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Old 09-03-2021, 01:52 PM   #121
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Our pre-tax employed income was 4x our post-tax expenses, including discretionary. Our retirement spending has absolutely nothing to do with hour pre-retirement income. Zip. Nada.

That income enabled us to save so we'd have a big enough nut to find our needs/wants expenses for retirement, at a SWR that we were happy with. And that's all that counts.

The back and forth over what defines good vs. great in retirement is silly. Location, COL, hobbies and such vary wildly from person to person.
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Old 09-03-2021, 02:30 PM   #122
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A good retirement is having a retirement income equal or greater than your income while working. If your income while working is $100K per year than a nest egg of $1M will only get you $40K per year based on the 4% rule. Hence you need a nest egg of $2.5M to earn $100K a year. Yes $1M is not what it used to be.
$2.5M doesn't mean you will "earn" $100K/yr. Using the 4% rule, that means you can "spend" 4% per year (of initial stash, adjusted for inflation each year) without completely depleting your stash during retirement. Remember, as an example, your principal in non-retirement investments and some other sources of your retirement spending are NOT income, yet they can contribute to your spending.

As an example for myself, I earn 6 figures now while still working, I expect to earn closer to $25K/yr income during early retirement, and I expect to spend much MORE per year during retirement than I do now! So, my discretionary spending will be many times higher in retirement despite MUCH lower income during early retirement. And I consider that a "good" retirement. My actual "income" will go up later in retirement when other defined retirement income kicks in but still well short of my working income while spending much more.
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Old 09-03-2021, 02:44 PM   #123
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I think so too!! I have posted a few time on this thread but a million bucks is more then most have.

With some help from SS or some other small cash flow, that 1 million bucks could compound.
Very much agree.

I've often mentioned my friend who is $.5mil in debt at age 77. I estimate his two SS's (his and wife) plus his pension come to about $80K. That amount covers his debt service (so far) and leave him enough to spend and get more credit. He is happy, so who am I to say he has to have $1Mil (to the good) to be happy. When he dies, I have no idea what happens to his wife. I hope he has made some kind of arrangement for his debt, but I doubt it. At that point, it might become sad very quickly - yet bankruptcy laws will probably spare her a place to live and she will still have the higher of their two SSs plus half his pension. She should survive. All is well - and they definitely do NOT have $million! YMMV
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Old 09-03-2021, 03:30 PM   #124
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Koolau, your example you gave are a norm. I know many friends of mine are happy as a lark and will never have a million bucks, never.
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Old 09-03-2021, 09:40 PM   #125
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Originally Posted by Aerides View Post
Our pre-tax employed income was 4x our post-tax expenses, including discretionary. Our retirement spending has absolutely nothing to do with hour pre-retirement income. Zip. Nada.

That income enabled us to save so we'd have a big enough nut to find our needs/wants expenses for retirement, at a SWR that we were happy with. And that's all that counts.

The back and forth over what defines good vs. great in retirement is silly. Location, COL, hobbies and such vary wildly from person to person.
Agree with this completely. I make almost double what my expenses (Taxes included in that value) are and that I continue to plan on spending post retirement next January. About a third of that is taxes mostly at 24% plus 5% state, FICA and medicare. another good portion is my maxed out 401K contributions then another significant portion is what I put into savings so I can retire.

Now I get to eliminate many expenses like eating in the megacorp Cafeteria, 45 miles (roundtrip) of commuting 5 days a week and a few more misc

Since I have essentially 5 weeks of vacation every year due to my years of service my wife and I have made big expensive trips a priority to Australia, Europe in Business class etc. And I am already funding my hobbies just don't get to do them as much as I like. And just to be sure I can enjoy retirement, I planned another $20K of expenses in the "lets just go do stuff" category. so my planned expenses to achieve a better lifestyle are still almost half of my income

Back to the original topic. I always thought $1M was a lot of money and it is. Raising kids and putting them college it took me until 53 (kids then gone) to have a net worth of $1M, 56 $2M and 59 $3M. This does include property for the classic definition. Got to love compounding earnings. If I wanted to work a couple more years I would be at $4M and the path I was on was to work 2 more years. THEN I did the numbers I figured out I could have retired last January and maintained the same lifestyle for the next 45+ years so I decided that increasing wealth wasn't important once you had enough to meet all your goals. Living life was more important once that happened. The main reason I am waiting until 1st week of January 2022 is Health Care and I also want to make a good transition to the person I hired to replace me. I have a lot vested in this company and this current project which I have taken from a powerpoint design to building an actual spacecraft and want it to succeed after I am gone.

