Know how much you need to retire?

[LARS]

Fifty percent more than you have! With that joke out of the way, I just found these forums and think they are great.

My own situation is that I have been retired for 14 years already. Left the workforce in my late 30’s. Married, no children, which I think makes ER a lot easier on the net worth.

Look forward to discussions of how people are dealing with the current uncertain times.

 

[CuppaJoe]

Welcome to the forum, Lars.

Love the joke, it's also a good propaganda line to keep the young whipersnappers working and funding SS.

I'm curious how your portfolio has performed over these 14 years. I retired in Aug. 2008; am surprised that my PF is up by about 4% from retirement date, after 4% withdrawals.

Is your DW also retired?

 

[LARS]

Thanks for the welcome.

Wife is retired as well.

How the portfolio has done is a somewhat complicated question, because during retirement went from owning a house (saw the bubble on real estate coming) to renting though expect to buy again soon.

That having been said, we are very, very conservatively invested and I would guess net worth is up somewhere around 15% to 20% (i.e. after spending). We live quite comfortably off about 2% of portfolio.

 

[template]

Welcome to the forum Lars. You mentioned that you were a very conservative investor. Same here. I lost less than 5% during the worst of the recession and have more than fully recovered this month.

Our financial assets have more than doubled since retiring 8 years ago (not factoring in inflation). My wife still works. She doesn't earn much, but it sure helps.

Medical insurance costs have been an area of uncertainty for us, but we have been able to cope with the increasing monthly premiums so far.

Enjoy the forum. There are lots of good folks here.

 

[JustNtime]

Welcome to the forum Lars. You mentioned that you were a very conservative investor. Same here. I lost less than 5% during the worst of the recession and have more than fully recovered this month.

Our financial assets have more than doubled since retiring 8 years ago (not factoring in inflation).

Made me look up mine and I'm very near the double milestone after 7yrs of full retirement(not factoring inflation or real estate values)... Verry conservative(lazy) investor more than half of our net worth (excluding real estate) is in I-Bonds purchased 7+ years ago... I know they won't be earning much for the next ~6 months due to 'deflation', but they've done well and if I sold now I doubt future I-bonds will be anywhere near as attractive.

The financial advisor I consulted with before I retired was even more pessimistic than your joke Lars... Obviously, I'm enjoying the last laugh!

 

[LARS]

There is actually a lot of truth in the joke. For most mere mortals, the trick to early retiring is controlling the "wants". It is so easy to step up lifestyle to match (or exceed it would seem for many Americans of late) income that you can never achieve retirement.

 

[bbbamI]

Question: Know how much you need to retire?

Answer: Enough.........


Welcome to the forum.

 

[LARS]

I'm guessing we have different definitions of conservative. To get a portfolio to double in 7 years you have to average a little over 10% after-tax per year.

And that is assuming ZERO withdrawals.

So if you guys are getting that kind of return without risk you have a secret you ought to let the rest of in on... not to mention you ought go back to work as a money manager because you'll make a fortune!

 

[Ed_The_Gypsy]

"Need" is not the issue.

I know what we have and I have figured out how to live within those limits, even if we had to pull the plug today. I reset that evaluation often.

 

[JustNtime]

I'm guessing we have different definitions of conservative. To get a portfolio to double in 7 years you have to average a little over 10% after-tax per year.

And that is assuming ZERO withdrawals.

So if you guys are getting that kind of return without risk you have a secret you ought to let the rest of in on... not to mention you ought go back to work as a money manager because you'll make a fortune!

Ahhh, NOT really much of a secret LARS - a modest portfolio can double, if you make contributions to it during those 7yrs... Here's my current allocation:

I-Bonds 50%
VALBX 10% (TRESURIES)
S&P 10% (INDX FUND)
IJS/SJT 10% (SMALL CAP /OIL GAS)
misc stock picks 10%
CASH 10%

Overall a current 30% exposure to the stock market seems conservative to me.

NO, I didn't make anywhere near 100% return in that period. According to MS Money, I did enjoy a 14.61% annual return on my stocks which only comprise 20% of current portfolio compared to 6% S&P index fund return. I-bonds returned 5% annually during this period and I did have a 7% CD for a while. These are all before tax returns. Most of the taxes are deferred (IRAs and I-bonds).

