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-   -   Is there a poll re: RE portfolio amounts? (http://www.early-retirement.org/forums/f28/is-there-a-poll-re-re-portfolio-amounts-45973.html)

Chaos Abounds 08-26-2009 03:41 PM

Is there a poll re: RE portfolio amounts?
 
I was just wondering if there is a poll out there that shows what ER folks had in their portfolios when they pulled the plug at w*rk. Seems like everyone has SO much money when they ER... either I don't have enough or most other folks enjoy a more expensive lifestyle than I do.

I know there are a lot of variables that determine the size your portfolio needs to be, but it would still be interesting to see.

Moemg 08-26-2009 04:12 PM

We usually do a yearly poll of net worth .

Lusitan 08-26-2009 05:41 PM

Quote:

Originally Posted by Chaos Abounds (Post 849307)
either I don't have enough or most other folks enjoy a more expensive lifestyle than I do.

I found myself thinking along the same lines when I first joined the forum. I've come to the conclusion it's the latter. To each his own ...

Amethyst 08-26-2009 06:17 PM

If they enjoy a more expensive lifestyle, wouldn't that imply they have less? ???

NW-Bound 08-26-2009 06:18 PM

Quote:

Originally Posted by Amethyst (Post 849369)
If they enjoy a more expensive lifestyle, wouldn't that imply they have less? ???

Yes. Eventually. :laugh:

freebird5825 08-26-2009 06:35 PM

Quote:

Originally Posted by Chaos Abounds (Post 849307)
...what ER folks had in their portfolios when they pulled the plug at w*rk.

Good question ;D...the magic number for portfolio size.
There is a huge variability for that number, stemming from the existence or absence of a pension and/or annuity (sorry folks, I said the "A" word), whether health care is completely/partially covered at low cost or self paid at high cost outside a DB plan, years from FIRE date until SS eligibility, etc etc
By deduction, I know I am on the small potatoes end of net worth with regard to portfolio size. However, other income sources balance that out.
Your own situation is unique, so using "raw" portfolio size is not always the only data point to use to make the FIRE decision. It is the aggregate of assets.

Amethyst 08-26-2009 06:42 PM

Plus, some folks inherited money, or know they're going to, so that gives them a bit of a cushion as well.

NW-Bound 08-26-2009 06:43 PM

By the way, some people might wonder how Amethyst got such a nice house too. ;)

Amethyst 08-26-2009 07:04 PM

Quote:

Originally Posted by NW-Bound (Post 849381)
By the way, some people might wonder how Amethyst got such a nice house too. ;)

Might they indeed? hmmm

youbet 08-26-2009 10:10 PM

Quote:

Originally Posted by Chaos Abounds (Post 849307)
I was just wondering if there is a poll out there that shows what ER folks had in their portfolios when they pulled the plug at w*rk. Seems like everyone has SO much money when they ER... either I don't have enough or most other folks enjoy a more expensive lifestyle than I do.

I know there are a lot of variables that determine the size your portfolio needs to be, but it would still be interesting to see.

If I recall correctly, it seems that pensions have about as much to do with successful RE as portfolio size. When we take polls on portfolio size, we always wind up realizing at the end that a person's pension situation is really key. For example, I'd take a 50k/yr cola'd govt pension over a one million dollar portfolio anytime, assuming the starting date for the pension and the portfolio withdrawals were the same.

Another major kicker is health care. One person has cheap retiree health coverage. Another is paying a ton of bux.

And there are a zillion other factors beyond pensions and health care. So, just polling portfolio size as a determiner of probability of RE success isn't very meaningful in and of itself.

heyduke 08-27-2009 05:30 AM

Quote:

Originally Posted by Amethyst (Post 849380)
Plus, some folks inherited money, or know they're going to, so that gives them a bit of a cushion as well.


that is my problem.. I am the rich guy in my family that everyone else is waiting to kick off...:nonono:

and that my friends is sad... sad.

