Enough - How much is that?

[Leo1277]

This way of looking at it really simplifies a lot of philosophical issues, questions, and discussions.

Yes, it looks simple and right at, or even beyond, the border of being silly. But over all these years, I find myself more and more pulled towards this view, despite the fact that I have a quite high-brow job and the education that goes with it, and from that perspective, this view is a bit self-defeating for me to have. But, watch that "Office Space" movie, and you again see the caveman brain in action, just trained enough to deal with a bit of modern tech. Even all the high-brow jobs and the motivation to enter them, may often just go back to "I wanna be the more clever caveman".

What most philosophers and psychologists feed us is often just the caveman stuffed in a designer suit fitting our times, if it's not just rather naive like Kant's categorical imperative: "Man should behave in such a way that his action could be used as a universal law". More power to Kant, with such beautiful thoughts he helped launch the Time of Enlightenment, which was supposed to lift us out of the more caveman-like dark ages and of which we all are a product. But the reason the world is so messed up 250 years later is quite simply that the cunning caveman couldn't care less about taking care of anything but himself and his close family, since he understands that this assures survival of his genes, and that's why we still have too much of him in the current gene pool.

 

[Leo1277]

About having "enough": Does anyone know if there ever was a poll or detailed discussion of what percentage of the "100% FireCalc" number FIRE people are drawing?

 

[RetireeRobert]

I retired at 54 with our three kids then ages 7, 11, and 17. And my wife at that point had not worked at a job since our first child was born. (Interestingly, my wife left her job the very day she went into labor and gave birth to our first!) Obviously, I decided we had "enough" at that time 20 years ago.

Since I retired, we got all three kids through college debt free (them and us), got each started with a funded Roth IRA, and got each a used car.

Another interesting note, right now I have a bigger net worth by far than at any other point in my life, even after 20 years of retirement. I am now contemplating a generous gifting program to the kids each year, will save them some state estate taxes down the road. Also contemplating my qualified charitable distributions for church, need to talk with some of the people over there.

 

[W2R]

About having "enough": Does anyone know if there ever was a poll or detailed discussion of what percentage of the "100% FireCalc" number FIRE people are drawing?

I don't recall a poll or discussion like that, although there probably has been one.

Personally, last year the total amount that I spent came to 54% of my "100% FIRECalc number", calculated for being retired until age 117 and a $400K minimum balance. But I have SS (started at age 70), and a mini-pension and they supplied almost all of that 54%. My retirement is a bit over-funded.

As for withdrawals, I didn't withdraw anything from my portfolio other than my equal monthly withdrawal from the TSP, which was equal to my RMD plus $159/month. My withdrawal rate as a percentage of my portfolio itself was 0.7%.

 

[Closet_Gamer]

This is a very current discussion at our house...or really what to do once you have enough.

For me money has never been about money. Milestones, round numbers, and dividends make me smile...but those are just reference points against a long range plan.

Money always been about the purposes that money can accomplish:

- Security and good quality-of-life for my family.
- College for my kids.
- An early, comfortable retirement.
- A substantial impact on important charitable causes.

Many years ago I set goals in each of those categories with the objective of achieving them by the time I was 50, though I expected the charity part to take longer.

I turn 50 in three months and life has been good to us.

We hit our goals for retirement and college a while ago.

This last run up in the markets took us so far past the retirement goal that this year we donated a large amount of appreciated securities to our charitable fund and took that goal off the list.

We've created a side fund to help the extended family should they require it and stashed a pile to the side for weddings or future needs of children/grandchildren.

We always spoke wistfully of buying a beach house and we're now stacking wood for that...the pile should be completed by next March.

Meanwhile my employment and the market run-up have catapaulted us well past our retirement goal and that just continues on its way. Even a 30% drop in the markets wouldn't scuttle the retirement plan.

For contractual and other reasons, I will continue working for a few more years. The company may offer me the opportunity to run the business unit I helped start as a new venture 17 years ago. That may be enough to keep me going for a few more years...but definitely not for the money.

So, we have more than "enough"...for me the question is about purpose.

Do I find some new purpose that makes me want to keep bringing in income or do I pull the rip cord and seek purpose in other ways.

We'll find out!

 

[Winemaker]

DW and I never believed our numbers would work despite accurate predictions from an AmEx financial planner from 1986 (almost spot on!) and our former accountant turned financial planner and wealth manager. The a/FP gave a complimentary review in 2005 when she expanded her business into wealth management. We shlogged on for another 9 years despite her pleas to hang it up! We never thought we could manage retirement at 45! So with the grace of God, our coffers are full, our annual income is 33% more and the NW is up 40% since 2014.

