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Old 10-16-2020, 08:39 AM   #41
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What level of spend gets you to 95%? Are you confident in your budget and that discretionary spending being truly discretionary?

We essentially retired at 90%. I say essentially because we made decisions that would be career/income limiting based on that, but DH continues to consult part time.

We also have a fair amount of discretionary spend in our budget, along with sizable enough assets that we knew we had room to downsize if necessary.

With the market run up, we’re over 95% now and basic expenses are tracking under my initial budget, though we’ve been spending a lot on home projects that will hopefully start slowing down.

At a high level, it seems with your discretionary spend that you’re ok. My only issue would be how realistic is it that you cut some of the discretionary stuff. As others have said, a PT job can give you some extras and be a nice buffer. That’s how we’re thinking about DH’s work.
We've been living by the base budget for 2 years now. Except for 2 sick pets that are now gone , we've stuck to it. So I am very confident in the base budget (and think it is fat, but we're a team, so it stays fat).
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Old 10-16-2020, 08:50 AM   #42
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90% is based on $145k. It's well over 100% if I use $112k.
Corn, you seem to be OK to me. If you are at 100% on your real spending then no worries. Your fatter budget is what is getting you below 95% and you will find that you can adjust downward annually based upon the markets returns. BTY, I also think your budget sounds logical. My DW spends far more on cloths etc.
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Old 10-16-2020, 09:37 AM   #43
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If I were in your shoes I would not be worried about the RIF and would consider myself retired, or semi-retired if it comes.

As long as you're willing to pull in the spending during a downturn, you should be fine.

I, personally, wanted 100% before I pulled the plug... But I'm a belts and suspenders kind of gal. Overall, we've been spending less than originally budgeted.... without trying hard (but not spending like crazy, either.) I've been fortunate since retirement because of market gains - so now it's better than 100%.

Would you be willing to get a part time job and/or cut spending if there are down market years early in the retirement? Look up sequence of returns risk (SORR) to understand this is the riskiest part.

But you are close enough... you can probably make this work.
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Old 10-16-2020, 09:50 AM   #44
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I would take the RIF. Unless you really do enjoy your job AND if you believe that another package may be on the table next year. Not just based on the 90 percent, but on your pension income and your health care status.
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Old 10-16-2020, 09:52 AM   #45
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Optional retirement is a choice with multiple objectives. How bad is your job? How desperately do you want to do retirement things?
If my retirement budget were $145k a year , I would retire normally with 90% success rate, because I could have 100% success rate if I would choose to live on $130k a year, which would still check all my boxes.
On the other hand, I'm not fully retired, because my job is very easy.
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Old 10-16-2020, 09:54 AM   #46
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I think you are good to go.

Could you take 6-12 months off and then take on a part-time role somewhere if you decided that you wanted to keep working?
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Old 10-16-2020, 09:54 AM   #47
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If I were in your shoes I would not be worried about the RIF and would consider myself retired, or semi-retired if it comes.

As long as you're willing to pull in the spending during a downturn, you should be fine.

I, personally, wanted 100% before I pulled the plug... But I'm a belts and suspenders kind of gal. Overall, we've been spending less than originally budgeted.... without trying hard (but not spending like crazy, either.) I've been fortunate since retirement because of market gains - so now it's better than 100%.

Would you be willing to get a part time job and/or cut spending if there are down market years early in the retirement? Look up sequence of returns risk (SORR) to understand this is the riskiest part.

But you are close enough... you can probably make this work.
I am definitely willing to get a part time job, and consider that likely after a year off. We are definitely willing to cut spending in down years. SORR is a beast, and we will keep an eye on that. The other issue we look at is survivor benefits. My pension is 55% and my SS is 50% survivor, so I needed to make sure that was accounted for when I die. I have laddered term life ins out to age 78 which keeps her in good shape. Also have a term policy on her, but I spend a lot less than she does.

We have made big purchases over the last 18 months in prep for retirement. Two new cars, new house, new camper. Built up a bond tent, so we're at 50/50 vs 60/40 right now. Will let that go back up to 60/40 as we spend cash/fixed income. While I feel I have accounted for everything, it's the bullet you don't see that will kill you.
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Old 10-16-2020, 10:01 AM   #48
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If you don't take the RIF, what are the chances you're let go with nothing to show not too soon after?
In this situation I would take the RIF. That's not a company I would want to stick around at any longer.
I'd either take the leap at 90%, or adjust my spending to get to 100%. Best of luck.

Cheers!
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Old 10-16-2020, 10:08 AM   #49
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If you don't take the RIF, what are the chances you're let go with nothing to show not too soon after?
In this situation I would take the RIF. That's not a company I would want to stick around at any longer.
I'd either take the leap at 90%, or adjust my spending to get to 100%. Best of luck.

Cheers!
Unknown. The risk is my RSU's. If I get RIFd before 1 Jul 2021, it triggers vesting of $200k of RSUs. After that, I have to wait until Mar 2022 to get them.
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Old 10-16-2020, 10:13 AM   #50
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Corn, I think you are all set. I too was a BD VP in government contracting. While I was 100% in FC, I planned to do some consulting just to stay engaged. I targeted 1/4-1/3 time, but industry people who heard I was consulting contacted me and shoved retainers in my face. So I'm almost 1/2 time, but that is equivalent to 1/3 time in MegaCorp - and almost all from home even before Covid.

Really the only reason I stayed full time at mega as long as I did was to meet the Rule of 55 and have my 401(k) as a backup funding source from age 55 through 59.5.

