Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-13-2022, 11:01 AM   #61
Dryer sheet wannabe
 
Join Date: Jan 2022
Posts: 20
LOOKING 4WARD..Yes Yachtworld is a good site to understand whats out there for purchase. Also trawerforum.com and cruiserforum.com will keep one busy for years!
Pablo1 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-13-2022, 03:11 PM   #62
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,792
Quote:
Originally Posted by Pablo1 View Post
....Also, my SS for working 30 yrs I haven't mentioned either as its not in the 4% rule , as I understand. One thing I haven't got an answer to, among all the great advice, is some sort of spend down of assets calculator. ...
Quote:
Originally Posted by Sunset View Post
...The spend down calculator is firecalc.

You haven't said when you would take SS, give us your thoughts on that and the thread will go many more pages
Quote:
Originally Posted by tb001 View Post
This. This is why you keep getting sent there. There is an alternative withdrawal method which has your spend decreasing with age and gives you more up front—you can look at this on firecalc. ...
Yes, FIRECalc is the answer that you are seeking. Go to firecalc.com

Note the tabs going from left to right about an inch down from the top. In the Start Here tab input your annual spending, portfolio ($1.4m less $350k for the boat) and years (41 or 46... 95 or 100 less your current age of 54). Click on the Other Income/Spending tab and input your SS and the year that your SS begins. For now, I would use your full retirement age amount or 75% of your full retirement age amount if you want to be conservative... you can get that info from your SS statement at SSA.gov. Go to the Your Portfolio tab and replace the 75% with the percentage of equities in your total portfolio. Go to the Investigate tab and select the radio button that says Spending Level towards the bottom and leave the 95%.

Then click Submit. The results page will include a sentence like this:

Quote:
Looking for a spending level that will result in 95% success rate . . . . . . . . . . . . . . . [done]

A spending level of $38,129 provided a success rate of 96.4% (110 total cycles, of which 4 failed). This spending level is 3.63% of your starting portfolio.
Above is based on $30,000 spending, $1,050,000 portfolio, 41 year time horizon (live to 95 - your current age of 54), no SS, 75% equities. Note it is less than the 4% from the 4% rule because you have a 41 year time horizon rather than a 30 year time horizon... if you change the 41 years to 30 years then you get 4.04%.

If keep the 41 years and add $25,000 SS starting in 2034 then I get:

Quote:
Looking for a spending level that will result in 95% success rate . . . . . . . . . . . . . . . [done]

A spending level of $51,152 provided a success rate of 95.5% (110 total cycles, of which 5 failed). This spending level is 4.87% of your starting portfolio. (Your spending is assumed to come from any Social Security and pensions you entered, as well as from the portfolio.)
What FIRECalc does is solve for a level of spending that combined with SS results in 95% success over a 41 year time horizon which is why the year 1 withdrawal can safely exceed 4%... SS reinforcements come in beginning in 2034.

The above numbers ignore the paid off townhouse so if the townhouse cashflows at $30k a year you can add $30k to the above numbers.

Play around with the numbers to see how sensitive the result is to different assumptions.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 01-13-2022, 03:20 PM   #63
Dryer sheet wannabe
 
Join Date: Jan 2022
Posts: 20
Jeez PB4USKI. Thanks alot! If I ever start another business I'm hiring you..
Pablo1 is offline   Reply With Quote
Old 01-13-2022, 03:23 PM   #64
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 12,608
Quote:
Originally Posted by Pablo1 View Post
Jeez PB4USKI. Thanks alot! If I ever start another business I'm hiring you..
I think you'd have to pay him a LOT - since he'd have to come out of retirement. LOL
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
rodi is offline   Reply With Quote
Old 01-13-2022, 03:27 PM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,792
^^^ You got that straight!
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 01-13-2022, 03:29 PM   #66
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,792
Quote:
Originally Posted by Pablo1 View Post
Jeez PB4USKI. Thanks alot! If I ever start another business I'm hiring you..
You're welcome... but you need to put in your numbers and play around with it some... YMMV.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 01-15-2022, 11:44 AM   #67
Recycles dryer sheets
 
Join Date: Aug 2017
Posts: 58
I did a quick read thru this thread and had a handful of thoughts.

1) The 4% Rule covers a traditional 30 year retirement when you retire in a random market based on age. This would not apply to you. You are retiring with a longer retirement period. And, you wouldn’t be retiring in a random year, you’d be retiring based on hitting a number. This is something that gets glossed over by too many early retirees. The 4% rule still failed 5% of the time against all years for 30 year terms. If you looked at needing, say, 45 years and only compared against bull markets hitting market highs (CAPE > 25 or something), you’d see drastically lower success rates. I urge you to dive into the excellent Early Retirement Now blog, specifically the series about SWRs and SORRs.

2) 4% Rule (which probably needs to be 3.5 or lower in your case) also I believe assumes a mixed portfolio with a certain level of stocks and bonds. Iirc, at least 40% equities.

