Poll: Fat FIRE II

[tb001]

I think it’s an interesting poll in that it tells you a fair amount about the makeup of the site. Or at least those answering the poll. I find it interesting that over a quarter of the respondents were over $6mm, though I think the post title may be influencing who participates.

Someone with $1mm in assets and a pension (or not) will likely have different financial questions and concerns than someone with $10mm living solely off equities. It’s reassuring to see the breadth of people here.

 

[DawgMan]

If the intent of the poll is to survey how many people are FatFIRE, I suggest using a retirement income approach that takes into account one's income generating portfolio, pensions, etc. NW by itself is a meaningless number.

The most common NW cited for FatFIRE is $5 million, which based on 3% SWR yields $150k annually. So you can use that as a yardstick for a FatFIRE annual income amount. That income can include dividend/interest from one's portfolio, SSI, pensions, annuities. This would account for someone who may have less than the $5 million FatFIRE NW threshold and yet have pension, annuities, etc. that provides additional income, etc. That would be a more meaningful way to measure FatFIRE.

As it relates to what I have read about "FatFire, I tend to agree the annual spend rate year after year above a certain threshold is probably a more interesting "tell" about the range of lifestyles being lived by those on this site. I would further suggest a number closer to $200K+ annual sustainable spend at a "healthy" WR of 4% or less (say for 30 years) would be more representative of FatFire today.

As others have said, NW or investible assets total is a data point, but if your plan includes a big juicy pension, it may not tell the real retirement living picture.

 

[scrabbler1]

Not sure if it what the OP intended, but I answered what my portfolio was worth when I retired 12 years ago. Just because it grew over the years doesn't mean it changed how I viewed being FIREd or the type of FIRE it is.

 

[Montecfo]

It appears that well more than half here are pensioners. Those funds are not considered here.

This sets the table for Fat Fire Poll 3.

 

[MarieIG]

[/B]
To some that question is stupid or their thinking someone is bragging about their portfolio etc..

At one time I asked that question and was ridiculed for asking such a question. I really didn't know and was asking if I had enough and I guess I was very naïve. I had no idea I could retire, and I always respect that same question when asked.

I will take part in this poll, the last one was not of interest to me at all.

- I have noticed that with some it is "open season" on persons perceived to be of a higher net worth, and found some of the commentary to be unkind . . .

- Agreed.

 

[LarryMelman]

maybe the other option should be “none of your business, anonymous or not” - might be substantial…

That's my answer.

Knowing everyone's "number" is useless when you don't know their other details - the basic cost of living in their area, whether they have pensions, whether they have retiree medical coverage, obligations such as parents or children, and on and on. It makes the base "number" meaningless, and I would encourage the mods to delete threads like this.

 

[Nick12]

I put $2M but I also have a COLA military pension and free health care that I value at about $1.6M.

Military benefits are good and your burial is included too!

 

[street]

- I have noticed that with some it is "open season" on persons perceived to be of a higher net worth, and found some of the commentary to be unkind . . .

- Agreed.

I still have to chuckle when I asked that question. I will say it wasn't here on ER but at Bogleheads. I didn't go back there for a long time after. Lol

I then found ER and so glad I did. Some great people here and willing to help.

 

[TheWizard]

I still have to chuckle when I asked that question. I will say it wasn't here on ER but at Bogleheads. I didn't go back there for a long time after. Lol

I then found ER and so glad I did. Some great people here and willing to help.

I'm not so happy with BH either, therefore, I am here...

 

[Ready]

Is this poll only for people who are currently retired? We have a lot of people on this forum who are still working so they haven’t hit their final number yet. In that case are they supposed to respond with their current net worth anyway or not participate because they are not retired?

 

[statsman]

Knowing everyone's "number" is useless when you don't know their other details - the basic cost of living in their area, whether they have pensions, whether they have retiree medical coverage, obligations such as parents or children, and on and on. It makes the base "number" meaningless, and I would encourage the mods to delete threads like this.

Agreed.

 

[Closet_Gamer]

The only merit I see to the polls is that it suggests two insights:

1) For all the commentary in popular media about people living like paupers to FIRE on a modest assets, this board of people who actually RE do so on the basis of substantial assets/security.

The bell curve on the poll skews high with 48% of people reporting $3M+ in retirement assets. 26% are $4M+. Only 6% have said less than $1M (at least as of this writing)

To the others comments, those reporting lower investment assets likely have pensions which would easily be worth $1M+ if valued as an asset and folks with very high net worths may stay silent due to privacy concerns.

$3M (assets or assets+pension value) isn't Fat Fire but it isn't exactly just scraping by either. At 3% SWR you'd get $90k/yr which is 1.3x the median family income...and the people on this board are more like to be done accumulating, saving for college, have kids mostly out-the-door, etc.

2) While I personally find the "Can I retire on $10M?" posts a bit eye rolling, the poll makes me surprised that we don't see more discussions of the legitimate financial questions/necessities that come with very high net worths.

Estate/trust planning, managing executive compensation, consequences of proposed tax changes impacting higher income/net worth individuals, managing charitable donations at large scale, etc.

These become different problems at very high net worths vs. more modest asset levels. The relative lack of conversation on these topics makes me the think that the high net worth folks on the board are largely thoughtful about not preening their assets in public.

Interesting.

 

[Alan]

It appears that well more than half here are pensioners. Those funds are not considered here.

This sets the table for Fat Fire Poll 3.

