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Old 03-12-2017, 08:03 AM   #21
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Have you looked directly at actual expenses these past 3 years? $275 per year is higher than most any estimate I've seen on these forums. And Texas isn't generally thought of as a crazy COL state.
Yes -I'm realizing that DW's early spending estimates are based too much on pre-RE spending. She insists its over $300k. We need to build it from the ground up instead of whittling it down from current level. I'm guessing it should be around $175-200k. I'm sure I'm not the only one here that tries to be overy conservative with estimates.

Also need to consider down sizing in interim of our final RE move. Texas is crazy affordable but this big house eats energy and maintenance dollars each month. We'll have 7,500 sq ft for the two of us and the dogs. Dilemma is when to do it.
Ultimately we'd like to move back to Mid-Atlantic area but daughter is starting up college here in Texas later this year - we will stay here for next 5 years. Does it make sense to downsize for that period of time factoring in all costs?? That's the topic of many happy hours with DW and me.
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Old 03-12-2017, 08:09 AM   #22
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TexasRider
In the same boat. 56 and want to retire 2020 will have less money then you but $2 to $2.5M but will work for us. This week Megacorp handed me a RSU package and said we want to keep you here for at least 3 years. The up side is I do get a pension and I can stay with the megacorp heath insurance till 65 (Medicare time). Also kid is almost done with collage and mortgage done this year.

We will see what happens in 2020
Stock grants are a fantastic incentive. I will ultimately leave some on the table when I leave but they have accelerated our savings a great deal. No pension or health reimbursement (unless I stay til 2022-which I can't stomach). Sounds like you're in a great place.

Good to have another in Class of 2020. See you at the graduation ceremony!!
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Old 03-12-2017, 08:11 AM   #23
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Yeah - Need a better handle on what the real spending levels will be. Maybe $275k is not necessary. I think since we are just starting this process, everything is based on what we do now instead of what our new life will be. Thanks all.
Does that $275K include taxes?

Getting a handle on your real and needed spending is everything when planning to retire.
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Old 03-12-2017, 08:28 AM   #24
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Does that $275K include taxes?

Getting a handle on your real and needed spending is everything when planning to retire.
Thanks. We are quickly realizing that determining a solid spending estimate is the whole ball game. Taxes are a big part of it.
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Expenses are key
Old 03-12-2017, 08:39 AM   #25
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Expenses are key

Texas, congratulations on your success and positioning going into the home stretch.

You are absolutely right about expenses. Getting a real track on these made all the difference to our confidence levels about projections. I am the same general ballpark as you and "4%" or 3% of any percent only works as your base case if it resembles the level of pre-tax income your asset base is capable or producing.

Two years of hard-core but incredibly simple tracking in MINT made the challenge go away. A year in we knew exactly what we were dealing with for actual expenses and the 2nd year has allowed us to affect it in smart, easy ways and see the long term trends very clearly. We need substantially less than we thought on a yearly cashflow basis.
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Old 03-12-2017, 08:44 AM   #26
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I'm getting the impression that you and your spouse might not be on the same page here. If you are spending 300K a year now things might not drop that much when you do retire. This is just a comment about your house, 7500 for 4 people and dogs is crazy large in the minds of a lot of people. Just think of the furnishings you need for a home that large.

Since your DW isn't up and in the trenches every day like you are, she might not really wants her daily life to change. I suggest the 2 of you have a serious heart-to-heart about the whole process. In my mind a SAMS with an empty nest is retired in place.
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Old 03-12-2017, 09:04 AM   #27
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Two years of hard-core but incredibly simple tracking in MINT made the challenge go away. A year in we knew exactly what we were dealing with for actual expenses and the 2nd year has allowed us to affect it in smart, easy ways and see the long term trends very clearly. We need substantially less than we thought on a yearly cashflow basis.
Never heard of MINT but looked it up after I read your post. I had a feeling we could benefit from a decent tracking tool. I'm sure there's a thread here discuss software programs. Is MINT a good tool?? Can't really find the cost on their web page - they hide it pretty well.
Thanks
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Old 03-12-2017, 09:05 AM   #28
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...
Ultimately we'd like to move back to Mid-Atlantic area but daughter is starting up college here in Texas later this year - we will stay here for next 5 years. Does it make sense to downsize for that period of time factoring in all costs?? ....
Probably not worth it. Common rule of thumb is that transaction costs will be 10% for seller of a house. Plus, in light of avoiding in-and-out transaction fees, you'd be looking at renting someplace for 5 years, which is likely to have negative subjective appeal.