3) you keep asking about a way to spend down your assets. The 4% Rule is not about protecting your assets. Success is defined by not running out of money. There’s ways you can model spending less as you age, but you want to at least have a floor that you can get by on and a plan for LTC. Firecalc, mentioned often, let’s you have an “off-chart spending reduction” that starts in a given year. You could do something like have a $10K/yr spending reduction at age 70 (or whatever number and age). This would let you have more while younger and presumably more active.

4) because the 4% rule has to handle nearly worst historical case, if you don’t hit a case that bad, you end up with a lot of money at the end. If you do something like #3 above in your initial planning, you very likely will get to 70 and not need to drop your spending after all. But at least you’ve planned for it.
DireWolf is offline   Reply With Quote
Old 01-15-2022, 12:26 PM   #68
Recycles dryer sheets
 
Join Date: May 2013
Location: Toronto
Posts: 229
A true spend-down calculator sounds like VPW. This is a method where your withdrawal varies from year to year, based on how much money you have at the end of each year. If the market has done poorly, your withdrawal amount will be lower, and conversely, if it's done well you will be able to live a bit higher on the hog. The amount to withdraw each year is calculated using a spreadsheet. You tell it when you plan to die and it's designed to exhaust all your money by then.

https://www.bogleheads.org/wiki/Vari...age_withdrawal
Spudd is offline   Reply With Quote
Old 01-15-2022, 02:14 PM   #69
Recycles dryer sheets
 
Join Date: Aug 2017
Posts: 58
I like VPW a lot, but it really only works well when you have a solid floor from pension/SS and have either over-saved or had an incredible run early in FIRE and are switching to it going forward. If you hit a bad SORs, it can mean needing to live on like a 2.5% WR for many, many years.
DireWolf is offline   Reply With Quote
Old Yesterday, 05:20 PM   #70
Recycles dryer sheets
Sconie's Avatar
 
Join Date: Mar 2010
Location: Arizona
Posts: 68
According to Morningstar, 3.3% is the new 4.0%

https://www.morningstar.com/articles...-33-the-new-40
Sconie is offline   Reply With Quote
Old Yesterday, 06:53 PM   #71
Thinks s/he gets paid by the post
 
Join Date: Aug 2013
Location: North
Posts: 3,190
Quote:
Originally Posted by GTP2022 View Post
After reading all the Travis McGee novels decades ago I have always thought that would be a great life. I think you're on the right track. Following your dream and trying to be pragmatic about your finances.



As others have said the budget is the big one. Use firecalc.com and try a free excel budget sheet online to tighten up the numbers. You're obviously smart enough to run a business and worldly in travel in language. Why not chase that dream? Worst thing that could happen in losing the boat, busting a budget, fight with girlfriend, etc. You can always come back from that.



If you have good info on the schools-forums you mentioned private message them to me, I'd be interested to do something like that on my upcoming retirement. Which is coming up very quick.



Wish you the best on the adventure, update us as you go!
I follow this family Sailing Zatara on YouTube. Keith is a retired ditch digger from TX. Sold the biz and set sail with his family. Watching him and all the repairs he has done, the long multi week passages taking their toll, navigating all the COVID rules with different ports and jurisdictions and basically how limiting living on sea can be has been both refreshing and entertaining...thankfully at their expense and not mine. I am an avid sailor, grew up around boats my whole life but in freshwater with land on all sides. I definitely feel the draw of open sea navigation and the freedom it might present but appreciate the limits and nuances mother nature can provide. YMMV.
__________________
AA (Stock/Bond/Cash ): 97.5/0/2.5% MIX (Small/Mid/Large): 25/25/50% BLEND(US/Foreign): 100/0%, REIT (Real Estate Equity): ~50% of Assets

FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
kgtest is offline   Reply With Quote
Old Yesterday, 08:15 PM   #72
Confused about dryer sheets
 
Join Date: Dec 2019
Location: Seattle
Posts: 5
My reply is regarding your comment: "isn't there another plan, like a spend down plan and enjoy the assets slowly?"

The answer is yes, there is. On the FireCalc website there is a reference to a book named Nest Egg Care by Tom Canfield. In this book, the author outlines and approach for how to estimate maximizing your safe spending amount and enjoy more now. The book includes templates and worksheets to help you calculate what your own SSA.
hmango is offline   Reply With Quote
Old Yesterday, 08:47 PM   #73
Recycles dryer sheets
Reach's Avatar
 
Join Date: Nov 2011
Posts: 66
Quote:
Originally Posted by Pablo1 View Post
HenryD.. Full insurance is about $3k a year staying out of the summer hurricane zone. Getting my captains license helps. For you in sailing , it would be ASA 101, 103, 104 and 114(Cats), though don't need them all, insurance companies like to see a couple completed
The marine insurance business has changed significantly, following recent catastrophic hurricanes. My DH and I live aboard our sailing catamaran full time and our insurance doubled recently after being fairly steady (for the last 13 yrs), even being outside of hurricane zone in season.

It is also becoming harder to obtain by many of our cruising friends, for various reasons, and the market constantly shifting. You might want to be prepared for a different insurance quote (e.g., double your $3k estimate to $6k or more). Lots to watch for in fine print for full replacement value vs. depreciation policy, etc.

