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Old 12-18-2016, 02:50 AM
 
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when you look at the leading indicators for 2016 they all looked pretty good for a decent year even though markets were down . pe's were lower , profits were high ,market pessimism was high and bond rates were falling .

it took a while to work through but the building blocks were all there .

the start of 2017 looks just the opposite . the building blocks are not there and have not falling but rising bond rates . they have seen the equivalent of 4 fed tightening's in 3 months so far . we maybe running on a wish that is likely to be nothing but a puff of smoke about the new presidents plans .

if you were running a conservative model in 2016 and didn't catch all the gains there is a good chance 2017 may be the year you catch up and end up at the same average return but with less peaks and valleys unless you are a good market timer .
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Old 12-22-2016, 01:40 PM
 
Location: Pennsylvania
12,460 posts, read 4,213,163 times
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Quote:
Originally Posted by FeelinLow View Post
I have no savings, no retirement anything, lost all during the recession. I work a part-time job and just filed for early SS. We get by.
What are you worrying about? No offense meant, but how much money does a person really need to survive and be happy?
If I had a bunch of money, which I don't obviously, I'd be giving it away to help a lot of hungry people. That's MHO.


Good posting.
Repped you.
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Old 01-27-2017, 05:26 PM
 
341 posts, read 170,801 times
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Quote:
Originally Posted by FREE866 View Post
I'm just under 1.1 million....Calendar year 2015 net expenses were $42,000 and calendar year 2016 expenses will be $35,000
I appreciate all the comments on this thread. I initially assumed with firecalc saying 98% success most of you would say "go for it" so I am surprised there are many suggesting not to pull the plug, but that's fine....
As I might have mentioned I've been selling for almost 30 years and been at the same company for almost 12. I'm just done. I know myself. I'm def done with corporate America. That doesn't mean after 6 months I won't consider doing something that brings in more income, but man the idea of just "not working" for a bit and doing things I truly enjoy is something I really look forward to!
If firecalc says 98% success rate and you ran the numbers in the Fidelity Planner and the number is at 100 or more you should be fine. I use those sites all the time to review and recalculate our numbers.

One advice a relative gave me years ago was to not wait too long to retire. If you can retire at age 50 and your financial numbers look good for 25+ years you should be fine with expenses around 40,000 or less. Your expenses are very low for New York city.

My only advice is to always have a plan B in case things change that you cannot predict or control. Like healthcare and the costs of the ACA. You have to allow for extreme changes in order to survive. Or you could work a part time job that you enjoy if things change down the road to make a small salary. Or you could move to a lower COL area. You have so many options if things change.

We are retiring this year and planned to use the ACA subsidies to get us through until age 65. Well, we know how that worked out. Plan B -- I just made sure to budget financially for the full premiums until we reach Medicare age. Plan C -- We can work part time if something happens.

I never knew being retired was deemed to be a negative thing but we call it "Moving to our Next Chapter". Can't wait to go hiking, camping, cycling, and traveling across the US. Like you, we have low expenses and most of our hobbies are free or low cost.

If you want more positive like minded feedback there are some other forums you can visit.

Early Retirement & Financial Independence Community

https://www.bogleheads.org/forum/index.php

Life is too short. Enjoy it while you are young and in good health.
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Old 01-31-2017, 04:27 PM
 
761 posts, read 637,452 times
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For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 0 cycles failed, for a success rate of 100.0%.

Guess I should be ok.
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Old 01-31-2017, 04:33 PM
 
Location: Central IL
15,201 posts, read 8,509,345 times
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Quote:
Originally Posted by elliotgb View Post
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 0 cycles failed, for a success rate of 100.0%.

Guess I should be ok.
As long as your inputs are accurate - for example that you've estimated your needs/expenses accurately, put in your portfolio mix and not relied on some general "placeholder", etc. I'm sure some people lowball their expenses and then everything looks rosy or find out their returns are overly optimistic because they ended up not being able to stomach the percentage of equities to bonds, etc.
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Old 02-01-2017, 06:34 AM
 
341 posts, read 170,801 times
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Quote:
Originally Posted by reneeh63 View Post
As long as your inputs are accurate - for example that you've estimated your needs/expenses accurately, put in your portfolio mix and not relied on some general "placeholder", etc. I'm sure some people lowball their expenses and then everything looks rosy or find out their returns are overly optimistic because they ended up not being able to stomach the percentage of equities to bonds, etc.
I agree the numbers you input need to be accurate. In our situation I ran the retirement numbers through firecalc, Fidelity and Quicken to make sure our retirement dollars would get us through the estimated number of years in retirement.

