Retired from Wall Street; mountain climber, RIA, and real estate investor

[grfiv]

Quote:

Originally Posted by haha Since we know that a determinsitic scenario is also an unrealistic one, why not try these different scenarios, just as they are presented, in FireCalc? Ha

The research I cite in Withdrawal limits from a fixed portfolio addresses the issue of determinism as does the spreadsheet.

[haha]

I hope no one is making plans based on the odd idea that you need less money to fund a 50 year retirement than you would to fund a 20 year one. Just isn't so, folks.

These spreadsheets and the anti-intuitive result are based on a fallacy- the use of nominal rather than real amounts at the various withdrawal starting dates. Of course you will need more nominal dollars to fund the nominally larger year one withdrawal at time t+30 than you would at time t+10. Absolutely. But your savings, and your annual income neded to create this fund will also be much larger.

To make this clear, just imagine that you decided to trick the charts. You will tell them, at age 40, "I am retiring", and you will start taking your annual draw just as the chart tells you to do. But secretely you keep working, and with your earnings you set up a whole new savings program, putting 100% of it after taxes into this program also at 7%. Then 20 years down the road at age 60 you decide to really retire, and start to draw from your new fund, as well to continue drawing from the old fund.

Who do you think will have a greater income at this point? You, or the guy who actually retired 20 years earlier?

Ha

[grfiv]

Quote:

Originally Posted by haha I hope no one is making plans based on the odd idea that you need less money to fund a 50 year retirement than you would to fund a 20 year one. Just isn't so, folks. These spreadsheets and the anti-intuitive result are based on a fallacy- the use of nominal rather than real amounts at the various withdrawal starting dates. Of course you will need more nominal dollars to fund the nominally larger year one withdrawal at time t+30 than you would at time t+10. Absolutely. But your savings, and your annual income neded to create this fund will also be much larger. To make this clear, just imagine that you decided to trick the charts. You will tell them, at age 40, "I am retiring", and you will start taking your annual draw just as the chart tells you to do. But secretely you keep working, and with your earnings you set up a whole new savings program, putting 100% of it after taxes into this program also at 7%. Then 20 years down the road at age 60 you decide to really retire, and start to draw from your new fund, as well to continue drawing from the old fund. Who do you think will have a greater income at this point? You, or the guy who actually retired 20 years earlier? Ha

I think you are more interested in posting than in reading.

It's obviously true that the amount you need TODAY for a 40-year retirement is larger than for a 20-year one. But that's not what's being said.

What IS being said does not depend on nominal or real or whatever else; it merely depends on math.

[ChrisC]

Quote:

Originally Posted by grfiv I think you are more interested in posting than in reading.

I think that's about one of the best one-liners I've seen here to deflate a "one-upper" post.

[haha]

Quote:

Originally Posted by grfiv I think you are more interested in posting than in reading.

Well, I am not interested enough in taking you by the hand to spend any more time on this. I read enough of your stuff to know I am not interested in reading any more.

But as an old debater, I recognize your ad hominem attack above as a sign of weakness.

If you have nothing valid to say, attack the opponent!

Ha

[haha]

Quote:

Originally Posted by ChrisC I think that's about one of the best one-liners I've seen here to deflate a "one-upper" post.

I think so too, Chris C.

Good going big guy!

Ha

[travelover]

Quote:

Originally Posted by haha Well, I am not interested enough in taking you by the hand to spend any more time on this. I read enough of your stuff to know I am not interested in reading any more. But as an old debater, I recognize your ad hominem attack above as a sign of weakness. If you have nothing valid to say, attack the opponent! Ha

Boy, this forum is going to get a bad rep after the MommyMillionaire debacle and now this dust up.

[Medit8]

Thanks for sharing your web pages, George. I have found the information incredibly useful and lucid.

[friar1610]

Quote:

Originally Posted by growing_older I think my thoughts were more along the lines of volunteer teacher. Showing people how to understand the choices and make decisions themselves. No way I want to be a volunteer account manager or expect anyone to have me make decisions on their behalf. Too much like w*rk. Too much like liability. I'd think a volunteer teacher with real world experience would be a valued helper.

I looked into financial planning as a second career. A couple of the universities in the area where I was living at the time had courses which tracked the CFP curriculum (which you can also do outside the classroom as a correspondence course.) I thought it would be interesting to take the courses and then, perhaps, go into the field as a fee-only planner. When I looked further into it I found that once you complete the curriculum and pass the tests, you need to have 3 years of real experience before you are officially a CFP. Looking at what I would need to do during those 3 years (work a lot of evenings, build a clientele, etc., etc.) I decided it wasn't worth it to me.

What I then tried to do was incorporate financial education into adult literacy tutoring I was doing. At two separate adult literacy centers in two different states I tried to launch a basic financial literacy course using curriculum which is available for free from the FDIC/NCUA. In both cases, the course did not get many takers and attendance dwindled after the first couple of sessions. (I hope it was the subject matter, not the instructor, since I seem to get very good reviews for my reading and basic math tutoring.) I'm still interested in doing something along these lines, but haven't found the venue yet.

[bongo2]

Quote:

Originally Posted by nickel The projected nest egg that I need *decreases* with earlier retirement/long post-retirement. Is the calculator wrong? Or am I missing something?

This answer may have already came through in what haha and grfiv were saying. The nest egg increases with the later retirement, but at less than the rate of inflation, so it shows up as a larger nominal dollar amount. Using the default numbers you need $3.5m. Changing it to a 20 year retirement you need 19% less, but putting the retirmeent 10 years later gives you 34% inflation = 13% more nominally.

[FinanceDude]

Quote:

Originally Posted by friar1610 I looked into financial planning as a second career. A couple of the universities in the area where I was living at the time had courses which tracked the CFP curriculum (which you can also do outside the classroom as a correspondence course.) I thought it would be interesting to take the courses and then, perhaps, go into the field as a fee-only planner. When I looked further into it I found that once you complete the curriculum and pass the tests, you need to have 3 years of real experience before you are officially a CFP. Looking at what I would need to do during those 3 years (work a lot of evenings, build a clientele, etc., etc.) I decided it wasn't worth it to me.

Yeah, 3 years of work and keeping your CE up to date is no easy feat........