09-15-2015, 06:54 AM   #28
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Come on, lets not hijack th thread with an argument about hijacking the thread.
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Old 09-15-2015, 07:40 AM   #29
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We can disagree but there's never a need to be dismissive...
Agree to disagree, and we're both guilty. Moving on...
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Old 09-15-2015, 03:39 PM   #30
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So the OP has a lot of money in taxable accounts and wants to retire and generate income. I suggested a ladder of tax free municipal bonds, another suggestion was preferred stock. How about we discuss the merits/problems with these and how they might fit into a portfolio for the OP's particular assets.
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Old 09-15-2015, 04:15 PM   #31
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Rich people have to have everything! Even our forum!


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Old 09-15-2015, 04:16 PM   #32
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So the OP has a lot of money in taxable accounts and wants to retire and generate income. I suggested a ladder of tax free municipal bonds, another suggestion was preferred stock. How about we discuss the merits/problems with these and how they might fit into a portfolio for the OP's particular assets.

I will bite.... My disclaimer first.....Like 53and done, I have a nice pension and assets wanting to invest for income. However I have no where near the assets 53 has and my pension provides about 140% of my yearly expenses. So basically I can invest anyway I want, so I invest "aggressive/conservatively". Basically I have almost all my money in 6.25% -7.2% utility preferreds. I know the 20-60 year track record of how they preform vis a vis to the inflation/interest rate and can live with it, since I am collecting my dividends.
Some people conflate "chasing yield" with seeking income from higher yield. Thus assuming they are high risk, when in fact the dividends are very low risk. Many preferred have better bond ratings than senior bonds from other companies. And the fact they are 15% qualified vs a much higher rate on interest issues in a higher tax bracket cannot be ignored. BUT, one most be cognizant and tolerant of any negative price movement in the stock itself despite the dividends being very secure. That issue must be squared away in ones mind before purchasing. If you are truly not wanting to invest "for income" these should not be bought as a general rule I believe anyways.
Also, most prudent financial advisors consider these "garnishes" with their portfolio. In other words no more than 10%-20% of portfolio.
My opinion means nothing, but I agree also with Nun. If I had a stash of that size and yearly taxes to deal with considering size of pension, I would be boning up on the muni bond market!


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Old 09-15-2015, 04:54 PM   #33
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$6.5 mil is a lot, but I think we could have achieved that if we worked until 58 or 60 instead of retiring at 45. The pension is pretty jaw dropping though...
Just think of all the covered calls and cash-backed puts you can write. Who needs a pension?


Quote:
There is a limit to how patient most on here will be with high net worth individuals. If someone comes on stating they have $120 million and want to know if they can retire early, I think I won't be able to respond seriously.
Look at Buffett who is still working at 85 despite his stash of $67B. What's his WR I wonder. Too bad he does not come to this forum for us to learn how he spends his money, but from media coverage I gather that he's drinking coke and eating at hamburger joints. Should that make me feel guilty about eating steaks, then sipping XO Cognac after dinner? Nah!
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Old 09-15-2015, 05:01 PM   #34
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Just think of all the covered calls and cash-backed puts you can write. Who needs a pension?




Look at Buffett who is still working at 85 despite his stash of $67B. What's his WR I wonder. Too bad he does not come to this forum for us to learn how he spends his money, but from media coverage I gather that he's drinking coke and eating at hamburger joints. Should that make me feel guilty about eating steaks, then sipping XO Cognac after dinner? Nah!

+1 and since your "NW" drawfs mine, please have an extra for me!
Personally I don't know why any gutter sniping has been fired OP's way. He has been nothing but nice without any chest puffing.


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Old 09-15-2015, 05:06 PM   #35
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+1 and since your "NW" drawfs mine, please have an extra for me!
If I had a 2nd shot, it would be for me, not you. I need no pretext.

Sorry my friend, but my bottle of spirit costs a lot less than your trip to Vegas to play your sport bets. You see, it's all about priority that one decides how to self-indulge with his money.
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Old 09-15-2015, 05:37 PM   #36
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Both of you have more than us, but this isn't really a contest if everyone is pretty much happy. NW has two home to take care of and our homebuilt RV will outlast his class C

Like I said, we could likely have had 6 mil by age 58, maybe earlier instead of retiring this year at 45. We only started really saving 6 years ago and went from $100,000 NW to over $1.5 mil in that time. Figure 13 more years of that and $6 mil seems pretty much in the bag with just a little good market returns.

But who is going to guarantee we don't get cancer at 54 and never even get to enjoy the money?

To the OP, just retire already. Life is expensive and always seems to be out of stock.
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Old 09-15-2015, 05:57 PM   #37
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....Personally I don't know why any gutter sniping has been fired OP's way. He has been nothing but nice without any chest puffing. ....
+1 Sad
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Old 09-15-2015, 06:01 PM   #38
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Just out of curiosity, what type of job had a $127k pension after (25?) years of service plus the ability to sock away $6.5mil?

That is one of the higher pensions I have seen on here.
Got to say I am not sure of the point of asking if "this is enough?". If that is not then most of us are toast...................

YMMV
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Old 09-15-2015, 06:18 PM   #39
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It all depends on what you need to support the lifestyle that you want in retirement.

I suspect that the envy of some have scared the OP away. Too bad.
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Your approach to 3-4% income with 3% withdrawal and 15 year plus horizon?
Old 09-15-2015, 06:56 PM   #40
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Your approach to 3-4% income with 3% withdrawal and 15 year plus horizon?

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It all depends on what you need to support the lifestyle that you want in retirement.

I suspect that the envy of some have scared the OP away. Too bad.

That is exactly the way I see it. I spend about 60k a year including taxes, and save the rest to build up the reserves I should have done 30 years ago when I was being stupid. That said, I damn well would be spending more and have a higher standard of living than I do now if I knew it was 100% financially feasible!

Maybe we should have this sticky note posted in the forum..."All rich people seeking information about their financial situation should automatically deduct the last "0" on their assets and yearly expenditures before posting any questions"


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