If you are trying to guess the 4% calculation for me (I know someone is ) I also have a pension which makes it easier for me or I likely would have worked another few years

On the flip side. My older relatives now gone never had even $500K, some $200K and lived happily but frugally for a long time. Money isnt the end all for retirement happiness. It just makes it easier
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Old 09-03-2021, 09:49 PM   #126
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Very much agree.

I've often mentioned my friend who is $.5mil in debt at age 77. I estimate his two SS's (his and wife) plus his pension come to about $80K. That amount covers his debt service (so far) and leave him enough to spend and get more credit. He is happy, so who am I to say he has to have $1Mil (to the good) to be happy. When he dies, I have no idea what happens to his wife. I hope he has made some kind of arrangement for his debt, but I doubt it. At that point, it might become sad very quickly - yet bankruptcy laws will probably spare her a place to live and she will still have the higher of their two SSs plus half his pension. She should survive. All is well - and they definitely do NOT have $million! YMMV
You are in Hawaii? Not fair!
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Old 09-03-2021, 09:55 PM   #127
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You are in Hawaii? Not fair!
Yeah, every once in a while I talk to someone here on the mainland (my yearly sabbatical) and mention that I live in Hawaii. Sometimes they will say "You are so lucky!" I used to say "Luck had nothing to do with it." Of course, luck DID have at least something to do with it - but mostly we planned it that way. So, as always, YMMV.
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Old 09-04-2021, 04:59 AM   #128
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You are confusing me. Having retirement expenses greater than income expenses imply a negative cash flow.

In any case. Your disposable income (income minus expenses) is what drive your standard of living. If your expenses are $3000 per month and your retirement income is is 10% more or $3300 month then your disposal income is $300 a month. 10% is OK. 25% is good. 50% is excellent. 100% is difficult to do. Most FIRE has low disposal income while a traditional retiree has much more. This is because your nest egg in the stock market generally double in 10 years. Triple if you continues to contribute. Wealth increases exponentially and not linearly due to the compounding effect.
My point was a simple change to your focus on income. My income is much less since I FIREd, but my expenses are also lower. I'm much more concerned with my expenses than my income. If I have enough to cover all my expenses I'm in great shape. The focus on income is the mistake IMHO.
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Old 09-04-2021, 10:30 AM   #129
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Yeah, every once in a while I talk to someone here on the mainland (my yearly sabbatical) and mention that I live in Hawaii. Sometimes they will say "You are so lucky!" I used to say "Luck had nothing to do with it." Of course, luck DID have at least something to do with it - but mostly we planned it that way. So, as always, YMMV.

