Looking Back at the Big Financial Picture

[Retire52]

after 3 years in retirement I took a moment to see how we were doing with our investment income and spending. since DW and I are not good at detailed tracking of our spending, I thought it would be good if I looked in the aggregate to see how we were doing.

we use our monthly income from pensions--$13k monthly-- for day to day needs, and use our investment income for extraordinarily needs, such as major home repairs, buying a car, big vacations, etc.

after retiring in summer 2017, we lived abroad for a year in Spain, bought a house in FL, and bought a few cars--two for our children's and two for DW and I. I noted this morning we spent the following in the Extraordinary category: $244k
-home purchase (down pymt and fees) $129k
-car purchases $58k
-taxes on investment income $24k
-misc (mostly the spending spree in Spain) $32k

as far as income, we started with $979k in our taxable investment accounts and now have $1,038k. we did not touch our tax free or deferred accts, so I didnt need to consider them in my calculations.

this review gave me a better gauge of how we are tracking and increased my confidence level. overall I was a little surprised at how much we spent. I thought it would have been much less as I usually only look at the total value of the taxable acct to see if we needed to slow down our spending. though I am pleased after looking at where we spent that we were more responsible than I thought. I guess I will have to apologize to DW for all the complaints i made thinking we were spending-like-drunken-sailors-on-shore-leave.

 

[REWahoo]

Made me look.

A very high level summary our investment income and spending since retiring in 2005:

Our 15 years of withdrawals equal 78% of our initial portfolio amount. Our portfolio is currently 20% larger than when we retired.

So far, so good...

 

[Dash man]

We’re not good at tracking spending either, but I check our net worth several times a year. In the seven years since I retired we have done some travels to Europe and Alaska, bought a condo in Florida and a beach house in New Jersey. We’ve bought two cars for us and one for our son, and bought a townhome for our other son and his family. Some how our net worth is not quite three times what it was in 2013. DW did work three years longer than me which significantly helped that extraordinary growth. Now we just try to help family, our church and charities we care about.

 

[Retire52]

Made me look.

A very high level summary our investment income and spending since retiring in 2005:

Our 15 years of withdrawals equal 78% of our initial portfolio amount. Our portfolio is currently 20% larger than when we retired.

So far, so good...

not bad when you throw in the lost decade from the great recession nearly out the gate. With a roughly 5% WR, and you still managed to come out ahead.

 

[Retire52]

We’re not good at tracking spending either, but I check our net worth several times a year. In the seven years since I retired we have done some travels to Europe and Alaska, bought a condo in Florida and a beach house in New Jersey. We’ve bought two cars for us and one for our son, and bought a townhome for our other son and his family. Some how our net worth is not quite three times what it was in 2013. DW did work three years longer than me which significantly helped that extraordinary growth. Now we just try to help family, our church and charities we care about.

Dash man, I dont know how you did it. paying for 3 homes and still triple net worth! did you pay off all three houses, or are they mortgaged? I'm guessing Bitcoins or Tesla stocks [emoji16].

i thought i was a big risk taker by investing in stock index funds all the way, but i will happily take my measely 12% annual

 

[unclemick]

27 years hand grenade wise, 1993 to now. lowest about 12k and highest 129k taxes included. Needless to say, with ups and downs included, portfolio did well overall.

Withdrawal rate ballpark 2% to 6% range - travel and remodel/house purchase in the 6% year.

heh heh heh - it hasn't been dull.

 

[Markola]

Made me look.



A very high level summary our investment income and spending since retiring in 2005:



Our 15 years of withdrawals equal 78% of our initial portfolio amount. Our portfolio is currently 20% larger than when we retired.



So far, so good...

Those results are terrific. I calculate a 5.2% average SWR. Seem about right?

 

[REWahoo]

Those results are terrific. I calculate a 5.2% average SWR. Seem about right?

5.2% average is correct. WR ranged from a high of 9.8% in 2007 (motorhome purchase) to a low of 3.5% in 2013 (both DW and I taking SS). This year may mark a new low thanks to no travel, around 3.3%.

Note that all percentages are based on the initial value of our portfolio back in 2005.

 

[pb4uski]

Made me look.

A very high level summary our investment income and spending since retiring in 2005:

Our 15 years of withdrawals equal 78% of our initial portfolio amount. Our portfolio is currently 20% larger than when we retired.

So far, so good...

And you made me look. Property is significantly higher due to purchase of winter condo and improvements thereto and replacing small 1-car garage with 2-car garage with finished bonus loft at summer home. Mortgage is paid off. Personal property (cars, boats, etc) are about the same. Portfolio is only a little higher, but paid for 8 years of retirement, paid off mortgage, paid for condo and improvements in cash and financed new garage. Net worth is 25% higher. Life is good.

	At retirement	Current	Change
Investments	89%	91%	2%
Real estate	18%	32%	14%
Personal property	3%	2%	0%
Mortgage	-9%	0%	9%
Other	0%	0%	0%
Net Worth	100%	125%	25%

 

[pb4uski]

...This year may mark a new low thanks to no travel, around 3.3%.

