Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 01-25-2008, 10:20 AM   #21
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 47,474
Quote:
Originally Posted by REWahoo View Post
Yep. No doubt I'll be wanting a set of oversize chrome rims for my wheelchair.
Hey, my mother was pretty smug about having the niftiest walker in her continual care facility. She showed me all the features that made it cooler than everybody elses, like I would care! And all the other seniors would stop her so they could drool over it.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.

Happily retired since 2009, at age 61. Best years of my life by far!
W2R is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-25-2008, 10:37 AM   #22
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 398
My SWR, including pension, will be about 100K if I retire in 2 years and 150K if I retire in 5 years (I could retire today at 48 but I'm hanging on for lifetime medical). Not including my mortgage, which I may or may not pay off when I retire, my current expenses are about 18K/yr (this includes about 5K in charity/gifts). Hence, my expected withdraw rate at my current standard of living will be about 1% or less. I see no reason for this to significantly change, except for possibly 1 or 2 one-time high cost activities (e.g., Everest summit). OK. Maybe it will bump up to 25K. I can't fathom spending more than 30K. But it's still at the 1% level.

For me, like many others, the point of retirement is to spend my time, not specifically my money. The way I currently enjoy my time is through activities that are either free or inexpensive (running, bicycling, hiking, reading, puzzles, etc). I'd much rather go to fast food restaurants than expensive restaurants. My idea of heavy drinking is orange and grape soda. If I had the choice of a free car, I'd still go with a Corolla or Civic. The reliability, gas mileage, and ease of getting around make them ideal. I'm still driving my 1980 Corolla. It gets me to where I want to go. I don't need anything different. I live alone, not counting pets. My house is already big enough for one person. The one thing that the money will provide is the priceless feeling that it is there should I ever need it (e.g., take care of parents or myself in very old age).

Many people say that they want to die broke, meaning that they want to spend down their retirement assets as they age. Not me. I want to die filthy rich. The more the better. I'll be quite happy after I die knowing that my money has gone to the charities that I support. I don't see the problem.
Shawn is offline   Reply With Quote
There are many reasons
Old 01-25-2008, 10:38 AM   #23
Recycles dryer sheets
aenlighten's Avatar
 
Join Date: Apr 2007
Posts: 275
There are many reasons

Uncertainty about expenses and returns early in retirement (inflation equities), the length of the retirement, the lumpiness of assets and when they become accessible (real estate appreciation and sales, pensions, iras, social security), the lumpiness and uncertainty of expenses and when you incur them (capital expenses, future medical costs) and whether you want a constant standard of living (inflation), a constant position in society (inflation+1%), or a rising position in society (inflation + 2+%). One's personal inflation rate may be higher or lower than average. Even a constant standard of living doesn't maintain one's position in society which is growing richer; if you want to afford tomorrow's technology and medical treatments you should plan on more than inflation. If you retired earlier than you would have preferred, having more to look forward to in the future may be satisfying. You can make a lot of assumptions and level everything over your expected lifespan, accounting for more uncertainty, or you can adopt a more incremental approach and only spend it when it comes it in.
aenlighten is offline   Reply With Quote
Old 01-25-2008, 11:08 AM   #24
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Quote:
Originally Posted by utrecht View Post
I just read a thread where a poster said something to the effect of "our pension meets most of our needs so we will only have a withdraw rate of 2.5% from our IRA".
Not to pick on him, as its his money to do with what he pleases, but Im just wondering why people think this way. Im dead center of the LBYM crowd and my savings rate during this accumulation phase is VERY large. It boggles my mind how much my wife and I are saving (while still not feeling like we are sacrificing much)....BUT...the whole point of this for me is to live much more comfortably in retirement.
Hey, I resemble that remark.

There's frugality, and then there's deprivation. Working life sucks badly enough without crossing the line in your non-working life too. Spouse and I don't feel that we sacrificed anything while we were working except for our free time-- we were too busy working (or deploying) and parenting to be able to think of creative ways to spend it. We'd spend most of our family time at the beach, the park, the library, or working on the house-- again hardly expensive activities, and we certainly didn't feel we were sacrificing anything but our time and our sleep.

