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Hello- I'm new and want to exchange views.
08-22-2011, 04:25 PM
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#1
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Recycles dryer sheets
Join Date: Aug 2011
Location: aberdeen
Posts: 267
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Hello- I'm new and want to exchange views.
I'm 61 yrs old and my wife is 60. I've been working in a prof. career for 30 yrs straight. My only daughter is done with college and independent.
My wife is retired. My house is fully paid. Our three vehicles are also paid full. I have very little credit card debt.
We're about to jump to this new chapter. Retirement.
We are frugal and simple. How much liquid asset do you think I need in order to spend about $85,000 US/year. The median income of folks where we decide to live is about $75,000. It is a slightly affluent part of the state.
Thanks,
Birchwood
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08-22-2011, 04:30 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Birchwood, I'd recommend you run your numbers through FIRECalc. That should help you answer your question.
__________________
Numbers is hard
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08-22-2011, 06:36 PM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,304
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Of course REW is right, best if you start with FIRECALC, link to the right too.
If you're familiar with the 4% SWR studies, you know that 25 times your expected first year annual spending is widely considered the rule of thumb for required assets to retire at age 65 assuming a 30 year retirement including keeping up with inflation. That works out to $2,125,000 for you - though you're younger than 65 so presumably you could need more. And all this is based on historical returns and inflation, you have to decide if you're comfortable with that, not to mention predicting your own longevity.
Again, FIRECALC is the place to start, best of luck.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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08-22-2011, 06:46 PM
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#4
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Full time employment: Posting here.
Join Date: Dec 2005
Posts: 567
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You don't need 25 times your total spending. You can first deduct social security and any pensions or other steady income. If the two of you get 35K worth of SS and pensions you only need 25K times 50
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08-22-2011, 07:25 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
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 Quote:
Originally Posted by old woman
You don't need 25 times your total spending. You can first deduct social security and any pensions or other steady income. If the two of you get 35K worth of SS and pensions you only need 25K times 50
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Yes, or, making the reasoning a little more explicit, estimating your and your wife's yearly combined SS income as $35,000 (that's just a wild guess), then for a total income of $85,000, you need $50,000 per year from your investments. Using the rough 25X approximation, this gives a figure for investment savings of 25X$50,000 = $1,250,000.
__________________
Greg (retired in 2010 at age 68, state pension)
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08-22-2011, 07:50 PM
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#6
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Recycles dryer sheets
Join Date: Aug 2011
Location: aberdeen
Posts: 267
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Thanks all.
At least I have a rough estimate. Based on your data, looks like it's OK.
I Expect to draw about 80K the first yr, plus SS to help pay for health insurance. The 80K is slightly above the median income of folks where we're planning to retire. We're going to buy a house exactly the same price as our old house we sell. Our cars are late model with few miles. We intend to do road trips. We buy only on sale and discounts. Early bird special is the rule, and buy only what we really need.
Thanks again.
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you wanna exchange views - ok
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08-25-2011, 11:52 AM
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#7
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Dryer sheet aficionado
Join Date: Dec 2009
Posts: 33
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you wanna exchange views - ok
Hi Birchwood,
Here's my view, lets see yours  :
LBTS by trlkdivers, on Flickr
Welcome to the board
__________________
...way down here, you need a reason to move
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08-25-2011, 12:25 PM
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#8
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2011
Posts: 8,368
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Quote:
Originally Posted by TeeRar
Hi Birchwood,
Here's my view, lets see yours :
LBTS by trlkdivers, on Flickr
Welcome to the board |
As a buddy of mine used to say, while tilting his head to one side, "I look at it this way".
__________________
"Exit, pursued by a bear."
The Winter's Tale, William Shakespeare
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08-25-2011, 06:28 PM
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#9
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Recycles dryer sheets
Join Date: Aug 2011
Location: aberdeen
Posts: 267
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Nemo
Nice pic. BTW, I also do a little photography as a hobby.
The sunset looks nice, even if you broke one of the common rules, not to put the horizon in the center of the pic. The clouds and the dark lower background add to the drama.
Thanks.
Birchwood.
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08-25-2011, 08:17 PM
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#10
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Administrator
Join Date: Apr 2006
Posts: 23,038
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Hi Birchwood. Welcome aboard. I had the honor of visiting Aberdeen once in January 1976. I didn't see much, as everything was covered in snow.
__________________
Living an analog life in the Digital Age.
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08-26-2011, 08:01 AM
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#11
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Recycles dryer sheets
Join Date: Apr 2007
Posts: 491
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Wow! Aberdeen, SD. I don't meet to many other locals. My immediate family is from the VERY small town of Westport, just to the north. Many others live/farm in the greater Aberdeen area. You know any of the Schaunamans? They are the most prolific branch of the family.
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08-26-2011, 08:08 AM
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#12
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,304
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Quote:
Originally Posted by old woman
You don't need 25 times your total spending. You can first deduct social security and any pensions or other steady income. If the two of you get 35K worth of SS and pensions you only need 25K times 50
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You're right, my bad. I don't have a pension and I exclude SS for purposes of my situation, though I realize I will probably get something from SS - just not what current estimates shows for my remaining up to 40 years. And I build in a safety factor beyond 4% WR because I'm 57, though the OP is in the ER category at only 61 (4% SWR assumes age 65 & age 95 end of plan).
Indeed the right rule of thumb answer is 25 times your spending minus any income you'll have in retirement (SS, pensions, property income, etc.)...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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08-26-2011, 08:35 AM
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#13
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by old woman
You don't need 25 times your total spending. You can first deduct social security and any pensions or other steady income. If the two of you get 35K worth of SS and pensions you only need 25K times 50
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If the pensions have a COLA kicker. If not, you'll probably need a bit more than that to compensate for inflation.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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08-26-2011, 11:10 AM
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#14
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Recycles dryer sheets
Join Date: Aug 2011
Location: aberdeen
Posts: 267
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Culture,
Although we lived in Aberdeen, SD for 27 years, we are not originally from SD. Westport, is a small enclave and we knew some people from there.
Shaunamans, there are a lot of folks with that name here.
Unfortunately we are planning to move to Sioux Falls, SD within a year.
Bigger city, jet service, more things to buy, eat, shop etc., more culture, shows, parks, walking trails, shooting range and better quality of life.
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08-26-2011, 02:31 PM
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#15
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,357
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Sounds like a good choice. I think Sioux Falls is about the perfect size for a city, at least in my experience.
__________________
I thought growing old would take longer.
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08-26-2011, 03:46 PM
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#16
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Recycles dryer sheets
Join Date: Apr 2007
Posts: 491
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Quote:
Originally Posted by Birchwood
Unfortunately we are planning to move to Sioux Falls, SD within a year. Bigger city, jet service, more things to buy, eat, shop etc., more culture, shows, parks, walking trails, shooting range and better quality of life.
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Much of my family has also migrated to Sioux Falls for the same reason. However, you will not find better shooting ranges in Sioux Falls than the section of prairie dogs behind the barn in Aberdeen!
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09-07-2011, 05:45 PM
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#17
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Dryer sheet wannabe
Join Date: Mar 2011
Location: slingerlands
Posts: 19
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I understand the 25 times rule of thumb. My question is how would you propose to get that 4% return? If I could get 4% guaranteed, I think I'd retire tomorrow! Thanks all !
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09-07-2011, 06:07 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
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Quote:
Originally Posted by birdie
I understand the 25 times rule of thumb. My question is how would you propose to get that 4% return?
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You spend your principal. It's like an annuity.
__________________
Greg (retired in 2010 at age 68, state pension)
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