How far over your 'number' did you go?

[street]

Can someone explain the 33x rule.

Assume the following as an example: Retiring at age 57

$80K per year in expenses

$1.7M in pension annuity (age 60 - 94 $52K per year)
$1M (401K fund at age 57) - Need to use Rule 55 to withdrawn from 401K starting at 57
$704K in SS funds (age 62-94 $22K per year)
$100K in cash (age 57)

Would the person be OK to retire at 57?

If you use the http://firecalc.com/ with 80K per year expenses. The results are 100% and that is using 43 years in retirement which would put you at 100 years old. You will still have money left over.

 

[G-Man]

If you use the http://firecalc.com/ with 80K per year expenses. The results are 100% and that is using 43 years in retirement which would put you at 100 years old. You will still have money left over.

Never used this calculator before. How did you come up with the results?

 

[street]

^ If you read the instructions, they give you how to and what you want to include and fine tune your portfolio, spending and so forth.

On that first page put in your spending amount, your portfolio amount and years you want it to go. Hit enter and the results will take you too a new page and will give you a success percentage.
There are some on here that can help you way better than I can. Good luck and you should be good to go.

 

[skyking1]

It's fun! I had never been to I-orp till today and that one is cool too. I saw the projected taxes and see the hole in them for doing our roth conversions. Good stuff.

 

[HI Bill]

53%. I started with a lower budget, then added the purchase of a house, and increased the travel budget. Due to COVID, we haven't been spending what we could...

 

[Dtail]

Never used this calculator before. How did you come up with the results?

Give the calculator a shot. The instructions are reasonably straightforward.
Pensions and Social Security are input as yearly amounts and you choose the starting year. Plus for the pension, you would uncheck the inflation box, as it appears non cola'd.
Try it out. Many folks including myself can answer any questions on the calculator.

 

[G-Man]

Give the calculator a shot. The instructions are reasonably straightforward.
Pensions and Social Security are input as yearly amounts and you choose the starting year. Plus for the pension, you would uncheck the inflation box, as it appears non cola'd.
Try it out. Many folks including myself can answer any questions on the calculator.

I have been using the Fidelity Retirement tool and I'm in the green with a score above 100.

For the FIRECalc, I assume I would start on the "Start Here" tab and then enter information on the other tabs. On the last tab, I would then click the "Submit" button.

 

[street]

I have been using the Fidelity Retirement tool and I'm in the green with a score above 100.

For the FIRECalc, I assume I would start on the "Start Here" tab and then enter information on the other tabs. On the last tab, I would then click the "Submit" button.

Yes, that is right. Then at the top of that first page you can go into all those categories and fine tune what your situation is.

 

[Time2]

I never had a number. I started reading MMM in 2014 and a couple years after that I was pretty sure we had enough. We were self employed and I had a very easy job, TV, internet surfing, walking a half mile loop while still being able to watch business, the problem was we were open 10 hours a day 7 days a week. And there was more to do after hours. We did that for over 17 years. I was 61, we had 36 X our SWR and SS was 2 to 9 years away. My wife didn't want to retire, so I worked one day a week and she worked 70+ on her own, that went on for 1-1/2 years when a hurricane destroyed the business, finally got the wife to retire.
Soon after retiring, our daughter decide on a professional school and the tuition + costs was $300,000, we paid for that over the 4 years, now even with the market drop we still have 41X a SWR. We have done another thing or two that the extra money has allowed.

Our SWR was high and I have zero regret. (even though we don't spend up to out SWR)

 

[G-Man]

It looks like the FIRECalc tool is not as flexible as the Fidelity Retirement tool. For example in the Fidelity tool, I can have a start and end date for the various expenses. For example, mortgage has an end date. Medicare kicks in at age 65. Car loan has an end date. So, your expenses will be lower in later years.

In the FIRECalc tool, it looks like it assumes that your spending is constant from the start of retirement to the end.