I receive a cola'd pension which continues to exceed our annual ER spending and adds to our portfolio monthly. I hadn't realized how well I did in stock picking (when I use to pay attention) until I looked to compose this reply. Luck I suppose - a few very good picks, a couple clunkers and some solid middle stuff. Still NOT all that confident in future stock outlook or my picking ability. Sooo, I imagine my portfolio will continue to get more conservative. I had my mother put her entire IRA in a PENFED 7yr CD at 6.25% a couple years ago - so she's happy and I don't have to listen to her complain about what the stock market is doing. Wish I had dumped some cash into that CD rate as well, since I think it will be hard to beat w/o alot of risk...

BTW: I don't need a yob, I don't want a yob, and I don't want to put 2 people out of work by taking their yobs.

 

[LARS]

JustNtime,

I figured there must have been new money coming in. Having stopped work in late 30's I don't have the pension thing (which would be nice.... obviously). So we have to "hunt what we kill" so to speak.

By the way, I-bonds (notwithstanding current reset period) are I think an excellent place to put some money. Tax deferred, inflation protection (assuming Govt doesn't play too much with COLA) and once out of the holding period can be liquidated if need money even though it is a long term investment.

EE's weren't bad either until the Treasury changed the formula a couple of years ago.

 

[walkinwood]

Welcome to the board Lars. I think you'll enjoy it here and I look forward to learning from your experiences.

 

[mickeyd]

Hey LARS.

Welcome here.

My simple pre-retirement plan consisted of saving as much of my net income as I could along the way (over the last almost 40 years). That's basically it. No $ goal, no retirement year goal~ just constant saving and investing over a 40 years period.

When I finally found myself out of work and saw no jobs around that would pay me what I was worth, I declared myself ER (early retired) and began to figure out how to spend it all during the next 40 years or so.

 

[JustNtime]

JustNtime,

I figured there must have been new money coming in. Having stopped work in late 30's I don't have the pension thing (which would be nice.... obviously). So we have to "hunt what we kill" so to speak.

By the way, I-bonds (notwithstanding current reset period) are I think an excellent place to put some money. Tax deferred, inflation protection (assuming Govt doesn't play too much with COLA) and once out of the holding period can be liquidated if need money even though it is a long term investment.

EE's weren't bad either until the Treasury changed the formula a couple of years ago.

I wouldn't buy I-bonds now, but at the time I could use a credit card and earn an extra 2% upfront in CC rewards and then transfer CC balances to zero percent CC offers. Also higher limits. At the time I retired, I had 120k in Ibonds and 60k CC debt. Kept buying Ibonds until I got up to 97k CC debt and then started paying it down. Since I was using CCC zero percent money the effective yield was about double(half the money was the CCC) during the beginning of my ER and I had the Ibonds to cash in if I needed to pay down the debt quickly. Much more conservative now 16k CC debt. I have to go now - I'm traveling - more later...

 

[LARS]

Ah yes the good old days when you could arbitrage on credit cards...

No question that current I-bonds are not as attractive, but they still provide tax-deferred earning and inflation protection (hopefully) which is not something to sneeze at in the current enviroment...

 

[Bestwifeever]

Just want to join in to welcome you to the boards, Lars. As someone who knows next to nothing about money management other than what works for DH and me (sort of like "I don't know what's good art but I know what I like") I look forward to your contributions to the boards, as I've learned so much from others who do know about money management.

 

[Milton]

I hadn't realized how well I did in stock picking (when I use to pay attention) until I looked to compose this reply

Ah yes, the coffee can approach.

 

[JustNtime]

Ah yes, the coffee can approach.

OR the don't sweat the small stuff and get a life approach... OR it's; 'only castle's burning' approach to investing... I wouldn't make much of a money manager for someone else I'm afraid, but i'm by far the best one I've ever had... (Single income family of five, moving to 12 locations in 25yrs including 3 countries overseas. Funded my masters degree and bachelor's for the 3 kids and still retired at 48 to travel the country).

