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Old 05-22-2015, 11:32 AM
 
Location: Idaho
1,454 posts, read 1,154,572 times
Reputation: 5487

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Wow,
I am very impressed that quite a few of posters have done as detailed budget and retirement planning as mathjak107. I took few accounting and economic courses both at undergrad and grad levels and quite good at math but never had the patience to do or maintain very detailed planning.

What I did to plan for my impending retirement was: 1) tally up the total annual expenses for each of the last 5 years or so. 2) review my annual financial spreadsheets (total assets, liabilities, net worth) 3) tally up our expected retirement income (mostly from SS with a small portion from tiny pensions). I then plugged these actual numbers and other sets of worst-case scenarios (unexpected expenses, increased discretionary spending for travelling, lost of 20-30% of our networth) in several online calculator along with our guestimated life expectancy (added 10 extra years to the age of our deceased parents).

When the results from several sources gave the assurance that we have zero chance of running out of our money even in the worst case scenarios, I thought I was good to retire. So financially, I am all set. However, mentally and emotionally, I am still not quite ready. I think preparing for retirement is a daunting task with so many things to do especially regarding relocation: deciding where to go, checking out various possible locations, deciding on how to downsize (get rid of everything or ship certain items), fixing up the house to get it ready for sale. I was kind of stressed out for a short time then decided just to take it easy and take the time to take care of these steps.

If I quit tomorrow, I will be inclined to spend my time fixing up the house myself. It's better for me to keep working and pay somebody else to do the work. I still find enjoyment and derive personal satisfaction from my job. In addition, my husband wants to hang around this area to finish/polish up his documentary film project (which we thought it would end this spring but now it may take anywhere from 3 to 9 months. His producer is a perfectionist!! She wants to win film festivals). I had thought I would retire by the end of this year but now it seems more likely to be a year from now.

Last edited by BellaDL; 05-22-2015 at 11:41 AM..
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Old 05-22-2015, 11:39 AM
 
71,550 posts, read 71,712,424 times
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i don't really consider it that deatailed planning. it really just amounts to " i made it to the end and i have this pile of money " what can i live on safely ?
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Old 05-22-2015, 11:48 AM
 
Location: Idaho
1,454 posts, read 1,154,572 times
Reputation: 5487
Quote:
Originally Posted by mathjak107 View Post
i don't really consider it that deatailed planning. it really just amounts to " i made it to the end and i have this pile of money " what can i live on safely ?
Mathjak107,
Geez, with all the figures and numbers that you have given, and you don't consider your financial plan detailed enough ;-)

I am pretty good with math and consider myself pretty educated in financial matter and yet my head spun few times in reading your posts containing incredible detailed financial information and advices. No wonder that you took the screen name mathjak107. I think it should be mathjak 007 ;-)
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Old 05-22-2015, 12:34 PM
 
48,516 posts, read 83,922,814 times
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There are so many variable such as healthcare cost before Medicare; to own home or leasing/renting; to the area COL; debt; to compare accurately. Healthcare cost alone is a huge consideration especially as we age. Securing it has best one can lowers a growing risk in retirement.
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Old 05-22-2015, 03:50 PM
 
71,550 posts, read 71,712,424 times
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Quote:
Originally Posted by BellaDL View Post
Mathjak107,
Geez, with all the figures and numbers that you have given, and you don't consider your financial plan detailed enough ;-)

I am pretty good with math and consider myself pretty educated in financial matter and yet my head spun few times in reading your posts containing incredible detailed financial information and advices. No wonder that you took the screen name mathjak107. I think it should be mathjak 007 ;-)
except i suck at math and it actually represents part of my first name. lol
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Old 05-22-2015, 03:55 PM
 
71,550 posts, read 71,712,424 times
Reputation: 49155
Quote:
Originally Posted by BellaDL View Post
Mathjak107,
Geez, with all the figures and numbers that you have given, and you don't consider your financial plan detailed enough ;-)

I am pretty good with math and consider myself pretty educated in financial matter and yet my head spun few times in reading your posts containing incredible detailed financial information and advices. No wonder that you took the screen name mathjak107. I think it should be mathjak 007 ;-)

playing the 2nd half of the game when we spend down has it's own rules , formulas and taxes which are very different than the first 1/2 when we accumulate money.

for those who count on their own portfolio's to support them to have that money stand a good chance of lasting 30 plus years takes an awful lot of assumptions.

the variables are your age and how long you will live ,the sequence of the gains and losses , market returns , interest rates and inflation.

juggling all of the above to get a ball park plan in place can be like putting a puzzle together.

i just find it easier to start at the spending level and work outward.

how much you need to have will depend entirely on how high of a success rate you want that income stream to have if you desired no spending changes.

Last edited by mathjak107; 05-22-2015 at 04:08 PM..
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Old 05-22-2015, 06:15 PM
 
6,620 posts, read 3,746,469 times
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The main helpful thing is a low cost lifestyle. If someone wants to spend whatever they want, or travel, they will need a lot more money than someone like me. I do not recommend retiring early for those w/o a pension, until you get to a point where Social Security and Medicare takes care of most of your needs. Then your retirement funds can ensure you lead a better lifestyle, since most of your basic needs are taken care of by SS & Medicare.

I semi-retired beg. of last year. (I worked temp/contract half the year last year; not doing that right now, since I'm in the midst of trying to fix up my house & move.)

I have no debt, including paid-off house.

I'm probably not comparable to many people, since I am frugal and live a simple life, both by design and by happenstance (my interests are not expensive).

I can live fine on a fairly low sum, compared to most, not counting special purchases and emergencies (new roof, new car, expensive house repair, etc.).

