FIRE And My Mental Health

[Vincenzo Corleone]

The issue is that the calculator is only as good as the input. If you don't account correctly for expenses, you may not be 100% at all.

+1 Yes, I think that's exactly my concern. Although, I'm pretty sure I've tracked expenses fairly closely for the past four years.

I should relax.

 

[Retch The Grate]

I just run through the numbers and models in my head. Every. Single. Time. I. Walk. The. Dog.

So it goes with my brain.

 

[CyclingInvestor]

While you were contemplating early retirement, poring over your various spreadsheets, models, scenarios, data sets, etc, did you seek out validation - someone to say, "yeah, looks to me like you're in good shape"? Did you ever get over that need for validation?

No, I was pretty confident in my approach. I never had anyone else look at the numbers.

 

[daylatedollarshort]

I made my own spreadsheet, ran the calculators and then had our 401K person go over everything and use his online planner. Interestingly, his online planner showed we were fine even with all short term bonds, but he tried to convince us we weren't set.

We got the old you'll need 80% of your former gross, you'll develop more expensive hobbies in retirement, and a bunch of comments that seemed more like sales jargon than valid math or fact based critiques. We weren't spending 80% of our gross before we retired and have never had expensive hobbies. Anyway it has been almost a decade now and so far everything has been going much better than our initial spreadsheets. Pensions and Social Security cover most of our expenses so in hindsight I wish we had retired much sooner. But I am glad we at least retired when we did.

 

[jim584672]

I kept running the numbers and finally trusted the math, even after I retired. I totally get what the OP is saying.

 

[gauss]

+1 Yes, I think that's exactly my concern. Although, I'm pretty sure I've tracked expenses fairly closely for the past four years.

I should relax.

Do you have access to spending documentation, or can you recreate it, going back beyond 4 years?

When the time for me to RE came, I found the value of having ~20 years of categorized spending data ready for analysis was priceless.

I was never on a budget, just spended what my values allowed.

When I saw that the quicken spending data was remarkable constant from year to year, I knew that I was set to RE.

Using a software package such as quicken that allows dual-entry accounting will prevent you from having untracked spending. You wouldn't be able to reconcile all of your financial accounts with their statements if you tried this.

-gauss

 

[racy]

OP, there's a book written just for your circumstance: The Number by Lee Eisenberg

 

[racy]

... I had also monitored my progress using Financial Engines that was available through Vanguard for years. ...

It's still there (at least for me). Look under Services in your Profile & Account Settings.

 

[Time2]

I retired in 2001, without the benefit of FIRECalc and all the other calculators available today. Just seat of the pants calculation. So far it has been working just as planned.

One thing I believe may be useful is to run FIRECalc using only a portion of your portfolio (maybe 75%) and inflating your planned expenses (maybe 120% of actual). If that comes out to a high success percentage, it should give anyone the assurance they need.

Hi braumeister, Can you give us an idea of the percentage your nest egg has increased in 19 years?
i.e. $1M to $2M is 100%, $2M to $6M is 200%. Thanks
Edit: I'm going to start a new thread on that subject.

 

[braumeister]

Hi braumeister, Can you give us an idea of the percentage your nest egg has increased in 19 years?
i.e. $1M to $2M is 100%, $2M to $6M is 200%. Thanks
Edit: I'm going to start a new thread on that subject.

I don't have records going back that far. Certainly we're more comfortable now than we were then.

 

[Ole Red 29]

When I retired, I attended a "free retirement workshop" that was offered locally. I knew it was most likely a FA trying to get clients, but I was looking for information anywhere I could get it. I went to the class, which turned out mostly to be about social security (I did learn a few things). At the end of the class, the instructor offered to give everyone a "free one on one evaluation of your finances".

I told the instructor that I had no intention of ever hiring a FA, but he still offered the evaluation. We set up a meeting time, he sent me a workbook to fill out about my finances. I went to meet with him, his partner was in the room. They were Fiduciary FA's. We sat and went through my finances for over 2 hours. They were very knowledgeable on finances and confirmed all my actions and understandings were valid. Even though I repeatedly told them I would not be using them as FA, they continued to help me.

We set up a second meeting to give them time to run my numbers through their model. I took my wife with me to the second meeting. It also lasted several hours reviewing the model. The most valuable thing I got out of the second meeting was the validation for my wife that we were doing things right.

In the end, these two guys spent hours with me and gave me validation and great advice for free. They even offered to let me come back in a year for a "check up". Even though I told them repeatedly I would never use a FA. They said they do this for possible referrals and also said some wives do use them after their husbands pass away. Overall, it was a great experience.

 

[Markola]

I think the key is to obtain enough expert validation for one’s very specific circumstances without seeking so much validation that one gets confused from too much entirely well-intentioned but contradictory, opinionated advice. I feel for people new to FIRE topics who occasionally wander in here with a basic question, such as “What do you all think about this Edward Jones mutual fund for my retirement?” and get approximately 1,000 different, heated answers. I wonder if they sometimes leave with analysis paralysis.

I like the free Personal Capital app, which captures all of my various accounts in one thorough dashboard. PC has a built in Monte Carlo-based retirement planner with very clean and modern graphics. Probably twice a month, I think of some, “Hey, what if?...”, which I drop in there and play with as an experiment. Then I usually hit “Reset” to return to reality. The only place we make actual money decisions to ensure DW and I are on the same page, and in case something happens to the other one, is together with our assigned Vanguard Flagship PAS once/year using their powerful, proprietary software. These two methods, plus the occasional query on this wonderful board, give me the external validation I need.

 

[doneat54]

About 5 years before retiring in 2017, DW asked me "You're really serious about retiring at 55" one day on vacation. She made me hire a FA to look over the numbers before she could be convinced. We hired a "for fee" (not getting a % of anything) and suggested a few moves but then said "you're good." And that forced us to make a real budget and understand our real expenses. A year before retiring we hired him again to follow up.

