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New poster from GA, ready to do something else
Old 07-12-2007, 05:03 PM   #1
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tightasadrum's Avatar
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New poster from GA, ready to do something else


It’s time to step out of the shadows. I’ve enjoyed following many threads infrequently on this forum for about a year now. Have wanted to jump in several times with input. But now I have a question, so here I am.

First the personal:

Age 60 (don’t look it, don’t feel it, how did this happen?)
Married to a beautiful younger woman off and on for 32 years
Daughter in 3rd year at UNC, economics major (hey…I started late, OK?)
Two cats and a rooster (don’t ask), just buried my 17-year-old dog
Home in Athens, GA (Go DAWGS!)
Veteran (Navy) during the last bad white house decision before this one;
ASWO DD-547 & DE-1078 Plank owner

Hobbies: golf and tennis until I quit the country club, no time to play
Private pilot, but haven’t been up lately, too costly
Own Sailboat and won several annual lake races, haven’t been out in three five years?
(Are you picking up a pattern here?)
Do get to every football home game though

Asset setup:

80% tax deferred; 20% after tax investments
(Allocation way out of whack; way too liquid)
Real estate: home, lake home (will sell);
rentals: 8-unit apartment, 2BR & 3BR houses
(Now I remember why I’ve got no time for hobbies.)

FIRECalc tells me to quit … yesterday. But I’m still nervous about expense line.
I don’t spend much, but I’m still talking to DW & DD about LBYM. I see the heads go up and down, but the bills keep coming. Any ideas for selling this?

Here's the Question: Should I enter the amount for the retirement portfolio as it exists in the accounts, or should I discount it for what it probably will be after taxes. I’ve seen the answers in the Forums that you should put taxes in the expenses line, but taxes will vary widely depending on whether it comes out of the tax deferred account or the after tax account and when. How can FIRECalc possibly produce an correct number with this kind of variation of inputs? Please explain.

I’ll enter this now and jump into traffic for an hour and a half. Wish me luck!
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Old 07-12-2007, 05:45 PM   #2
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Posts: 4,391
Welcome Tightasadrum !

As you may already know Firecalc doesn't account for taxes. So all of the methods you refer to are only approximately correct.

As you indicate, you can approximate how much after tax income you'd have by discounting the nestegg assets by your (average) tax rate.

You might also want to check out the "Optimal retirement Calculator" (ORP) which gives a better handle on taxes than Firecalc. ORP uses a constant asset growth model but allocates what to sell off based on their "optimal" tax model. One warning about ORP though is that it hasn't been updated in 5 years or so. Therefore some of the tax rates that it uses are based on previous tax code.

ORP Retirement Calculator link

between ORP and Firecalc you can get a pretty good idea as to what your after tax income might be.
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Old 07-12-2007, 07:21 PM   #3
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Hey how nice is it in Athens?? We seriously are considering moving there from the greensboro nc area.
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Old 07-12-2007, 08:34 PM   #4
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I read an article that said that 60 was the new 40, sounds like you may fit this category. You have not given enough information as per financials, but neither did I. Your DW and DD are not on the same page as far as FIRE, yep - me too, Gyspy says it takes 2 - he's right. I'm working on it.

Now being from a neighboring state that has Steve Spurrier as a coach, you say that you have 2 cats and a Rooster and you like uhga's - I mean UGA? what's that all about. How do the cat's and the Rooster get along (its about that time of year ya know). I know there are folks from the left coast that read this but don't get to play in our league, so ?

Sorry about your dog, man's bestfriend, no doubt.

One of the best days of my life was when I got out of the rental property business. (I still do pretty good on commercial rentals). I remember the day DW and I were cleaning up after a messy tennant - that didn't pay their bill -DW said, thats it, not ever doing this again. Next day rental went up for sale and used the equity to buy 8 acres that still appreciates and I don't have to fix nothing or collect rent. No liquid $$, but value has 3X's in 8 years. If it was me -I would either get a property mgr - pay the 10% and let them handle the property or sell it. Go back to Flying - Golfing - Tennis -yippee with DW and / or get a motor boat. Just kiddin, do what you want to do, sounds like you already know how to have fun, just do it.
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thanks for the responses
Old 07-13-2007, 09:02 AM   #5
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thanks for the responses

MasterBlaster, Thanks for the input. Iíll look at the ORP to see how that works, when I can stand to face it. Sometimes I get totally exhausted ďrunning the numbers.Ē I read a comment once from a woman who suddenly found herself loaded with money after publishing a book. She was suddenly confronted with the anxiety of watching out for her money, a totally new experience for her, and she found it exhausting. Not ready to go back to being broke though. I guess every situation in life has a cost.

BooBooBear, Thatís funny you would want to move to Athens. The grass is always greener etc. DW has bugged me for years to move to NC, here maternal family area. I just ignored her. The point is, every place is both good and bad. Friends mean a lot, although new friends are fun to find also. But to your question, hereís a good comparison. If you're familiar at all with Chapel Hill, Iíd say Athens is a larger version of CH. Both have the stateís major university. Both have a downtown scene. Both have plenty homeless and indigent. Both are more politically liberal than the rest of the state. If you want Chapel Hill times 3, you might enjoy Athens. I do.

Shootnstar, hello neighbor. Steve who?? As to the pets, they arenít allowed to mingle. However, Iíd put my money on the rooster if they did. I canít tell you how many times Iíve considered selling all the rentals. In fact, I have sold two over the years, the first one with a 1031 to buy the apartment, and the last one in May because many expenses were coming up and the depreciation was all gone. But if I do sell other property, it will probably be after the pension & SS kick in. And then it will be to roll the thing over to another investment. But the plan is to let my DD pick up the new tax basis on the whole thing some day when Iím gone. A property manager could be a good plan, the problem is finding one thatís worth using. Most Iíve seen arenít worth shooting. Now the having fun partÖneed to work on that one.

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Old 07-14-2007, 06:34 AM   #6
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Originally Posted by tightasadrum View Post
FIRECalc tells me to quit Ö yesterday. But Iím still nervous about expense line.
I donít spend much, but Iím still talking to DW & DD about LBYM. I see the heads go up and down, but the bills keep coming. Any ideas for selling this?
How about jokingly telling them that if they want to spend money, they need to get jobs. When we wanted to control spending, we put all the credit cards in our little lock safe, and only used the debit card. In addition, we opened a MM at ING direct so the money wouldn't just be sitting in checking [s]waiting to be spent[/s] earning no interest. Then we had regular auto deposits from the checking account to the ING MM to decrease the amount in checking faster.

It also helped that we logged all our spending for a couple of months, and broke it down into necessary spending [mortgage, daycare, utilities] and unecessary spending [eating out, new clothes, new toys]. That really hit home. "I spent how much last month on [X]?!!!"

- Alec
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spending less
Old 07-14-2007, 07:45 AM   #7
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spending less

Alex, I've so many accounts now that the mailman has threatened a lawsuit.

However, I have been thinking about trying to identify all the tiny details of all the spending. Not a budget, but what is it being spent on? I mean, how much "stuff" does a family need? I thought that maybe I could use nothing but the credit card one month for all spending. The monthly statement gives a pretty fair summary of spending.
You know, it's funny, but we really don't eat out that much, but I suspect "things for the house" and "clothes for DD" may be the prime suspects. Oh, BTW, they both have jobs already.

Thanks for the thoughts,

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