Poll: When you retired, how many years of expenses had you saved POLL

[2017ish]

If we had liquidated on date we retired and spent down the assets with savings account returns, we had about 50 years--when looking at our baseline expenditures and ignoring any other possible sources of income (social, inheritances, etc.). Add in travel, which varies according to portfolio value each year, and it turns out to have been about 25 years.

I answered the poll without regard to our travel expenditures, as they are entirely variable and discretionary.

 

[Lewis Clark]

If you specified net expenses after other income sources, it might be more useful, because that is what you need your stash to actually cover.

I answered the poll this way. My expenses after deducting my pension, which I started collecting right away.

 

[COcheesehead]

I answered the poll this way. My expenses after deducting my pension, which I started collecting right away.

I did as well, less any future social security.

 

[Romer]

I didn't answer the poll as it is more complex than picking a single number

When I retired I had 10 times my annual BUDGETED expenses in my portfolio.

BUT, I have a nice Pension

AND eventually I will receive Social Security

AND I do expect some returns on my money

Then there is the question of expenses

If I lived bare minimum in my current home, I would need $58K, the largest expenses are $20K Health Insurance (Pre Medicaid), $12K for Home owners Ins and Property taxes. Then Auto Insurance and Fed and state taxes

But I saved a lot (with pension in mind) so I wouldn't have to live bare minimum

I can up a level of comfort to $100K a year covering my NFL Football tickets, $15K for travel, $16K for Entertainment, eating out and shopping. Shopping is a broad topic that covers anything we buy from Landscaping Materials to clothes. Plus additional taxes

But then there is always something. This year I replaced an HVAC system, next year the 2nd HVAC and possibly trade in my wifes car

Some years we splurge on a more expensive trip and fly Business Class or sail SilverSea Cruise rather than Celebrity

And then there are things I buy because I want to. Not extravagant or wasteful (to me). Something to do with one of my hobbies

So I budget $150K a year.

If I take the last 5 years of expenses while working and add in my current Health Insurance, I come to between $128-$136K in expenses once my House payment is removed (Paid off now). I no longer need the 401K contribution or savings expense allocation so those are removed as well. Anything I don't spend is savings I up'd the expense to $150K to cover more travel and more other things even though there are less expenses like lunch, gas and clothes. How you determine your Expense target depends on what you want to do.

This year with a new HVAC, funding 529, and out of pocket costs on a new roof, I will be slightly over the $150K budget.

Some years I will be over and some years I will be under

That is why I stress test my long range plan to $160K. At $160K, with portfolio, pension and SS, I could live forever At least until the 110 years my plots go to.

Do I believe the plan? I believe it is a good starting point that will change over time getting better at times and worse at others depending on inflation, market returns, health and other factors.

I know I could also chop my expenses way down if I HAD TO. I also know I can afford to live life the way I did before I retired and do what we want when we want as long as the value is there for us.

I factor Inflation, 1.5% COLA on SS and a 23% cut to SS in 2034 (Just in case). No COLA on my pension and a 3-4% ROI on my investments. I have stress tested it to 0% ROI and still good to age 97

I made a great living and enjoyed life while I did it. I did not want to change that when I retired or I could have retired earlier. That was more important to me than retiring early, which I still did at 60.

Sorry for the long post, I just wanted to explain why for me it was more complicated than how many years of expenses and the reason behind it

The one thing I have learned on this forum above everything else is every ones situation is different and what works for one does not work for others.

 

[TheWizard]

I retired back in 2013 and had about 15 times my desired retirement retirement income in my 403(b) with TIAA.
I didn't track my expenses anymore at that point but they were way lower than my DRI, which was around $130k to start with.

And then I pensionized/annuitized a good portion of my TIAA accumulation for lifetime income, with a ten year guarantee period.
At this point, my excess income has accumulated my investible assets back to about where they were in 2013, accounting for the fact that Roth and taxable accounts are more valuable per dollar than tax-deferred accounts...

 

[TheWizard]

I’m not a good fit for the poll, because I seem to be retiring often.

Explain in more detail, please...

 

[COcheesehead]

Not sure what this is that Aerides posted, then deleted.

 

[Alex The Great]

AND eventually I will receive Social Security

Do you count on that?
I do but most likely it will be changed. One way or another. The only hope I have is that changes will be applied to younger population i.e. those under 50 by that time. Which is not guaranteed either.

 

[Romer]

Do you count on that?
I do but most likely it will be changed. One way or another. The only hope I have is that changes will be applied to younger population i.e. those under 50 by that time. Which is not guaranteed either.

I do count on it. If it goes to zero than I will be good to about 90. I have my house as a backup. I Bought if for $600K in 2008 and it is now worth $1.5M. I figure I could use half for lower cost housing and then supplement my portfolio with it

So even though I do count on it, I would still be ok and have my backup path.

I don't see it going away. You would get a huge block of folks who fully depend on it voting with their pocket books

 

[DrRoy]

Value of investments was 48X. Both have gone up. It’s about 40 now.

 

[old medic]

the answer depends on SIRE vs FIRE, and the large number of people somewhere in between. You don’t need to save much if anything if you’re SIRE.