I too, second guessed all the time, but I finally "let go" when I realized that we had so much "fat" in our lifestyle that there was plenty to cut if/when the **** hit the fan.

3+ years in, I am still very comfortable with the move, despite what 2020 has brought us.

 

[pacergal]

Yes, we went to three FA, two of them were free one time consult from our job pension.
We were told we were OK.
Then I discovered this forum, along with firecalc and other calculators named and started doing my own checks.
We are OK, but I still have doubts creep in.
When that happens, I re run firecalc, and create different scenarios.
Only 4 years into retirement, but so far, doing well.

 

[Finance Dave]

I did have a little of that anxiety, but here is how I got over it:

1) I realized I still wanted to stay engaged by w*rking maybe 4-8 hours/week for awhile...so I knew if I came up short I could just w*rk more hours/week or more years.

2) I "oversaved" by about $100k. I know the market is volatile, and at the time I ER'd the market was near all time highs. I was concerned that I'd FIRE and it would drop...yikes. So my DW and I talked, and we agreed to oversave before FIREing by about $100k (only took 1.5 years more). We also reduced our AA by about 15% on the equities side to lower volatility.

It's now been about 2 years (no exact FIRE date lol...I slowly transitioned out of full-time work to where I am now....about 4-8 hours/week) and I have not had the slightest bit of anxiety.

Good luck.

 

[daylatedollarshort]

A big factor that helped us was looking at the Consumer Expenditure Survey and comparing our budgets to people in the survey. We had a lot of fat in our budget compared to most people. Some expenses we optimized before we retired, others we kept as is, like keeping a house that was kind of big for the two of us in a high cost of living area. But we also looked at lower cost of living areas and townhouses near where we lived, and decided worst case we would rather downsize or move a little bit out into the suburbs more than keep working.

We also have much lower overhead being retired - more time to price shop, we do our own yard and housework, our kids are grown and off the payroll, we no longer have to save for retirement or pay into Social Security, we have more time to do our own house projects, we don't have any job expenses, make use of the library, time to make the house water and energy efficient, etc.

 

[Koolau]

OP, there's a book written just for your circumstance: The Number by Lee Eisenberg

I agree, this is an excellent book. It delves into the emotions and psychology as well as the practical. YMMV

 

[rkser]

I am also in the Camp of looking for validation, wanted to be sure 100%, many times over. We start our withdrawal phase next year & I am hoping this validation fever will subside then.I have run Firecalc, Fidelity Advice & Planning, NewRetirement & many other Retirement Calculators.
Recently to have local access & other reasons I have moved some of our Accounts from Vanguard to Fidelity & Schwab. Each of the CFPs there gave a free Financial Plan & validated our financial readiness for retirement.
In addition, I have & continue to ask numerous questions on this & Bogleheads knowledgeable & helpful Forums. Videos on You Tube have also been some what helpful.
Yes, you have company, & are not alone by any means

 

[Camas Lilly]

While you were contemplating early retirement, poring over your various spreadsheets, models, scenarios, data sets, etc, did you seek out validation - someone to say, "yeah, looks to me like you're in good shape"? Did you ever get over that need for validation?

I find that I'm constantly looking at my numbers, constantly looking for holes in my analysis, and I find that I constantly need validation. I've already posted some of my numbers here and on Bogleheads to get peoples' feedback.

But as time goes by, I find that I want ever more validation. I'm still obsessing over my numbers, slicing and dicing, looking at various data points to jump out at me to say "YOU'RE GOLDEN!" Trying to look for flaws, weaknesses, risks that had been overlooked. I can't stop even though I know it's not healthy.

I know there are no guarantees, but I try to get as close to one as possible.

No one specific question, I guess. I'm just interested in peoples' reaction.

I consulted a financial planner and received a collection of papers and charts, saying "you're fine". I was also concerned I was missing something, but I wasn't. I felt better but I really don't recommend it. It just cost a bunch of money to have someone tell me what I already knew.

 

[aja8888]

Nope, too late now. It is what it is.

 

[kmiao]

Needed validation as well

I too needed validation after running multiple models, and when Ric Edelman was on the radio offering a free checkup, I took the opportunity and scheduled an appointment. Funny story, their program indicated I had a 100% probability of success (that I could retire right now), but their recommended adjustments indicated a 99% probability of success. I asked the financial planner what's that about, he said, "Oh, that's our fee". I thanked him for his honesty.

Still, I get that nagging feeling that I need more buffer above and beyond my current needs (which includes an ample amount of discretionary spending), just in case....

 

[RobbieB]

I never stressed over the numbers. Just bagged it and shagged it.

 

[Ed_The_Gypsy]

You can weigh a pig more frequently before sending it to be processed but it won’t get any heavier.

If you look hard enough for flaws you eventually will find one, be it real or imagined, substantial or trivial.

Well said! [emoji16]

 

[PointBreeze]

In the 6 months before my projected ER I probably checked FIRECALC every other day! And on the off days I merely did handwritten budget checks, just to be sure. And I'm only slightly exaggerating.

+1 it makes me feel so much better to hear how common this obsessive checking is!

 

[Koolau]

+1 it makes me feel so much better to hear how common this obsessive checking is!

You know, I got to thinking back to BEFORE I declared Financial Independence at 51. I too checked every day. I especially liked looking at my 401(k)'s GIF results. It ALWAYS went up - even when the various other accounts bounced around. The really FUN fund was Megacorp stock which was on a tear about that time. Shortly after FI, I really slacked off - to the point I eventually just looked at the quarterly statements. Toward the end, I just looked (closely) at the year-end reports. YMMV