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Old 07-19-2017, 10:47 AM   #41
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We decided to semi-ER when we found the Consumer Expenditure Survey and realized we would have more than most retirees already, but less than we had been spending per year. We realized our expenses could be much lower because we had a house in a high cost of living area and we were prepared to downsize or live in a lower cost of living area if we needed to. Plus with working less our taxes would be lower, our kids would finish college and either move out or pay rent before too long, with lower expenses we were FI and being FI we could eliminate disability insurance and life insurance, with more free time we could price shop more and outsource less, etc. In hindsight if we had been on top of our expenses more we could have retired ten years sooner or at least just switched to part-time work much earlier than we did.
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Old 07-19-2017, 01:16 PM   #42
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.............. Having said that it is hard to walk away from a good income at work so I am trying to work less for now. .............
Another way to look at it is that you have enough money to do anything you want with your (remaining) time. Given all the choices, is working your present job what you want to do?
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Old 07-19-2017, 01:36 PM   #43
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When you pull the trigger that's enough . Hopefully you've done your homework. There are way too many variables to ask a simple question and expect validation.
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Old 07-19-2017, 03:38 PM   #44
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To me, a person has "enough" wealth to retire when they don't have to "depend" on investments in the equity market to fund and maintain their intended retirement lifestyle for their anticipate life expectancy. Personally I would (and did) pad those numbers a bit too.

Example,
My base retirement funds (bucket #1) are invested in a bunch of FDIC insured accounts across multiple banks. (Yes I understand the effects that inflation will have on that money) but it's better than burying it in a 55 gallon drum out in the fields somewhere. While I do have a little in gold and silver but I'm not a "prepper" so if the US dollar goes bust I'm screwed.

However, I do invest (bucket #2) in the equities market but not with money that I depend on to support my retirement. I'll probably never spend that money unless I decide to get really crazy with my hobbies.

In my case, I would not have felt comfortable retiring in my mid to late 40's, with my wealth at that time following such a philosophy, but I was very comfortable by my late 50's. Of course YMMV.

I realize that this is not an opinion shared by many on this board but that was my investment/retirement philosophy before I retired and still is today.
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Old 07-19-2017, 05:45 PM   #45
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Enough is when passive income exceeds active spending without touching the principal.
Way too conservative IMO... plus, what is "passive income"... just interest and dividends or interest, dividends and capital gains?

If just the former and dividend yields are 2% and bond interest is 3% then that would be 40x... many of us have successfully retired with a lot less.
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Old 07-19-2017, 05:56 PM   #46
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Whenever i read these threads I'm like "oh man maybe I made a mistake" ...seems like people are extra conservative on this board. I "retired" 6 months ago with ~25x yearly expenses..maybe I'm too aggressive, but it's worth the risk....Not working is an indescribable feeling of freedom.....
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Old 07-19-2017, 06:05 PM   #47
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Whenever i read these threads I'm like "oh man maybe I made a mistake" ...seems like people are extra conservative on this board. I "retired" 6 months ago with ~25x yearly expenses..maybe I'm too aggressive, but it's worth the risk....Not working is an indescribable feeling of freedom.....
Good for you, Enjoy your freedom, you earned it. Tomorrow is promised to no one. I worked 5 extra years being too conservative, lost time I can never make up.
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Old 07-20-2017, 01:29 AM   #48
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Whenever i read these threads I'm like "oh man maybe I made a mistake" ...seems like people are extra conservative on this board. I "retired" 6 months ago with ~25x yearly expenses..maybe I'm too aggressive, but it's worth the risk....Not working is an indescribable feeling of freedom.....


+1
We have no kids and lots of flexibility with our expenses. About 45% of our budgeted spending is for travel, dining out, concerts and theatre, wine and gifts. Therefore I am very comfortable that 25x expenses will more than cover us throughout retirement, and we probably could have retired much earlier.
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Old 07-20-2017, 08:00 AM   #49
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I appreciate all the great replies... even the few slightly snarky ones. Thanks all.