I was going to buy a condo near Waikiki as a second home because I love surfing the 3 foot beginner waves. I am age 70 and a wipe out on a 3 foot wave is no big deal. However after renting an Airbnb place for 30 days, I decided against it due to the heat, humility and high COL. I am from Northern California which is cooler, lower humility but similar high COL. Instead I decided to buy my second home condo in China where the COL is only 1/3 of California and Hawaii. I will spend 90 days in China in my second home condo, 30 days in Waikiki using Airbnb rental and the rest of the time in California. The low COL in China should pay for the airfare. A Chinese Condo in 4th tier city is only 1,000,000 RMB or $160K US dollars. $160K is similar to a small Waikiki condo but the title is a lease holder and there is a much higher monthly HOA and maintenance fee. Yes Hawaii lifestyle i really nice.....but I decided to have all three life styles during my retirement.
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Old 09-04-2021, 10:34 AM   #130
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I was going to buy a condo near Waikiki as a second home because I love surfing the 3 foot beginner waves. I am age 70 and a wipe out on a 3 foot wave is no big deal. However after renting an Airbnb place for 30 days, I decided against it due to the heat, humility and high COL. I am from Northern California which is cooler, lower humility but similar high COL. Instead I decided to buy my second home condo in China where the COL is only 1/3 of California and Hawaii. I will spend 90 days in China in my second home condo, 30 days in Waikiki using Airbnb rental and the rest of the time in California. The low COL in China should pay for the airfare. A Chinese Condo in 4th tier city is only 1,000,000 RMB or $160K US dollars. $160K is similar to a small Waikiki condo but the title is a lease holder and there is a much higher monthly HOA and maintenance fee. Yes Hawaii lifestyle i really nice.....but I decided to have all three life styles during my retirement.
Long flights to another country to spend retirement for prolonged period each year is just not attractive to me.
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Old 09-04-2021, 10:48 AM   #131
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My point was a simple change to your focus on income. My income is much less since I FIREd, but my expenses are also lower. I'm much more concerned with my expenses than my income. If I have enough to cover all my expenses I'm in great shape. The focus on income is the mistake IMHO.
Oddly, my income has increased significantly - depending on how you calculate it. We have 2 SS and a modest pension. Together, they are about what I used to make on my own. DW never made much though she managed a small business. If you count RMDs then we are well above our old income - even if I include the dividends we were able to take from the small business. Our expenses are higher as we moved to a HCOL area. We planned it all this way, so I guess all is well - assuming inflation doesn't go wild. YMMV
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Old 09-04-2021, 10:51 AM   #132
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I was going to buy a condo near Waikiki as a second home because I love surfing the 3 foot beginner waves. I am age 70 and a wipe out on a 3 foot wave is no big deal. However after renting an Airbnb place for 30 days, I decided against it due to the heat, humility and high COL. I am from Northern California which is cooler, lower humility but similar high COL. Instead I decided to buy my second home condo in China where the COL is only 1/3 of California and Hawaii. I will spend 90 days in China in my second home condo, 30 days in Waikiki using Airbnb rental and the rest of the time in California. The low COL in China should pay for the airfare. A Chinese Condo in 4th tier city is only 1,000,000 RMB or $160K US dollars. $160K is similar to a small Waikiki condo but the title is a lease holder and there is a much higher monthly HOA and maintenance fee. Yes Hawaii lifestyle i really nice.....but I decided to have all three life styles during my retirement.
For the right person, this seems like a very good plan - especially if you do Hawaii in the winter (cooler by about 5 degrees.)

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Long flights to another country to spend retirement for prolonged period each year is just not attractive to me.
I agree to this extent: We still travel back and forth from Hawaii to the mainland each year (except last). The trip seems a bit more unpleasant each time. Maybe we'll upgrade to first class. Naaaaaaahhhh! YMMV
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Old 09-04-2021, 10:53 AM   #133
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My point was a simple change to your focus on income. My income is much less since I FIREd, but my expenses are also lower. I'm much more concerned with my expenses than my income. If I have enough to cover all my expenses I'm in great shape. The focus on income is the mistake IMHO.
If you read my previous post that my retirement life style will consist of living in Hawaii, China and California, then my focus on income is NOT a mistake IMHO.

During my retirement planning....I knew that if my retirement income is equal or greater than my pre-retirement income, then my retirement standard of living will be higher than my pre-retirement standard of living. This is because the mandatory retirement expenses will decrease but my disposable income will increase.

Focusing on expenses is just OK to maintain your standard of living pre-retirement and post-retirement. However, my original retirement objective was to have a standard of living in retirement that is GREATER than my standard of living pre-retirement. We had two different objectives and two different outcomes.
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Old 09-04-2021, 10:57 AM   #134
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For the right person, this seems like a very good plan - especially if you do Hawaii in the winter (cooler by about 5 degrees.)



I agree to this extent: We still travel back and forth from Hawaii to the mainland each year (except last). The trip seems a bit more unpleasant each time. Maybe we'll upgrade to first class. Naaaaaaahhhh! YMMV

I take a sleeping pill during a long flight. When I wake up, I am there! Sleeping in first class and sleeping in economy class makes very little difference. Get a strong sleeping pill that knocks you out!
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Old 09-04-2021, 11:14 AM   #135
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For the right person, this seems like a very good plan - especially if you do Hawaii in the winter (cooler by about 5 degrees.)