Sometimes you just gotta believe!

 

[garyt]

I have no where near the money I see mentioned here, but I have enough to retire on very nicely for us IF we don't have a catastrophe like one of us needing long term care. There's no way we could ever retire if we wanted to totally prepare for that. My MIL was in memory care at $92K a year. That's going to put a crimp in all but the best retirement funds.

 

[24601NoMore]

I had a conversation on this once with one of our Sr. VPs while on a bus ride back from a company event..

He admitted to being worth more than $10 million. He was horribly unhappy, had spousal issues, the works. Yet, also believed that he "had" to "keep working for the money".

While he didn't elaborate on his expense needs, it was hard for me to imagine that $10 million wasn't "enough" to live out the rest of one's life and seek happiness and fulfillment vs simply running up the score further.

Not being satisfied that one has "enough" also seems to show frequently in equity heavy asset allocations. It's often surprising how much risk some are willing to take simply to run up the score further, after "enough" has already been achieved. That's never been for me..so I sit at roughly 25% equity allocation as that's "enough" to succeed with our own ER plan.

 

[disneysteve]

I had a conversation on this once with one of our Sr. VPs while on a bus ride back from a company event..

He admitted to being worth more than $10 million. He was horribly unhappy, had spousal issues, the works. Yet, also believed that he "had" to "keep working for the money".

While he didn't elaborate on his expense needs, it was hard for me to imagine that $10 million wasn't "enough" to live out the rest of one's life and seek happiness and fulfillment vs simply running up the score further.

Not being satisfied that one has "enough" also seems to show frequently in equity heavy asset allocations. It's often surprising how much risk some are willing to take simply to run up the score further, after "enough" has already been achieved. That's never been for me..so I sit at roughly 25% equity allocation as that's "enough" to succeed with our own ER plan.

Many people suffer from "lifestyle creep". Income goes up so they lease a fancier car, move to a bigger house, join the country club, eat at more costly restaurants, get the premium cable package, send their kids to a ritzier summer camp, have a private box at the theatre, etc. Once they have all of those things, it's very hard to give them up. Much easier to live well below your means all along. If you're saving 30 or 40 or 50% of your income when working, you need a lot less in retirement to maintain your lifestyle.


As for the AA, for some people it's simply about math and odds. Stocks outperform bonds over time. They just do. So even once you're retired, and especially if you retire early, you may not want to walk away from that growth even if you already have enough to sustain you. I know people that are 100% stock or close to it not because they need more but just because they know stocks are best long term. We're about 65% stock right now which I'll probably shift down to 60% as we enter retirement but then probably hold at that level for the most part.

 

[jollystomper]

"Having "enough" has to factor in the degree of contentment one has. Contentment with one's lifestyle (including the required expenses of that lifestyle such as taxes and medical costs), as well as contentment (or perhaps better, ignoring) what one has in relation to others. Sometimes people feel they do not have "enough" because someone else has more, even if what they have could, in others eyes, support their family for generations.

My definition of having "enough" for me was more linked to independence. I felt I had enough when I could choose to retire and not have to choose to ever earn income again, or be dependent on anyone else - including the government - for our lifestyle.

I tent to agree with 24601NoMore on the statement regarding "enough" and heavy asset allocation. I am fine with folks having high AAs, I personally would not, part of the reason is my belief that i have "enough" the additional risk at this point is not worth potential gains. I do not need to be 100% in equities to stay ahead of inflation, so I am happy with having shrinking the equity component of our AA since I retired.

I also believe that one really never knows how one feels about having "enough" until things go "wrong" financially. It is easy to talk about having "enough" when the market is rising. But a year ago, few were talking about not caring, they had "enough", in comparison to those suddenly worried (and in many cases selling of out) their equity allocation. In other words, perhaps one has enough when whatever they could lose in the market does not matter .

 

[kcowan]

?..If we retire at 60 with $3M and find ourselves at 75 or 80 or 85 with it having grown to $6M or $8M, we'll happily start writing some large checks.

It really boils down to your current SWR and current inflation.

I see my two sons doing just fine and I am being extra generous with my 5 GCs.

 

[daylatedollarshort]

Many people suffer from "lifestyle creep". Income goes up so they lease a fancier car, move to a bigger house, join the country club, eat at more costly restaurants, get the premium cable package, send their kids to a ritzier summer camp, have a private box at the theatre, etc. Once they have all of those things, it's very hard to give them up. Much easier to live well below your means all along. If you're saving 30 or 40 or 50% of your income when working, you need a lot less in retirement to maintain your lifestyle.