We had about 5 years of minimal pay the bills, survive on cat food expenses. But my pension alone covers that. DW working has added about 2 more years to that and is closer to her pension.

 

[Midpack]

I do count on it. If it goes to zero than I will be good to about 90. I have my house as a backup. I Bought if for $600K in 2008 and it is now worth $1.5M. I figure I could use half for lower cost housing and then supplement my portfolio with it

So even though I do count on it, I would still be ok and have my backup path.

I don't see it going away. You would get a huge block of folks who fully depend on it voting with their pocket books

I don’t think anyone is projecting SS will “go to zero.” The benefit may change, but it won’t “go away” in our lifetimes. It’s not uncommon for folks to plan on 70-77% of current SS benefits, but that’s just one number.

 

[rk911]

"When you retired, how many years of expenses had you saved?l

Well, none.

We based our decision to RE based on our pensions, not savings. I tracked our expenses over the previous 3-years as compared to what we could expect in pension payments. We determined we had a very good positive cash flow so we pulled the plug at age 55. We had zero debt..not a single penny. We also had savings and investments but apart from a targeted expense we had been saving for (new motor home) we didn't then and still haven't touched savings or investments (other than RMDs which go to charity). Life is good.

 

[Sojourner]

I voted in the poll, but in my case there wasn't a clear-cut retirement date. I semi-FIREd in 2014 and continued to do various part-time consulting j*bs for several years. But, for the purposes of the poll, I used my investable net worth as of the day I left my full-time corporate gig.

 

[LateToFIRE]

I too did not answer because (1) Not retired yet and (2) Post-retirement finances will be very messy first couple of years as we retool our living arrangements, investments, realize on asset sales, RSU's. deferred comp, etc.

So, maybe NW is a better proxy for me right now. If I retired today, NW divided by retirement budget would be > 25x. Of course, that ignores SS, pension, taxes, etc. so not sure what conclusions could draw from the number other than seems similar to what others have stated.

 

[pacergal]

We are SIRE, pensions and SS cover expenses.
We had public service jobs, earned less than $100,000 year combined. Still saved every paycheck, but not millions.

 

[PatrickA5]

I don't consider us completely retired until this year when DW finally retired. We have somewhere around 22X expenses at that point.

SS (3 years) will cover about 60% of our expenses and at such time our withdrawal rate will be around 2%.

 

[Major Tom]

Explain in more detail, please...

I'm assuming that by saying he retires often, he's referring to increases in WR beyond the rate of inflation, effectively resetting the beginning of the retirement period. I'm in the same camp, as I suspect most of us here are. How many calculate their WR at the beginning of their retirement, giving themselves increases to allow for inflation only, for their entire retirement? Probably nobody.

When I retired, I had about 42x expenses saved up. As the bull market continued to roar, I gave myself a fairly sizable raise which meant that, at that point, I had about 32x expenses saved. I have given myself no further raises since (I don't do annual raises to account for inflation). Currently, I have about 40x expenses saved. Social Security will be a wonderful bonus when it comes along. I remember W2R saying how happy she was to finally be receiving her SS, on top of all that income from her investment portfolio.

In this post, by expenses, I actually mean my total expenditure, and not my basic "bare bones" expenses.

 

[unclemick]

Odd Ball here. Lay off at age 50. Cut expenses 85% or so. Rental plus for sale by owner RE. 5 Years from non cola pension and 12 from early SS. A mish mash of some temp work, sold and consume RE proceeds, some dividend stocks, etc.

Heh heh heh - looking back - big dog was letting index funds ride in IRA until RMD. Ball Park I could have stretched IRA ?? 10 - 15 years. Maybe?

 

[SloHan]

When I retired I had about 27 years of net planned expenses. This does not include future SS which was always part of the financial plan for >30 year retirement.

 

[Surewhitey]

Excluding the home, SS & small non-cola pension, ~30x trailing 12mo (which is 10% higher than last year), but we're still going, so I didn't do the poll...

 

[COcheesehead]

High water mark for us was 42. We sit at 39, but we are also 3 years into retirement so that makes sense.
If I add in social security, it jumps to 69 years of planned expenses.

 

[pb4uski]

If you tracked this data, when you retired how many years of expenses did you have?
Years of expenses = retirement assets / planned expenditures

I had 20 years of expenses when I retired.

I had 40 years of gap (expenses less pension less SS) when I retired.

Our retirement assets are harder to measure. If I exclude the fair value of a second home (condo) purchased with retirement assets that was not part of our retirement plan our retirement assets are 5% lower than I planned, but if I include the value of the unplanned second home then our retirement assets are 7% higher.

 

[Koolau]

So many changes from the plan and the reality that I don't know how to answer the poll. So many more changes along the way that complicates things further.

 

[COcheesehead]

I had 20 years of expenses when I retired.

I had 40 years of gap (expenses less pension less SS) when I retired.

Our retirement assets are harder to measure. If I exclude the fair value of a second home (condo) purchased with retirement assets that was not part of our retirement plan our retirement assets are 5% lower than I planned, but if I include the value of the unplanned second home then our retirement assets are 7% higher.

I don’t include our house in retirement assets. I include some land we own because that will be sold someday and used that value ( it adds about 3%) to calculate the years of expenses on hand.
I like how you describe the expenses less pension as gap.