I agree to this extent: We still travel back and forth from Hawaii to the mainland each year (except last). The trip seems a bit more unpleasant each time. Maybe we'll upgrade to first class. Naaaaaaahhhh! YMMV
We only fly first class and business class anymore but it is still miserable being on the plane for prolonged period. Having to go back each year to a "retirement home" that requires a airplane makes me feel trapped/stuck. We fly to Hawaii every couple of years for vacation but even then we try not to go too often as we simply hate flying.
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Old 09-04-2021, 12:47 PM   #136
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I take a sleeping pill during a long flight. When I wake up, I am there! Sleeping in first class and sleeping in economy class makes very little difference. Get a strong sleeping pill that knocks you out!
I actually seem to be able to drift off for a while on most flights. Unfortunately, even with my neck-collar pillow, I get stiff rather easily under such circumstances. Honestly, for me, I can deal with the flight itself. I just hate all the rigamarole before and after (For instance, this year, I dread returning to HNL and needing to prove that I've been vaxed.) We have no direct flights, so we always have to change planes. It seems every flight is the longest distance between terminals and gates. But, I'm just whining. Realistically, to think that I can leave home at say 2PM for a 5PM flight and arrive at the homestead 14 to 16 hours (door to door) after a nearly 5000 mile flight, I shouldn't complain.
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Old 09-04-2021, 05:56 PM   #137
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I actually seem to be able to drift off for a while on most flights. Unfortunately, even with my neck-collar pillow, I get stiff rather easily under such circumstances. Honestly, for me, I can deal with the flight itself. I just hate all the rigamarole before and after (For instance, this year, I dread returning to HNL and needing to prove that I've been vaxed.) We have no direct flights, so we always have to change planes. It seems every flight is the longest distance between terminals and gates. But, I'm just whining. Realistically, to think that I can leave home at say 2PM for a 5PM flight and arrive at the homestead 14 to 16 hours (door to door) after a nearly 5000 mile flight, I shouldn't complain.
Here are my overseas vacations to date: Paris, London, Amsterdam, Rome, Venice, Florence, Dubai, Afghanistan, Seoul, Beijing, Shanghai, Shenyang, Hawaii, Seorak Mountain, Hangzhou and all of these trips are 11 hours plus from California, except for Hawaii.

One of the reasons for me buying a condo in China is that I can now easily fly to Thailand, Philipines, Tokyo, Hong Kong, Manila, etc which are much closer closer than California. I love to travel and the long distance on an airline does not bother me a bit since I am asleep most of the time. I have my proof of vaccine card so I am ready to go.

Of all the places I've been to Hawaii beats them all...except for California and China. Once i hit 80 or 85, I may stay in China due to the low health cost which is so low that you do not even need health insurance. I truly believe the US health industry is ripping off the US public. My wife had a heart procedure in China which they snaked a camera and electrical probe into her heart via her thigh artery to stop severe Atrial Fibrillation. The total procedure and hospital cost was less than $5K. That same procedure would have cost $30K plus in California.
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Old 09-04-2021, 06:48 PM   #138
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Interesting comments on this topic. I know people that are worth close to 8 figures and I know some people that live check to check so I think it all depends on the eye of the beholder as they say. For me, given I don't have big expenses, a million dollars + is a really nice cushion and provides me with a great deal of mental/financial security.
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Old 09-04-2021, 07:19 PM   #139
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Lol, I have to laugh, when mrs 55 and I were first married… we said if we could make 20K we would be on easy Street!
Here we are 44 years later with a 2.7 million net worth! How lucky are we! We are very blessed.

Ha! Our first year of marriage, ("81") we earned $18k and saved $5,380. I knew we were on our way. 40 years later we are at the same $2.7 million.
Things have just been great after the 2008 crash. It has been a fabulous time to have some already established some wealth. Yes, we are lucky with our timing, just born at the right time.
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Old 09-04-2021, 07:30 PM   #140
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Interesting comments on this topic. I know people that are worth close to 8 figures and I know some people that live check to check so I think it all depends on the eye of the beholder as they say. For me, given I don't have big expenses, a million dollars + is a really nice cushion and provides me with a great deal of mental/financial security.
There is a Buddha saying: live your life as if you are going to die tomorrow. Both people ($1M versus paycheck to paycheck) can be equally happy depending what they do today…and not tomorrow. I make sure that I share my wealth with my family and my community which I work as an unpaid volunteer. If I die tomorrow then I will be satisfied that I made a positive impact on other people’s lives. I made a lot of friends in Afghanistan but they recently told me not to contact them. My wealth cannot help them so money is not everything. I now realize enduring friendships and my community matters more.
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