Questioning oneself? Peer pressure?

[Sam]

So you have done your homework more than one time. You are confident about your required expenses, thus your nest egg. Then you hang around other people and learn about their required expenses. Problem is their numbers are much higher than yours, by a factor of 2 or more.

Does it make you feel uneasy? Do you begin to question your sanity? Are you tempted to work a little longer hoping that your numbers will become more "reasonable"?

I never thought it would affect me, and so far my plan remains intact. But I caught myself more than once feeling uneasy.

 

[Nords]

So you have done your homework more than one time. You are confident about your required expenses, thus your nest egg. Then you hang around other people and learn about their required expenses. Problem is their numbers are much higher than yours, by a factor of 2 or more.
Does it make you feel uneasy? Do you begin to question your sanity? Are you tempted to work a little longer hoping that your numbers will become more "reasonable"?

I wonder what's wrong with those people, and whether they need the help of a good budget-review consultant...

I've seen enough on "Oprah" & "Dr. Phil" to believe that people will rationalize any expense-- even if it's string instruments & old horses.

In the mid-1980s, as I was just starting out, one of the other junior officers at my command was going on and on about his $50K stock portfolio. (Nearly $100K in today's dollars.) He wasn't the sharpest tool in the shed, we all knew how much each other made (not much), and how much we'd be able to save (not much more), so I was pretty surprised that he'd managed to sock that much away.

Then I found out that he'd been buying on margin. Oct 1987 pretty much ended that.

I really like the commercial where the guy's showing a typical wonderful weekend afternoon around his house, with his loving family enjoying all their consumer comforts, everyone smiling and having a great time, and the voiceover is saying "How can I afford all this? Well, I'm in debt up to my eyeballs! Somebody please help me?!?"

 

[W2R]

So you have done your homework more than one time. You are confident about your required expenses, thus your nest egg. Then you hang around other people and learn about their required expenses. Problem is their numbers are much higher than yours, by a factor of 2 or more.

Does it make you feel uneasy? Do you begin to question your sanity? Are you tempted to work a little longer hoping that your numbers will become more "reasonable"?

I never thought it would affect me, and so far my plan remains intact. But I caught myself more than once feeling uneasy.

It makes me feel timid. I wonder what they know that I don't know. I check and re-check my plans, and the numbers always add up. Still, I will probably work another 7 months from my initially planned retirement date (until I am 62), just to be careful.

The thing is, I don't want to make a mistake. There is no "re-do" in my plans. It will be easier to make money now, at the top of my career, than by working part time in retirement (and possibly losing some social security), or some such thing.

 

[bssc]

I am being conservative in my plans. I also told my wife to not burn any bridges when she leaves because she can work from home (anywhere we decide to move to).

On the other hand, one of the other people who retired from her office is back at work since he invested a good chunk of his retirement money with a guy who he met at church (can we say affinity fraud).

 

[crazy connie]

When you hear others talking 2x's as much... Look at their lifestyle. Perhaps they have more expensive tastes and different goals. For everyone of us who save and bargain shop and make do or do without some of lifes material items there are at least a dozen others who want it all now and forever. They can work longer and not have to fund as many years of no income as we do. Also, remember that many have not done the math and have no idea of what is truly needed. If they have mortgage, car payments and credit card debt then they may well have to amass 2 or 3 times more than you or I.

It is all about choices. I choose a debt free life. Because I have no debt my basic living expense is modest. What I need could more than be covered by a minimum wage job. I have savings and retrirement assets to cover the needs and many wants and will still leave some on the table. Now I have time to enjoy. Could I have worked another year or two? Yes. Did I want to? No. Am I jealous of those still there making the big bucks? Not at all. I hear that I am envied for having bailed. I do not envy those I left behind who have divorced, heart attacked or had a stroke. All their consumer debt kept and still keeps them in a toxic high stress work envionment.

Had it been a different work enviornment... I might still be there and uber nest feathering... I have enough and I have time and health to enjoy it. I AM BLESSED!

