For those that have retired with =>$5M in investable assets
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Not sure what 5 million watermark would have to do with budget hitting.
Also not sure lot's of people would want to self identify they have 5million by responding.
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NYEXPAT
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Who budgets? When the Champagne runs out, just order another bottle!
Big_Hitter
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Major Tom
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Surely whether you end the year with a personal budget surplus or shortfall has more to do with whether you spend more (or less) than your income, and not with the actual dollar amount of your portfolio.
I'm scratching my head on this one.
I'm scratching my head on this one.
My guess is there will be quite a few responses to this post but not many will be on topic.
REWahoo
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My guess is there will be quite a few responses to this post but not many will be on topic.
Why would you say that?
Senator
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I do not have $5M, and likely will not when I retire in 5 months.
I do project my NW will be close to that in a few years, especially if my DGFs NW is included in it. It will not be in investable assets, but in rental real estate. Mostly because I have been paying off mortgages. It is very hard to buy even a cup of coffee with an apartment building.
I could sell and invest at that time, but the taxes and commissions would make $5M look more like $4M, or less. Even so, If I spend more than I make, it will not last. If I spend less, it will grow.
I have heard that $5M is a key number to being financially independent with no worries, and there is a bunch of sports figures, movie stars, lottery winners, etc. that would say otherwise.
A number like $5M is just that, a number. Without the rest of the context, it means nothing.
I do project my NW will be close to that in a few years, especially if my DGFs NW is included in it. It will not be in investable assets, but in rental real estate. Mostly because I have been paying off mortgages. It is very hard to buy even a cup of coffee with an apartment building.
I could sell and invest at that time, but the taxes and commissions would make $5M look more like $4M, or less. Even so, If I spend more than I make, it will not last. If I spend less, it will grow.
I have heard that $5M is a key number to being financially independent with no worries, and there is a bunch of sports figures, movie stars, lottery winners, etc. that would say otherwise.
A number like $5M is just that, a number. Without the rest of the context, it means nothing.
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marko
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Ending up with more at year-end than when started IS THE PLAN of just about everyone on this forum.
Portfolio size isn't relevant, planning is.
RunningBum
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Maybe you'd like to expand on why you are asking only those with $5M or more?
Someone with mid-seven figure portfolio has a greater portion of discretionary expenses. These are easier to reduce, so a year-end financial goal might be achieved by pushing off some expenses into the future.
youbet
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I wonder what you mean by that?
Of course, it will not last for eternity. But, it may last long enough. For example, FireCalc tells me my WR (increased annually by inflation) could exceed the earning level of my FIRE portfolio going forward. Eventually, in some scenarios, I'll deplete the portfolio if I live long enough. But, if historical limits continue, I'll be well over 100 yrs old when that happens.
Other eventualities might lead the FIRE portfolio to actually increase in real dollars.
It's a pesonal decision of course, but for me spending only to the point where my FIRE portfolio holds steady or grows in real dollars is way too conservative.
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ESRwannabe
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Retiring on $5 million is pretty rough. I wouldn't recommend it.
Probably a failed attempt to avoid off-topic comments from the riff-raff.
youbet
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Yes, I've noticed that trend growing the past few years.
Many people seem to be taking the outlook that the goal is to have as much or more, in real dollars, at the end as in the beginning whether you're talking a single year or the balance of your life. Whereas in earlier years on the Forum most seemed to be looking at simply not running out of money while trading it for the retirement lifestyle they enjoyed the most.
I think the proportion of folks who get more satisfaction out of not spending than spending is growing. For example, there seem to be more folks who would gain more satisfaction from staying home and not spending $10k on travel than actually doing the travel. They'd really enjoy the travel. But they'd enjoy opening the spreadsheet and seeing the unspent money there even more.
After a lifetime of intense planning and saving, seeing your portfolio grow in real terms post retirement is more satisfying than spending some money to have more experiences.
Not my view but I can understand how it can be for many.
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JoeWras
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When you travel, it is a commitment. You won't have time to log onto e-r.org, nor time to check your spreadsheet.
Better to stay home in front of the computer or tablet. For sure.
euro
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travelover
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+1 No way would I risk cutting it that close.
I'm not at $5M, and not sure how that relates to the question.
I am living off only my portfolio for now and the next 9 years or so until SS starts up if things go as planned. My portfolio is allocated for total return and is all equities. The income it generates is incidental, and not enough to cover our spending, so I sell shares as needed to fund our budget.
Given the vagaries of the market, some years I have more than I started with and some years I have less. Our budget is at a constant level, adjusted for inflation, that I hope will avoid depleting the portfolio over the long term. If it looks like the portfolio value is getting unsustainably low, we'll lower the budget to preserve the portfolio. If the portfolio value gets too high, we might increase the budget if we can think of something to spend it on. But that will be over periods of five or ten years. Otherwise, we'll just stick with the budget as is and let the portfolio do what it wants.
As to the budget itself, we're usually below budget unless we add in plenty of travel. No problem sticking with it.
NW-Bound
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Don't you simply keep a case or two of Dom Perignon in the cellar to avoid running out and losing face when your friends drop by and you tell the cook to prepare an impromptu dinner?Who budgets? When the Champagne runs out, just order another bottle!
It's rough, I tell ya, very rough. We don't get near the proper amount of filet mignon and champagne that we deserve.
Car-Guy
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Major Tom
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I was thinking the exact same thing. With my current annual spend of ~17K, that would represent a whopping 0.34% WR. Not that I'm overly conservative or anything, but I'd be nervous about retiring with so little
We are a rather cautious lot on this board, you see
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