Money Isn't Everything

[Mountain_Mike]

"Nothing would be worse than to RE and have to find a job at 60 years old, because your out of money."

I disagree with this statement. Look at it this way, if you ERed at 50 and "had" to work at 60, you had TEN GOOD YEARS in the prime of your life to do what you wanted to do.

I think nothing would be worse than to forgo the best years of your life, work until 60 or 65, and then drop dead, or spend your ER days in poor health, in hospitals, etc.

Time is a non-renewable resource.

[jdw_fire]

Quote:

Originally Posted by ReadyToGo I'm 50 years old (wife 54) and would like to FIRE in the next year or so. If I run the numbers they come up 100%, but would like some reassurance from the experts. We currently have 590k in 401K accounts, 70k in cash accounts, 580k in home equity (own it free and clear) and no other debt (all new auto's for wife & kids paid for), in 5 years I am elgible for 1600 per month in retirement benefits (another story my co. went bankrupt so retirement benefits were reduced by half) and have medical through my wifes former employer (360 per month). I have 2 kids in college (1 junior and 1 freshman), both on academic scholorship, so financial burden is minimal (3000 per year). Would like to sell my home and retrieve 200k in equity for ER and put the rest into another home that would be paid in full.* I need 55k gross to live on. Social security benefits at 62 will total 2700/mo my wife is elgible to begin drawing 1200/mo in 8 years.

Fellow posters, I don't understand where you are coming from with all the pessimism on RTG's analysis.* When I input his numbers into FIRECalc I get 100% also.*

So that anyone can double check me my inputs were:
W/D = $55000
Starting Portfolio = $860,000 ($590K + $70K + $200K)
Lifespan = 40 years
Your SS = $18,000 in 12 years (($2700-$1200)*12)
Spouses SS = $14400 in 8 years ($1200 * 12)
W/D change 1 = -$19,200 in 5 years not inflation adjusted (his pension $1600 *12)
Settings and Defaults used CPI and checked box for First Year W/D
All other settings were left the way they were set when the program opened.

Therefore if he is correct about his expense and asset numbers HE CAN RETIRE NOW!* If I missed something please point it out.* If not why are you all encourging him to wait?

[Sam]

Quote:

Originally Posted by jdw_fire Fellow posters, I don't understand where you are coming from with all the pessimism on RTG's analysis.* When I input his numbers into FIRECalc I get 100% also.*

jdw_file,

I have no idea what you were doing. But using the your numbers, FireCalc reported 65.9% sucess.


FIRECalc Results

You have proposed a withdrawal of 6.40% of your starting portfolio.

We looked at the 91 possible 40 year periods from 1871 until 2002, and the 40 partial periods from 1962 until 2002, starting with a portfolio of $860,000 and taking out $55,000 the first year, and the same amount after adjustments for inflation (PPI) each year except as follows:

Starting in year 12, the withdrawal was decreased by $18,000 (your Social Security; adjusted for inflation).


Starting in year 12, the withdrawal was decreased by $14,400 (spouse's Social Security; adjusted for inflation).


Starting in year 5, the withdrawal was increased by $19,600 (without adjustment for inflation).

Your Success Rate is 65.9%

In 34.1% of those 131 periods, the portfolio would have been fully depleted at or before the withdrawal in year 40. In 65.9% of the years, the portfolio would have maintained a positive balance through the withdrawal in year 40.
The average (mean) portfolio balance following the withdrawal in year 40 was $2,680,951.

[Sam]

Actually the success rate in 70.5%.* In the previous calculation, I had his wife SS at 12 instead of 8 years.

Sam

[astromeria]

Quote:

Originally Posted by Sam Starting in year 5, the withdrawal was increased by $19,600 (without adjustment for inflation).

This is where you went astray--you forgot to add a minus sign before the pension amount. (A confusing bit of UI that will undoubtedly be fixed in the next iteration.)

[Sam]

Thanks astromeria. You're absolutely correct.

jdw_file: You are absolutely correct too.

My bad, my bad, my bad...

Sam

[Sam]

Quote:

Originally Posted by ReadyToGo Thanks for reviewing my situation. I guess I'm not quite there yet, but I'll keep chipping away at it. Nothing would be worse than to RE and have to find a job at 60 years old, because your out of money. I think I'll go ahead with the house sale and invest the proceeds. This will help me get where I need to be before I ER. I guess 1.2mm is really the right number, if I consider everything. I should be able to get there in the next 5 years if I achieve 8% return and continue adding 15k per year. Its great to have those who have been there, and are unbiased critique your plan. Thanks, ReadyToGo

ReadyToGo,

In light of recent development (thanks to jdw_file), you should reconsider.* If your numbers are indeed like the ones used by jdw_file, you are all set to go.

Sam

[dndjones]

Thanks, jdw, astromeria & sam for taking the time to discuss my situation. I was beginning to think that I had really screwed up the numbers I entered into firecalc. I have surfed quite a few websites containing retirement calculators and fireseeker is by far the best. If it works out 100% over the full history of the stockmarket, depression included, then what more could you ask for? Well, maybe the added bonus of a great board complete with advise from those that have traveled down the same road. Sounds funny, but I feel less stressed just knowing that I can leave at any time. I am currently looking at changing my profession to something less stressful and continuing to work until one of my kids get out of college, which should be no more than a couple of years.

I don't want to have 1 foot in the grave before I have lived a little bit.

Thanks again,
ReadyToGo