For you Sam... Do the math check the math validate the categories factor in a bit for mtc, fun, and travel you may want. Once, you feel you truly have enough then you can evalute how & when you pull the plug. Knowing there is enough is a real stress reliever and once there is enough it just seems to double down on the growth rate because the NUT is covered and the growth is the whipped cream and a cherry!

 

[dex]

You got some great answers here.
If you have done your homework don't worry about others.
If you are on this board you are different from those others and are probably on a better path.

 

[TromboneAl]

You are confident about your required expenses

If your estimate is based on one or two years of actual expenses, in which you are sure you tracked everything, then you got no worries.

 

[Sam]

It makes me feel timid.

Ditto. Luckily not all the times.

For you Sam... Do the math check the math validate the categories factor in a bit for mtc, fun, and travel you may want. Once, you feel you truly have enough then you can evalute how & when you pull the plug. Knowing there is enough is a real stress reliever and once there is enough it just seems to double down on the growth rate because the NUT is covered and the growth is the whipped cream and a cherry!

If your estimate is based on one or two years of actual expenses, in which you are sure you tracked everything, then you got no worries.

My numbers are calculated estimates. I don't have real numbers since I still have two kids. My projected expenses are a percentage of the actual expenses for the last decade.

I've seen enough on "Oprah" & "Dr. Phil" to believe that people will rationalize any expense-- even if it's string instruments & old horses.

I hear you. But still it's hard to get rid of the "inadequate" feeling

If you are on this board you are different from those others and are probably on a better path.

Well, some of "those others" are on this board too

 

[runchman]

Crazy Connie, I think you can remove the 'crazy' from your name. You sound like you have the right priorities in life; I enjoyed your post, well said.

- John

 

[UncleHoney]

Talk about uneasy, back in February a coworker retired at 61 for health reasons. We were kicking tires one afternoon before he left and he said something that just about knocked me out of my chair. The words right out of his mouth were "I really can't afford to retire". He's going to do some consulting to make ends meet.

I didn't say anything but got to thinking "what does he know that I don't. This person earned a lot more than I did and had the same benefits and a good pension. I did some serious calculating over the next few days and came to the conclusion I was on track.

I found out later the reason he needs to work parttime, it's spelled HELOC, a $100K HELOC, and a mortgage on top of that.

That would put a real damper on a lot of retirement plans for sure.

 

[chinaco]

I am always retesting an revalidating. I will continue to do that up tille we ER to be confident that we are set. After that, I will be retesting and revalidating (my model) to ensure we stay in bounds.

Yes! I question myself constantly. Reason: I can't believe its true.

Yippee!

 

[ladelfina]

I know what, in theory, the "average" Italian takes home.. €1000-€1500/month. Our egg covers that with plenty to spare.. I see a lot of LBYM folks here.. mortages are not all that common, nor is consumer debt, but those markets are growing fast.

But still my reaction to everything is.. "that costs way too much!" Cheesy dress in a cheesy mall store = $80.. "who can afford that?" I ask myself. Average pair of shoes =$90 "who can afford that?". I see a Porsche Cayenne go by (lowest US price $43k.. lowest Italy price $71k).. "who can afford that?" Hell, I see a VW Golf go by (prices here $22k lowest-end model; $48.8k highest-end model) and I say "who can afford that?"

Yes.. it is possible here to spend $50k on a VW GOLF!

There's money out there, but I don't see where it comes from.
Or am I just a hopeless tightwad?

 

[Joss]

Connie nailed it.

My wife and I are shooting for the end of this year and, yes, I do have times of being uneasy. I have run the numbers many times. I have spending data for the last five years. It all says we'll be ok.

But like several have said, it's a new road and there's not much way to say "oops" and go back. I'm also old enough to know that you can plan your a$$ off, but "plans" can go out the door with first contact. Then there's the fact that we (and ye here) are much the minority. Many, many times in my life have I found that my "against the mainstream short cuts" were nothing of the kind.

All that said, it's still a plan I believe in and it has several "safety valve" redundancies.

About those that are stating 2X your estimate for themselves, I have to believe that much difference would produce a very visible lifestyle difference, or there's hidden issues these folks haven't described, or they are not being completely honest. Unless the let you sit with them when the run their spreadsheet - you don't really know.

