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Old 12-12-2016, 09:00 AM
 
77 posts, read 70,310 times
Reputation: 88

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Quote:
Originally Posted by FREE866 View Post
I'm 50.
My plan has baked in me taking SS when I'm 70.
Not to butt in, but why would you be thinking of retiring at 50?
That's very early. You are most fortunate to have worked it
out to be able to live in The City ion the prime of life. There
must have been sacrifices.
My opinion, you are asking the wrong questions, entertaining
the wrong options. For most of us, retirement is the dead end,
the end of the line. No, get a grip, get a new outlook, and
take the retirement option off the table. As a matter of fact,
advisors suggest never calling yourself retired on your
resumes or correspondence. That's because most active people
consider retirees useless. And, they are right.
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Old 12-12-2016, 09:09 AM
 
Location: SoCal
13,189 posts, read 6,301,958 times
Reputation: 9808
Quote:
Originally Posted by FREE866 View Post
Couple things...
you said the 25x expenses being for 30 years. But what about the fact that I will have SS kicking in in 20 years?
not owning my home is actually a major plus as I don't have to have unplanned expenses hit me. No car payments, no capital expenditures on a home, no education costs...my situation is unique in that way....
And yes NYC is expensive if you eat most of your meals out, and spend 100's a month on overpriced Broadway shows and take cabs everywhere.....

and hahaha on FIRECALC....I hear you....
I take these calculators with a bit skepticism, just in case I'm wrong. Who am I to blame years down later? No one.
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Old 12-12-2016, 09:18 AM
 
Location: RVA
2,164 posts, read 1,264,175 times
Reputation: 4451
Everyone that has worked and can amass 25x expenses gets SS. That is always assumed, and not an added bonus. A home is (or should/could be) a long term investment, and is not included in the 25x calculation. For many, it is their LTC policy if needed. A pension is different and a bonus. Also, and though you don't specify, but based on your answers, your 25x sounds as if it is for a lower income in NYC. 25x for someone living and making $250k is a totally different ballpark than 25x for someone living frugally in rent controlled that made $45k a year. Yet, based on living expenses inputed, FIREcalc will give the exact same answer. A unique situation has an annoying habit of blowing up when least expected. That's why they are unique.

Someone with a 25x of $3M invested has a lot more options to downsize, relocate, etc and handle major market upsets than someone with a 25x of $1M. Not denigrating or being a debbie downer here. Just pointing out possibilities and scenarios. Lots do it on less, but times are not what they used to be. If you hate your job so much that you absolutely have to leave asap at 50, then find a vocation you enjoy, now that saving is not the top priority. If you just don't want to work at all, regardless, then you will find that you are working harder to just live, on a fixed income. Do you want to be working that hard to survive at 80, because you didn't want to work at 50? I work at something I enjoy, and am planning my retirement in 3 years not so that I can "make it", bit make it with no worries and comfortably with options. To each their own of course.
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Old 12-12-2016, 10:02 AM
 
Location: NE Mississippi
13,632 posts, read 8,554,879 times
Reputation: 19842
Quote:
Originally Posted by Listener2307
We were just talking about a friend we have who retired with a similar amount in 1988.
Dead broke now. The only thing that saves him is the fact that his wife is still working.
Quote:
Originally Posted by FREE866 View Post
Interesting. I'm pretty sure FIRECALC and Fidelity's calculator was created in the last 10-20 years..

can you give me a little more specific information on your friends financial picture from 28 years ago?
Sure, as best I can:

He was with AT&T. In 1988 AT&T offered a buyout plan. It was a cash payout that replaced the pension plan. Friend was about 50 years old, and pretty senior, so he took it. Based on what I remember and people I know it must have been around $600,000. His salary must have been something like 50K/year.

I don't really know how the money was handled, and I'm not in a position to ask. They lived in a nice house in a nice part of a nice college town. And Friend is not a big vacationer or a big traveler. Wife worked a job she still enjoys.

More important than how the money was handled is an observation of everything that has happened in the years since 1988.
The DotCom bubble happened. Then it collapsed around 2000. We have another friend who never recovered his money from that.
In the early 90's there was the Asian Crisis. The Japanese economy collapsed after a long runup.
2001.
The Housing collapse.

Two important points here - at least to me:
#1 The Dow was at around 2000 in 1988. By that, you would think that Friend would have killed it!
#2..The Dow has been a minefield. True, it has gone from 2000 to 20,000, but it also touched its low point three different times. '98; '02; and the great low of '08. I suspect that one of those scared him out of the market. But I don't know that.

So maybe he got scared and sold low, maybe he got wiped out in some way. I don't know.
You plan to be retired for 40 years. In market years that seems to be about 4 lifetimes..

Go slow. Be careful. You are about to pass through a one-way door.
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Old 12-12-2016, 10:09 AM
 
1,040 posts, read 483,913 times
Reputation: 1434
Quote:
Originally Posted by edshaw4947927 View Post
Not to butt in, but why would you be thinking of retiring at 50?
That's very early. You are most fortunate to have worked it
out to be able to live in The City ion the prime of life. There
must have been sacrifices.
My opinion, you are asking the wrong questions, entertaining
the wrong options. For most of us, retirement is the dead end,
the end of the line. No, get a grip, get a new outlook, and
take the retirement option off the table. As a matter of fact,
advisors suggest never calling yourself retired on your
resumes or correspondence. That's because most active people
consider retirees useless. And, they are right.