Most people have no idea what their true expenses are and are usually unprepared at how much they spend annually. I set us up as a company in Quicken two years ago to track our budget and expenses. We are very conservative but I was shocked at our expenses. This allowed us a true picture of where our money went and where we needed to cut back before retirement. I suggest everyone do this years before retirement to prepare for a more seamless and less painful transition. Even if you use an excel spreadsheet or app.
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Old 02-01-2017, 07:07 AM
 
Location: Location: Happy Place
3,685 posts, read 1,864,831 times
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With 30yrs/6mo of Fed time, I will retire in Dec 2017.

Between SS and my pensions, I will bring home $700 more when I retire.

Good spot to be in!
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Old 02-01-2017, 07:37 AM
 
6,875 posts, read 7,270,643 times
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I must have picked the wrong career, because my Soc. Sec and pension won't be more than I made while working. So such luck. Enough to live on and not be too worried about it? Sure. But more than my highest salary? Not even close.
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Old 02-01-2017, 07:49 AM
 
Location: Atlanta
5,628 posts, read 4,220,455 times
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Quote:
Originally Posted by selhars View Post
I must have picked the wrong career, because my Soc. Sec and pension won't be more than I made while working. So such luck. Enough to live on and not be too worried about it? Sure. But more than my highest salary? Not even close.
ditto.. but cheers to those who do!!!

I don't expect to need/want more when i retire.. mayhap i will
i will have no mortgage or rent.. no car bill, no loans or debt.. just need enough $ to live on and i expect to have that plus some to splurge, travel a bit.. do things i enjoy doing.. I wont be living a lifestyle of the rich and famous but i wont be going hungry either...
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Old 02-04-2017, 02:13 AM
 
71,469 posts, read 71,652,652 times
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Quote:
Originally Posted by reneeh63 View Post
As long as your inputs are accurate - for example that you've estimated your needs/expenses accurately, put in your portfolio mix and not relied on some general "placeholder", etc. I'm sure some people lowball their expenses and then everything looks rosy or find out their returns are overly optimistic because they ended up not being able to stomach the percentage of equities to bonds, etc.
the input numbers are really not crucial to stress test the max the portfolio can sustain .. in fact any income numbers you put in are subtracted out and the balance is what is stress tested . if you just keep upping the spending box with no actual expenses entered the portfolio is stress tested for maximum safe income . .

i never enter expenses in firecalc . i just stress test what i can pull as a max from the portfolio . i just keep upping the draw until the portfolio fails and then that is my portfolio side draw limit .

i add that amount to my other income ,social security ,etc and that sets the bar for spending .

whether your total income can support your lifestyle really is a separate issue from stress testing your maximum draw from the portfolio . you can project your expenses outside of firecalc and the results will be the same . in fact it may be a better idea to run your expense side elsewhere in something more sophisticated in the way it handles inflation adjusting expenses .

don't forget by default firecalc does not figure the fact healthcare or long term care costs run way way more then the general inflation figure .

fidelity's planner considers that fact and adjusts healthcare costs by 5.50% and long term care costs by the same . they recently brought the healthcare costs down to 5.50% from the 7% they were running . firecalc does none of that by default .

firecalc and the fidelity planner give you a place to add up expenses but those expenses have nothing to do with the actual portfolio stress testing . the max draw from your portfolio will stay the same regardless of what your expenses are.


so for those having a hard time following here is an example of how i would arrive at the total budget in a hypothetical situation . .

first i added up our non discretionary expenses , those we have little to no say in . .lets say it is 45k a year . we doubled that amount to include all discretionary spending as a rough budget . things like food ,cloths ,trips ,gifts , membership to non essential things , car , etc .

in retirement we found the discretionary side can be as big as we can go and even beyond budget since we can easily exceed what we have available with just travel
so the 50% discretionary budget gives us enough slack to cut back if markets crap the bed . if you find you have little discretionary spending be careful investing in stocks . you have little to cut back when the whole budget is pretty much needs and not wants .

so now we add up all our income like social security ,pension ,rentals ,annuity ,etc . lets us say it is 50k . so we take our 90k budget and subtract the 50k , that leaves 40k that has to come from the portfolio . if we take the 40k and multiply it by 25 we see we need a ballpark of 1 million to safely draw 4% in the laboratory with no human intervention .

that 40k is actually what the planners stress test . they check to see if your 40k and amount of years you are figuring would have survived the worst of the past using the investments and allocations you intend to ..

it is only that 40k draw that the planners are really interested in or whatever amount you enter as your income draw .

in fact you can just see the results of stress testing right on a chart like this . 90% success is the min .

whether you enter your expenses or not , just based on what the maximum your portfolio can spin off would be pretty close to these numbers . firecalc goes back to 1871 while most claculators start with the trinity data set in 1926 .


Last edited by mathjak107; 02-04-2017 at 03:16 AM..
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