Anyone Retire With Less Than One Million '09-'13

[ER Eddie]

Quote:

Originally Posted by seabourne I think that there is also a self-sorting effect. The board over at ERE is fairly active, and most of the people there are looking at retiring with $500k or less

Thanks for mentioning the ERE board/forum. I wasn't aware of it. Looks like I may have some things in common with the folks over there (although I'm probably not as "extreme" as some, not interested in recycling my urine, etc.).

[foxfirev5]

Quote:

Originally Posted by modhatter I am amazed at how people can live on so little. Even with medicare, I still am paying out nearly $400 a month for insurance ( Part A/B and Medicare Supplement Insurance.) I know I could live somewhere else where my RE taxes might be a little less, and utilities a little less, but I would not fare well in ultra conservative areas. I was self employed all my life, so no 401K, pension or other goodies. Saved about $600,000 over the years from my business (could have saved more, which I regret - but no do overs) Then like you, I purchased some rental properties, and was lucky to sell a few before the crash was about a year old, but saw the others sink to levels below what I paid for them in and around 1995. But when I got sick, I turned over $500,000 to a well known bond investor, who invested part of it in Fanny Mae, General Motors, a bank that went under, and I can't remember the 4th one that went under, so I instantly lost $160,000 in a blink of an eye with no possibility of a come back, and the total amount shrunk down from $500,000 to $220,000. I am now back up to just a little over that $500,000 amount invested six years later. Not a great return. I had another portfolio I invested myself at about the same time (Only about $150,00) but that has now more than doubled. Still have one more rental. Trying to wait it out if I can before selling it. At any rate, I managed to put together over a million. BUT IT'S NOT ENOUGH !!! I need almost three times what you live on, and I own my own home free and clear. If you can manage on $1300 a month, then your a better man than I. I am learning how to be frugal late in life, and wish I learned a little earlier.

Not sure I'm correct but if you're of medicare age, have a cool mil in investments, you should be ok with a 3900/ mo lifestyle.

[Katsmeow]

Quote:

Originally Posted by ER Eddie Thanks for mentioning the ERE board/forum. I wasn't aware of it. Looks like I may have some things in common with the folks over there (although I'm probably not as "extreme" as some, not interested in recycling my urine, etc.).

You might also try the MMM board. I read it some and occasionally post. It definitely tends to have a younger crowd more what here would be Young Dreamers and I think an overall more frugal crowd. It is a good example between here and there that every board typically has a culture that tends to become the norm. I don't necessarily fit the MMM board crowd culture in many respects, but then I don't always fit the crowd culture here. Regardless, I get value from seeing both perspectives (some of which align in both forums, while in other ways they are quite different).

[ER Eddie]

Will do, thanks Kats.

p.s. Geez, the ERE forums keep going down. Upgrade your server, you cheapskates, lol.

update: Think I'll stick to this forum. The ERE forum seems to be filled with youngsters with dreams of retiring by 35 or 40. I'm 51, so I'm in a different phase of life. MMM focuses mostly on frugality, which is fine (I've bookmarked it), but I'm more interested in talking about retirement issues.

[jkern]

I retired at age 51 in August 09' with my portfolio at $900K and no pension.

1) Cash $550K
2) 403b $350K
3) Package from former employer equaling approximately 2 1/2 years salary ($250K over three years)
4) Fully funded lifestyle approximately $50K to $55K per year.

What made it work:

1) Used income from former employer to cover first three years.
2) 403b was at a low point after the crash and has increased to approximately $675K
3) Invested $300K in three rental properties netting 8% to 9% ROI per year. Purchased properties that were slashed by 60% from the peak. While not counting capitol appreciation in my plan, the properties have already increased in value over $150K.

Today at age 55:

1) Portfolio at approximately $900K
2) Rental properties valued at approximately $450K
3) Rental income about $25K, withdrawal from portfolio at about $25K to $30K
4) SS comes online in 6 1/2 years, expecting $20K per year.

