My dream is very close?

[HI Bill]

Quote:

Originally Posted by Spiff The debt, free fed money, P/E ratios are a bit unnerving and some articles i read were predicting increasing chance of bears coming out to play or recession, and the reasoning seemed sound enough. Trouble is there are plenty of articles saying the opposite, but their reasoning seemed less sound to me.

Ah, I think you have the bias problem (there's a name for it that I can't recall), but it goes something like this: Given two explanations with equal veracity, you're likely to choose the one you believe in! Well, history has shown that on average, you can't successfully time the market. Miss just a few of the best days, and you'll miss out on huge market gains...or losses. This is the reason for asset allocation. Allocate, and let it ride....JMHO.

[tb001]

If you have access to fidelity’s Retirement planner, I would suggest using this to help put together a budget. It includes many very detailed categories that are easy to overlook (dental comes to mind for us) and gut checks medical. It will at least help you identify areas you might be missing.

[Spiff]

I downloaded activity from my checking account for 1 year. I spent less than i thought, and there were 3 trips to visit friends in this year.

Take home pay was. 55458 yr
Checking account increased 28051 yr.

Actual spending was. $27,407 yr.

Thanks for the tip to use the bank account. Just downloaded the data, select it, press sum... boom! Easy peasy.

Need to get the quote on HI, but closing in on the needed data. I see folks talking about fire calc. I'll give that a shot. I am encouraged by what i am finding out so far. Thanks a million.

I do need to visit the fidelity investments guy again, i'll have him run a couple updated simulations .

[Geld ist Freiheit]

Welcome!

We could be doppelgängers. I am in a similar situation in every respect.

I think you’re in pretty good shape.

Sounds like you’ve got a good grasp on LBYM.

Definitely take a close look at your spending to sharpen the picture. When I made my rough estimate I was looking at about $3k per month. Actually tracking showed it around $4k. That said, it varies wildly month to month. Sometimes it’s $2800, sometimes it’s $6000+ so I don’t bother with a monthly budget but tracking allows you to look into the outliers. As you’ve seen, bank statements and credit card annual summaries are a great resource.

You’ve been there for nearly 30 years. Is there a pension?

When SS kicks in much of your expenses will be covered so your WR will drop considerably.

Let us know what FireCalc has to say.

[Gumby]

When you put your spending into FIRECalc, make sure you gross up for taxes. That is, if you want to spend $30k and the money is coming from a 401k, you need to actually withdraw about $33k to be able to pay your federal and state income taxes.

[Dtail]

Quote:

Originally Posted by Spiff I downloaded activity from my checking account for 1 year. I spent less than i thought, and there were 3 trips to visit friends in this year. Take home pay was. 55458 yr Checking account increased 28051 yr. Actual spending was. $27,407 yr. Thanks for the tip to use the bank account. Just downloaded the data, select it, press sum... boom! Easy peasy. Need to get the quote on HI, but closing in on the needed data. I see folks talking about fire calc. I'll give that a shot. I am encouraged by what i am finding out so far. Thanks a million. I do need to visit the fidelity investments guy again, i'll have him run a couple updated simulations .

In addition to Firecalc, you can have the Fidelity guy show you the Fidelity Retirement calculator, which is a Monte Carlo simulation calculation and is typically more conservative than Firecalc.
There are many folks on this forum, who can provide assistance with using either calculator.

[target2019]

Quote:

Originally Posted by Spiff I downloaded activity from my checking account for 1 year. I spent less than i thought, and there were 3 trips to visit friends in this year. Take home pay was. 55458 yr Checking account increased 28051 yr. Actual spending was. $27,407 yr. Thanks for the tip to use the bank account. Just downloaded the data, select it, press sum... boom! Easy peasy. Need to get the quote on HI, but closing in on the needed data. I see folks talking about fire calc. I'll give that a shot. I am encouraged by what i am finding out so far. Thanks a million. I do need to visit the fidelity investments guy again, i'll have him run a couple updated simulations .

Welcome. It's good that you hung in this thread and found discussion that benefits you.
I know from managing in-laws "books" that a key indicator is how much flows to the bottom line after expenses are subtracted from income.
If you want to go at 62-4, why not take a few months to gather more information from various sources before final decision? You can always retire, yes, so the decision still remains yours.

[Spiff]

Quote:

Originally Posted by Geld ist Freiheit Welcome! We could be doppelgängers. I am in a similar situation in every respect. I think you’re in pretty good shape. Sounds like you’ve got a good grasp on LBYM. .... You’ve been there for nearly 30 years. Is there a pension? When SS kicks in much of your expenses will be covered so your WR will drop considerably. Let us know what FireCalc has to say.

Cheers to my Brother from another mother !

Maybe i do understand, but i don't know what LBYM is Hahahaha! Newbee here.

Yup 30 years next week. I don't get a pension, or a gold watch, but i do get a great card signed by about a dozen folks!!! I might pin it to my cubicle wal for a whole day!

I did get some company stock back in the early days, i was able to sell it when the founding father/CEO sold the company a few years ago. It turned out to be worth around 150,000$ Can't complain. Pensions are mostly a thing of the past.