When we decided to ER, I made my spreadsheets and then we tried to validate the numbers with our 401K financial adviser. He tried to tell us we would need 80% of what we were grossing in our working years, but we never spent that much even when we were working. Plus in retirement our income and SS taxes decreased, we no longer needed to save for retirement, we had time to do more for ourselves like our own yard work and taxes, our kids would be finishing college and be off the payroll in the foreseeable future, we no longer needed life and disability insurance, we no longer had job or small businesses expenses, and we had more time to analyze and optimize our current expenses, like making the house more energy and water efficient, renegotiating the cable bill every year to always get the best new customer rates, price shop insurance, and hundreds of other little expense reductions that really added up.

If needed, we also had the option of downsizing, moving to a lower cost of living area, or even just moving to a lower rated public school district or further out into the suburbs where the home prices were much lower. We didn't end up needing to make any of those moves, but we decided that any of them would have been a good trade off to not having to work at all any more.

 

[Boose]

Jollystomper, I would say that DH and I feel exactly like your opening paragraph. We're content with our lifestyle, we know we have the savings to pay for it, and we're not really concerned with what others are doing with their money. They have their interests, and we have ours. It's incredibly freeing.

 

[kcowan]

..I tent to agree with 24601NoMore on the statement regarding "enough" and heavy asset allocation. I am fine with folks having high AAs, I personally would not, part of the reason is my belief that i have "enough" the additional risk at this point is not worth potential gains. I do not need to be 100% in equities to stay ahead of inflation, so I am happy with having shrinking the equity component of our AA since I retired.

We have had an asset allocation of 80% equities for the last 10 years. I have had the conversation with our heirs and they agree that a high allocation makes sense for them as beneficiaries.

With The Fed raising rates, I am expecting that to cool the equity markets so I am liquidating some assets to give away. Enough to cover the extra tax too.

It is difficult to do this but it is the plan!

My forecast for YE S&P 500 was 4200 last December but I am beginning to think 4100 is more realistic.

 

[disneysteve]

When we decided to ER, I made my spreadsheets and then we tried to validate the numbers with our 401K financial adviser. He tried to tell us we would need 80% of what we were grossing in our working years, but we never spent that much even when we were working.

Exactly. Last year, we saved 41% of my gross income. That means the most we could possibly need to have the exact same lifestyle in retirement would be 59% of what I currently make. In reality, it would be far less for all of the reasons you mentioned.

 

[skyking1]

^ this^
I am stuck with a pension and no path beyond roths to defer taxes, but DW has a 403b and (MUCH THANKS TO THIS PLACE!), i just dialed it up to the max. Even with that, her remaining salary is more than we spend and my wages are all going to investment. We need about 30% to live comfortably.

 

[daylatedollarshort]

When we decided to retire, instead of looking at percent of gross earnings in our working years for what we would need in retirement income, we looked at the Consumer Expenditure Survey. We put our expenses in the same categories and identified some key areas where our expenses were unnecessarily high, like haircuts and groceries, even for a HCOL area. I saved a lot by going to a strip mall stylist instead of a fancy downtown salon, and my hair actually turned out better. Now with the pandemic I learned to cut my own hair using some guides (like the crea-clips) from Amazon. I only had to learn one hairstyle so it wasn't that hard. My hair looks the same as the salon cut. The 80 / 20 for lowering our grocery bill was changing where I shop. I started a price book and realized the same items in my neighborhood supermarket stores were often 3 - 5 times as much as they cost going to discount and outlet stores just 10 minutes further away. These were small changes that didn't really impact our overall lifestyle, but 100+ of these kinds of recurring expense reductions (times 40 years of potential retirement), made a huge difference in how much NW we needed to retire and keep, or even improve upon, the same basic lifestyle we had when we were both working.

 

[24601NoMore]

..we tried to validate the numbers with our 401K financial adviser. He tried to tell us we would need 80% of what we were grossing in our working years, but we never spent that much even when we were working.

I always cringe when an adviser (or magazine, newspaper, etc article) recommends trying to replace "X%" (usually 70-80%) of pre-retirement income in retirement. Yet it still seems there are a lot of so-called "professional" advisers and others out there making the same old generic recommendations to people. YIKES. Hard to fathom why they don't simply recommend getting a good handle on actual expenses pre-retirement, use that as a baseline, and adjust as needed for lifestyle changes expected in retirement.