I've had a little luck, but so far the plan appears to be working.

[Chuckanut]

Quote:

Originally Posted by jkern Today at age 55: 1) Portfolio at approximately $900K 2) Rental properties valued at approximately $450K 3) Rental income about $25K, withdrawal from portfolio at about $25K to $30K 4) SS comes online in 6 1/2 years, expecting $20K per year. I've had a little luck, but so far the plan appears to be working.

+1
It's hard to argue with success.

[Gotadimple]

Quote:

Originally Posted by youbet Hi Rita..... Could you have made it without the pension, employer subsidized health care and future SS? For example, if you were a relative youngster and won a million bux, would you be able to live out a long retirement just on that million bux?

Here's what I think, if all the stars align properly:

You own a home free and clear and are in a community where you will not move for the next 45 years (means you are about 45 years old today)

You live modestly on less than $40,000 a year in today's dollars including taxes

You invest your portfolio in a conservative 40-60 stock/bond mix with bonds being split 10/50/30 between muni's (taxable account)/corporate bonds/treasuries. Everything except the muni's are in index funds or index etfs with the lowest expense ratios possible, in tax-deferred or tax-free accounts, AND you do everything yourself

You stop working at the bottom of the market, not the top of the market.

THEN,

Your portfolio will grow more than your annual expenses and you should be able to make it last 45 years, although the last 5 years or so might be iffy.

Cost of health care is still a question, even with ACA, but Firecalc says this is doable:

$1M today to last 45 years.
No other income, no portfolio changes
Constant spending power ($40,000 spend + inflation)
Portfolio: US Small Value 10%, S&P 500 20%, US Large Value 10%, LT Treasuries 20%, Corp Bond 30%, ST Treasuries 10%

Firecalc doesn't consider International as a category, but most of the S&P 500 and Large Value has international companies.

How much younger than 45 will you be when you stop working?

-- Rita

[gerntz]

I retired on less than $100M if that helps.

[Surewhitey]

Quote:

Originally Posted by ER Eddie Interesting perspective. I haven't been around long, just a few months. I would've liked to have seen the boards back then. But you're right, I'm sure 2008 scared the pants off some people.

Scared the w*rk slacks off me

[Surewhitey]

No, but seriously, we did it in 2011 for a year (test). Went back to w*rk for a year (test). Moved back to Playa del Carmen 3 months ago. Testing for 2 years this time with 1.02 mil...

$400k in 401k
$150k home loan to DD
$360k in CD's
$110k in dividend stocks ($8k / yr)
Combined income of about $40k annually.

Living on $25k...so far.

[heyduke]

I fit into this category...

I ER'ed in march 2011 at the age of 55 with about 800K. Neither my wife nor I have a pension, but will have SS.

- Started saving hard in my late 40's putting 20 percent of salary into ROTH, and 403b also had a 401K, wife had no 401K but got bonuses at xmas we used to fund both ROTHs

- had about 70K in savings and 2.5 yrs later still have 40 k but have infused the income stream with some money from my one rent property and some from trading stocks - about 35k

So after 2.5 yrs we still have about 750k and haven't worked a day. We sold our house and goods and travel full time in an RV all over the USA... life is good for us right now...

[Major Tom]

Quote:

Originally Posted by heyduke We sold our house and goods and travel full time in an RV all over the USA... life is good for us right now...

Now you've got my attention. Inspirational!

[pb4uski]

Quote:

Originally Posted by jkern I retired at age 51 in August 09' with my portfolio at $900K and no pension. 1) Cash $550K 2) 403b $350K 3) Package from former employer equaling approximately 2 1/2 years salary ($250K over three years) 4) Fully funded lifestyle approximately $50K to $55K per year.....

No disrespect but in your case you had over $1 million at the time you retired- $900K + a $250k receivable - but congratulations!