Like this?

https://www.early-retirement.org/fo...-to-cover-monthly-costs-come-from-109394.html

or this?

https://www.early-retirement.org/forums/f28/poll-do-you-have-a-pension-109239-12.html#post2611108

 

[stepford]

Several folks have pointed out (quite correctly) that polls of investable NW without inclusion of real estate or pensions are poor indicators of how FAT one's FIRE may be. But there are several well established ways of valuing pensions, so why not just choose one and use it in the poll.

It would still be a NW poll and of arguable usefulness, but at least it would apply more uniformly to everybody here.

 

[RetiredAt55.5]

Several folks have pointed out (quite correctly) that polls of investable NW without inclusion of real estate or pensions are poor indicators of how FAT one's FIRE may be. But there are several well established ways of valuing pensions, so why not just choose one and use it in the poll.

It would still be a NW poll and of arguable usefulness, but at least it would apply more uniformly to everybody here.

But, then it seems like Social Security should be thrown in too just for completeness.

 

[stepford]

But, then it seems like Social Security should be thrown in too just for completeness.

I agree, and the same valuation methods work there too. In cases like that of my DW, who will get a good state pension but no SS, it would seem only fair to level the playing field.

The only real argument against all this is that if we're used to thinking about just our investable assets then including everything and the kitchen sink like this makes the new number seem overinflated (hey everyone's a multimillionaire now).


PS. Just for fun I used my favorite pension valuation method (immediateannuities) and found the value of my SS varies from about $385 to $425K depending on when I take it. Not perfect actuarial neutrality, but close enough.

 

[jollystomper]

Several folks have pointed out (quite correctly) that polls of investable NW without inclusion of real estate or pensions are poor indicators of how FAT one's FIRE may be. But there are several well established ways of valuing pensions, so why not just choose one and use it in the poll.

It would still be a NW poll and of arguable usefulness, but at least it would apply more uniformly to everybody here.

But, then it seems like Social Security should be thrown in too just for completeness.

I agree, and the same valuation methods work there too. In cases like that of my DW, who will get a good state pension but no SS, it would seem only fair to level the playing field.

The only real argument against all this is that if we're used to thinking about just our investable assets then including everything and the kitchen sink like this makes the new number seem overinflated (hey everyone's a multimillionaire now).

Perhaps what is being said is that NW in terms of investments alone is a poor way to define "FAT FIRE". That having good pension and SS income (particularly during "down" market periods that shrink the investment portion of NW) can be just as valuable to move someone into "FAT FIRE" territory.

 

[pacergal]

I voted but, We are not pulling from retirement funds at this time due to pensions

 

[TheWizard]

I voted but, We are not pulling from retirement funds at this time due to pensions

Similar here, but pension/annuity plus age 70 SS.
I've actually got excess retirement income, so I'm investing a few thousand $$$ a month into my taxable account.
And this is prior to my starting RMDs in 2023...

 

[USGrant1962]

But, then it seems like Social Security should be thrown in too just for completeness.

Then again, once you are collecting SS you no longer qualify for the E in Fat FIRE. You are just FIR.

 

[RetiredAt55.5]

Then again, once you are collecting SS you no longer qualify for the E in Fat FIRE. You are just FIR.

Yes!

But, in terms of planning what money to spend (both during and after the "early" years), it does come into play.

 

[youbet]

That's my answer.

Knowing everyone's "number" is useless when you don't know their other details - the basic cost of living in their area, whether they have pensions, whether they have retiree medical coverage, obligations such as parents or children, and on and on. It makes the base "number" meaningless, and I would encourage the mods to delete threads like this.

That would be kinda silly. We have lots of threads that have some value but fail to detail exceptions, contingencies, differences between individual circumstances, etc. The "When to Take SS" threads come to mind. By your standards, those threads would all be deleted because many of the suggestions and solutions do not include the vast array of individual circumstances that should be considered.

OP wasn't asking how large your FIRE portfolio should be in order to FIRE. He was only asking how large it is. Whether you have pension, SS, high value personal primary dwelling, etc., on top of that isn't being considered. Personally I found the percentages of folks above the $6mm mark, and especially the $10mm mark, interesting. Since by the criteria of this poll, they can only have more (if they have assets not being included such as the ones you mentioned), it left me quite surprised. Apparently a well-to-do crowd off in the right hand tail of the distribution!

 

[youbet]

I'm totally unclear whether to answer as an individual or married couple.

I do agree with that. I typically answer these type of financial worth or income questions combining both DW and myself. But I can certainly see the value in answering as a single by just doing a rough cut at what I'd have on my own. (DW always says I'd have "nuttin' ")

 

[youbet]

Similar here, but pension/annuity plus age 70 SS.
I've actually got excess retirement income, so I'm investing a few thousand $$$ a month into my taxable account.
And this is prior to my starting RMDs in 2023...

Remember that RMD's are only a mandate to pay income tax on a portion of your tax deferred savings. After you move the money from your IRA to your taxable account and pay the taxes, your worth will be a tad less than before.

 

[TheWizard]

Remember that RMD's are only a mandate to pay income tax on a portion of your tax deferred savings. After you move the money from your IRA to your taxable account and pay the taxes, your worth will be a tad less than before.

Absolutely correct, especially if you value tax-deferred account money at 100%.

But the RMD amount should be close to the amount I've been Roth converting each of these last few pre-RMD years, due to my levelizing approach.
So just a different destination for the proceeds...