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-   -   Don't forget to spend it. (http://www.early-retirement.org/forums/f29/dont-forget-to-spend-it-24198.html)

setab 11-22-2006 09:00 PM

Don't forget to spend it.
 
I was starting to worry. I just wasn't quite making ends meet. Then I realized that I was continuing to invest like before FIRE and not withdrawing anything. My pension covers almost everything, but I put the money in TSP for a reason. Once I figured that in, it was magic. It's there if I need it. All I have to do is remember to use it. Duh!

setab

Khan 11-22-2006 09:03 PM

Re: Don't forget to spend it.
 
I'm in a similar situation.

I can't stop thinking of ways to save money.

Will tap TSP next year.

Leonidas 11-23-2006 11:05 AM

Re: Don't forget to spend it.
 
The exact same thought hit me the other day - and had me worried for a minute. My unused leave and vacation is nearly spent and I'll have to go in soon and actually retire. I've already planned it all out a dozen times, but I decided to start with a blank page and re-do it all over just to make sure I hadn't made a mistake. When I got to the bottom line I realized there was very little money for all the fun stuff I want to do - "Oh crap, I've screwed up".

Visions of going back to work or living without world travel and adventures filled my head for a few moments and then I rechecked my figures. As I checked where all the anticipated revenue streams came from I realized that the object was not to leave the principal behind when I die.

Quote:

Originally Posted by setab
I Once I figured that in, it was magic. It's there if I need it. All I have to do is remember to use it. Duh!

And I thought it was just me.


Cut-Throat 11-23-2006 11:13 AM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by Leonidas
As I checked where all the anticipated revenue streams came from I realized that the object was not to leave the principal behind when I die.

And I thought it was just me.

I see a lot of folks here that 'bake' that in the retirement plans 'just to be safe'. - Most professional advisors agree that it is unnecessary and limiting.

renferme 11-23-2006 11:59 AM

Re: Don't forget to spend it.
 
I have a friend who was going to retire last Sep. of 2006; he had a house built in Ocala, FL. and was ready to pull the string when the company decided they still needed him. They offered to let him work out of his house in FL until next Feb.
So he's down there in FL now and working from home.
Nice deal.
But, here's how he is: he was so cheap before retiring, saved almost every penny,
but did play some golf on a semi-regular basis and loved it. My guess is that after he officially retires next Feb., he will continue to live cheap, not use his money, and play golf even less, much less, than he did when working. He'll be afraid to use his money. Not my idea of a happy retirement.

LeatherneckPA 12-25-2006 07:49 PM

Re: Don't forget to spend it.
 
My parents have bought the same single bumper sticker for each of their last three vehicles, "We're spending our kids inheritance!" 3 out of 4 of us say, "Good for you, enjoy it."

I'm glad to read that I am not the only "selfish" person who doesn't plan to make my daughter wealthy by leaving her everything I've earned in the last 30 years.

haha 12-25-2006 08:22 PM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by bennevis
I have a friend who was going to retire last Sep. of 2006; he had a house built in Ocala, FL. and was ready to pull the string when the company decided they still needed him. They offered to let him work out of his house in FL until next Feb.
So he's down there in FL now and working from home.
Nice deal.
But, here's how he is: he was so cheap before retiring, saved almost every penny,
but did play some golf on a semi-regular basis and loved it. My guess is that after he officially retires next Feb., he will continue to live cheap, not use his money, and play golf even less, much less, than he did when working. He'll be afraid to use his money. Not my idea of a happy retirement.

Do you realize how much sheer fantasy is in this post? This guy has not done any of these things yet, and if he does go on too behave in this way, maybe this is his bliss.

Ha

lazygood4nothinbum 12-25-2006 09:06 PM

Re: Don't forget to spend it.
 
my friends don't get me not spending. it seems a lot to them but i'm not convinced i have all that much. i've worked out budgets on things i want to do while projecting where that leaves me in 5 years when maybe i'll feel safer about having retired so early.

i want to maximize adventure and minimize cost while increasing or at least not diminishing net worth during that period. my choices of lifestyles include keeping house with summer travel. selling house & moving on a boat. selling house with landlubber living in monthly rentals here & overseas.

the last option seems to optimize all my goals, if only i could convince myself to pull up roots. so i might try option 1 for a year or two then go to option 3 and finally, if the winds of fortune are with me, i should have enough and not be afraid to spend down some cash for that boat of my dreams.

peggy 12-26-2006 06:08 AM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by Cut-Throat
I see a lot of folks here that 'bake' that in the retirement plans 'just to be safe'. - Most professional advisors agree that it is unnecessary and limiting.