By the time we retired we were already living in a great house, near a good school, with all the amenities and lifestyle we could want. When we retired we got our time back and could take naps pretty much whenever.

What more could we want in our retirement? I equate "living more comfortably" with "having control over my time", not "spending more money".

Another issue is the timing of retirement. A military retirement doesn't normally vest until a minimum of 20 years. Other retirees have saved plenty but continued to put their time in to be able to have (let alone to afford) medical insurance. Still others invested during the world's greatest bull market and their returns far outstripped their realistic expectations (oh well).

More importantly, is there something you could do now and enjoy/value more highly by doing it now than by waiting until you're retired? For example, many retirees advise not saving sex travel for retirement... and Ty Bernicke has observed that retiree spending generally drops every decade in retirement.

Finally, I'm no Chicken Little, but FIRECalc's fundamental assumption is that past is prologue. 4% is the best number we have, and it's good enough for me, but I sure hope it turns out to be right. I'll get back to you on that in six or seven decades.
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Old 01-25-2008, 11:33 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
Quote:
Originally Posted by REWahoo View Post
Yep. No doubt I'll be wanting a set of oversize chrome rims for my wheelchair.
Chromed, high-lift, supercharged, NOx-injected bedpan...
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 01-25-2008, 11:49 AM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 7,866
Quote:
Originally Posted by utrecht View Post
I want to withdraw the maximum amount possible (as per firecalc) and let that determine my standard of living which will be extravagant compared to how we live now as opposed to continuing to live like we do now and letting my assets grow to millions and millions for someone else to enjoy.

...

As I said, I live well below my means now so I understand that mindset but I dont understand why people want to continue to do it after retirement.

Thoughts?
My approach is to take my current living expenses, my FIRE stash, and the 4% rule, and FIRE when those three variables line up. Depending on how accurate my assumptions and spreadsheets turn out to be, that's around age 49, or about 10 years from now.

There is the possibility of me inheriting something from my parents. It could be anywhere from $0 to about 15x my current FIRE stash, sometime between now and 20 years from now. If it is sooner and on the larger side, then I would end up in a situation where I would probably be FI immediately and be facing a 1% withdrawal rate. In that case I would probably still live way below my means. I will cross that bridge when I come to it.

I personally am planning on following, as best I can, the model where I rerun FIREcalc every year with my new portfolio balance and reduced life expectancy, and raise my spending accordingly. But beyond a nice standard of living, I'll probably start feathering my children's retirement, or becoming more involved in charities or something.

2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 01-25-2008, 12:01 PM   #27
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 17,773
Not to mention the effect on the nest egg of a possible bear market when one first retires, correct? Someone whose expenses are well below the 4% swr may be sleeping a little better these days (even though their nest egg presumably would still be okay with Firecalc's computations for the 4% swd).
Bestwifeever is offline   Reply With Quote
Old 01-25-2008, 12:01 PM   #28
Recycles dryer sheets
TeeRuh's Avatar
 
Join Date: Oct 2007
Location: Sugar Land
Posts: 265
What Nords said. My excitement about my pending retirement is time related. Wow, get up when I wake up, do what I want, when I want without w*rk getting in the way!! My belief is I'll be spending significantly less than now if I consider the reduction in savings and taxes.

t.r.
__________________
Life is a Holiday!
TeeRuh is offline   Reply With Quote
Old 01-25-2008, 02:36 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
Quote:
Originally Posted by utrecht View Post
... but assumming that FireCalc is correct and withdrawing 4% will allow you to never run out of money, there will be plenty left for inheritance anyway.
Big assumptions, and some errors.

4% gives a 95% success rate for 30 years. 30 years is not forever. 5% failure is not 'never'. And it is a guide based on history - who knows what the future will bring?

If the ER is age 50, and wants a good confidence that they will not financially burden their children if they make it to age 95, 4% is too high. That's 45 years. People are living well past 100 today - it may be much more common 40-50 years from now.

And if you try to do FireCalc runs for 50 years, it cannot include the most recent 50 years in the analysis, and there were some bad times in there.