Note that all percentages are based on the initial value of our portfolio back in 2005.

+1 We seem to be spending a lot less... in fact I have skipped a couple monthly "paychecks" transfer because I didn't need to have that much money in our checking account.

 

[Souschef]

I retired in 2009, and rolled over my 401K into mutual funds. Dumb luck to pick a good one, because in the 11 years it is 5 times what it was in 2009.
Our normal expenditures are covered by our SS and pensions, and I use my RMD money to cover all our taxes, gifts to our 4 sons, and travel.
Life is good!

 

[Dash man]

Dash man, I dont know how you did it. paying for 3 homes and still triple net worth! did you pay off all three houses, or are they mortgaged? I'm guessing Bitcoins or Tesla stocks [emoji16].

i thought i was a big risk taker by investing in stock index funds all the way, but i will happily take my measely 12% annual

Well, I include the homes in our net worth. I don’t own Tesla, but MSFT, APPL, AMZN, ADP, SBUX, AVGO, CMG, BA, ABC and a few others all did well for us. I don’t do index funds. We also have a lot in dividend stocks. I’m no genius but have been fortunate picking good companies and recognizing when it’s time to bail. I sold BA at 310 though I should have sold sooner. I’ve been in and out of AMZN at times and bought back in when it was lower. ABC was our biggest success because of stock options, but sold large parts of our gains to diversify.

 

[Perryinva]

@retire52 -assuming you retired at age 52? With 13k in pensions! Plus SS in 10 years? Nice job, but I fear this thread is a bit too rarified for me.

 

[jeeper]

Made me look also. This format from rewahoo, thank you.

A very high level summary our investment income and spending since retiring in 2010:

Our 10 years of retirement withdrawals equal 70% of our initial portfolio amount. Our portfolio is currently 18% smaller than when we retired.


Paid off mortgage, student loan, motorhome purchase.



Holding off drawing Social Security until FRA... Maybe not such a good idea!

 

[RunningBum]

A little over 9 years of retirement. I've spent just over 32% of my investment net worth at retirement. That net worth is now about 41% higher. I think my tracking is consistent from year to year so the numbers are accurate. At most they shouldn't be more than a little bit off.

The one thing I probably do differently than most others is that I'm using "after tax" numbers on my net worth, so Roth conversions does not change (lower) my net worth except for being off on the tax estimates. I also don't include the taxes paid on conversions as part of spending, since I accounted for it with the "after tax" net worth adjustment. It makes a lot of sense to me because a Roth conversion is really a zero sum event after taxes are paid.

 

[GravitySucks]

Interesting excercise. Spent about 37% of the initial nut and almost 150% of it left at 7 and 1/2 years in.

 

[Winemaker]

I manage DM's money as well as my DW and myself. Since 2005, my mother's 401k, less all RMDS, is up 20% since then. Since she doesn't need the money, it has been placed in a brokerage account. That brokerage account is now 4x the amount of the original 401k.

As for DW and my accounts, we have been retired for almost 6 years, with withdrawal rates between 2 and 4.5% of the original amounts. Those, too, are up 20% since retirement, although they were down 20% back March/April when the pandemonium started.

I tracked expenses 5 years prior to retirement, and determined that we lived very well at the income we had while w*rking. So our plan was to exactly replace the salary income we received, hence the lower withdrawal rate of 2%. Once we were more comfortable with where we were, last year I withdrew 4.5%. I track the total withdrawals, and our total is still below the 4% plus inflation of the original nest egg.

 

[Retire52]

Well, I include the homes in our net worth. I don’t own Tesla, but MSFT, APPL, AMZN, ADP, SBUX, AVGO, CMG, BA, ABC and a few others all did well for us. I don’t do index funds. We also have a lot in dividend stocks. I’m no genius but have been fortunate picking good companies and recognizing when it’s time to bail. I sold BA at 310 though I should have sold sooner. I’ve been in and out of AMZN at times and bought back in when it was lower. ABC was our biggest success because of stock options, but sold large parts of our gains to diversify.

you have a knack for picking the winners and getting out-- heck, that's the holy grail of investing if you can pull it off. my crystal ball has proven to be too cloudy and trying to time when to pull out, too much of a crap shoot for me. glad though you had great results, and thanks for the clarification.

 

[Retire52]

@retire52 -assuming you retired at age 52? With 13k in pensions! Plus SS in 10 years? Nice job, but I fear this thread is a bit too rarified for me.

it is a misnomer. I retired at 48, over shot by 4 years due to blind luck--an unexpected promotion and raging bull market. I will get around to changing it to retire48 when I can figure out how to message the admin guys

thanks, the pensions stemmed from sticking to the Army 30 years and annuity income. with SSN to look forward to and DW pension to kick in 6 years , we are truely fortunate. as I've learned from following this forum, there are much bigger fish out here, but it's not the size of the fish, but the size of your nut in ratio to your appetite that matters. best of luck in growing your nest egg while controlling your expenses. as I found out, good things happen when you plan and execute well.