Thanks Gumby, never thought i would be happy to be in a lower tax bracket!

I was looking at a websites for health insurance. One of them showed wether or not i qualify for reduced rates. At 2018 income i do not, but at retirement income rate i qualify for a big monthly reduction. So the question is do i sign up for Cobra for the first year or so, then switch to Marketplace at the lower rate ( if that program survives ) ?

[Geld ist Freiheit]

LBYM = Live Below Your Means
From what you’ve posted earlier, it sounds like you adopted that philosophy quite early.

[kgtest]

Quote:

Originally Posted by Spiff That has been on my mind a lot. Bailing out has been by far the biggest financial mistake i have ever made. The debt, free fed money, P/E ratios are a bit unnerving and some articles i read were predicting increasing chance of bears coming out to play or recession, and the reasoning seemed sound enough. Trouble is there are plenty of articles saying the opposite, but their reasoning seemed less sound to me. I acted on it, and it felt good at the time, but it has been about 2 years... I need to get that engine restarted. Thanks for the heath ins link.

Ignore those articles, listen to us. Problem solved.

[Rianne]

This forum is entertaining, insightful and has a bunch of smart people giving valuable advice. Stay plugged in, you won't regret it.

If you're a spend it all, live for today, gal/guy, like my DB, the Vanguard Nest Egg calculator has you at 95% for 30 years (based on your suggested spending habits) and does not take into account SS. Cash isn't all that crazy if you dig into the documentaries from 2008. We're flying high right now. It's easy to suggest getting in the market. How's your health?

You have no tax issues. Who's to say taxes won't explode? This is an investing forum with brilliant investors. Actually, you are in the driver's seat if the market tanks.
DH/me prefer buying things with cash unless there's zero financing available. That's a whole other discussion.

[Spiff]

" Ignore those articles, listen to us. Problem solved."

Hehehehe. I'll definitely have a look.

" Cash isn't all that crazy if you dig into the documentaries from 2008. We're flying high right now. It's easy to suggest getting in the market. How's your health? "

Very true. I had some cash set asside before the great recession hit. It was terrifying at the time, but i pushed every penny of that cash into the market, some of it went into the market a little early, but a bunch of it was pretty close to the bottom. Even the early purchaces made for a great recovery.

Extreemly selfish of me but if they were to have a massive corection next week i would be wistling and dancing.

My health is OK, I need to work out, ability to deal with stress has declined a bit. Might be connected to sitting around too much?


" LBYM = Live Below Your Means." Thanks. Absolutely! It can't grow for you if you spend it.

[pb4uski]

Here is another thing the OP can do... put his numbers in FIRECalc, including SS and then use the investigate tab to calculate his max spending... if he thinks he can live below that then green light!

I get $26,829 with no SS and 0% equities (all 5 year Treasuries) and $50,832 with all the same but 50% equities.

[Spiff]

I just spent a short time with FIREcalc. I think i am falling for her! ;-)


With SS starting at age 62, Mixed Portfolio, and drawing 70K to start ( 2.56 times what i currently spend ) it still works thru 100% of the historical scenarios. Should i call my boss now? Hehehe.

[Dtail]

Quote:

Originally Posted by Spiff I just spent a short time with FIREcalc. I think i am falling for her! ;-) With SS starting at age 62, Mixed Portfolio, and drawing 70K to start ( 2.56 times what i currently spend ) it still works thru 100% of the historical scenarios. Should i call my boss now? Hehehe.

Perhaps you should use your current equity % and run the numbers, since you have converted some monies to cash. See if you are still at 100%, then call your boss.

[gamer-stu]

If you're looking at ACA/Obamacare for insurance, just be sure to understand the income minimums and maximums in order to qualify for a subsidy. Since you will likely be living off of savings, with taxable income only coming from your after-tax account gains/dividends, you might not hit the minimum, which would stick you with Medicaid (if you live in a Medicaid expansion state). If I were to retire now, I'd be in that boat. In my case I would have to use a Roth conversion ladder to move a certain amount from IRA to Roth in order to recognize taxable income.

Edit, I see that you are 58... so you could w/d straight from your IRA soon, and would be able to recognize income from that.

[IMATERP]

Quote:

Originally Posted by Spiff I just spent a short time with FIREcalc. I think i am falling for her! ;-) With SS starting at age 62, Mixed Portfolio, and drawing 70K to start ( 2.56 times what i currently spend ) it still works thru 100% of the historical scenarios. Should i call my boss now? Hehehe.

Personally, I'd call the boss in 6 months. Take a look at the book called "How to retire Happy, Wild, and Free. You really need some preparation time + it will give you time to devise a comfortable asset allocation and track your expenses.

BTW, it's okay to be risk adverse. I'm 58, have about 800K + a paid off house and will receive a pension and healthcare from my previous employer at age 60. My stock allocation is around 30%. It is a number that I am comfortable with because my annual spending is less than 30k a year.

Another question to ask, is how would you feel if you had more money invested in stocks and the market was in a prolonged bear market? Probably not so good, so just find your own allocation that keeps you sleeping well at night.

