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Old 05-04-2021, 09:53 AM   #41
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I didn't have a buffer when I stopped working. I refer to it as "stopped working" and not "retired" because, at the time my company went out of business and laid me off, I spent a year or two considering the possibility of going back to work at some point.

My numbers were marginal at first, so I was entertaining the possibility of some kind of work in the future, if things didn't work out. Then 2 things happened. I came into a modest sum from my father's estate, on his passing. This, combined with what turned out to be the most marvelous bull run, graduallly eased me into retirement.

In my case, my "buffer" was my flexibility, and ability to turn on a dime. I am single, with no kids, so these sorts of lifestyle and economic decisions are much easier for me than some others.
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Old 05-04-2021, 10:28 AM   #42
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The 25x expenses is just a rule of thumb, which is one that I actually believed in prior to leaving the place that paid me. Another ROT is when savings x 4% is > than your take home pay after deducting any monthly retirement savings. These estimates don't take into count pensions or SS or maybe inheritances. I now believe that it is an over simplified method. There are so many more detailed calculators that help confirm your plan. As it it turned out, we had around a 100% buffer after when the other income sources. I guess that is good since our SS will cover our fixed plus planned discretionary annual expenses. That leaves the entire savings for the real buffer! It is our longevity insurance so we don't go too wild. We lived a life of LBYM so we really don't know how to go wild.
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Old 05-04-2021, 10:31 AM   #43
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Felt comfortable retiring with a 2X buffer.
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Old 05-04-2021, 12:26 PM   #44
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My "expenses" and my desired income in retirement are two different things.
This allows me flexibility in retirement to spend more on discretionary expenses.

So my target back before start of retirement in 2013 was simply to replace 100% of my net employment income.
This approach has worked out well...
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Old 05-04-2021, 12:33 PM   #45
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I’ll add that early in our planning, when our success rates were cutting it closer, I looked at possible inheritances as another buffer. Not a sure thing, but potential upside, along with the other items I mentioned.

I’m glad I listened to people here who wisely told me not to count on that. We’re lucky to have parents in their 90s, but caring for them in the last few years has been very expensive. I’m just grateful that they (so far) have planned well enough that there are dollars available for their care.
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Old 05-04-2021, 01:46 PM   #46
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We probably could have retired 2+ years before we did, but the extra savings from working that time and the recent market performance give us a lot of confidence that the question will be "how much inheritance we leave the kids?", instead of "do we have enough?".

My dad thought he was going to have plenty and instead, he had a decade of nursing home care for Alzheimer's that ate up almost everything, so that experience drove me to keep going past the minimum. I like the peace of mind of knowing we should be OK.
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Old 05-04-2021, 02:02 PM   #47
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We were about 10% above our savings goal at retirement, not including an ESOP that isn't available to us to draw yet. My wife (the employee) has tended towards caution regarding its value, but it has done well so far.

I based Firecalc simulations on that savings goal and was well above 90% success to age 94/95).
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Old 05-04-2021, 02:05 PM   #48
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With a very conservative portfolio, we planned for more than most would have. In almost four years of retirement, we haven't hit 1% WR yet. But inflation is here, so we'll see.
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Old 05-04-2021, 02:38 PM   #49
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My buffer is working 6 years longer than DW... Well, maybe that's her buffer.
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Old 05-04-2021, 02:42 PM   #50
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The year I stopped working, our expenses ran around 4%WR. However, I knew our expenses would go down due to many non-recurrent items going away with time, such as college expenses, some house-related items, and just plain Bernicke's effects. Future SS was also a big factor.

Nine years later, the above effects happened as thought. Additionally due to a fortunate sequence of return, my WR has been 1% with just my wife claiming SS, and I am still delaying my SS till 70.

Huge buffer now.

And I still do not feel the need to "blow the dough".
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Old 05-04-2021, 02:44 PM   #51
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I retired quite early, so I made sure that I had way more than adequate as we were taking quite a risk. We wanted to be able to have plenty available for spending on travel. I was shooting for probably 2x what we needed, maybe even more.
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Old 05-04-2021, 03:23 PM   #52
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I find 25x (of normal spending, barebone might be 60% of that) is too risky in today's valuation. So we would want at least 33x, that's a buffer of ~30%.
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Old 05-04-2021, 03:24 PM   #53
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My buffer was about $25K to $50K depending on how you look at it. I need about $50K to live at my current level. That's no frills and barely keeping up with maintenance etc. While I hope I never have to live at that level, I could. I also realize that many live on that or less and do well, so I am grateful of my situation. To live at the level my current situation suggests takes about $75K. That includes not having to consider it a crisis if the roof needs replaced or I need a new/used car type of expenses come up. My budget and the number I used to evaluate my retirement situation is $100K. That level pretty much lets me just live and let live however I want. It's not living large, but it's comfortable for me and I don't have to think about money at that level. So, starting with $100K in my planning but knowing I would be okay at $50K is my buffer. I've been retired for just over 3 years now and I've come in under $100K each year. So, so far, so good. Portfolio and pension/SS still would support $100K. My main concern is hyper inflation followed by end of life/long term care. Those seem to be the most plausible budget busters. Not much I can do about those though.
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Old 05-04-2021, 04:00 PM   #54
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I wanted to get to a point where my WR was 2%.
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Old 05-04-2021, 04:07 PM   #55
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No true major buffer. Just wanted all the retirement calculators I was using to be at 100% success rate.
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Old 05-04-2021, 05:26 PM   #56
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Zero. Or negative even. Spending is well over 4%, somewhere between 5 and 6. But I keep getting richer notwithstanding.
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Old 05-05-2021, 07:18 AM   #57
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I'm retiring in Dec with a monthly pension thats more than my current take home.
We have and plan on keeping one years expense in savings, and start building an IRA to go with my 401K. Wifes in the same boat, but a few years away...
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Old 05-05-2021, 07:59 AM   #58
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We both worked at the same company and there was a voluntary severance plan. We retired with a nest egg that was 10% below my goal. Social Security would be the buffer. The first years spending rate was just a hair above 4%. With the good market since retirement our nest egg is 48% higher then when we left our jobs.
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Old 05-05-2021, 08:10 AM   #59
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Quote:
Originally Posted by RobbieB View Post
Zero. Or negative even. Spending is well over 4%, somewhere between 5 and 6. But I keep getting richer notwithstanding.
The market has been going gangbuster. But if it drops 20% or more a year, and does it in consecutive years as it has done in the past, will you have the stomach to keep spending 5-6%?
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Old 05-05-2021, 09:10 AM   #60
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I don't know that my answer would be very helpful to you, as our situation was not planned at all.

We have approximately 2.25X more than what FireCalc says we need to support our current (pre-Covid) standard of living for a 45-year retirement at 100% success rate using the "Constant Spending Power" spending model. But that's taking into account a COLA'd pension and retiree healthcare that my wife still needs to work several months for in order to become eligible for it. Without those anticipated benefits, I estimate we have approximately 1.36X more than what we need.

This is without taking Social Security into account.
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