Yes, the problem is my wife doesn't know what enough is since she isn't involved in our finances though I have tried. I have a good handle on expenses and know exactly what income our assets produce so I know it's enough. Having said that it is hard to walk away from a good income at work so I am trying to work less for now. Again, thanks for all the great feedback.
Walking away from a high paying job and leaving $$$ on the table is another issue many struggle with.

Perhaps a partial solution while you continue to work is to ensure you take really great vacations even to the point of including a week or two of unpaid time off work (if allowed).

So many people work and don't even take their 2 week vacations, it's no wonder they get burnt out.
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Old 07-20-2017, 09:26 AM   #50
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Walking away from a high paying job and leaving $$$ on the table is another issue many struggle with.

Perhaps a partial solution while you continue to work is to ensure you take really great vacations even to the point of including a week or two of unpaid time off work (if allowed).

So many people work and don't even take their 2 week vacations, it's no wonder they get burnt out.

For sure. I live for vacations. Like the old Loverboy song Working for the Weekend... I work for my vacations! I am an owner at work so can choose my schedule. I just make a little less money when I am gone. Plus, I think it paints a bad picture for employees if I am gone too much or too extravagantly. Having said that, I just did over a month in Europe with the family... and already working on plans for next year's big trip. It does make work more bearable but it's hard to get away from the workplace stress as it's always there for me.
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Old 07-20-2017, 09:39 AM   #51
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For me, 25 - 30x expenses + a paid-off home in an area I was happy living + some modest ability to generate a little part-time income doing stuff I like.
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Old 07-20-2017, 10:14 AM   #52
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Quote:
Originally Posted by GrayHare View Post
about 40x annual spending
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Originally Posted by bradaz2488 View Post
Sounds like you know you have enough. You just need to convince your wife.
<snip>debt free with a NW (exclude house) of 36X expenses and a plan WR of 2.6%. ..
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Even with a 45-year time horizon, FIRECalc gives a 100% success rate for 35X, which equates to a WR of 2.9%
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Originally Posted by brucethebroker View Post
40X annual income are quick rules of thumb....
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then our 35x will be over 40x..
Sounds like you have the right range in your ROT so it is now a matter of salesmanship!
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Old 07-20-2017, 10:15 AM   #53
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about 40x annual spending
agreed for 40s retirement - mid-50s retirement I could live with 25x-30x
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zeroday rule of thumb
Old 07-20-2017, 01:30 PM   #54
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zeroday rule of thumb

Here is the zeroday "FIRE rule of thumb":

Calculate X - average yearly expenses for the rest of your life in present dollars.
Calculate Y - any large one-time future expenses in present dollars (e.g. college).

FIRENW = X * (85 - age) + Y

Example: 60 year old, $60k budget, wants to buy a $100k sailboat in a few years.

60k * 25 + 100k = $1.6M

Example: 42 years old, $100k budget, one kid to put through college ($200k)

100k * 42 + 200k = $4.5M

For the purposes of this simple rule of thumb, FIRENW includes house equity.
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Old 07-20-2017, 02:07 PM   #55
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Originally Posted by zeroday View Post
Here is the zeroday "FIRE rule of thumb":

Calculate X - average yearly expenses for the rest of your life in present dollars.
Calculate Y - any large one-time future expenses in present dollars (e.g. college).

FIRENW = X * (85 - age) + Y

Example: 60 year old, $60k budget, wants to buy a $100k sailboat in a few years.

60k * 25 + 100k = $1.6M

Example: 42 years old, $100k budget, one kid to put through college ($200k)

100k * 42 + 200k = $4.5M

For the purposes of this simple rule of thumb, FIRENW includes house equity.
So at age 86, I can spend as much as I want? I don't need any networth, or even negative networth is OK? Or the more I have, the worse I am because it becomes negative? I don't understand what your formulas represent. Looks like the NW I would need to support these expenses?

