Accumulation or Withdrawal Phase - Still Deciding

[TromboneAl]

I retired in '06 but for two more years I'll be receiving capital gains from the sale of my business. Also, I have two more years of college to pay for.

I've figured that I won't start my 4% SWR withdrawal strategy until those two years are done, that is, I'll continue to LBMM, and continuing to accumulate.

However, I realized recently that I could think of myself as in the withdrawal phase where, annually,

Spending + College - Capital Gains = 4% of egg

If I do that, I should start spending more money immediately. I'm leaning towards that.

 

[Empty Pockets]

Could you expand on how you sold your business ? Did you structure the payments with the buyer ?

I plan on selling my business in a few years and I'd sure like to hear from others how they handled their transactions.

 

[lowflyer]

TA - As my DW would say, "You think way too much about this stuff." She's probably right, but heck, you gotta plan....don't you?

Your line of thinking isn't too much different than mine. Although I like to think of myself as ER, we still bring in a few bucks from a little work each year...and likely will for a few more years. When I look at our finances though, I also come up with the idea that I could/should start spending more. The bottom line for us is that we still just keep living our life the way we normally would. I'm not likely to accelerate spending just because I can. Of course, the fact that you CAN spend more tends to make you feel a little bit better. Enjoy!

 

[TromboneAl]

Could you expand on how you sold your business ?

I got a lot of good advice on this forum concerning selling it.

Essentially, the new owner got the business (http://www.ResponsiveSoftware.com), and he's paying me about half of the gross for three years. He's a great guy, and it's working out quite well.

LF, yes your analysis is right. We've had a lot of "Can I learn to spend more?" threads here. I've realized this: I think I can spend more, but I can't waste money.

For example, we heat our house with firewood, and I don't leave the fire going all night. In the morning the living room can be 52 to 60 degrees.

Now, I could just use our furnace, and set the temp to 64 at night, and, say 68 in the morning before we wake up. That would be nice, but I just can't see using all that propane to keep all of the rooms warm at night when no one's in them. Also, it would mean that I have to buy propane in the winter, when it's expensive.

So, I'm not sure whether I'd be able to spend (waste?) money in that way. But I am thinking of a nice surfing vacation in San Diego, Mexico, or Hawaii.

 

[Texas Proud]

Sorry TA.... but being warm to me is NOT a waste of money.... I do have it set to 73 in the morning... and I do warm the whole house...

But, you can get a timer plug and use an electric room heater and have it just heat the one room you need...

PS... I also pay to keep my house cool in the summer...

 

[Dog]

I got a lot of good advice on this forum concerning selling it.



For example, we heat our house with firewood, and I don't leave the fire going all night. In the morning the living room can be 52 to 60 degrees.

Now, I could just use our furnace, and set the temp to 64 at night, and, say 68 in the morning before we wake up. That would be nice, but I just can't see using all that propane to keep all of the rooms warm at night when no one's in them. Also, it would mean that I have to buy propane in the winter, when it's expensive.

This must be a NW thing (TA, I have the impression you are from the NW). Anyway, DH and I are much the same. We will bundle up in the house just to keep the thermostat set low. This winter has been a struggle with the storms and snow. We keep telling each other to live large and just heat the house!

 

[Khan]

I can't make myself turn up the thermostat (60 day, 50 night).

I am going to buy some more warm socks.

Any sock suggestions?

 

[TromboneAl]

Note that it's plenty warm in the living room once the fire has been going for an hour or two. I do most of my web surfing in front of the fire (as now), so we're not depriving ourselves that much. It's just that first half-hour in the morning.

 

[donheff]

This must be a NW thing (TA, I have the impression you are from the NW). Anyway, DH and I are much the same. We will bundle up in the house just to keep the thermostat set low. This winter has been a struggle with the storms and snow. We keep telling each other to live large and just heat the house!

I don't know what it is about keeping the thermostat down. We do it also (although not to the degree some of you do). I have been wearing socks to bed lately. We can afford to turn up the heat but...

 

[REWahoo]

Note that it's plenty warm in the living room once the fire has been going for an hour or two. I do most of my web surfing in front of the fire (as now), so we're not depriving ourselves that much. It's just that first half-hour in the morning.

So Al, you'e what, about 52? Got 35 or so years left? This half-hour of cold you're experiencing is for about 5 months of the year?

35 years x .5 hour x 5 months x 30 days/month = 2,625 hours of uncomfortable cold.

Tell me again what you're saving it for?

 

[mickeyd]

We can afford to turn up the heat but...

Exactly....If you are asleep, that it the best time to LBYM. Works well with AC also.

 

[TromboneAl]

Tell me again what you're saving it for?

 

[REWahoo]

OK. But I suspect you're gonna have to suffer for longer than a half hour per day to be able to afford that baby!

 

[Elderdude]

Al,
To hell with the expense, give the canary another seed!

 

[TromboneAl]

you're gonna have to suffer for longer than a half hour per day to be able to afford that baby!

I wash baggies, too.

 

[Khan]

I wash baggies, too.

As do I.

I also use washing machine rinse water to water outdoor plants during a drought.

 

[yakers]

I have a situation with some of the same elements. Wife retired June 06 and I may follow very soon (March to Nov 07 dependent of buyout offer). One thing that I have to face is youngest son (only child left at home) is a senior in HS and we expect he will be off to college in the fall, probably a state school so its pension+deferred comp withdrawals--college costs=

Overall it should work out but college costs are not well defined and I willn't feel like I am on a retirement withdrawal plan until at least college is finished.

 

[TromboneAl]

Yes, the "college not yet done" thing has been important in my thinking. However, now I'm reasonably confident that I know the maximum that will remain on the college bill. That is, two more years of the same amount I paid this year (financial aid is expected to increase to cover tuition increases).