-ERD50
ERD50 is offline   Reply With Quote
Old 01-25-2008, 03:04 PM   #30
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
with luck of the womb, and having very fun parents, i've lived pretty well all my life. raised in new jersey with big boat in marina for weekend cruising the hudson or a week out off long island. i lived in a condo on a beach in the usvi with a boat in a marina. i had friends with boats. everyday after school we were waterskiiing and splashing tourists for fun. i lived on the water in florida with a big boat in the backyard. heck, i've even lived on the boat.

through friends i've flown in private planes and cruised on large yachts (100 footers) and enjoyed a life i could never afford on my own, allowing me to be pretty frugal with my own money while living the so-called good life.

now that i'm financially independent i'm considering downscaling by a longshot my lifestyle and living for a few years in third world and developing countries. maybe after that i'll live on a sailboat in guatamala. you don't have to spend a lot of money to enjoy a fulfilling life. i think i would be happier pulling into $250/month dock on the rio dolce than i would paying $1500/month for a slip in fort lauderdale.

not being able to buy what you need would sure suck. but happiness doesn't come from spending money, not for me anyway. i've always had just as much fun without it.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Old 01-25-2008, 04:34 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,202
Quote:
Originally Posted by ERD50 View Post
Big assumptions, and some errors.

4% gives a 95% success rate for 30 years. 30 years is not forever. 5% failure is not 'never'. And it is a guide based on history - who knows what the future will bring?

If the ER is age 50, and wants a good confidence that they will not financially burden their children if they make it to age 95, 4% is too high. That's 45 years. People are living well past 100 today - it may be much more common 40-50 years from now.

And if you try to do FireCalc runs for 50 years, it cannot include the most recent 50 years in the analysis, and there were some bad times in there.

-ERD50
Yeah, what he said. And I don't know how acurate my budget is to guarantee I won't blow past 4% by accident.
RunningBum is offline   Reply With Quote
Old 01-25-2008, 05:09 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
Quote:
Originally Posted by utrecht View Post
Sure I want to leave money for my son, but assumming that FireCalc is correct and withdrawing 4% will allow you to never run out of money, there will be plenty left for inheritance anyway.
ERD50 already said it, but I'll reiterate.......

You need to look carefully at the output of FireCalc and make sure you understand the results. A 4% WR and 30 year span, with the usual AA, depletes your portfolio completely in about 5% of the trials. And an additional percentage of trials leaves the portfolio well below it's starting point.

If you want to assume "there will be plenty left for inheritance anyway," be sure to use the option where you call out the minimum amount you want left at the end and FireCalc will use that number instead of zero in defining a failure.

It's all very interesting and a bit of a crap shoot! One person can withdraw at a 5% rate for 30 years and make it OK with money left over. Another can withdraw at 4% rate for 30 years and go broke before the grim reaper arrives on the scene. All depends on investment return and inflation during their 30 year period.

I do agree with you that some folks do seem to use excesively conservative WR's. I just wanted to point out that your statement seemed to be unrealistically optimistic.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 01-25-2008, 05:19 PM   #33
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
http://www.early-retirement.org/foru...les-32828.html
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Old 01-25-2008, 05:30 PM   #34
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Location: North of Montana
Posts: 2,769
Quote:
Originally Posted by youbet View Post
ERD50 already said it, but I'll reiterate.......

You need to look carefully at the output of FireCalc and make sure you understand the results. A 4% WR and 30 year span, with the usual AA, depletes your portfolio completely in about 5% of the trials. ...
WADR, that's 1 time in 20. Would you bet $1,000,000 on a coin toss if you won, 19 times out of 20?
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
kumquat is offline   Reply With Quote
Old 01-25-2008, 06:01 PM   #35
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
Quote:
Originally Posted by kumquat View Post
WADR, that's 1 time in 20. Would you bet $1,000,000 on a coin toss if you won, 19 times out of 20?
may be a smaller amount -- say 100,000.
Spanky is offline   Reply With Quote
Old 01-25-2008, 06:03 PM   #36
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
Quote:
People are living well past 100 today - it may be much more common 40-50 years from now.
The probability is pretty small, however. For planning purpose, I use 90.
Spanky is offline   Reply With Quote
Old 01-25-2008, 06:30 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
Quote:
Originally Posted by kumquat View Post
WADR, that's 1 time in 20. Would you bet $1,000,000 on a coin toss if you won, 19 times out of 20?
Hi kumquat.....