Why the need to stay there when she is in school? Is there a big in-state tuition discount that requires maintenance of residency? Or a mutual desire to be in relatively close proximity for family purposes? We had our three scatter all over the country, including Houston, and never had a problem with being quite a ways apart (but private colleges...)
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Old 03-12-2017, 09:09 AM   #29
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Never heard of MINT but looked it up after I read your post. I had a feeling we could benefit from a decent tracking tool. I'm sure there's a thread here discuss software programs. Is MINT a good tool?? Can't really find the cost on their web page - they hide it pretty well.
Thanks
Mint gets its revenue from referrals of its "customers" (aka "products") to financial products tailor-offered to them through the site. Also via sales of aggregated data. Quick overview here: How Mint.com Makes Money (INTU) | Investopedia

I haven't used it (quicken user since early 90s), but many swear by it. Owned by Intuit (the former owner of Quicken), which also owns turbotax and quickbooks

E.T.A. other options include MoneyDance, Legacy Microsoft Money, YNAB ("You Need A Budget"), Excel, and Quicken. I would not recommend Quicken unless you are also going to be tracking investments in it--and even that may not be enough for a prospective user given what may be on the horizon for pricing.
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Old 03-12-2017, 09:16 AM   #30
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Never heard of MINT but looked it up after I read your post. I had a feeling we could benefit from a decent tracking tool. I'm sure there's a thread here discuss software programs. Is MINT a good tool?? Can't really find the cost on their web page - they hide it pretty well.
Thanks
MINT (mint.com) and Personal Capital are the premier tools for this. Both are absolutely free and link directly to your financial institutions. You have to be ok with this requirement of course but that is the magic that makes it so easy and non time-intensive for you. You should read reviews and make a choice or decide if it's right for you at all.

Many people use these for tracking and budgeting but at this level and for your purposes, I am only talking about using it for tracking. Forget about the asset and wealth management or debt stuff; not relevant to you in this case. Simply attach MINT to your transaction accounts from which all Expenses flow. MINT will collect these and categorize them with our help (initially) and then on it's own. You will get a complete read-back of everything that is happening in every area of your life. It's like having a dedicated accounting and financial analysis team working for you in the background, 7/24, for free.
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Old 03-12-2017, 09:41 AM   #31
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Why the need to stay there when she is in school? Is there a big in-state tuition discount that requires maintenance of residency?
You guessed it - In State Tuition. Difference of half.
Have oldest in college on east coast so we are not crippled by attachment issues.
Plus the job is here - 3 more years until RE.
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Old 03-12-2017, 09:43 AM   #32
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MINT (mint.com) and Personal Capital are the premier tools for this. Both are absolutely free and link directly to your financial institutions. You have to be ok with this requirement of course but that is the magic that makes it so easy and non time-intensive for you. You should read reviews and make a choice or decide if it's right for you at all.
Thanks - I'll read up on it.
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Old 03-12-2017, 11:11 AM   #33
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Thanks - I'll read up on it.
Been using MINT for 4+ years and is a good tool for communication for us. I'm accused of fudging numbers, so this helps alot...
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Old 03-13-2017, 05:59 AM   #34
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Word to the wise on stock options. I had 7 digits of "execution value" disappear when the Domestic Auto industry collapsed in bankruptcy. Also lost Supplemental Executive retirement Program and almost all of the value of restricted stock units. My point is don't count those chickens until executed. Even without a bankruptcy, a lot of things can drive an option below its strike price.
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Old 03-13-2017, 06:52 AM   #35
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Word to the wise on stock options. I had 7 digits of "execution value" disappear when the Domestic Auto industry collapsed in bankruptcy. .
Thanks Shanky
I would have been worried too if I was high leveraged in Domestic Auto Industry during those years.
I have taken into account the health of my Mega Corp and the industry we do business in. Most analyst continue to rate Mega Corp as Buy or Strong Buy but nothing should be taken for granted. I watch it every day and I still dump batches every time we hit a new high.

I think we all agree - all investments need to be understood and monitored. Vigilance and a bit of paranoia is a good thing.

Thanks again for input.
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Old 03-13-2017, 03:33 PM   #36
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Thanks Shanky
I would have been worried too if I was high leveraged in Domestic Auto Industry during those years.
I have taken into account the health of my Mega Corp and the industry we do business in. Most analyst continue to rate Mega Corp as Buy or Strong Buy but nothing should be taken for granted. I watch it every day and I still dump batches every time we hit a new high.

I think we all agree - all investments need to be understood and monitored. Vigilance and a bit of paranoia is a good thing.

Thanks again for input.
I was worried too, but unvested options and requirements to hold a certain amount of company stock can put one in a position where a good percentage of their wealth is in one basket. Your approach of "cashing in" when you can is a good approach. Once company equity is less than 10% of your wealth, I don't think it is an issue any longer. Also going from high income, high spend lifestyle is doable. Our retirement income is still 6 digits, but it is about 25% of my former income. Downsizing our lifestyle my last few years of work was easier than I expected. Most amazing is how much your tax bill goes down with a modest income.
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Old 03-14-2017, 07:50 PM   #37
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I'm getting the impression that you and your spouse might not be on the same page here. If you are spending 300K a year now things might not drop that much when you do retire. This is just a comment about your house, 7500 for 4 people and dogs is crazy large in the minds of a lot of people. Just think of the furnishings you need for a home that large.

Since your DW isn't up and in the trenches every day like you are, she might not really wants her daily life to change. I suggest the 2 of you have a serious heart-to-heart about the whole process. In my mind a SAMS with an empty nest is retired in place.
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