Dawg52 08-27-2009 06:18 AM

Quote:

Originally Posted by heyduke (Post 849458)
that is my problem.. I am the rich guy in my family that everyone else is waiting to kick off...:nonono:

and that my friends is sad... sad.

How can I get into the will?;)

Lusitan 08-27-2009 08:28 AM

Quote:

Originally Posted by Amethyst (Post 849369)
If they enjoy a more expensive lifestyle, wouldn't that imply they have less? ???

Well, no. More likely they simply earn a much higher income that gives them the ability to enjoy that more expensive lifestyle, while still saving substantially, and thus could still have a much larger FIRE stash than a low-spending, low-earning FIRE-hopeful.

Given that most Americans save essentially zilch, and a large percentage are in debt up to their eyeballs with no realistic hope or plans for retirement, the "FIRE crowd" is a very, very select group of people. One has to keep that in mind when they're reading comments about the temperature and depth of the river below ... ;)

Leonidas 08-27-2009 08:38 AM

Quote:

Originally Posted by youbet (Post 849421)
If I recall correctly, it seems that pensions have about as much to do with successful RE as portfolio size. When we take polls on portfolio size, we always wind up realizing at the end that a person's pension situation is really key. For example, I'd take a 50k/yr cola'd govt pension over a one million dollar portfolio anytime, assuming the starting date for the pension and the portfolio withdrawals were the same.

A good pension does make a world of difference. Before my pension plan got really good, it was well-known joke. Most people retired and just went to w*rk somewhere else. The pension allowed them to w*rk someplace that didn't pay as well, but it wasn't enough for anybody to live on for the rest of their life. (Which was better than what we had before the pension; w*rk until you can't show up anymore.)

I once joked that with the pension I could afford to lead the lifestyle of an affluent wino; sleep in a flophouse hotel instead of a vacant lot, buy the better vintage of Mogen David, smoke generic cigs rather than hand-rolled, etc.

I even had the perfect flophouse picked out; it was a blow to my retirement planning when gentrification caused the place to be imploded:

http://swamplot.com/wp-content/uploa...-demo-half.jpg

When the affluent-wino pension turned into something better, it opened up a lot of new possibilities. Certainly it meant retirement came earlier and with less concern over fluctuations in the capital markets. But the increased importance of the pension in retirement brought new complexities in planning for retirement.

My plans changed as my circumstances changed. I came to this forum as a lurker two years before I retired, and one of the most important things I learned from the experiences of others is how changeable our individual situations can be. How people succeed or fail in their own circumstances stimulates my own thinking and refines my planning.

My eyes have been opened to many good and bad possibilities that I would never have considered without the discussions here. I went past "I need X dollars in my portfolio before I can ring the bell", to "what I need will depend on what's going on in my life and what my needs are at the time, and I need to look at all the ways I can have the appropriate amount available at the right time." Like I said, planning became more complicated.

I'll contribute to some of the "how much" conversations, because this forum is about each of us trying to help each other find the info they want/need (and I find more than a few are useful and informative). But I have to say that I don't find much use in knowing how much more or less than me you guys have accumulated. It's much more useful to learn how you accumulated what you have, why you thought that was enough, how you invest it, how you protect it, how you spend it, and all the stuff you used in making your decisions.

Knowing someone has a certain amount is okay, but I really want to know the things they did right and what they did wrong and what they would do different if they could have a do-over.

Bestwifeever 08-27-2009 09:04 AM

I think a poll could be interesting but would be complicated.

You could convert the pension to a lump sum if you wanted to have a poll--a pension of $50K would be equivalent to an extra $? in a 401(k) (sorry, the math escapes me--equivalent to $1,250,000? $1,000,000?).

The inheritance thing would have to be excluded--I wonder if most people who receive an inheritance get it before they retire. If not, it's in the "counting your chickens before they croak" category.

There's also paid (or semi-paid) health insurance that has a value that would have to be included too.