At your level you must know all of your industry BD heads, all the major consultants, all the contract proposal shops in your business line. It should be easy for you to find consulting work at whatever level you are comfortable, and at a pretty good hourly/day rate.
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Old 10-16-2020, 10:41 AM   #51
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You look in great shape to pull the plug. Aside from your $33K pad for whatever, that budget looks bloated to me, and could certainly be pared back if push comes to shove.
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Old 10-16-2020, 11:02 AM   #52
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I think you are beyond fine to pull the trigger. There is a contingent here that gets way too fixated on 100%+++.

The main reason I would say you're fine is what a worst case portfolio failure means for your situation. It means you are reduced to a great pension, SS and tricare. You'll never be in danger of cat food cuisine. The worst that can happen is you have to drive an older car and moderate a fat clothing and gift budget in your late 70's. There is a big spread on how devastating a firecalc portfolio failure is. You appear to be well over on the "not that devastating" side of the bellcurve.

I'd leave and start spending according to plan without concern - and I just did with a similar firecalc situation and package offer. I don't particularly fear a 10% chance of having nothing but my SS, pension and retiree medical at age 75 and beyond. There is a 20% chance a male will be dead before then.

https://engaging-data.com/will-money-last-retire-early/
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Old 10-16-2020, 12:31 PM   #53
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If we were to use the budget I think is more than enough, we are at 100%. How could we possibly live on this budget?

It does bring up an interesting way to look at retirement spending. We could run with this reduced budget and still have $33k of purely discretionary spending @ 100% Ps. If we want to spend more on clothes that month, it comes out of the discretionary budget which might mean less vacations. Same for gifts. Wanna give each kid $1,000 for Xmas? That's fine, but it comes out of the discretionary budget. I kindof like this approach because we would have a $135k annual spending budget that has 100% Ps. We can spend that no matter what the market does (although we likely would spend less). And if the market treats us well, we can spend more. Might have to chat this up with my wife.

Auto 720
Clothes 200
Pets 200
Food 1,500
Gifts 413
Health / Beauty 320
House 1,569
Entertainment 160
Misc 500
Insurance 652
Medical 605
Cell Phone 120
Utilities 320
Internet 150
Taxes 748

TOTAL EXP 8,178 monthly 98,136 annual
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Old 10-16-2020, 12:49 PM   #54
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We, and many couples on this forum, live quite well on $100k a year or less.
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Old 10-16-2020, 01:07 PM   #55
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I retired from the Navy in '96 and for good in '03. My pension at Navy retirement was about what yours is now. My plan was to retire for good when my portfolio hit $X. I was 10% short of $X when I hit the point that I couldn't stand what I was doing any longer, so I retired with 90% of portfolio goal. As it turned out, I had somewhat overestimated our expenses and we were absolutely fine. My estimated expenses were lower than yours (although this was a while ago, so I don't know what they'd be in today's dollars. They certainly didn't have us living at a lower level than we were accustomed to.) But I'll bet you're going to find that there is more "give" in your budget than you think there will be. In any event, with your industry experience, willingness to work some more if need be and the amount of discretionary spending in your budget, you have a Plan B and a Plan C, even if you'd prefer not to use them.

Good luck.
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Old 10-16-2020, 01:13 PM   #56
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at 100% if you cut out any fluff I would say go for it for sure
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Old 10-16-2020, 01:19 PM   #57
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My plan was always that our lifestyle would have to be the same or better after we retired (at least as far as finances can make it so). I did not want to have to curtail our spending in any way just to retire. In fact, we anticipated several luxury trips every year above and beyond our usual summering in Maine and going to Italy every year (this year we only made it to Maine due to COVID). That's why I always ran FIRECalc with double spending, just so we could. To my mind, there was little point to retiring if we could not really enjoy all the freed up time. It helped, of course, that I enjoyed my work and had the option to stay as long as I wanted.
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Old 10-16-2020, 01:37 PM   #58
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My plan was always that our lifestyle would have to be the same or better after we retired (at least as far as finances can make it so). I did not want to have to curtail our spending in any way just to retire. In fact, we anticipated several luxury trips every year above and beyond our usual summering in Maine and going to Italy every year (this year we only made it to Maine due to COVID). That's why I always ran FIRECalc with double spending, just so we could. To my mind, there was little point to retiring if we could not really enjoy all the freed up time. It helped, of course, that I enjoyed my work and had the option to stay as long as I wanted.
I'd have to work another 8 years to do that, so that won't work for me. I adjusted the base budget so we could be at 99%. We'll see how that goes. Somehow we will have to survive by only spending $4800 a year on clothes vs. $6,000. If that's all it takes to get me out of the rat race, I'm willing to have my wife make that sacrifice.
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Old 10-16-2020, 01:53 PM   #59
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I'd have to work another 8 years to do that, so that won't work for me. I adjusted the base budget so we could be at 99%. We'll see how that goes. Somehow we will have to survive by only spending $4800 a year on clothes vs. $6,000. If that's all it takes to get me out of the rat race, I'm willing to have my wife make that sacrifice.
You'll probably be just fine. My young wife's spending on clothing so far in 2020 has been $363.88. Mine has been $36.75. We are finding that we simply have no need for new or additional clothes.
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Old 10-16-2020, 02:07 PM   #60
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Clothes? Unless I pick up some new underwear before the year end, my clothing spending will be $0 this year.

Hmmm... Maybe I should look to see if I have some holey socks that need replacement too.
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