Well we're in rainy Dubois, PA today - yesterday Niagara Falls, where a good time was had by all until we made a wrong turn into Canada. Paid toll, then proceeded to cross border w/o passports - received a verbal warning from Canuk customs - DON'T try that again or else and then proceeded in country - caught a view of the falls on the drive by (and the $14 parking fees) and continued on. Frankly, prefer US side to the touristy build up over there... Well we may go in search of the elusive Amish today, since it isn't exactly rock climbing weather...

The answer to how much was NEEDED to retire for me; was a whole lot less than the financial guru's told me I needed. YMMV (your mileage may vary)...

 

[Milton]

made a wrong turn into Canada. Paid toll, then proceeded to cross border w/o passports - received a verbal warning from Canuk customs - DON'T try that again or else

The passport requirement is relatively new. It's an American requirement: specifically, the "Western Hemisphere Travel Initiative". Everyone entering (or re-entering) the US from Canada must now show a valid passport.

There is no reciprocal requirement for Yanks to present a passport when entering Canada; but in practice Canada Border Services will not allow a US citizen in unless they can show proper documentation allowing them to return home to the States.

So much for "the world's longest undefended border"!

TravelAddict.org Blog suggests that Canadian border people are generally much friendlier than their American counterparts, and that is certainly consistant with my own experience. But now that the union has won the right for Canadian customs agent to carry sidearms (why??), that may change ... hope not.

Frankly, prefer US side to the touristy build up over there

Know what you mean re the touristy characterization. Still, it seems preferable to the US side: Niagara Fall NY is, and in my memory has always been, economicially depressed, with a downtown area full of boarded-up, abandoned buildings. Sad.

On the bright side, gas is cheaper over there!

 

[Meadbh]

The passport requirement is relatively new. It's an American requirement: specifically, the "Western Hemisphere Travel Initiative". Everyone entering (or re-entering) the US from Canada must now show a valid passport.

Yup, you USians started this!

But now that the union has won the right for Canadian customs agent to carry sidearms (why??), that may change ... hope not.

I think it was related to a recent incident at the BC-Washington State border.

 

[swampwiz]

Ah yes the good old days when you could arbitrage on credit cards...

Up until last year, I have done very well on that arbitrage, eking out a net income of $30K/yr sometimes. Last year though, I lost $25K with about $5K in finance charges. Oh well, like everyone on Wall Street, hello Chapter 7.

 

[Milton]

Yup, you USians started this!

I was just explaining, not finger-pointing. Ordinary Americans have essentially no more to do with this silly new requirement than do Canadians. And many of the border states have been pretty vocal in their opposition.

I think it was related to a recent incident at the BC-Washington State border.

AFAIK, the only documented case of a terrorist entering the USA from Canada is Ahmed Ressam, the ‘Millennium Bomber' who was caught at Port Angeles, Washington (in 1999, ten years ago!). That hardly seems worth all the time, expense and inconvenience caused by the heavy-handed approach (see heightened security at U.S.-Canada border catching few terror suspects).

Unfortunately, the silly "homeland security" people are behaving like typical bureaucrats and are relentlessly focused on expanding their empire. See generally Interview with Janet Napolitano.

 

[JustNtime]

Up until last year, I have done very well on that arbitrage, eking out a net income of $30K/yr sometimes. Last year though, I lost $25K with about $5K in finance charges. Oh well, like everyone on Wall Street, hello Chapter 7.

That's why I only used for I-bonds and kept enough to bail myself out!

Concerning unplanned crossing: Well, it was the Canuks that had us dismount go inside and talk to the friendly guy with the gun. Just galloped through the US return. Wish, I knew about the cheaper gas - I didn't even notice a station though.

I had always heard how much nicer the view was from the Canuk side, but with the mist blowing that way, the sidewalk adjacent to a busy street and the minimal parking - we weren't really impressed....
On the US side of the falls, we parked at the closed 'Discovery Center' and walked along the river in a park-like setting upto and past the falls and eventually took a free trolley back after visiting 3 Sisters' Islands. We didn't do downtown Niagara NY except to find an BofA ATM.