Does my "Winning the Game" math pass the sniff test?

[mrfeh]

I just added 10 years and go this. Still looking ok. Thanks for the charts.

You're probably ok, but don't have much margin for error.

I'd triple check your expenses before handing in a resignation letter.

 

[SecondCor521]

You're probably ok, but don't have much margin for error.

I'd triple check your expenses before handing in a resignation letter.

OP is solving for 95% success rate. They're getting that with a 40 year plan and $88K in annual spending compared to their actual spending of $60K - $65K, which also includes significant discretionary expenses. Oh, and a paid off home.

I think that's a lot of margin personally.

 

[mrfeh]

OP is solving for 95% success rate. They're getting that with a 40 year plan and $88K in annual spending compared to their actual spending of $60K - $65K, which also includes significant discretionary expenses. Oh, and a paid off home.

I think that's a lot of margin personally.

Which is why I said to triple check expenses. If that 60K becomes 80K, it could be dicey.

New cars? Replace the roof? Large OOP medical expenses?

Triple check.

 

[JohnnyPHX]

FYI we will have been retired for 2 years as of DEC 1 2025. We retired with just a little less than 1 Million at that time. Our discretionary includes 10k for vacations, 5K lumpy and 15k in misc like dining, BTD ect. We got most everything updated on the house before we pulled the plug. New doors, windows, central air, car patio front and rear. Roof is about 8 years old.

 

[Steelpony]

We have been fine tuning our 2026 budget with lots of padding for cost increases. We even added a 5k lumby expenses into the budget. Pretty sure we have everything covered in our budget as we have been doing them forever. We live a pretty modest lifestyle compared to a lot of people on here I think. We can live comfortably on 60k to 65K annually with close to half of that being in the discretionary category. This doesn't include our 450k paid for home which may be used for LTC needs way down the road. No kids to worry about leaving a nest egg to.
So I was just playing around with a 3 bucket strategy to kind of plan out where our moneys should maybe be allocated. Just kicking around numbers, nothing serious here. I did bucket 1 for the first 5 years at 65K annual spending each year, bucket two for the next 5 years at 75k spending each year and bucket three for 20 years at 90K spending each year. I had the spread sheet start deducting 49.5K annually for our Social Security starting at year 6 which is bucket 2. I tried to account for increasing cost by the spending increase and did not account for any increases in SS payments through the years. Again just playing with some numbers here because we can't really predict the future. So the total dollar amount needed to fill all three buckets was about 1.2 million. This happens to be about the same as our current retirement accounts balance. So other than accounting for the great unknowns ahead of us seems maybe "we won the game" or close enough where we could invest it all in safer assets than the stock market. Not planning on doing any big changes of course but perhaps getting a little less aggressive than our current 60/40 allocation?
So feel free to shoot holes in my very rough plan/idea. Does the math work? Is it close enough that I should sleep a little better at night?
View attachment 59960

We use a cousin of the bucket system:

1. 5-10% cash and near cash in this area. We have a muni fund on reinvestment currently to feed cash used like a faucet, on and off reinvestment. This fund yields 4% tax free at this time. Eyeballing a statement is much easier as we age. Using your total needed that would be about $120k minus 1year cash with the balance in the muni, on or off. This should always provide a return near or above inflation.

2. We’re income investors and live off of this section and SS. I don’t know if I can help you here. It looks like half or more of your balance would be here. Ours is about half at this time. It all depends on lifestyle, investing limits etc. we make a lot because we are comfortable with risk.

3. Probably about half here also. That would roughly work out for you to be 45/45/10 to start. We don’t allocate or rebalance. Excess to needs income goes where we need it or the best sale at the time. Never ever long in just cash.

So there’s many variables. We just work with a compound calculator and a blant online tax form. I skip the charts, daily noise, and all the blah, blah, blah. Eyeball everything monthly and quarterly and adjust when needed. Throughly check my assumptions yearly.

Having been through 2 retirements with 2 sets of parents up to 37 years #3 should be set up to reach at least 1 mil. We have VTI on reinvestment as an untouchable set aside for that. We hold 1 equity ETF then, 1 municipal bond fund, 2 REITS and 14 closed end funds. So 18 holdings.

 

[FREE866]

Interesting thread. I find once I go into FIRECALC it almost becomes addictive haha. Just spent the last hour playing with different numbers. I'm 59 , retired almost 9 years. Portfolio has more than doubled after expenses. Not bragging, but it's just incredible . I need to start spending more money or giving to charitable organizations. I'm so damn grateful!

 

[mrfeh]

Interesting thread. I find once I go into FIRECALC it almost becomes addictive haha. Just spent the last hour playing with different numbers. I'm 59 , retired almost 9 years. Portfolio has more than doubled after expenses. Not bragging, but it's just incredible . I need to start spending more money or giving to charitable organizations. I'm so damn grateful!

9 years ago was a great time to retire. The next 9 years? Who knows...

 

[joejetski]

FYI we will have been retired for 2 years as of DEC 1 2025. We retired with just a little less than 1 Million at that time. Our discretionary includes 10k for vacations, 5K lumpy and 15k in misc like dining, BTD ect. We got most everything updated on the house before we pulled the plug. New doors, windows, central air, car patio front and rear. Roof is about 8 years old.

That is my plan, updating while working. Pulling the plug in early 27 after the final upgrades are done. Mine is a bit different situation. Second marriage, both Feds so 2 pensions, 2 SS, and about 2.5 million (projected) assets starting my retirement in 2027. Carrying a 2.5% mortgage till she retires, then selling and moving to a LCOL area south of the DC Metro area. DW will follow 4 years later and we will delay her pension till 62.

 

[Semi-Retyrd]

We have been fine tuning our 2026 budget with lots of padding for cost increases. We even added a 5k lumby expenses into the budget. Pretty sure we have everything covered in our budget as we have been doing them forever. We live a pretty modest lifestyle compared to a lot of people on here I think. We can live comfortably on 60k to 65K annually with close to half of that being in the discretionary category. This doesn't include our 450k paid for home which may be used for LTC needs way down the road. No kids to worry about leaving a nest egg to.
So I was just playing around with a 3 bucket strategy to kind of plan out where our moneys should maybe be allocated. Just kicking around numbers, nothing serious here. I did bucket 1 for the first 5 years at 65K annual spending each year, bucket two for the next 5 years at 75k spending each year and bucket three for 20 years at 90K spending each year. I had the spread sheet start deducting 49.5K annually for our Social Security starting at year 6 which is bucket 2. I tried to account for increasing cost by the spending increase and did not account for any increases in SS payments through the years. Again just playing with some numbers here because we can't really predict the future. So the total dollar amount needed to fill all three buckets was about 1.2 million. This happens to be about the same as our current retirement accounts balance. So other than accounting for the great unknowns ahead of us seems maybe "we won the game" or close enough where we could invest it all in safer assets than the stock market. Not planning on doing any big changes of course but perhaps getting a little less aggressive than our current 60/40 allocation?
So feel free to shoot holes in my very rough plan/idea. Does the math work? Is it close enough that I should sleep a little better at night?
View attachment 59960

IMO there is a reason why most pension and endowment funds place around 20% or more of their portfolios in alternative investments. They do it to reduce risk via diversification as well as increasing total return. To learn more I suggest you read all of my thread "Why I like certain alternative investments" in the Active Investing forum.
Then I suggest you consider allocating 20-30% of bucket 3 to QLENX and all of bucket 2 to EGRIX or EGRAX. You should monitor these maybe once a quarter to see that they stay on track. I will post if I think one is going off the rails with a suggested replacement.
The above comments are opinion and not financial advice. You must do your own research before investing.