Would you retire @ 90% probability of success?

[eytonxav]

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.

 

[bada bing]

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/

 

[corn18]

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

 

[pb4uski]

We, and many couples on this forum, live quite well on $100k a year or less.

 

[friar1610]

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.

 

[FREE866]

at 100% if you cut out any fluff I would say go for it for sure

 

[Gumby]

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.

 

[corn18]

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.

 

[Gumby]

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.

 

[NW-Bound]

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.

 

[corn18]

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.

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.

I hear ya. We (and by we, I mean my wife) spent $10,100 on clothes in 2019 and $13,420 in 2018. YGTBSM!

 

[Dtail]

We spent $1,066 so far on clothes this year.

 

[RunningBum]

I hear ya. We (and by we, I mean my wife) spent $10,100 on clothes in 2019 and $13,420 in 2018. YGTBSM!

So is she on board with going from that to $2400 or $6000 (the two numbers you put in plans posted here), if need be? I assume the difference is the $33K pure fluff.

 

[braumeister]

If it helps any, that spending category will most likely go down quite a bit over time.

We've been retired for a long time and our 2018 clothing expenditures were 1.15% of total spending. 2019 was 1.57%. The only reason it was so high was because we really couldn't resist some expensive sweaters and stuff in places like Stockholm, Oslo, Edinburgh, London, etc.

 

[corn18]

So is she on board with going from that to $2400 or $6000 (the two numbers you put in plans posted here), if need be? I assume the difference is the $33K pure fluff.

She is because we have the fluff money. I like this approach because then she has to decide if spending $6k of our fluff money is worth it to buy clothes vs. maybe going on an extra vacation or buying a nicer car.

 

[NW-Bound]

Even when we were still working and had to buy clothes, we never tracked how much we spent. It could not have been that much.

In fact, I never tracked any spending on anything until I was thinking about early retirement, went on this forum, and learned that one needed to know some details about expenses, not simply that "Income > Expenses".

Once I started to use Quicken, it's all very simple to have transactions downloaded and categorized broadly. And I do not categorize things as finely as some people do. What we spend at Costco, it's food because that's what it is mostly. The occasional flannel shirt or a jacket I bought is insignificant, and did not need itemizing. Or the socks.

But I am quite certain that I have bought no shirt, nor socks, nor underwear this year.

PS. When the money is spent at Men's Wearhouse, then it is definitely clothes. However, the last time that happened was the tux plus a new suit I bought for the occasion of my daughter's wedding. And that's 5 years ago.

 

[Koolau]

She is because we have the fluff money. I like this approach because then she has to decide if spending $6k of our fluff money is worth it to buy clothes vs. maybe going on an extra vacation or buying a nicer car.

It's unfortunate that immediate gratification often wins out over future pleasure. For whatever reason, I seem to have been "born" with the delayed-gratification gene. I know so many folks who have the immediate-gratification gene. I have tried to council my good friend (the one who owes $500K) that if ONLY he would wait, he could have MORE. He understands my logic. NOT spending all that interest would mean more to spend on toys - eventually. BUT, he just can not wait. That's why I think it must be genetic - but I could be wrong 'cause YMMV.

 

[LRDave]

This is obviously a FIRECALC result - there are other calculators. Find one that gives you the answer you want or tweak the parameters until you get the answer you want.

I am with Old Shooter on this point: 90% vs 95% vs 85% are all about the same if you ask me in terms of what your particular future will look like.

 

[corn18]

This is obviously a FIRECALC result - there are other calculators. Find one that gives you the answer you want or tweak the parameters until you get the answer you want.

I am with Old Shooter on this point: 90% vs 95% vs 85% are all about the same if you ask me in terms of what your particular future will look like.

I actually use The Flexible Retirement Planner for my Monte Carlo sims. It tells me what I need and Ps. My real planner is my giant spreadsheet. That's where I do all of my what if's.

 

[Koolau]

This is obviously a FIRECALC result - there are other calculators. Find one that gives you the answer you want or tweak the parameters until you get the answer you want.

I am with Old Shooter on this point: 90% vs 95% vs 85% are all about the same if you ask me in terms of what your particular future will look like.

I don't know the inner workings of FIRECalc. My gut tells me there IS quite a difference between - especially the upper-numbered "survival" percentages. Sort of like 50% chance of rain is pretty nebulous. You can't loose. But if you say 100% or 0% chance of rain, you are staking your weatherman reputation on the outcome.

SWAG: The difference between 50% survivability and 55% isn't much difference in stash. BUT difference between 90% and 95% is a fairly large difference in stash. (Even bigger "stash" difference from 95% to 100%) I very much doubt it is linear - BUT I DO NOT KNOW so YMMV.

 

[badatmath]

Yes, because the next RIF offer (if there is one) will likely be less or nothing at all.

 

[Dtail]

Yes, because the next RIF offer (if there is one) will likely be less or nothing at all.

True in general the 1st RIF offer tends to be the highest.

 

[tb001]

I hear ya. We (and by we, I mean my wife) spent $10,100 on clothes in 2019 and $13,420 in 2018. YGTBSM!

I’m sure you probably covered this earlier but is she still working? I needed a pretty nice work wardrobe and spent about that every year on clothes. I cut it to 6k for retirement and so far this year that’s a big over estimation based on what I need.

 

[corn18]

I’m sure you probably covered this earlier but is she still working? I needed a pretty nice work wardrobe and spent about that every year on clothes. I cut it to 6k for retirement and so far this year that’s a big over estimation based on what I need.

Stay at home mom.

 

[sandlapper]

If you have health care covered, I think you be fine. I waited on retiring until ACA was passed.