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Losing my suspenders !
Old 10-16-2019, 10:19 AM   #1
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Losing my suspenders !

DH was forced to resign his position after a serious on the job injury. He is out of sick time and FMLA time because of a hip replacement earlier in the year. We cannot sue because his employer offers Workers Comp. Nothing we can do - it's all within the law (we've contacted several attorneys).

When I retired in June 2015 I had included the full costs of an ACA policy plus the out of pocket maximum for both of us, and zero income (for both of us) before pulling the trigger. Budgeted expenses were at 3% back then. DH continuing to work were my suspenders and allowed me sleep soundly.

The cost of ACA and the OOP max has gone up significantly in the past 4 years and expenses will now be 3.75% of our initial 2015 portfolio (3% of the current portfolio, thank you bull market !).

The budget is sound an includes 12% for non-recurring expenses such as new roof, new car, new appliances, etc etc.

I'm sort of freaking out a little and need to know if we need to consider part time employment.

What do you guys think ?
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Old 10-16-2019, 10:37 AM   #2
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At a 3% withdrawal rate, I think you are fine as long as you have a number of years of withdrawal in non-stock things (CD's, bonds, etc). This is so when/if the market crashes down 40%, you won't need to sell stocks at a low price, and can wait out the market bounce.

Remember that stocks paying dividends will mostly continue to pay the same dividend amount even if the market tanks and this can be part of your income per year.
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Old 10-16-2019, 10:56 AM   #3
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If you haven't done so, DH needs a Work. Comp attorney. You are correct, DH cannot sue his employer for the injury. But he is entitled to Indemnity benefits (% of his gross wage), and all medical related to the injury, PLUS an award for the permanency resulting from the injury. Although my career was in Workers Comp, I am not familiar with Florida's W/C law. Based on your husband's injury, you definitely need a W/C attorney to guide you through the process.
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Old 10-16-2019, 01:37 PM   #4
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Sha la la la la la live for today

If you can cover today's spend with a 3% WR from today's portfolio, then you're at 3%. I expect most ER folks would consider 3% to be a safe "belt".

However, I sense your confidence has dropped that your expense level will remain constant. Is that based on extrapolating the past 4 years, or do you have data indicating that costs will definitely escalate significantly again? You still have contingency money; maybe applying those funds to the higher ACA bills, instead of to cars/roofs/appliances, until DH reaches Medicare might be enough.

From what I've read so far, I think you're still safe, even sans suspenders. But if you are certain the budget will rise uncontrollably above your comfort zone, then you'll need to consider returning to earning. Sorry.
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Old 10-16-2019, 01:53 PM   #5
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Sunset - our portfolio is 50/50 so we have several years of expenses in CD's and bond funds.

Mystang52 - you are so right - we did go to a WC attorney. The only thing we can do is settle with WC for the potential future medical costs. We are looking into doing that. He is not disabled from doing his job, he's just out of FMLA and Sick Day time. He can (eventually) do another job at the same pay. Honestly, I really just want him to retire .... I am having OMY syndrome but this time with HIS pay, not mine !

Mdlerth - great points ! I went back to my budget as of my own retirement date and the only expense that went up significantly was ACA. You are correct that we can redirect some budget funds until he is covered by Medicare - the roof is only 5 years old and our aging cars will be fine for at least another 4 years.

I know I'm going to freak out a bit when the market drops 25% (which I'm fairly confident it will - maybe soon). I just need to hear from others if I am worried too much to help boost my confidence.
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Old 10-16-2019, 02:09 PM   #6
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Quote:
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....expenses will now be .... 3% of the current portfolio...

I'm sort of freaking out a little....

What do you guys think ?
I think you can take solace in this post I found

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THIS is why I worked until I had a 3% WR (it will be lower once SSI and Medicare come on board). I don't want to have to think about ways to pare down expenses and I shouldn't have to. I sleep well at night
That and the oft-quoted: "What does FIRECalc say?"