Why would I would want to retire at 50? umm because I've been in the corporate world for almost 30 years and I'm done!
I'm sorry you feel retirement is a "dead end". I find that sad. Yet you're telling me to get a new outlook and to get a grip??!? lol
Exploring my other passions I hardly think makes me "useless"
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Old 12-12-2016, 10:17 AM
 
1,040 posts, read 483,913 times
Reputation: 1434
Quote:
Originally Posted by Listener2307 View Post
Sure, as best I can:

He was with AT&T. In 1988 AT&T offered a buyout plan. It was a cash payout that replaced the pension plan. Friend was about 50 years old, and pretty senior, so he took it. Based on what I remember and people I know it must have been around $600,000. His salary must have been something like 50K/year.

I don't really know how the money was handled, and I'm not in a position to ask. They lived in a nice house in a nice part of a nice college town. And Friend is not a big vacationer or a big traveler. Wife worked a job she still enjoys.

More important than how the money was handled is an observation of everything that has happened in the years since 1988.
The DotCom bubble happened. Then it collapsed around 2000. We have another friend who never recovered his money from that.
In the early 90's there was the Asian Crisis. The Japanese economy collapsed after a long runup.
2001.
The Housing collapse.

Two important points here - at least to me:
#1 The Dow was at around 2000 in 1988. By that, you would think that Friend would have killed it!
#2..The Dow has been a minefield. True, it has gone from 2000 to 20,000, but it also touched its low point three different times. '98; '02; and the great low of '08. I suspect that one of those scared him out of the market. But I don't know that.

So maybe he got scared and sold low, maybe he got wiped out in some way. I don't know.
You plan to be retired for 40 years. In market years that seems to be about 4 lifetimes..

Go slow. Be careful. You are about to pass through a one-way door.

"I don't really know how the money was handled" was the most important thing I see in your response. Also, what were the expenses? if he owned a house thats a huge expense right there? did he own a car? probably? kids or grandkids?

600K in 1988 should not have yielded him broke by any stretch if his withdrawal rate per year was under 5% and he stayed invested
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Old 12-12-2016, 10:21 AM
 
Location: SoCal
13,189 posts, read 6,301,958 times
Reputation: 9808
Quote:
Originally Posted by Listener2307 View Post
Sure, as best I can:

He was with AT&T. In 1988 AT&T offered a buyout plan. It was a cash payout that replaced the pension plan. Friend was about 50 years old, and pretty senior, so he took it. Based on what I remember and people I know it must have been around $600,000. His salary must have been something like 50K/year.

I don't really know how the money was handled, and I'm not in a position to ask. They lived in a nice house in a nice part of a nice college town. And Friend is not a big vacationer or a big traveler. Wife worked a job she still enjoys.

More important than how the money was handled is an observation of everything that has happened in the years since 1988.
The DotCom bubble happened. Then it collapsed around 2000. We have another friend who never recovered his money from that.
In the early 90's there was the Asian Crisis. The Japanese economy collapsed after a long runup.
2001.
The Housing collapse.

Two important points here - at least to me:
#1 The Dow was at around 2000 in 1988. By that, you would think that Friend would have killed it!
#2..The Dow has been a minefield. True, it has gone from 2000 to 20,000, but it also touched its low point three different times. '98; '02; and the great low of '08. I suspect that one of those scared him out of the market. But I don't know that.

So maybe he got scared and sold low, maybe he got wiped out in some way. I don't know.
You plan to be retired for 40 years. In market years that seems to be about 4 lifetimes..

Go slow. Be careful. You are about to pass through a one-way door.
$600k is a lot of money back then.
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Old 12-12-2016, 10:24 AM
 
1,040 posts, read 483,913 times
Reputation: 1434
Quote:
Originally Posted by Perryinva View Post
Everyone that has worked and can amass 25x expenses gets SS. That is always assumed, and not an added bonus. A home is (or should/could be) a long term investment, and is not included in the 25x calculation. For many, it is their LTC policy if needed. A pension is different and a bonus. Also, and though you don't specify, but based on your answers, your 25x sounds as if it is for a lower income in NYC. 25x for someone living and making $250k is a totally different ballpark than 25x for someone living frugally in rent controlled that made $45k a year. Yet, based on living expenses inputed, FIREcalc will give the exact same answer. A unique situation has an annoying habit of blowing up when least expected. That's why they are unique.

Someone with a 25x of $3M invested has a lot more options to downsize, relocate, etc and handle major market upsets than someone with a 25x of $1M. Not denigrating or being a debbie downer here. Just pointing out possibilities and scenarios. Lots do it on less, but times are not what they used to be. If you hate your job so much that you absolutely have to leave asap at 50, then find a vocation you enjoy, now that saving is not the top priority. If you just don't want to work at all, regardless, then you will find that you are working harder to just live, on a fixed income. Do you want to be working that hard to survive at 80, because you didn't want to work at 50? I work at something I enjoy, and am planning my retirement in 3 years not so that I can "make it", bit make it with no worries and comfortably with options. To each their own of course.
I said my situation was unique in that the overwelming majority of people at 50 have numerous expenses that I don't have: House payments, car payments, kids or grandkids expenses, etc....those are all VERY big detractors..I don't have that and I'm grateful....and I don't think you're being a debbie downer here at all..you're bringing up valid points......
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Old 12-12-2016, 10:27 AM
 
1,040 posts, read 483,913 times
Reputation: 1434
Quote:
Originally Posted by NewbieHere View Post
$600k is a lot of money back then.
It definitely was and the fact that now he is broke tells me he either spent a ton or it was managed horribly
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Old 12-12-2016, 10:32 AM
 
Location: SoCal
13,189 posts, read 6,301,958 times
Reputation: 9808
Quote:
Originally Posted by FREE866 View Post
It definitely was and the fact that now he is broke tells me he either spent a ton or it was managed horribly
I have a relative who had 5-6 million in USD back in 1988 and he has no where near it now, may $1 million max. We all think we are better than average, I'm sure.
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