It's probably a function of it being barely 5:00 a.m. when I post this, combined with a mild fugg-headedness from holiday indulgence (and my usual fugg-headedness), but....

I thought the 4% SWR was designed to leave the principal relatively untouched. How wrong am I?

REWahoo 12-26-2006 06:16 AM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by peggy
I thought the 4% SWR was designed to leave the principal relatively untouched. How wrong am I?

Historically, a 4% withdrawal rate has not drawn your principal to zero over a 30 year or so time frame. In the majority of cases it has left a nice nest egg at the end of 30 years, but not always. It is not designed to be a 'preserve my principal' withdrawal plan.

REWahoo 12-26-2006 06:23 AM

Re: Don't forget to spend it.
 
Peggy, FIRECalc has an option to put in the requirement that your portfolio always have a certain minimum amount in it (FIRECalc advanced, Options tab). If you are interested in seeing how your withdrawal % would vary if you wanted to be sure you preserved your principal at the end, you might want to try running your numbers with and without this option enabled.


Rich_by_the_Bay 12-26-2006 06:25 AM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by peggy
I thought the 4% SWR was designed to leave the principal relatively untouched. How wrong am I?

Peggy, what REW said.

Plus, when you run the numbers, say on FIRECalc, you find that when you plan for 25 years or more of retirement, the amount you need in order to live off of a 4% SWR begins to approach the amount you would need to draw that amount forever. That is, in order to survive 25 or 30 years, your savings, investments and withdrawals probably have the robustness to last 100 years.

Nice place to be once you get there.

dex 12-26-2006 07:51 AM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by bennevis
I have a friend who was going to retire last Sep. of 2006; he had a house built in Ocala, FL. and was ready to pull the string when the company decided they still needed him. They offered to let him work out of his house in FL until next Feb.
So he's down there in FL now and working from home.
Nice deal.
But, here's how he is: he was so cheap before retiring, saved almost every penny,
but did play some golf on a semi-regular basis and loved it. My guess is that after he officially retires next Feb., he will continue to live cheap, not use his money, and play golf even less, much less, than he did when working. He'll be afraid to use his money. Not my idea of a happy retirement.

I had a fear I would act like your friend but so far no - I bought a travel trailer, a house and have been spending on my hobbies. I'm not planning my travel for 2007. So your friend might just surprise you.

peggy 12-26-2006 12:40 PM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by REWahoo!
Historically, a 4% withdrawal rate has not drawn your principal to zero over a 30 year or so time frame. In the majority of cases it has left a nice nest egg at the end of 30 years, but not always. It is not designed to be a 'preserve my principal' withdrawal plan.

That's very cool. DH and I have no kids and never will, so preservation of principal is of little concern to us. And thanks for the info re FIRECalc and minimum balances. I'll play with that a bit and see what it does to our projections.

Unlike the DieBrokers, I do want to leave a little behind, if only for my peace of mind.

REWahoo 12-26-2006 12:51 PM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by peggy
Unlike the DieBrokers, I do want to leave a little behind, if only for my peace of mind.

Me too. I've yet to figure out an acceptable and reliable way of timing the expenditure of my last dollar with my last breath, so I am resigned to expiring with a positive balance.


jdw_fire 12-26-2006 02:32 PM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by REWahoo!
Me too. I've yet to figure out an acceptable and reliable way of timing the expenditure of my last dollar with my last breath, so I am resigned to expiring with a positive balance.


If you really want to die broke, you can put all your assets in a life annuity and make sure you spend all the income from it. :)

REWahoo 12-26-2006 03:19 PM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by jdw_fire
If you really want to die broke, you can put all your assets in a life annuity and make sure you spend all the income from it. :)

Guess you missed my"acceptable" qualifier... ;)


Nords 12-26-2006 08:08 PM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by REWahoo!
Me too. I've yet to figure out an acceptable and reliable way of timing the expenditure of my last dollar with my last breath, so I am resigned to expiring with a positive balance.

Quote:

Originally Posted by REWahoo!
Guess you missed my"acceptable" qualifier... ;)

My spouse also assures me that "reliable" is no problem. There was some confusion about a background check and a waiting period but she says that she took care of it.

I'm pretty sure that our offspring, or Al's new Society for the Prevention of Cruelty to Beavers, will take care of the "positive balance" problem...


jdw_fire 12-26-2006 10:37 PM

Re: Don't forget to spend it.
 
Quote:

Originally Posted by REWahoo!
Guess you missed my"acceptable" qualifier... ;)


I guess "acceptability" is in the eyes of the beholder, but then we've had this discussion before. :coolsmiley:


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