With the right expectations, it can be a wonderful lifestyle. Best of luck!
__________________
~Michele
Reach is offline   Reply With Quote
Old Today, 07:30 AM   #74
Confused about dryer sheets
 
Join Date: Jan 2022
Location: Chicago
Posts: 4
I would also caution against the 4% rule in the current environment. There are two economic things that can jeopardize an early retirement: high inflation, and high asset prices. We unfortunately have both going on right now. What this, I think, means is that retiring now is relatively likely to end up in the worst 10% of scenarios - so that 5% failure rate might be more like 25% or even worse. I personally have solved this problem by aiming for a withdrawal rate of about 3.25%, and I would even say that 3% at this moment is not unreasonably conservative.


Not pleasant news, but neither is running out of money
Optionality is offline   Reply With Quote
It can work
Old Today, 07:50 AM   #75
Recycles dryer sheets
 
Join Date: Nov 2010
Location: Crossville
Posts: 258
It can work

There is a well known couple in the FIRE field named the Kaderlis who have FIREd at 35 years of age, over 30 years ago, with $500K banked. They looked at the 4% rule and showed how it would have affected them over that time. Granted, there is no guarantee that the next 30 years will have a similar market, but this shows what happened even during significant downturns like we experienced in 2008 and 2018-19. They state that they left their monies in Vanguard index funds, primarily the S&P500, and I have no reason to suspect this is not the case. Good luck on your own journey.

https://retireearlylifestyle.com/aaa...withdrawal.htm
ychuck46 is offline   Reply With Quote
Old Today, 11:22 AM   #76
Thinks s/he gets paid by the post
 
Join Date: Jul 2007
Location: St. Louis
Posts: 1,468
Quote:
Originally Posted by ychuck46 View Post
There is a well known couple in the FIRE field named the Kaderlis who have FIREd at 35 years of age, over 30 years ago, with $500K banked. They looked at the 4% rule and showed how it would have affected them over that time. Granted, there is no guarantee that the next 30 years will have a similar market, but this shows what happened even during significant downturns like we experienced in 2008 and 2018-19. They state that they left their monies in Vanguard index funds, primarily the S&P500, and I have no reason to suspect this is not the case. Good luck on your own journey.

https://retireearlylifestyle.com/aaa...withdrawal.htm
Variable 4%
variable 5% would have work to. As long as you can live with the swings in income.
FANOFJESUS is offline   Reply With Quote
I agree
Old Today, 11:45 AM   #77
Recycles dryer sheets
 
Join Date: Nov 2010
Location: Crossville
Posts: 258
I agree

Quote:
Originally Posted by FANOFJESUS View Post
Variable 4%
variable 5% would have work to. As long as you can live with the swings in income.
Absolutely. While I always loved using FIREcalc before retirement to gauge my progress, using the 4% standard, I never intended to stay in that camp. Right now all in I am probably more like 1.5-2%, and we have a great life. I used the calculator mostly to make sure all the random scenarios totaled up to a 100% probability we would never run out of $.
ychuck46 is offline   Reply With Quote
Old Today, 01:08 PM   #78
Full time employment: Posting here.
 
Join Date: May 2007
Posts: 681
Quote:
Originally Posted by Sconie View Post
According to Morningstar, 3.3% is the new 4.0%

https://www.morningstar.com/articles...-33-the-new-40
Ha, saw this article which says 4.7% is the new number now.
Quote:
Looking for a way to boost your retirement income? You can't live off Social Security benefits alone. Smart retirement planning says the 4.7% Rule — not the 4% Rule — is your best shot for maximizing your retirement savings' ability to generate income for 30 years.

https://www.investors.com/etfs-and-f...me/?src=A00220
homestead is online now   Reply With Quote
Old Today, 02:02 PM   #79
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 18,084
It is very unlikely that the the young wife and I will ever voluntarily draw 4% from our portfolio (long term care expenses being a foreseeable exception). Currently, our draw is less than zero. Should overseas travel return to being a reasonable possibility, we may exceed zero, but even then 2% would be a real stretch.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old Today, 02:07 PM   #80
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,147
Quote:
Originally Posted by homestead View Post
Ha, saw this article which says 4.7% is the new number now.



https://www.investors.com/etfs-and-f...me/?src=A00220
The gist of the (IMHO unclear) articles seems to be that Bengen says you can do 4.7%, and you can do 4.7% if you either (a) add other asset classes, and/or (b) assume that you're not retiring in 1968.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 16 (1 members and 15 guests)
CindyBlue
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Hi, I am questioning (retirement strategies) Aramis Hi, I am... 6 10-30-2017 07:07 PM
A very thoughtful questioning of the buy and hold strategy to investing in equities.. LARS FIRE and Money 28 06-19-2010 04:10 PM
Questioning Age-Based Allocations mmcc FIRE and Money 19 01-10-2010 09:42 AM
questioning the "money magazine" approach hotwired FIRE and Money 18 11-30-2008 08:54 AM
Questioning oneself? Peer pressure? Sam Other topics 26 05-17-2007 03:43 PM

» Quick Links

 
All times are GMT -6. The time now is 11:29 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.