I

[Spiff]

Many thanks for the great advice. I am holding off on saying the R word to the Boss. Lots of things to learn, but I don't think i can hang on for 6 more months.

Stu, I checked on the minimum taxable income, seemed strange but you are corect. i need to show at least 12500$ or so of taxable income. Thanks!!

https://www.healthcare.com/info/obam...idy-calculator

[aida2003]

Quote:

Originally Posted by Spiff I will have a closer look at my bank statements. Still, much of what i do and spend has been quite variable over the course of my life so far. Fast forward to more recently, i do whatever i want. On a whim i bought a couple new motorcycles, both the same year, trips to visit old friends, eat out almost every day. sometimes it is just a burger no fries, no drink, a couple days a week it is Korean BBQ and 4 Moscow mules and a good tip for the bartender. Oddly i still shop at the thrift store, and still sometimes have the cheap noodles. I will look into the bank statements. Find out what current expenses are, and sort out what i can live without. If my rough idea of a livable budget seems unreasonable, fine, i need to know what the minimum to comfortable budget range should look like for me. Maybe in bull years, i can go up to this number, for bear years i can pull back as far as this number... ? how do you guys approach that situation? If i pull the trigger now, and i am considering it, i have 4 years till i turn 62 where Social security kicks in to help. I visited an advisor at fidelity who ran the scenario on his computer, he said i was over 150% of plan, but like you guys, he questioned my budget expectations a bit too.

Welcome to ER forum, Spiff.
When reading your OP on this thread, I thought you were really a frugal person who can easily retire. I still think you should be able to because of your age and amount saved and SS on the line. However, reading this post gives me a pause. If you impulsively buy motorcycles (not one, but two), then I'd really advise more caution to start planning and to check your spending over the past 12 months at least. I don't think nice bikes cost little.
So, the cash flow in your bank account would show your spending. If you use credit cards, their statements would tell you where exactly you spent that money.
You could import 12 months of bank activity into Excel or Google sheet and then delete incoming money from it. Right now you still have your salary deposited into the bank account which might give a wrong feeling that you don't have a spending problem in case you do in reality. If you removed salary deposits, you'd see true spending. That would me my first step.
I like Korean BBQ, too.

[lust4adventure]

+1 for balanced asset allocation. Of liquid assets, stocks have the highest potential for long-term growth, but if you're scared, allocate only a small portion of your assets to them: Put the rest into a mix of bonds, cash, and cash equivalents (money markets, CDs, treasuries, TIPS, etc.). Add a smaller REIT slice if you want a dash of risk but potentially higher dividends. With some exceptions (the 2008 crisis being one: everything tanked then), bonds tend to do fairly well during bear markets because spooked investors that pull out of equities pour funds into "safer" assets (fixed income). That drives prices up and preserves some of your capital.

As others have said here, you have to look at yourself in the mirror and understand how much risk you can actually take (How much income will you really need in retirement? Can you adjust your lifestyle during prolonged bears?) and how much you can stomach (How well do you want to sleep?). You're in or nearing the "wealth preservation" stage of your life and sound like you're risk-averse, so you'll probably want to play it safe and allocate more to income-generating assets like bonds. Some people only invest in bonds and bond equivalents (REITs) and live on the interest/dividends; I'd prefer to leave some assets in stocks even in this market because even if they tank tomorrow, they will probably rebound and grow in the (very) long run. They'll pay dividends in the meantime. But that's just me: You have to figure out what you need for yourself.

Here's a wonderful quotation from the final chapter of Burton Malkiel's "A Random Walk Down Wall Street" (the latest edition), a book I highly recommend:

Quote:

The first decade of the new millenium was one of the most challenging times for investors. Even a broadly diversified Total Stock Market fund devoted solely to U.S. stocks lost money. But even in this horrible decade, following the timeless lessons I have espoused [namely, picking a balanced asset allocation and sticking to it] would have produced satisfactory results. [...] An investment in the VTSMX (the Vanguard Total Stock Market Fund) did not produce positive returns in the “lost” decade of the “naughties.” But suppose an investor diversified her portfolio with the approximate conservative percentages I suggested [...] for the “aging baby boomers.” The diversified portfolio (annually rebalanced) produced a quite satisfactory return even during one of the worst decades investors have ever experienced.

“Satisfactory” is an understatement. He displays a graph showing that the balanced portfolio nearly doubled over the decade. Sure, it dipped during the two plunges, but it did well overall.

The portfolio is 33% fixed income (VBMFX), 27% U.S. stock (VTSMX), 14% developed foreign markets (VDMIX), 14% emerging market stocks (VEIEX), and 12% REITs (VGSIX).

Knowing how much you'll need in retirement (capacity for risk) and how well you need to sleep during bear markets (tolerance for risk) is key. Then you can pick an asset balance you're comfortable with and stick to it. And try to live flexibly if you can: When the markets tank (and they will, it's inevitable), being able to cut back even a little greatly increases your odds of weathering the storm until good times return.

You're in an enviable position. Congratulations on making it!