I don't get your point or understand the bet. That is, I don't understand your bet in regards to my post. Please clarify.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 01-25-2008, 06:32 PM   #38
Gone but not forgotten
Khan's Avatar
 
Join Date: Aug 2006
Posts: 6,924
Send a message via AIM to Khan
Quote:
Originally Posted by Shawn View Post
My SWR, including pension, will be about 100K if I retire in 2 years and 150K if I retire in 5 years (I could retire today at 48 but I'm hanging on for lifetime medical). Not including my mortgage, which I may or may not pay off when I retire, my current expenses are about 18K/yr (this includes about 5K in charity/gifts). Hence, my expected withdraw rate at my current standard of living will be about 1% or less. I see no reason for this to significantly change, except for possibly 1 or 2 one-time high cost activities (e.g., Everest summit). OK. Maybe it will bump up to 25K. I can't fathom spending more than 30K. But it's still at the 1% level.

For me, like many others, the point of retirement is to spend my time, not specifically my money. The way I currently enjoy my time is through activities that are either free or inexpensive (running, bicycling, hiking, reading, puzzles, etc). I'd much rather go to fast food restaurants than expensive restaurants. My idea of heavy drinking is orange and grape soda. If I had the choice of a free car, I'd still go with a Corolla or Civic. The reliability, gas mileage, and ease of getting around make them ideal. I'm still driving my 1980 Corolla. It gets me to where I want to go. I don't need anything different. I live alone, not counting pets. My house is already big enough for one person. The one thing that the money will provide is the priceless feeling that it is there should I ever need it (e.g., take care of parents or myself in very old age).

Many people say that they want to die broke, meaning that they want to spend down their retirement assets as they age. Not me. I want to die filthy rich. The more the better. I'll be quite happy after I die knowing that my money has gone to the charities that I support. I don't see the problem.
I am much the same.

Minus taxes and saving for retirement, for several years I spent $15k-$20k, and that includes $2k to charity.

My spending hasn't increased much, and it's still less than my pension. My withdrawal rate is still 0%.

I have everything I need.

House, paid for, ~1000sf, more than needed for one person (and one cat). Replaced 1989 car (with a 2005) this summer, don't want to go to restaurants, don't want to travel.

It's good to know the money is there if I need it.

Several charities will be enriched when I die.
__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan is offline   Reply With Quote
Old 01-25-2008, 07:33 PM   #39
Thinks s/he gets paid by the post
 
Join Date: Apr 2007
Posts: 1,305
Quote:
Originally Posted by HFWR View Post
Chromed, high-lift, supercharged, NOx-injected bedpan...
be sure to get the chrome dual 'exhaust' ...
sorry
__________________
Life is GREAT!
megacorp-firee is offline   Reply With Quote
Old 01-25-2008, 09:10 PM   #40
Recycles dryer sheets
 
Join Date: Mar 2004
Posts: 228
Why is the choice always yachts or dogfood? We're aiming to replace our middle-class lifestyle, not create a new jet-set one. If we continued working to 65 we'd really have it made ... until our health failed. No amount of money could replace freedom from the workplace for me. Just my opinion.
LRS is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
"Windows Live ID Login" Appears TromboneAl Other topics 4 09-14-2007 10:34 AM
"Work Less, Live More" radicals picket in Charlotte, NC! Nords Life after FIRE 5 05-05-2007 01:40 PM
Allow changing the 4% parameter in "Work Less, Live More" option? wasdana FIRECalc support 0 08-12-2006 08:41 AM
Do you get "paid" to live in high cost of living areas? wildcat Young Dreamers 31 02-19-2006 03:50 PM
Book report: "Work Less, Live More" Nords FIRE and Money 19 11-17-2005 09:10 AM

» Quick Links

 
All times are GMT -6. The time now is 07:18 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.