NW-Bound 08-27-2009 10:58 AM

I don't think that my lifestyle is that extravagant compared to others here, but like to share my experience.

What I do know is that in recent years, our spending has been higher than when we were still both working. When working, we were too busy to spend money, plus we had been LBYM'ers all our life. That was how we could save money. Now, we have more time to enjoy our savings.

My original plan was to enjoy two foreign trips + two domestic trips a year, each of about 2 weeks. It was simply so that we could recuperate between trips, due to our inability to become perpetual travelers. Even that seemingly extravagant lifestyle should fit within the 4%SWR, and would also be below our past income level (we never backpack but are reasonably frugal).

Well, but we do not have wage income anymore, and have to pay for two college tuitions to boot. The current economic downturn also reduces our portfolio, and I want to adhere to drawing no more than 4% of the current portfolio size. So, we have not made any foreign travel this year.

My often mentioning of travels is only to indulge in reminiscence of the recent years. Ah, the days of Dow 14000, when I came back from a 2-week vacation in Europe and found myself with far more money than when I left home. Don't the good old days just bring tears to your eyes?

I am going to browse my travel photos again...

Leonidas 08-27-2009 11:25 AM

Quote:

Originally Posted by NW-Bound (Post 849558)
Well, but we do not have wage income anymore, and have to pay for two college tuitions to boot. The current economic downturn also reduces our portfolio, and I want to adhere to drawing no more than 4% of the current portfolio size. So, we have not made any foreign travel this year.

Ah, you're killing me! I've been really selling myself on finally being able to do a long foreign trip once the youngest goes off to college in two years. But the oldest one will not have graduated by then and I'll be in the two tuition zone as well.

It probably wasn't realistic anyway. No way the Princess would spend a month in Italy during her baby's freshman year.
Quote:

Originally Posted by NW-Bound (Post 849558)
Ah, the days of Dow 14000, where I came back from a 2-week vacation in Europe and found myself with far more money than when I left home. Don't the good old days just bring tears to your eyes?

Double the good feeling by traveling someplace where the local currency is going to hell. Did that on a ten-day trip to Mexico once in 84. By the time Amex calculated the exchange rate I got a nice discount on everything but the airfare.

W2R 08-27-2009 11:28 AM

Like NW-Bound, I plan to spend more in retirement than I am spending while working. It only makes sense! I have no time or energy now to spend money. Should be interesting figuring out how to do that, since I have no desire for a McMansion or overseas travel.

Here are the "pull the trigger" conditions for my upcoming ER:

Plan A: Originally I planned to supplement my ridiculously meager pension and social security with a small SPIA, the sum of which would give me around $1800/month, more than I was spending at the time. I would have lifetime medical from my job and the onset of eligibility for that was the "pull the trigger" condition that I was waiting for. In addition to all that I had some, less than a half million, in the TSP and taxable accounts. I was figuring that I wouldn't spend any of my nestegg whatsoever at first, and would let it grow for as long as possible while LBYM'ing happily in ER.

Plan B: That amount has increased substantially due to inheritance, but that is a little awkward as I am and will be perfectly happy living on what I had before. But, I do plan to make the effort to spend more and see if it leads to a better quality of life. One difference that this increase in net worth has made in my investment plans is that I no longer plan to get an SPIA. I am presently invested in broad stock and bond indices, and 30% Wellesley VWIAX. The "pull the trigger" condition is still my lifetime medical eligibility, so my planned ER date is the same.

NW-Bound 08-27-2009 11:32 AM

Quote:

Originally Posted by Leonidas (Post 849573)
.. I'll be in the two tuition zone as well...

The pain, the pain... However, one manages to survive with the expectation that it does not go on forever. Then, it will be time to hit the road again, provided that the sky is not falling as the doomsayers keep telling us...

Chaos Abounds 08-27-2009 01:12 PM

I've estimated that a "pension" of $2700/mo. beginning at age 60 would be roughly equivalent to $450,000 in savings...does that sound right?


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