 

[Rich_by_the_Bay]

An important lesson I've learned from several others (both here and in the real world) is not to get too burdened with fixed, illiquid expenses. Almost everything else has some "give" during hard times -- you can travel less, eat out less, drive modest cars, etc.

But if you are stuck with a too-expensive house and/or mortgage, or have invested in things you might not be able to sell readily you are more vulnerable to miscalculating your safety zone. Get those under control before FIRE and sleep well.

 

[Sam]

Thank you all for your input. I guess it's all about the individual level of comfort one is accustomed to.

In retrospect, I guess I was not being totally fair to myself. I was only paying attention to people whose expenses are much higher than mine, and completely ignored the other end of the spectrum. On this very board, many have reported very low expenses, more than a few less than half of mine. I'd better pay closer attention to the complete picture instead of just the portion I am jealous, envious interested in.

A cup of coffee can cost 1 or 3 dollars. A house 150K or 600K, a 4K car or 40K. Yet they all perform the same function. Moving on.

 

[lazygood4nothinbum]

I was only paying attention to people whose expenses are much higher than mine, and completely ignored the other end of the spectrum...I'd better pay closer attention to the complete picture instead of just the portion I am jealous, envious interested in...
Moving on.

the trick to moving on is getting off the treadmill of comparing yourself to others. only then will you travel to see the full spectrum.

 

[justin]

Sam,

In planning for FIRE, I've had those uneasy feelings of "what if I'm wrong in my budget forecasts". And "what if I get a few years into FIRE, spend time around peers/friends that are spending 50-100% more than me, and want to increase my standard of living".

To address these concerns, I'm planning on putting extra padding in my portfolio to allow for future increases if necessary and a generous "entertainment/travel" budget allocation that we don't currently spend. The entertainment/travel budget item represents approximately 25% of our total expected budget, so it will allow us to do what we want to do without knowing exactly what "what we want to do" is today.

Right now, we are so busy working and raising a family that we just don't have a lot of time/energy to go on long vacations or spend a lot of money. But I recall when my wife was out on maternity leave and in between college and working for 6 months, she had much more time to be creative in finding ways to spend money. I figure we'll both come up with plenty of ways to spend more money when we don't have any formal obligations such as work to attend to every day.

 

[Sam]

To address these concerns, I'm planning on putting extra padding in my portfolio to allow for future increases if necessary and a generous "entertainment/travel" budget allocation that we don't currently spend. The entertainment/travel budget item represents approximately 25% of our total expected budget, so it will allow us to do what we want to do without knowing exactly what "what we want to do" is today.

Justin,

Yeah, I know. And I already have those extra padding included since the very beginning. But there lies the problem, how extra is extra? Is it extra or extra extra or really extra extra? if you know what I mean.

 

[justin]

Yeah, I know. And I already have those extra padding included since the very beginning. But there lies the problem, how extra is extra? Is it extra or extra extra or really extra extra? if you know what I mean.

Ultimately it is a balancing act. Let's say you already have a 25% pad in your target portfolio to cover unexpected future expenses. How many more years do you have to work to obtain an extra 25% pad? How much does the extra 25% pad benefit you? If work isn't too bad and you think you might really benefit from having extra pad in your portfolio (either to account for historically low returns or to allow for increased future spending), then you're not done working. If work really sucks, and you think your portfolio can, with a substantial degree of certainty, provide you with financial independence and a reasonable lifestyle for the rest of your life, then you are done working.

 

[Goonie]

.....If you have done your homework don't worry about others.
If you are on this board you are different from those others and are probably on a better path.

Exactly my thoughts, also. I ran the numbers....and ran the numbers....and ran the numbers, until I was 99.9% sure that all of my computations and calculations were OK. Then I added in some "buffer" room for anything that I could possibly have forgotten, or that might (reasonably) come up, like eventual LTC insurance. I'm now 100% sure that it's all OK. Now, I just sit back and relax and let things work.

