How much does one need to retire? Not in actual dollars but multiples of annual expenses.

[audreyh1]

The link in post #37 shows of those who participated in the poll, 30% retired at 50-55 and 40% retired 56-60.

I shot for 25x and retired around 30x. Since always LBYM for my working life, I’m still working on expanding my spending and enjoying the ride.

And 15% retired before 50.

What may confuse some new forum readers is that those who’ve retired early decades ago, and are of course now way older, still post here to discuss retirement issues and share their experiences.

 

[Dtail]

This doesn't surprise me. There is much sense in having a large gap between FI and RE. A frugal, highly-compensated employee might reach FI in the sense of Mr. Money Mustache in his or her mid-30s, but for whatever reason, chooses to work full-time for another 20 years. To my earlier point, our actual age-of-retirement is often not much younger than the median American age of 61-62. So many factors conspire to make it so, even for folks of modest needs and surfeit of money.

What does surprise me, is that apparently most of the regular-posters on this Forum are of quite advanced years. Occasionally we get an update such as "Greetings! Last year, I retired at age 55, and now at 56 I feel great! I should have retired sooner!" ... this is fantastic. But such folks rarely engage in social commentary, investment-strategy debate, talk about EVs and so on. They make their triumphant updates, and disappear. The people who do post regularly about their next car purchase, or their approach to buying a house, or their thoughts on the S&P 500, tend to be 70+. Sure, these folks may have successfully retired 15-20 years ago, but now they've aged into the traditional "senior citizen" age-range.

A specific example is the unrelenting unanimity in choosing a taller vehicle, because supposedly it's easier to enter/exit them. And that modern "driver safety aids" are a must-have. And there I was, daydreaming that this might be the venue to bench-race dream sports cars, that we could never afford in our youth, but that now perhaps we can!

Well not driving a dream sports car, but nevertheless a sports car at age 65. I can still get in and out of it. lol

 

[Car-Guy]

Well not driving a dream sports car, but nevertheless a sports car at age 65. I can still get in and out of it. lol

I still love perforamnce cars. Drove Vettes for well over a decade (in my 50's to mid 60's) so I'm very familiar with the challenges of getting in and out. Switched to high performance SUV's in my mid 60's to early 70's and they were much easier to get in and out of but not very sexy or cool looking. (All SUV's look the same to me). Switched to high performance trucks a few years ago that look cool (IMO) but now the challenge is "climbing up and down" to get in and out. But once inside, the room and comfort are incredible.

 

[TheWizard]

Well not driving a dream sports car, but nevertheless a sports car at age 65. I can still get in and out of it. lol

Me too, and I'm 75!

 

[Car-Guy]

^^^^^Yes convertibles really help getting in and out.

 

[big-papa]

I read the article and downloaded the Excel file. I kept Piper's 1.6% real discount rate and $1,000,000 portfolio and made all income $0 and all expenses $40,000. Funded ratio for the 30 year retirement was 103%. So, very close to the 4% rule with a 1.6% discount rate.

I do like the Funded Ratio concept, especially for matching assets to spending over time.

I think that a tool for adjusting WR for future spending and income changes would be useful. And yes, I'm aware that you can do both of those in FireCalc.

It's only a coincidence that right now with 1.6% that it's close to the 4% rule. The 4% rule knows nothing about future returns and Mike's use of 1.6% is conservative if one actually has some sort of stock/bond allocation. I moved away from FireCalc long ago once I found out about amortization based methods. They inherently use estimated future returns for which there are many sources. Stocks' future returns haven't suddenly become deterministic but VPW's use of ~5% for stocks can be justified based on worldwide long term trends. Other sources, though, may do better in terms of keeping the year on year withdrawal noise down. Or one can use something simple like 1/CAPE as an estimate of future returns. Regardless of the source, one should always use the latest numbers before making a withdrawal. Nothing of course is guaranteed.

