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the part you don't get is a cola adjustment is not the same as your personal cost of living . like the last hew years. if you were not in debt or refinanced your cost of just about anything is up alot but the cpi based cola adjustments were not.
20k is nothing over 70 years.
take a look at what happened to those who retired in 1965 or 1966 and were met with not only 20 years of bad markets but then in a matter of a few short years got whacked with double diget inflation. they were paying 2x what they were for everything by the time inflation came down.cola adjustments were so far behind that most of that group ran out of money well before they ran out of time.
in my opinion you are severly underfunded but that is something we can't argue as time will be the judge of that.
i can assure you i will not be back to work unless i want to. my plan is as bullet proof as i could get it. at least when i retire i am leaving the gate pretty well prepared .
not working is all about the success of your safe withdrawal rate and income stream..
the less you need to pull to live and the greater your nest egg the more bullet proof the plan.
mr haskell has nooooooo nest egg to speak off . the income stream he does have has little margin for inflation and unexpected expenses and emergencies. throw in not a typical retirement time frame of 30-35 years but as much as 70 years of the unkown and it is not a successful looking situation.
it is really based more on hope than sound financial planning and hope is not a strategy.
i hope it works for him but like i said if i could bet the outcome i think i would be right.
You are hoping your plan works out. You cannot predict the future any better than I can. You are rather stuck on those boxes.
you don't try to rule out uncertainty , rather you plan for it.
the op is ruling it out thinking he has every expense covered and what else could possibly happen with little slack in his plan for more capital unless he works..
in fact he has not 30k in savings to last him 70 years but only 20k.
it is all about the odds. nothing is 100% but those are pretty crappy odds,
since i am a new yorker i can build a house to sandy construction standards and rest assured that at least i will be okay with the worst to date and then some.
but if i built my house to minimum 1960 standards there is a good chance i can be destroyed all to easily.
that is what planning is about.
it is about withstanding at least the worst combinations we have seen to date.
i think eddie should throw his plan into firecalc and see how his plan would have worked to date. if he failed the combinations of inflation,interest rates, market returns and market sequences in the past he has not allowed for uncertainty vs what he hopes to spend .
Last edited by mathjak107; 01-13-2014 at 03:27 AM..
take a look at what happened to those who retired in 1965 or 1966 and were met with not only 20 years of bad markets but then in a matter of a few short years got whacked with double diget inflation. they were paying 2x what they were for everything by the time inflation came down.cola adjustments were so far behind that most of that group ran out of money well before they ran out of time.
Would I have ran out of money? $7k x 2 = $14k.
Wouldn't reducing what I buy help to isolate me somewhat? Lets say I grow my own food, add solar panels as they become a more viable option, replace driving with biking, etc. Also, if the current structure of healthcare continues, as my income goes down, insurance costs also go down. Tax rate goes down, too.
it is all about the odds. nothing is 100% but those are pretty crappy odds,
since i am a new yorker i can build a house to sandy construction standards and rest assured that at least i will be okay with the worst to date and then some.
but if i built my house to minimum 1960 standards there is a good chance i can be destroyed all to easily.
that is what planning is about.
it is about withstanding at least the worst combinations we have seen to date.
lets just say you hit the lottary .. how is that for all your lets say's.
you can think all you want about what you could do and would do. when the taste of battle comes your views,reactions and thoughts will be very different.
but enough of this what if scenerios. you won't know a thing until you are living it.
ha ha ha . you should spend some time with sandy victims and see what that covered.
home insurance in retirement planning is called annuities.
annuities are used in combination with ones own portfolio to provide "insurance " of income stability through rough times.
as far as budget cuts ,just like corporations ,you reach a point there is nothing to cut and next step is a card board box under the bridge.
cost cutting only works until you hit bottom. that is why companies are judged on both profits and revenue. profits can come from cost cutting but can easily hit bottom.
lets just say you hit the lottary .. how is that for all your lets say's.
you can think all you want about what you could do and would do. when the taste of battle comes your views,reactions and thoughts will be very different.
but enough of this what if scenerios. you won't know a think until you are living it.
Well so far I'm a few years in and all smooth sailing...perhaps I can update the thread every 10 years or so?
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