Just retired at 62 and I hope I saved enough??

[1-31-18]

Per data that I’ve seen, no equity drawdown of 50 percent has ever caused a retiree drawing thereafter at the 4 percent level to go broke.

So, at a 3 percent WR, you are good to go, Franklin, withdrawing about $250K pre-tax, assuming your port is no riskier than 50 percent equity (and assuming a worst-case equity drawdown of 50 percent). You might want to de-risk it to that point if you have more than 50 percent equity, and glide up from there. Mentioned only (but significantly) because the CAPE ratio exceeds 30.

I continue to work despite passing this test because I do cutting-edge work that is immensely rewarding and I control my working environment. Probably I will retire as we start to emerge from the next recession. That could be — oh, who knows? — three or four years from now. But I won’t retire even then if I am engaged in resolving a major insolvency, such as for example the deepening insolvency of the State of Illinois.

I realize that I could die before then. Not likely, but so what? I’ve been living a very rich life. People who aren’t fulfilled by their jobs have a very different outlook than I do. They should retire as soon as they can.

BTW, I’m a Franklin, too. Descended from Ben. A penny saved, early to bed, etc. Ben was FI in his 30s but did not RE, or at all. He was the oldest person to sign the United States Constitution. My kind of guy.

 

[Franklin]

Thanks

Thanks good feedback

 

[Elbata]

Just don't ask this over at The Bogleheads

 

[jim584672]

Think you need more.

 

[DrRoy]

You need to include taxes, medical, and sometimes the unexpected in your spending.

 

[Oz investor]

Franklin ,
i could live on your IRA alone ( being single and slightly older )

but i am frugal , and the opportunities to spend much in the next 3 years are heavily restricted ( allowing for some investment gains )

but the question is about you .. and you are concerned ( not always a bad thing )

wishing you good luck and good health

 

[foxfirev5]

If you're worried you might want to pickup a pt job at Home Depot. Only you know the answer.

 

[EastWest Gal]

This is nuts. You have way more than you need. Taxes will go down, but with that insane IRA, you’ll still be in a high tax bracket when RMDs kick in.

At $3.4K, FIRECalc says I need to spend about $120K/yr every year before there are any failures.

You should have quit last year. I envy your nest egg. But I’m glad most of mine is in after tax portfolio, 2/3 in stepped up basis from a rearrangement done 2015-16 when I wasn’t working.

 

[Scrapr]

Just don't ask this over at The Bogleheads

True. Financial portfolio not formatted correctly

 

[OldShooter]

I suggest that you start with one of National Geographic's "Around the world by private jet" trips. They run about $100K. Taking one of those should get you into the retirement frame of mind.

Congrats on your retirements and your assets!

 

[Franklin]

Thanks, I am so careful not to blow the $. First class is my limit but the Amex Private jet things sounds fun. It has taken me time to act retired. Learning day by day

 

[googily]

Also want to pass along my condolences about your brothers. DH was the oldest, and the effect of his death on his two younger brothers has been profound.

 

[Franklin]

no plan for HD but thanks

 

[Franklin]

how so? what is your estimate?

 

[REWahoo]

no plan for HD but thanks

how so? what is your estimate?

Franklin, unless you use the quotation button we have no idea what these posts are referring to.

 

[JustCurious]

while Franklin has a large amount of cash and low debt obligations , he MIGHT has a higher cost of living expectations...

Sure he could, but where does that end? Anyone can expect to spend any amount they want. So if he *expects* to spend $1 million dollars a year, you would say no, he is not able to retire? What if he had $50 million and he expected to spend $5 million a year? Is there any upside limit or some point at which most people would say enough is enough and you actually do have enough to retire, regardless of your pie in the sky spending expectations? Or am I just being naive?

 

[braumeister]

is there any upside limit or some point at which most people would say enough is enough and you actually do have enough to retire, regardless of your pie in the sky spending expectations?

As a matter of fact, we have a really good tool that is designed to do just that sort of calculation.

FIRECalc®: How long will your money last?

 

[Oz investor]

JustCurious,

when i was crunching my numbers back in 2015 ( my current situation makes that hobby near worthless )

i would use guesstimtes of expenditure biased to the high side as i think inflation will be a factor in 2020 ( and beyond )

yes i could always trim actual expenses a little , but my preference is for keeping well under budget and investing of saving any cash left over

others seem to be calculating future spending differently .

remember my parents were in the great depression and the days of rationing ( i still have some of the booklets so i know they didn't lie about that )

where you could only legally buy so much butter , or bread ( legally ) regardless of your personal wealth

that might never happen again ( in my life-time ) but what if it does

i was in my mid 20s ( 1970's) when inflation and lending rates were very high , and that could happen again , and several other nasty thing could happen in the next 20 years

 

[UnrealizedPotential]

I had the same thought. It just seemed strange to me that someone with such savvy to save this much would not be asking how can I enjoy my retirement not can I retire. It would be interesting and inspirational for us if posters who accumulate this much can share how they did it.

Probably a yearly income that was very, very high.

 

[Franklin]

Yes you are correct. However, I also took full advantage of company's match, full funding of retirement plan, deferred compensation, and always banked all bonuses. One $2MM windfall after selling company. Paid a lot in taxes and never got an invite to the WH. Ive only recently used a money manager but plan to nix that relationship and go it alone. ML seems to be making more than I am on my funds.

 

[dadu007]

BTW, if someone with $8.1M cannot retire, what hope do the rest of us have?

Exactly!

 

[Scratchy]

Obviously, 8.1 million dollars is a lot of money but due to your very high spending rate, this does not seem to be a slam dunk to me. In later years, to net $250,000 a year, you may have to withdraw $300,000 or more from your retirement accounts. So you were looking at a withdrawal rate of around 3.7%. Beginning at age 62, that is probably going to work out okay but not a sure thing. Of course, you presumably have the option - ability to decrease expenses and I assume Social Security will kick in and be another buffer zone. So clearly we can all rest comfortably that you will never be going hungry.

Have you use I-orp to model your withdrawal plan? You may be able to do some mega backdoor Roth conversions before rmds again.

I am curious what asset allocation you plan during your retirement?

Best wishes.

 

[Franklin]

Thanks Scratch. I agree it ain’t a slam dunk unless I can cut back in expenses. The model assumes I’ll double my spending in my 80’s and I doubt would happen. Per your recommendation I did run I orb and it was helpful. The wifey does not want to watch the expenses but I am frugal and keep tabs. I am gonna get hit hard on taxes when the RMD time comes. My mix for now is about 50/50 with the bonds in muni’s. I lost value in the bond funds when rates began to rise. My overall returns this year are flat at best.

 

[corn18]

Thanks Scratch. I agree it ain’t a slam dunk unless I can cut back in expenses. The model assumes I’ll double my spending in my 80’s and I doubt would happen. Per your recommendation I did run I orb and it was helpful. The wifey does not want to watch the expenses but I am frugal and keep tabs. I am gonna get hit hard on taxes when the RMD time comes. My mix for now is about 50/50 with the bonds in muni’s. I lost value in the bond funds when rates began to rise. My overall returns this year are flat at best.

Did iORP help with getting some of the tax deferred money over to Roth before RMD's? I'm about 50/50 as well and plan to retire at 55 and thought I was going to get slammed with taxes. iORP spit out a plan to get all my 401k into Roth before RMD's, but I have 7 more years to do it.

 

[Franklin]

I have not gone into that full detail yet. I like the IORP and plan to dig deeper. I have a financial advisor but have not mentioned this strategy yet. Is there a limit to the Roth conversion?