 

[Retire52]

Made me look also. This format from rewahoo, thank you.

A very high level summary our investment income and spending since retiring in 2010:

Our 10 years of retirement withdrawals equal 70% of our initial portfolio amount. Our portfolio is currently 18% smaller than when we retired.


Paid off mortgage, student loan, motorhome purchase.



Holding off drawing Social Security until FRA... Maybe not such a good idea!

Made me look also. This format from rewahoo, thank you.

A very high level summary our investment income and spending since retiring in 2010:

Our 10 years of retirement withdrawals equal 70% of our initial portfolio amount. Our portfolio is currently 18% smaller than when we retired.


Paid off mortgage, student loan, motorhome purchase.



Holding off drawing Social Security until FRA... Maybe not such a good idea!

well a 18% decrease to the nest egg, but at avg of a 7% WR, you're still beating the 4% standard as well as off setting nicely with a mortgage free home and a toy I have often thought about adding to my retirement. since DW and i are happy with our travel method of fly/drive and hotel stays. we did not relish our one RV rental experience where the RV parks we used were a bit unappealing, and we decided to steer clear of buying one. still haven't dropped the idea entirely.

with more than a decade to go for SSN decision, I follow the threads on when to claim closely and will decide when the time comes.

 

[Retire52]

A little over 9 years of retirement. I've spent just over 32% of my investment net worth at retirement. That net worth is now about 41% higher. I think my tracking is consistent from year to year so the numbers are accurate. At most they shouldn't be more than a little bit off.

The one thing I probably do differently than most others is that I'm using "after tax" numbers on my net worth, so Roth conversions does not change (lower) my net worth except for being off on the tax estimates. I also don't include the taxes paid on conversions as part of spending, since I accounted for it with the "after tax" net worth adjustment. It makes a lot of sense to me because a Roth conversion is really a zero sum event after taxes are paid.

congrats on growing your NW while living on it 9 years. another successful forum member.

I kept the tax in bc it was an emotional moment when I wrote the check and wanted to acknowledge my contributions to my favorite uncle [emoji16]

 

[Retire52]

Interesting excercise. Spent about 37% of the initial nut and almost 150% of it left at 7 and 1/2 years in.

you have managed to keep gravity at bay for 7+ years, poor joke but I'm a dad now so it is part of my DNA. I did find the view interesting as well and glad you have added to the discussion.

 

[Retire52]

I manage DM's money as well as my DW and myself. Since 2005, my mother's 401k, less all RMDS, is up 20% since then. Since she doesn't need the money, it has been placed in a brokerage account. That brokerage account is now 4x the amount of the original 401k.

As for DW and my accounts, we have been retired for almost 6 years, with withdrawal rates between 2 and 4.5% of the original amounts. Those, too, are up 20% since retirement, although they were down 20% back March/April when the pandemonium started.

I tracked expenses 5 years prior to retirement, and determined that we lived very well at the income we had while w*rking. So our plan was to exactly replace the salary income we received, hence the lower withdrawal rate of 2%. Once we were more comfortable with where we were, last year I withdrew 4.5%. I track the total withdrawals, and our total is still below the 4% plus inflation of the original nest egg.

I manage DM's money as well as my DW and myself. Since 2005, my mother's 401k, less all RMDS, is up 20% since then. Since she doesn't need the money, it has been placed in a brokerage account. That brokerage account is now 4x the amount of the original 401k.

As for DW and my accounts, we have been retired for almost 6 years, with withdrawal rates between 2 and 4.5% of the original amounts. Those, too, are up 20% since retirement, although they were down 20% back March/April when the pandemonium started.

I tracked expenses 5 years prior to retirement, and determined that we lived very well at the income we had while w*rking. So our plan was to exactly replace the salary income we received, hence the lower withdrawal rate of 2%. Once we were more comfortable with where we were, last year I withdrew 4.5%. I track the total withdrawals, and our total is still below the 4% plus inflation of the original nest egg.

nice job with your DM's retirement account. you are far exceeding the professional money managers, and I'm guessing not taking a chunk out of it to fund your yacht.

I'm tracking about where you and your DW are but you been doing it twice as long. we would be happy to keep things going at this rate and leave our kids with a nice surprise one of these days.

I also looked to see how we are doing compared to our peak working years income, and found we have more now monthly than when we were both working. it makes me do a little dance everytime I think about it. hah

 

[Winemaker]

nice job with your DM's retirement account. you are far exceeding the professional money managers, and I'm guessing not taking a chunk out of it to fund your yacht.

No yacht for me. Every now and then, even a garagiste makes a great barrel of wine.

DM turns 85 soon and is slowing down physically and mentally. The monies will go to her care, that's what it's there for. When the time comes, it will be split between me and my 3 siblings.

 

[dm]

I checked my net worth back in 2007 when I retired, it is now 75% higher than then. So I guess I’m doing alright, maybe need to spend a little more.

Now that I’m 63 I’m feeling much more comfortable on having enough. Back in 2008-2010 I was concerned.