 

[qwerty3656]

It looks like the FIRECalc tool is not as flexible as the Fidelity Retirement tool. For example in the Fidelity tool, I can have a start and end date for the various expenses. For example, mortgage has an end date. Medicare kicks in at age 65. Car loan has an end date. So, your expenses will be lower in later years.

In the FIRECalc tool, it looks like it assumes that your spending is constant from the start of retirement to the end.

I cannot figure out how to deal with taxes in Fidelity. For example, most of my money is in Roth - as near as I can tell it is assuming I am paying taxes on the withdrawal

 

[skyking1]

that was the cool part about I-orp. It handled the taxes well.

 

[CaliKid]

Based upon a conservative estimate, I am almost to my 'number' that would allow me to retire (I'm in my late 50's). I will be there by late summer.

BTW, I'm using FireCalc with a 95+ success rate.

I don't enjoy my job anymore, but I do have a financial incentive to stay. In a recent company sale, I was granted a sizeable set of options that vest at 25% per year. For each extra year, I could really pad the number.

My question is: How much longer did you remain at an unpleasant job once you hit your retirement number?

I really think everybody is different. I can think of myself and two friends for comparison:

1) Teacher friend - retired at 55, modest savings, teacher pension, and very modest lifestyle. Super comfortable in life. Money not important.
2) Myself - retiring at 55 with about double what I thought I would retire with. However, the value I put on financial security is making it REALLY hard for me to imagine spending principle. I know I'll have to do it but I really don't like that idea. Has made me go a few extra years.
3) Consultant friend - 7 figure income. Lives well below his means. Will work forever because he is really cheap. Lol. Will die very rich one day!

Everybody has a different right answer. Heck, if I could stand my job at all I would stick with it another few years just for the health insurance if nothing else. Hate my job though.

 

[scrabbler1]

I cannot figure out how to deal with taxes in Fidelity. For example, most of my money is in Roth - as near as I can tell it is assuming I am paying taxes on the withdrawal

I have complained to my Fidelity AE (Account Executive) about this, too. Their RIP program has very little flexibility when choosing an effective tax rate. This is annoying because my effective federal tax rate is about 2%. For my effective state tax rate, I am stuck with an arbitrary amount based on my home state, and it's too high.

I received an odd answer from my AE which said the program uses a previous year's income (which made no sense to me). Nearly all of my income is from Fido, so it should know how much of it is taxable. The program doesn't seem to have any knowledge of the ACA premium subsidy, something which has a big effect on my tax bill.

 

[tmm99]

I agree - the tax part of FIDO RIP is very inflexible now. Their tool used to be better in that regard (We could specify.) I don't know why they changed it.

 

[tmm99]

I'm glad I went over a lot (+30%). I retired in 2015 and the market has been very kind since then, but if I was retiring now when the market is very unstable, I would have ended up worrying a lot if I didn't have that kind of a cushy buffer.

 

[G-Man]

I have complained to my Fidelity AE (Account Executive) about this, too. Their RIP program has very little flexibility when choosing an effective tax rate. This is annoying because my effective federal tax rate is about 2%. For my effective state tax rate, I am stuck with an arbitrary amount based on my home state, and it's too high.

I received an odd answer from my AE which said the program uses a previous year's income (which made no sense to me). Nearly all of my income is from Fido, so it should know how much of it is taxable. The program doesn't seem to have any knowledge of the ACA premium subsidy, something which has a big effect on my tax bill.

So if the tool is providing a high federal tax rate and your score is 100 or greater, does that mean you are good to retire?

 

[indiajust]

I tend to use the system in reverse. I put in the savings, various life expectancies/return rates/inflation... and experiment to see the range of 95% spend rates. Then I compare that to current and past spending levels. The differential and ratio gives me my comparison between actual/FIRE.