I'm betting that FIRECalc has you at 100% success and that your max spending at 100% success is significantly higher than your 3%... so relax.
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Old 10-16-2019, 02:17 PM   #7
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Yep, 3% should be good indefinitely, and once you're eligible for Medicare you'll have a lot more disposable income. If anything happens between now and then, you can always tighten that belt!
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Old 10-16-2019, 02:17 PM   #8
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I think you can take solace in this post I found

I'm betting that FIRECalc has you at 100% success and that your max spending at 100% success is significantly higher than your 3%... so relax.
Ha - you got me there ! And yes, FIRECalc says I can spend 15% more than my current budget, which has historically been 20% below budget even after adjusting for the higher healthcare costs.

Deep breath .... ok .... but I did really like those suspenders !!!
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Old 10-16-2019, 05:48 PM   #9
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Think of it as trading the unnecessary suspenders that were not really needed for DH retiring and being home full-time.
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Old 10-16-2019, 06:38 PM   #10
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3% will always work in any historical sequencing or Monte Carlo simulations.
Relax, you got this.
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Old 10-17-2019, 11:00 AM   #11
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Think of it as trading the unnecessary suspenders that were not really needed for DH retiring and being home full-time.
Twice the husband, with now zero income. But twice the help around the house and twice the fun ! I can do that

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3% will always work in any historical sequencing or Monte Carlo simulations.
Relax, you got this.
It's the old "is 3% after a long bull run the same as 3% after a pull back" argument. I do appreciate the vote of confidence. In my heart I know you're right, I just don't trust my own thinking
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Old 10-17-2019, 05:48 PM   #12
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Twice the husband, with now zero income. But twice the help around the house and twice the fun ! I can do that



It's the old "is 3% after a long bull run the same as 3% after a pull back" argument. I do appreciate the vote of confidence. In my heart I know you're right, I just don't trust my own thinking
You'll get there.
3% has even worked (so far) for the 2000 year retiree who has suffered through 2 large bear markets and retired after a great run up in the markets from the 90's.
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Old 10-17-2019, 09:26 PM   #13
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How old are you both? If approaching 60, you’ll be fine.
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Old 10-19-2019, 10:51 AM   #14
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You'll get there.
3% has even worked (so far) for the 2000 year retiree who has suffered through 2 large bear markets and retired after a great run up in the markets from the 90's.
Good point ! Makes me feel better.

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How old are you both? If approaching 60, you’ll be fine.
He is 61 and I am 57.

Now I need to decide if we should start collecting SSI on him in March when he turns 62. Part of me says HECK YES - I'll get one side of the suspenders back which I know will help me feel better.
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Old 10-19-2019, 01:27 PM   #15
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Your 3% should be based on the beginning balance adjusted for inflation when you started drawing down your portfolio. Gains and losses are expected in an invested portfolio. And dividends are part of that percentage not in addition to it. If you do it the way firecalc calculates it you will not have to worry about the sequence of events-you started drawing down in the middle of a bull market.

I think you should be discussing this with your husband but don't shift blame on him-you were the early retiree- he has worked, in poor health to support you in that. Clinical depression is not sadness over a situation but it can be triggered by those circumstances
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Old 10-22-2019, 02:00 AM   #16
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All this talk of suspenders has got me feeling all 'unnecessary'
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Old 10-22-2019, 08:02 AM   #17
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.... Now I need to decide if we should start collecting SSI on him in March when he turns 62. Part of me says HECK YES - I'll get one side of the suspenders back which I know will help me feel better.
What does opensocialsecurity.com say?

For us, using a 3.3% discount rate and preferred non-smoker mortality, taking as early as possible, at 65, at FRAs or at FRA for her/70 for me... EPVs are all within 3%/$25k of their optimal solution so it isn't a "big" decision in the whole scheme of things.

We're deferring for now, but it is comforting knowing that if it ever gets to the point that we are uncomfortable that we "have enough" that we can start that income with a few clicks.
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Old 10-22-2019, 08:03 AM   #18
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All this talk of suspenders has got me feeling all 'unnecessary'

To paraphrase Red Green, if your partner doesn't find you handsome, they should at least find you handy!
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Old 10-23-2019, 02:00 PM   #19
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What does opensocialsecurity.com say?
Hadn't really seen that before, so thank you. It actually said to wait for FRA for DH. When I did the alternative of filing when he turns 62 the PV was only different by $5k ! Not what I was expecting and it makes me think starting at 62 may not be a bad idea at all. It will end up being our travel budget.
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