FIRENW = (average yearly expenses) * (85 - age) + (any large one-time future expenses)

so for $60K budget and no special expenses:

$60K * (-1) + $0 = -$60K I can be in debt and be OK ?

or $60K budget and a $150K one time expense:

$60K * (-1) + $150K = $90K I can buy the $150K RV with only $90K?

I like how it works, but I don't think it does work.

And by the way, for a couple at age 60, there is a 66% chance one of them will make it to age 86. That will probably be DW. Wow, I'm gonna have fun spending all this money, but DW might not be so happy one day!

https://personal.vanguard.com/us/ins...etirement-tool

-ERD50
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Old 07-20-2017, 02:16 PM   #56
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I don't see why it would include home equity-- it should only be investable assets: those you can live off of in retirement

The number may also be somewhat low in that you only go to 85, whereas a portion of the retirees live beyond that timeframe. (Suggest that you add about ten years-- that would give your guideline about the right level of conservative estimation relative to survivorship and SWR estimates)

{I use 3.5% SWR and 2% inflation in prior planning// now retired }
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Old 07-20-2017, 02:23 PM   #57
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Originally Posted by zeroday View Post
Here is the zeroday "FIRE rule of thumb":

Calculate X - average yearly expenses for the rest of your life in present dollars.
Calculate Y - any large one-time future expenses in present dollars (e.g. college).

FIRENW = X * (85 - age) + Y

Example: 60 year old, $60k budget, wants to buy a $100k sailboat in a few years.

60k * 25 + 100k = $1.6M

Example: 42 years old, $100k budget, one kid to put through college ($200k)

100k * 42 + 200k = $4.5M

For the purposes of this simple rule of thumb, FIRENW includes house equity.
Glad this wasnt a question on my job exam, I would still be pumping gas.
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Old 07-20-2017, 02:23 PM   #58
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So at age 86, I can spend as much as I want? I don't need any networth, or even negative networth is OK? Or the more I have, the worse I am because it becomes negative? I don't understand what your formulas represent. Looks like the NW I would need to support these expenses?

FIRENW = (average yearly expenses) * (85 - age) + (any large one-time future expenses)

so for $60K budget and no special expenses:

$60K * (-1) + $0 = -$60K I can be in debt and be OK ?

or $60K budget and a $150K one time expense:

$60K * (-1) + $150K = $90K I can buy the $150K RV with only $90K?

I like how it works, but I don't think it does work.

And by the way, for a couple at age 60, there is a 66% chance one of them will make it to age 86. That will probably be DW. Wow, I'm gonna have fun spending all this money, but DW might not be so happy one day!

https://personal.vanguard.com/us/ins...etirement-tool

-ERD50
You can make up your own rule of thumb for 86 year olds and older. Mine is for people considering early retirement.
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Old 07-20-2017, 02:29 PM   #59
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Something to consider is paying for kids college.

I FIREd at 49 with a son almost ready for college. We set aside money for this - it was still "our" money, but it wasn't part of our net worth that we used to calculate what we could spend.

This has worked well for us. He's now in grad school and those expenses are completely accounted for.
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Old 07-20-2017, 02:32 PM   #60
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Zero

I don't see why it would include home equity-- it should only be investable assets: those you can live off of in retirement

The number may also be somewhat low in that you only go to 85, whereas a portion of the retirees live beyond that timeframe. (Suggest that you add about ten years-- that would give your guideline about the right level of conservative estimation relative to survivorship and SWR estimates)

{I use 3.5% SWR and 2% inflation in prior planning// now retired }
Because it is a "rule of thumb", including home equity is a simple way to account for people in different housing situations (rent vs own, HCOL area vs LCOL). The FIRE decision for someone with $2.5M portfolio + $500k house should be identical to someone with $3M portfolio and zero house. The situations are essentially fungible.
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