Poll:Enjoyment vs Conservatism

[obgyn65]

To the OP : I am turning 49 this year, planning to FIRE hopefully this year with 50-year horizon.

Using a planned SWR around 3-3.5% in my calculations.

 

[aim-high]

To the OP : I am turning 49 this year, planning to FIRE hopefully this year with 50-year horizon.

Using a planned SWR around 3-3.5% in my calculations.

We'll be in the same class. What's your AA?

 

[daylatedollarshort]

Have you considered living some place low cost in Europe and covering your expenses with part time lap top work? If you live in Europe you can drive to different countries. Hiking is usually free and so is kayaking if you have your own gear, which you can buy used.

 

[aim-high]

Have you considered living some place low cost in Europe and covering your expenses with part time lap top work? If you live in Europe you can drive to different countries. Hiking is usually free and so is kayaking if you have your own gear, which you can buy used.

Not if I want to stay married.

 

[daylatedollarshort]

Not if I want to stay married.

Okay, second option - slow travel. Rent a flat or apartment in some central location like the south of France for extended periods. Rent is cheaper than hotels and you can cook most of your meals at home. Have a lock and leave, home base condo in a low cost of living area in the U.S.

 

[aim-high]

Okay, second option - slow travel. Rent a flat or apartment in some central location like the south of France for extended periods. Rent is cheaper than hotels and you can cook most of your meals at home. Have a lock and leave, home base condo in a low cost of living area in the U.S.

Mentioned the first half to DW and she thought that is a great idea! That way we could stay in Europe for a few months.

Where we settle in the US is going to be determined on where the kids land, as long as we're able to afford it. If not, your suggestion is a good one.

 

[jerome len]

My goal is not to worry about running out of money........and, have enough for emergencies as I get older. So, I don't even think about what % I'll take out......I look at how much I've got, will I still have enough if the stock market gives us a number of lean years, will I have enough if they raise taxes.......and after thinking about everything, the most important question is, "do I have to worry?". Since I have kids and grandkids, since a stroke could send me into a long term nursing home, I think about the unexpected. The good news is I've been lucky, always LBYM and saved, saved, saved. But I THINK I'll need less than 2% so I'll probably have a bit left even if I live a long time. My mother was a worrier and so am I.......I just don't want to run out of money and worry that I'm a burden on anyone when I'm in my 80's or 90's.

 

[obgyn65]

90%+ in CDs, munis, deferred annuities and similar conservative products in Europe.

We'll be in the same class. What's your AA?

 

[Live And Learn]

We don't have any pensions, and like you, I expect SS will cover 20% of my expenses at age 70. I will be starting with a WR of 3.25%, but I could potentially run out of money between age 90 and 95. I have a bit of fluff in my budget for healthcare for the two of us (30k/year to age 70 and 15k/year thereafter) so I'm hoping that will help extend the longevity of the portfolio.

FIRECalc gives me 100% to age 85 when I input only 80% of my portfolio value. There is a decent "smallest residual portfolio" that would probably last another 5 years. Fidelity RIP gives me a 10% risk of shortfall at age 85 using 80% of my portfolio, and 95 using my current portfolio.

Because of your projected longevity I voted start with 3%. I think you'll be just fine.

 

[daylatedollarshort]

Mentioned the first half to DW and she thought that is a great idea! That way we could stay in Europe for a few months.

Where we settle in the US is going to be determined on where the kids land, as long as we're able to afford it. If not, your suggestion is a good one.

If you Google the term digital nomad, you might get some additional ideas. Also, we watch House Hunters International for inspiration. There is a cool one on a couple with lap top jobs who rent an apartment in Cannes.

For years on the work forums I have hung out on there were younger guys doing lap top work and living on tropical islands or moving around the EU, saving lots of money by living in really inexpensive places like Croatia.

We aren't there yet, but once the kids are launched, we've gotten rid of decades of clutter and the house is sold, that could be us! It has been a blast just realizing we might be able to actually pull this off.

 

[kcowan]

saving lots of money by living in really inexpensive places like Croatia...

We spent three weeks in Croatia in 2012, and for sure, it is cheap for Europe. Almost like being at home. Lots of natural and historical things to see. The beaches are not great sand, but the Adriatic is just fine for swimming and kayaking. Some neat national parks. And island cities that are over 1000 years old. There is even a coliseum that is in better shape than the one in Rome.
Adriatic cruise - a set on Flickr

And of course great site-seeing and eating in Zagreb.

 

[38Chevy454]

3% is still rather conservative withdrawl, even for a 40+ year retirement. So I voted that as the option to allow you to do some fun activities and travel now while you have good health and desire to do them. As you said, if needed it can be cut back without a big sacrifice. You can also do some part-time work to supplement for those extra expenses for big trips.

It also comes down to your risk tolerance, if you can handle the bigger swings, then with more equities in your portfolio you can allow more flexibility in your plans. As you are aware, the biggest issue is your SS will be a small amount, and no pension or other defined benefit, so you are quite dependent on your savings being able to provide the bulk of your retirement income.

 

[Major Tom]

3% is still rather conservative withdrawl, even for a 40+ year retirement.

I wish I could convince myself of that. I could give myself a nice raise and some extra luxuries if I could increase my WR to 3%.

So if 3% is conservative, what do you call the folk on 2 and 2.5% WR's? Anally retentive?

 

[REWahoo]

So if 3% is conservative, what do you call the folk on 2 and 2.5% WR's? Portfolio retentive?

Portfolio retentive...

 

[Lsbcal]

I wish I could convince myself of that. I could give myself a nice raise and some extra luxuries if I could increase my WR to 3%.

So if 3% is conservative, what do you call the folk on 2 and 2.5% WR's? Anally retentive?

Probably richer then me.

I remember Joe Montana (49ers QB) was interviewed during the bull market in 2000. He said he "didn't do stocks". Well, if I had that kind of money I might not either.

Buffet probably could do handsomely on 0.1% SWR.

 

[jollystomper]

I'm fortunate to be getting a pension when I retire, and to make up the difference for our project expenses results in a SWR <2.0%. So we'll probably start with that for the first year, to get a handle on our actual expenses. If it turns out we are being too conservative, we'll happily increase the rate (and re-evaluate yearly).

 

[tuffshed]

I am in the (hopefully) class of 2015 when I will be 60. With two small pensions, a 3.5% WR would put me way above what I spend right now, and I do plenty of foreign and domestic traveling (albeit I do my own planning and get really good deals). I always planned on doing more travelling and sports (scuba, skiing, mtn biking, hiking) but then I would have more planning time and able to pull off more with less. I guess my vote would be 3.0% WR, maybe even 2.5% WR if I could pull it off, at least for a while till I see how my spending habits change. I'm pretty confident though since what got me to this pretty state of affairs has always been my (and DW) fiscally conservative spending habits.

 

[mickeyd]

Nothing in the poll options came close to our situation, so I'm sitting this one out.

Been retired (@ age 58) for 11 years and,( between DW and I) we have 6 income streams that have provided us with monthly cash that is currently more than our expenses.

Many folks talk about the cost of medical insurance. We have fortunately never had that problem as we were/are covered by tricare, and now Medicare/tricare for life. In November I will claim my SS benefits @ age 70. DW will drop her SS and claim her spousal benefits. We have enough in IRA/Roth/taxable accounts @ Vanguard to insure that we will have more than enough as long as we live.

It just took a simple plan, LBYM and execution of the plan.