Bonds, even bond funds, are significantly more deterministic. If using a nominal bond fund, then the current SEC yield minus expected inflation over the time period roughly equal to the duration of the fund is a decent choice and helps reduce the noise in the withdrawals, at least the noise due to bonds. The main thing is that an amortization based method transforms the risk of prematurely running out of money that any SWR method has into variable withdrawals, any one of which might be too low to pay the bills. I'd personally rather scramble in a low withdrawal year (or mitigate it with an income floor of SS + a TIPS ladder).

Cheers.

 

[Fermion]

What may confuse some new forum readers is that those who’ve retired early decades ago, and are of course now way older, still post here to discuss retirement issues and share their experiences.

It confuses me and I am one of the ones who retired over a decade ago. Why, I remember when hard drives were only 1GB.

 

[MichaelB]

It confuses me and I am one of the ones who retired over a decade ago. Why, I remember when hard drives were only 1GB.

I remember the IBM 3350 hard drive for the S370. It had 300 MB and was about the size of a card table. A customer used it to play cards every Friday afternoon, including the CFO and controller. They invited me to join them one Friday. It was a Spanish card game called “truco” and involved a bottle of scotch and lots of swearing.

 

[TheWizard]

It confuses me and I am one of the ones who retired over a decade ago. Why, I remember when hard drives were only 1GB.

Hold on.
The PDP-11/55 I worked with in the mid 70s had hard drives with either 5 MB or 10 MB of storage.
It's been a while so I forget...

 

[Max Valerion]

I'm here to discuss ideas and provide useful information to the extent I can. Certainly you're free to discuss whether a 4% withdrawal rate and SS will see most people from age 70 through the rest of their lives given the likely contingencies. In fact, I would say that, if we accept Bengen and the Trinity study, you are probably right that it will. And I think a fairly large number of people here would say the same thing. The issue is that you want "a debate" and for someone to declare you the winner. Since I just did that, what more do you want?

I don't know all I've discussed a lot of things on a lot of forums over the years but this is the only one where I seem to have issues communicating with people. I don't know what I'm doing wrong here but everyone seems to be offended at things that I say. All I can say is sorry to all of you and politely move along.

 

[TheWizard]

I don't know all I've discussed a lot of things on a lot of forums over the years but this is the only one where I seem to have issues communicating with people. I don't know what I'm doing wrong here but everyone seems to be offended at things that I say. All I can say is sorry to all of you and politely move along.

Nobody's offended.
You're making that up...

 

[LARS]

Nobody's offended.
You're making that up...

And now you’re offended at his being offended. Clearly Max V has a point…

 

[Handymike]

I wish we could have done the mega Roth thing for about 15 years before we retired. Only have about $350k in Roths now and I don't think that would generate $80k unless I put it in bitcoin.

We have about $600k in combined ROTHs. I have about 25 different issues, wife has about 35. All good to great dividend producers. I get about $3000 per mo. average in dividends, wife gets about $4000 per mo., all ROTH so no taxes. Hope this helps.
Mike

 

[Dtail]

We have about $600k in combined ROTHs. I have about 25 different issues, wife has about 35. All good to great dividend producers. I get about $3000 per mo. average in dividends, wife gets about $4000 per mo., all ROTH so no taxes. Hope this helps.
Mike

So if you are spending the dividend income, doesn't the value of the Roth accounts start to decrease?

 

[APP01]

^^^^^Yes convertibles really help getting in and out.

Agree 100% on the convertible. My wife has a 62 vette and the top is down all summer. If I try to get into it with the convertible top up, or hardtop on, it is a total pain. I have twisted my back a few times.

Now getting into my drag car it even worse with the roll cage.

 

[ShokWaveRider]

And now you’re offended at his being offended. Clearly Max V has a point…

Sticks and stones and all that. I am British, raised in the UK when it was normal (Not like it and Europe is today), typically we do not get offended that easily, unlike others. We grew up harassing each other, it was a hobby. It does amaze me how easily some folks get offended, especially with colorful language. Makes me wonder if they grew up in a bubble. I would get offended if someone tries to hurt me or brandishes a weapon of any kind in my general vicinity, but then I would just keep out of their way.

 

[Handymike]

So if you are spending the dividend income, doesn't the value of the Roth accounts start to decrease?