Then I realized I had forgotten some (several) of the expenses that I had while employed, that I no longer have in ER. Such as daily lunches out, w*rk clothes (especially extreme weather gear and safety gear), and other things that were needed for my occupation that weren't supplied by the employer. All of those things added up to several thousand dollars a year. So I then factored in that money for the (very) slight rise (after ER) in my monthly health/dental insurance premiums, and also to pay for my LTC policy. The rest of the newly 'realized' savings, will be added into my MMF, in the event that something unexpectedly comes up. So that's actually money that's now added in on top of the buffer.

As for what others are doing, or their particular numbers, or their lifestyle, or whatever....I don't get too concerned or fret over it! They have their facts and figures, and their thoughts and opinions, and their lifestyle......and I have mine! And I KNOW that mine are good for the long-haul.....for ME! 8)

 

[kcowan]

Sam

One other thing to question is how these other people have come up with their estimates. I know many currently working people are too busy to do any serious planning and when you ask to go over their assumptions or review their spreadsheets, there are none. It is there broker who told them to aim for 2x to be on the safe side.

Many of them have no clue where their money is going now because they do no tracking whatsoever. : In some of the articles in the popular press, there are many examples of people living off credit card balances while carrying mortgages and leasing cars. Eating out regularly, going to shows, with season tickets to the local sports teams, buying wardrobes that will never be worn often, sending the kids to private schools, buying them cars and providing big allowances.

 

[Sam]

Many of them have no clue where their money is going now because they do no tracking whatsoever. :

Agreed. I have seen too many. They don't track, they don't care, they have no idea what's going on. Imagine one of them being your significant other !!!

..., sending the kids to private schools, ...

Guilty. I sent my children to the most expensive school in Houston. In my defense though, I did track spending.

 

[kaudrey]

.....If you have done your homework don't worry about others.
If you are on this board you are different from those others and are probably on a better path.

------

Exactly! I'm a ways off from FIRE (14 years at age 52), but I have my spreadsheet full of projections and "what if" scenarios. My parents retired at age 57 -13 years ago now - and they don't spend a lot of money, but they do spend it when they want to, and they'll never run out. They don't ever feel deprived, but I'd be surprised if they spend more than $40K a year.

Anyway, I showed my father my spreadsheet last Christmas, and asked for his help in adjusting my assumptions, and after we played around for a while, he said I'll have nothing to worry about, and then said something that I think will always stay with me:

"The ones who make the spreadsheets are the ones who won't need them".

I liked that.

 

[VaCollector]

"The ones who make the spreadsheets are the ones who won't need them".

Smart Dad! 8)

 

[yakers]

Just had the same mental ‘panic attack’, a coworker asked how much longer I intend to work & I said well July of 08 is 35 years for me and that is enough. Last year I did apply for a buyout & didn’t get it & I’m still happily working but I imagine I would be at least as happy kayaking or spending time with the children & grandchildren. Now one interesting thing about this coworker, who is really a nice guy, is that he ‘retired’ from our office 5+ years ago and went to work for the state. He liked his job there for 4 years but hung on another year to get vested in their retirement system after 5 years. He left the state job and is working as a contractor to our office. In an earlier discussion he mentioned that he would work for nothing if he had to to keep out of the house & away from the wife. That is so sad to me. But the guy is great with numbers & spreadsheets & when I said I planned to go at 35 years (and didn’t mention I would go now with the right offer) he immediately knew what my pension would be and he said, “hay, deduct medical & you would have to live on 56%”. Which is about right, of course I have looked at my numbers & the house is paid & the 401k type funds are doing OK so I always thought the numbers were good. But just one comment from a knowledgeable coworker and all the little fears came out in me. My response was pretty calm and I mentioned the line I like ”Well, I don’t want to be the richest man in the graveyard” and he nodded in agreement. Its all a matter of balance. Do you want to work? Spend more time at home? Do you expect significantly higher expenses (traveling, buying a boat…)?
One big change for me is youngest son is a senior in high school and going off to college in the fall. That will open up more time, physical & mental space. I suspect this will accelerate my retirement date.