We identified some key areas where our expenses were unnecessarily high, like haircuts and groceries, even for a HCOL area. I saved a lot by going to a strip mall stylist instead of a fancy downtown salon, and my hair actually turned out better. Now with the pandemic I learned to cut my own hair using some guides (like the crea-clips) from Amazon. I only had to learn one hairstyle so it wasn't that hard. My hair looks the same as the salon cut. The 80 / 20 for lowering our grocery bill was changing where I shop. I started a price book and realized the same items in my neighborhood supermarket stores were often 3 - 5 times as much as they cost going to discount and outlet stores just 10 minutes further away. These were small changes that didn't really impact our overall lifestyle, but 100+ of these kinds of recurring expense reductions (times 40 years of potential retirement), made a huge difference in how much NW we needed to retire and keep, or even improve upon, the same basic lifestyle we had when we were both working.

It's really amazing how much savings there are for those who have the interest and desire to work at it. We don't "need" to clip coupons, shop at Aldi, aggressively negotiate our cable and other bills, re-use aluminum foil or do any of the probably dozens of things we do to save a few pennies here and there, but it DOES really add up! And every penny we save, as the old saying goes..is a penny earned.

My younger sis has worked in a garden center as a designer most of her adult life..she's usually scraping to get by. But when I suggest she try to do some simple things (like move her Prescriptions to Kroger to get $3 or $6 refills instead of the far more costly through her insurance plan), she won't bother to take the time to do it. Makes me kinda crazy as she always seems strapped for $$, yet won't expend the effort to do simple things to lower spending..I know far too many people like that, all of who complain about needing to work into their 60s, 70s or beyond because they expect they will "never have 'enough'" to retire.

 

[24601NoMore]

Removing double post..sorry bout that - weird!

 

[CindyBlue]

It's the internal ability to be satisfied, not to just know you have enough, but rather to feel happy with what you have.

This!
Hubby and I have talked about this idea. We both feel that as long as we have enough to pay our bills (and hopefully that will be for the rest of our lives) and have a little left over, we are happy. We don't need more.

 

[Leo1277]

... We don't "need" to clip coupons, shop at Aldi, aggressively negotiate our cable and other bills, re-use aluminum foil...

No, you really don't need to! On this site, we recycle dryer sheets, not aluminum foil!

 

[friar1610]

Many people suffer from "lifestyle creep". Income goes up so they lease a fancier car, move to a bigger house, join the country club, eat at more costly restaurants, get the premium cable package, send their kids to a ritzier summer camp, have a private box at the theatre, etc. Once they have all of those things, it's very hard to give them up. Much easier to live well below your means all along. If you're saving 30 or 40 or 50% of your income when working, you need a lot less in retirement to maintain your lifestyle.
.

One of the best deals I ever got on a used car was from a guy like that I worked for at a high-tech company. He got a promotion/raise and his leased Lexus ES-300 was no longer good enough for him. I bought the Lexus off the lease at a very good price before it got in the hands of a dealer. He then leased a Mercedes that spoke more to his new status. We were both happy.

 

[cyber888]

1) First tell that 'enough' is near is you have no more mortgage, no car loans, no debts.
2) Second tell if you have 'enough' is you have savings to last you 30 - 40 years.
3) Third is if you cannot already trade more of your time for money, then you have enough.

 

[1242Vintage]

Interesting question with my easy answer. I knew we had enough to retire when my wife told me so!

Not trying to be funny. She took care of me, the house, three kids and all our domestic finances for over three decades and knows what we need. With no mortgage or other debt and a few hundred k in various 401(k)s/IRAs/457 plans, I filed for my govt COLA-adjusted pension and retired last May.

There was another factor. I was promoted the year prior and my stress level was over the top. She saw that too and knew that I had enough!

 

[HI Bill]

5 years ago, having 'enough' money for me meant being able to pay cash for a $400K condo, and spend 1/2 of $75K annually on travel. Then I decided that the travel budget wasn't enough, and kept on OMY'ing. Then COVID-19 hit, and my wife decided we should buy a house, rather than a condo. That $75K spend just became $150K, to be able to afford a reasonable amount of travel and pay for the house. This year, without travel, we're only spending ~60% of budget, if not a little less. If I had known that COVID-19 was coming, I might have retired earlier, and traveled for a couple of years, very extensively. But no one knows the future. Having a solid retirement fund, house with a pool, safe community, health care, and living in Hawaii...I no longer feel the need to travel like I once did. Sure hope we can get back to some travel in 2022!