 

[Out-to-Lunch]

It looks like the FIRECalc tool is not as flexible as the Fidelity Retirement tool. For example in the Fidelity tool, I can have a start and end date for the various expenses. For example, mortgage has an end date. Medicare kicks in at age 65. Car loan has an end date. So, your expenses will be lower in later years.

In the FIRECalc tool, it looks like it assumes that your spending is constant from the start of retirement to the end.

You can take care of those limited-time expenses on the tab called "Other Income/Spending."

 

[fire161007]

Retired 5 years ago. Our number in firecalc gave a 99% success rate with a 3.2% SWR. Spouse retired 3 years later. 2 years later (5 total) our net worth is now 50% higher than our number at a SWR of 2.2%. (principal residence is not included in any calculations)

 

[Koolau]

Retired 5 years ago. Our number in firecalc gave a 99% success rate with a 3.2% SWR. Spouse retired 3 years later. 2 years later (5 total) our net worth is now 50% higher than our number at a SWR of 2.2%. (principal residence is not included in any calculations)

I was marveling the other day that my stash had doubled (without residence) since I was first Financially Independent 20 years ago. That was done with only about 30% equities. Once in a while, if I wax wistful, I think about what I would have if I had gone 60% equities. Then I shake my head (picture the jowls rebounding like a bull dogs) and recall: I have ENOUGH! YMMV

 

[W2R]

I never had a number.

I never had a number, either! I had a date by which I was determined to retire, and figured I'd just make do with whatever I had by that date. The date was the day when I became eligible to carry over my federal employee health insurance into retirement.

I was determined not to stay even ONE DAY longer than I had to, to get my health insurance. But real life is never that simple. I was eligible on a Saturday but I reluctantly decided to make my last day the following Monday. The office was closed on Saturdays and Sundays, and I was afraid that they might think I retired too early if my last day was Friday.

Those last couple of days were hard to bear! But it was worth it to not have to worry about my plans unexpectedly falling through due to a technicality.

 

[Koolau]

I never had a number, either! I had a date by which I was determined to retire, and figured I'd just make do with whatever I had by that date. The date was the day when I became eligible to carry over my federal employee health insurance into retirement.

I was determined not to stay even ONE DAY longer than I had to, to get my health insurance. But real life is never that simple. I was eligible on a Saturday but I reluctantly decided to make my last day the following Monday. The office was closed on Saturdays and Sundays, and I was afraid that they might think I retired too early if my last day was Friday.

Those last couple of days were hard to bear! But it was worth it to not have to worry about my plans unexpectedly falling through due to a technicality.

Ah, yes. The "sweet" agony of the last days at w*rk! When I gave my notice (Tuesday with last day Friday) those last days were difficult not to dance a jig at my desk. All my management (up 3 levels) came by my desk to find out what was "wrong." I told them honestly that I'd been given an assignment that I didn't want to do - and I didn't have to. Their reaction tended toward shock, but also a certain level of envy, I think. YMMV

 

[TheWizard]

Ah, yes. The "sweet" agony of the last days at w*rk! When I gave my notice (Tuesday with last day Friday) those last days were difficult not to dance a jig at my desk. All my management (up 3 levels) came by my desk to find out what was "wrong." I told them honestly that I'd been given an assignment that I didn't want to do - and I didn't have to. Their reaction tended toward shock, but also a certain level of envy, I think. YMMV

What was that assignment?

 

[W2R]

Ah, yes. The "sweet" agony of the last days at w*rk! When I gave my notice (Tuesday with last day Friday) those last days were difficult not to dance a jig at my desk. All my management (up 3 levels) came by my desk to find out what was "wrong." I told them honestly that I'd been given an assignment that I didn't want to do - and I didn't have to. Their reaction tended toward shock, but also a certain level of envy, I think. YMMV

You know, the amazing thing is that almost 13 years later I have never missed work, not even one bit! I thought for sure I would, but nope. "Real Life" (life after retirement) is so much more fun than being at work.