So far we are not spending anything from our dividend income from our ROTH accounts, our combined SSA payments cover all of our ongoing expenses including eating out several times per week, in country trips and vacations, personal hobby expenses. We reinvest all our ROTH income into additional shares of our current holdings or sometimes add new issues, very rarely sell any issues. If we were taking the income from dividends in ROTH the accounts would remain the same, just not grow as quickly in value.
Hope this answers your question
Mike

 

[Fermion]

I mean we have accounts with $600k that are growing at $80k a year (or more!) that are just invested in S&P500 but I don't consider that a SWR for that level of money. One of these days the S&P500 is going to stop returning 15% a year.

 

[reneeh63]

Well not driving a dream sports car, but nevertheless a sports car at age 65. I can still get in and out of it. lol

Ha - yes, my 2005 RX-8 has a clearance of less than 5" and when I started having issues getting in and out of it I began doing some extra back stretches. Good thing it worked because I wouldn't want to give that car up!

 

[Handymike]

I mean we have accounts with $600k that are growing at $80k a year (or more!) that are just invested in S&P500 but I don't consider that a SWR for that level of money. One of these days the S&P500 is going to stop returning 15% a year.

Were you responding to my post? If so, the $80k I mentioned is cash dividends paid to us every year, we get growth in value in virtually all the issues as their business grow and make profits. We are dividend investors and have been getting 9-15% dividends on our holdings for about 13 years now. Couple down years in there but since we don't rely on our investment income to live our lives it doesn't affect us the same way that it would if we really needed that income for our lifestyle.
Mike

 

[Fermion]

Were you responding to my post? If so, the $80k I mentioned is cash dividends paid to us every year, we get growth in value in virtually all the issues as their business grow and make profits. We are dividend investors and have been getting 9-15% dividends on our holdings for about 13 years now. Couple down years in there but since we don't rely on our investment income to live our lives it doesn't affect us the same way that it would if we really needed that income for our lifestyle.
Mike

Yeah I get that and I like the idea of dividends, but really it isn't that much different from a non dividend company, growing 30%, stock splitting, you sell off 15% and treat it like cash, yet you still have a growth of shares. I probably have a mix of both in my S&P500 index but I haven't really checked closely.

 

[Max Valerion]

Sticks and stones and all that. I am British, raised in the UK when it was normal (Not like it and Europe is today), typically we do not get offended that easily, unlike others. We grew up harassing each other, it was a hobby. It does amaze me how easily some folks get offended, especially with colorful language. Makes me wonder if they grew up in a bubble. I would get offended if someone tries to hurt me or brandishes a weapon of any kind in my general vicinity, but then I would just keep out of their way.

You guys don't get it at all. Most of you come off as cocky, incredibly wealthy people that like to flaunt it and look down on everyone else. Not everyone wants to fly first class and toss their cars away every year and have $4,000,000.00 set aside just in case we need top of the line private nursing care at some point. Some of us just want to stop working and are willing to live a simple life. Every time I politely ask for advice on how to do that I get accosted with a bunch of reasons why I can't do that. If that is the perception you want people to have of you then by all means keep it up. That is how I perceive a good majority of the people I have interacted with on this forum - most but certainly not all. I am out at this point and I wish all of you and your piles of excess cash the best.

 

[Al18]

Max,
I've never seen the type of behavior you are describing, and I've been a regular member here for 12 years.

 

[TheWizard]

You guys don't get it at all. Most of you come off as cocky, incredibly wealthy people that like to flaunt it and look down on everyone else. Not everyone wants to fly first class and toss their cars away every year and have $4,000,000.00 set aside just in case we need top of the line private nursing care at some point. Some of us just want to stop working and are willing to live a simple life. Every time I politely ask for advice on how to do that I get accosted with a bunch of reasons why I can't do that. If that is the perception you want people to have of you then by all means keep it up. That is how I perceive a good majority of the people I have interacted with on this forum - most but certainly not all. I am out at this point and I wish all of you and your piles of excess cash the best.

So, goodbye...

 

[TheWizard]

Max,
I've never seen the type of behavior you are describing, and I've been a regular member here for 12 years.

Me neither...
*shrug*