Poll: What was NW/Yr. Exp. ratio when you retired?

[Ronstar]

My portfolio ratio was 36 when I retired 2 months ago. I've been giving a lot of thought lately as to the ratio and how that number should weigh in establishing one's AA. It seems to me that the higher the ratio the less volatile of a portfolio one should have. I don't want to call this market timing, but it seems to me that more equities should be converted to cash, etc as the ratio climbs. I think going forward I'll adjust my AA using my age and ratio as guidelines.

 

[prototype]

Wow, so many people are over 35! I feel like I am doomed to retirement poverty (J/K) I did a quick guesstimate, and was about 25. So I selected 21-25.

Actually my ER just really cost me the dream (and hassle possibly) of owning summer and winter homes.

I have reasonable non-Cola'ed pension and SS coming soon. Neither of those I factored in. So I guess I'm OK (or so says Firecalc, other calculators, and Vanguard's FinacialPlan results).

 

[daylatedollarshort]

My portfolio ratio was 36 when I retired 2 months ago. I've been giving a lot of thought lately as to the ratio and how that number should weigh in establishing one's AA. It seems to me that the higher the ratio the less volatile of a portfolio one should have. I don't want to call this market timing, but it seems to me that more equities should be converted to cash, etc as the ratio climbs. I think going forward I'll adjust my AA using my age and ratio as guidelines.

We decided we are good with capital preservation, or a return of 0 - 1 real, going forward. Our pensions and SS should be more than enough to live a nice life, so why take chances with the rest. Plus we both have part time work I don't include in the plan.

The Fidelity RIP shows us at age 100 with a decent nest egg using our current AA / conservative portfolio, yet they still recommended much more equities. When I looked at the worst year performance of their recommended growth portfolio, based on historical returns, we could lose 52.93% of our portfolio in a single year early on in retirement, or over half our life savings. I don't really see any advantage to us in taking on that level of risk.

Added -
When I use RIP I use a flat annual expenses in today's dollars, keeping in mind what normal people actually spend based on the Consumer Expenditure Survey, and not Fidelity's much higher projected expenses.

 

[photoguy]

We were planning for 33x (3% w.r.) but ended up overshooting and are at 47x. This is based on projected expenses as we are still in the first year. Putting on my analytical cap, I think 47x is too high and we should increase some spending, but I think at least initially we'll keep it low until we feel comfortable.

 

[wmc1000]

with 2 years of semi-retirement to go before full ER we are at 11 excluding an annuity, (i know that is a dirty word to most!), and projected SS.

When Annuity and SS streams kick in, (even cutting SS by 25% in 2032), our WR will be less than zero.

 

[NW-Bound]

I have reasonable non-Cola'ed pension and SS coming soon. Neither of those I factored in...

The poll could have asked about the WR that retirees use to supplement whatever retirement income they have.

Many people like myself are still a few years from SS, but chose not to account for it. When we get there, it's like getting a lot of extra gravy. Hope I will last a few years to enjoy it.

 

[Live And Learn]

Here's my story.

No spreadsheet, no expense projections for me. Expense tracking with Quicken, after the fact mind you, shows that my expenses were 3.5% of invested accounts, dropping to 3.1% in the last 12 month periods. So far so good.

What if the market tumbles and crashes? If it persists and my WR stays consistently high and my accounts suffer significant shrinkage, I will make major lifestyle changes.

Isn't the whole point of the 3.1% WR that you would be able to weather market fluctuations and that you could continue to take the same "buying power" and make it to end of retirement ?

 

[Live And Learn]

These poll results are feeding my TMY (two more years !) syndrome. Assuming the market is flat until March 2015 which I plan to ER I'd be at 28 if I assume no income, 32 if I assume DHs part time income / social security.

 

[robnplunder]

These poll results are feeding my TMY (two more years !) syndrome. Assuming the market is flat until March 2015 which I plan to ER I'd be at 28 if I assume no income, 32 if I assume DHs part time income / social security.

Ditto. If I RE now, I will be in 16 - 20 camp. Still, FireCalc with Berneki box checked, I get 95% success result. TMY will bump me to 20+ crowd and will get 100% Firecalc result. I am a bit undecided on what to do (OMY, TMY, or RE now).

 

[Totoro]

Yes, results so far are not really encouraging for us in the gray zone and doubting what to do.

Am at x27 roughly right now with current lifestyle in a western country. Bit too nervous to jump straight off the cliff towards no income.

Then again, moving to Nepal would last me 70+ years.

Choices, inertia, and too much thinking ..

Oh well, back to house of cards season II

 

[wmc1000]

at x25 or greater before SS i would have jumped immediately - firecalc gives me a 100% success ratio at much less than that

 

[NW-Bound]

Isn't the whole point of the 3.1% WR that you would be able to weather market fluctuations and that you could continue to take the same "buying power" and make it to end of retirement ?

Yes, but you are talking to a perennial pessimist here.

What if an asteroid falls, not hitting my area (which would be the end of my life and worry), but the other side of the earth and causes a cataclysmic decline of worldwide economy?

 

[Totoro]

at x25 or greater before SS i would have jumped immediately - firecalc gives me a 100% success ratio at much less than that

Have a hopefully very long horizon at 34 years old, and quite worried about the current valuation levels in the stock market.

I am self-employed and taking it more slowly though. Might slip into retirement implicitly. Many variables too: might meet someone, have kids, get an inheritance doubling my assets or be disowned, ..

One thing I do know for certain: once I quit working in earnest I do not want to be forced back in a low level occupation.

 

[Totoro]

What if an asteroid falls, not hitting my area (which would be the end of my life and worry), but the other side of the earth and causes a cataclysmic decline of worldwide economy?

That uncertainty can better be hedged by building an underground shelter with 30+ years of food supply and marrying someone with field experience as an emergency medic

 

[NW-Bound]

One has to draw the line somewhere.

I chose to draw my line at 3.5% or less without SS, and by mental preparation of how to deal with catastrophes, by living in a motorhome parked in the forest and such (I have been taking notes of several limb chicken recipes posted here).

 

[Totoro]

My current definite line I've drawn at 3%.

Very curious whether I'll have the courage to follow through.