I am healthy as a horse, so no medical expenses, to speak of. This is by design. I live a healthy lifestyle, and RARELY eat at fast food places.

I have quite a bit of money saved up, but not the $1M that so many financial sites will tell you that you need.

I don't have a stream of income, as you put it. I do a "total return" portfolio for investment purposes. Currently, this throws off maybe half of my base annual needs. But I'm in the process of adding income holdings to get a stream of income. Dividends, preferred securities...not bonds right now (interest is too low). No TIPS or anything like that...interest too low. Maybe a little later.

I am 61, close to 62. I will wait a while before I claim Social Security. Not sure when. I expect the SS to meet about 3/4 of my annual income needs.

I am selling my house and moving "down," so will add about $30k-$40k to my retirement funds from that (I hope).

I plan on getting a part time job after I move, keeping the income down to where Social Security will not be affected, if that's possible.

There are special considerations relating to health insurance for early retirees, which I won't go into, since it's complicated. But if you want to ask me about this, I'll be happy to offer up info about that. The ACA threw a kink into everything for me and was a crisis.

With all these things in place, I should be fine. I've used all the retirement calculators on financial sites, as well as run amortization tables. Everything says I'll be fine, as long as I do the right things with investments. In the amortization tables, I have seen where I could run into trouble if I do certain things with investments, so I'm trying to set everything up so it's not that way, obviously. You can find such tables to alter to your specifications. If you want a link, let me know. I'll have to look it up and see if I still have the links. I saved the tables I altered for myself, but you would need the link to the site(s).

I will add that I am pretty frugal. More so than most. So that has been key. (I do not buy things that I may want, but which cost too much for a non-need; I clip coupons; I shop sales; if there are 2 products and the one in the color I like costs more, I buy the cheaper one in the color I don't like; I don't have a smartphone or a tablet, though I do have a state of the art laptop; I cut cable and do digital antennas for free instead, since I live in an area that has a lot of local stations; I have slow dsl internet, which works fine, even though I stream through my Roku; etc.) And having no debt. Still, I have expenses, and dogs who are getting old and have vet bills, and I go out to eat and to the movies with friends. So I'm not a hermit sitting in my house counting pennies.

I don't recommend retiring early, generally, though, unless there's something pressing you want to do, or unless you just hate what you're doing.
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Old 05-22-2015, 07:13 PM
 
Location: Near Manito
19,520 posts, read 20,900,729 times
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I had it all scoped, got my IRA and SS in order, paid off my mortgage, researched the Medicare supplements and got a good one, and was all set for the good life.

Then I discovered golf.
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Old 05-22-2015, 09:08 PM
 
Location: Grove City, Ohio
10,133 posts, read 12,383,606 times
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Starting two years ago, I was getting ready to turn 65, we estimated what our total retirement income would be, not counting on any withdrawals from any savings, should be at my FRA a little more than one year in the distance. We had social security for me along with two small pensions that totaled $3,367 and it was around this amount we modeled our retirement upon.

We could do it and live comfortably enough making all our bills but there wasn't a whole lot left once we set aside the $600 every month we would spend total on Medicare Part B, Supplements and Part D Pharmacy. We had worked "moving down" cutting the size of our house by half and having only one car. Well, one car and an electric golf cart which is street legal where we live.

We did OK on $2,767 which represented what we would be left with after Medicare. After paying property tax, property insurance, auto insurance, cost of driving 100 miles/week, internet, phones, cable television and household utilities we ended up with about $1,600 for food, entertainment and unforeseen expenses and repairs. I even had monthly pest exterminators and annual termite inspections in the budget and in the end we had $375/week set aside for food, clothing and entertainment.

We could have lived comfortably enough if we were homebodies but a homebody is something I never was. We had everything we needed but an annual trip to Vegas or a week long cruise in the Bahamas didn't happen and I want that too. Just because I am retired doesn't mean I am dead.

Part of what was hurting us at my FRA is my wife was a year and a half away from her FRA and I couldn't have her draw her ss early, just could not let that happen so I decided to work an extra year and a half at the end of which two things would happen; her social security would kick in allowing us an extra $900/month and by waiting my benefit would increase by $300/month giving us an extra $1,200/month bring our total retirement income to $3,967 after paying all our Medicare expenses.

At this point we would enjoy a $650/week set aside for food, clothing, entertainment and after livign the budget I am convinced we can live very well and do just about anything we want to do. $650/week gives us plenty $15,000/year to spend on things like vacations, cruises and trips to Vegas or wherever.

Now what I would like to do is work another year which would give me an extra $100/month... just in case.

What we have in savings we will withdraw and save the minimum when we have to leaving it for the surviving spouse.

Oh, and Medicare? I love it, we got Plan G and with that there isn't any surprises.
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Old 05-22-2015, 09:28 PM
 
6,253 posts, read 4,728,813 times
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I did a lot of preplanning including estimating expenses and estimating how much money we could pull from our retirement nest egg. It seemed income was not going to cover expenses. I calculated I needed to work until about age 70. Then I realized that I was not really getting ahead financially as much as just getting closer to the end of my life expectancy.

So we sold the house and retired right before the closing. We took off in an RV. Our expenses were very low compared with living in a high COL location. After a couple of years of retirement and travel, I was better off financially than I expected to be if I worked for 5 more years.

Being able to keep costs down at the start of retirement has a huge effect later on. It also helped to have good investment returns for those early years. Anyone who retires at the start of a downturn in investment returns needs to be very careful and cut expenses. You can plan as much as you want but retiring at the right time will be more important.
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