The Money Mustache Community
General Discussion => Post-FIRE => Topic started by: BBub on March 20, 2015, 11:49:00 AM
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Just curious to hear from those who RE'd. How big was your stash when you made the leap? If you're planning to actually RE within the next year, please feel free to chime in as well.
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<500k if we are talking liquid networth. A little over 500k if you want to include illiquid assets, especially my paid off primary residence.
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I included the guesstimated value of a future federal pension since it offsets the amount of a stash that is needed.
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Didn't include the value of pension ($42k a year 6.5 years from now)
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I didn't go by how big my stash was. I went by how much passive income it would throw off. That was between $25,000 and $30,000 a year. (My basic living expenses are $15,000 a year... and dropping.)
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I didn't go by how big my stash was. I went by how much passive income it would throw off. That was between $25,000 and $30,000 a year. (My basic living expenses are $15,000 a year... and dropping.)
I'm doing the same (rental income). But for people all in paper assets planning a specific WR (even if flexible), it's definitely more important than it is for us.
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bout 350
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Its curious to me that we focus on the size of the stash but in reality its the size of the income that stash generates.
Really this is how we should compare the value of a pension vs a stash.
I.e a $40,000 pension is worth a maximum of $1m. Its not perfect of course because in theory a stash should eventually grow in size with a SWR of 4%.. which in turn leads to more income.. But thats not guaranteed so 4% is the best measure we have.
Focusing on the stash makes sense though because when working we want to know when we can RE.. and that question innevitibly becomes "hey I got $xxxk, do I have enough to retire?
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The problem is that we often haven't really put together the figures of everything we have coming to us (including pensions, old age benefits of various sorts...) and worked out what our income actually is going to be.
This is exacerbated by us not being sure how much risk is associated with these things. For instance, I have heard that some pensions in the US from some companies have become lower than what was promised. In Australia we have superannuation which is equivalent to the US 401k but it cannot be accessed (unless your doctor signs something saying you are less than 6 months from death...) until you are 60 - and there are numerous rumours that the age will go up. The risks must be a real concern to anyone trying to work out what they can actually count on getting.
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OK, I 'fess up. I wanted to see what everyone had voted in the poll so I voted even though I'm not FIRE. I voted for >2 mm since it doesn't hurt to dream:)
So I've buggered the poll, I'm sorry. I thought there was a way to "unvote " but I can't seem to find it now. If there is please "aware" me of how to do this.
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DAMMIT HAPPY I can't believe you did that!! haha, jk, no worries... will keep that in mind when viewing results.
On pensions, rentals, side gigs, passive income... everyone's situation is unique. I'm not so much worried about the details in this particular poll.. Just use whatever figure you feel is right for your situation - some will include PV of pension payments, or whatever. I just wanted a big picture glimpse of what asset level various folks felt secure with before deciding to make the leap.
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Well, it looks like you go for more than 2mil if you're going for more than 1.5mil, otherwise everything over 1/2mil is almost even.
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OK, I 'fess up. I wanted to see what everyone had voted in the poll so I voted even though I'm not FIRE. I voted for >2 mm since it doesn't hurt to dream:)
So I've buggered the poll, I'm sorry. I thought there was a way to "unvote " but I can't seem to find it now. If there is please "aware" me of how to do this.
You can't "unvote," but FYI there is a "view results" link below the poll so that you don't have to vote to see them.
[MOD NOTE: I edited the poll so you can remove your vote. But editing this post, not replying in thread, so this doesn't show up in my replies posts. :) ]
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Oh good.. I realised that I wasn't being quite honest because one could argue that my p.t. gig means I am not really retired (and Wife is working f.t.). During the last three months I clipped over the $1.5M threshold (not counting future pensions) and seeing as the 1.5 to 2M category looked a bit sad I moved my vote to there..:)
English people always root for the underdog...:)
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Over 2 mil but i will need it with 4 kids! :-) but needing less and less of it as we get better and better about what were doing
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OK, I 'fess up. I wanted to see what everyone had voted in the poll so I voted even though I'm not FIRE. I voted for >2 mm since it doesn't hurt to dream:)
So I've buggered the poll, I'm sorry. I thought there was a way to "unvote " but I can't seem to find it now. If there is please "aware" me of how to do this.
You can't "unvote," but FYI there is a "view results" link below the poll so that you don't have to vote to see them.
[MOD NOTE: I edited the poll so you can remove your vote. But editing this post, not replying in thread, so this doesn't show up in my replies posts. :) ]
Ok, thank you I have removed my vote.
Thanks for pointing out the "view results" link, I will use that in future :)
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I selected >$2M, but a a fair chunk of our stash is tied up in superannuation which I can't access until 65. We also have a toddler and a hopefully many decades of retirement so my 'large' stash still doesn't make be feel secure yet.
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I put $500K - $1MM and that included the value of my small pension as well as my paid off house in a HCOL area which will be downsized soon and some (much) of the equity added to the stash. But like other's, I generally go by the amount of passive income I get rather than my stash size or NW.
Didn't vote because I'm not there yet, but in the same boat as spartana and DoubleDown -- will have a pension to offset need for a bigger stash. That being said, conservatively projected to have @$800K in @4.5 years when I RE. If it were just me, I'd already have enough, but DW is 7 years younger and does not have a pension, so I'll need to subsidize her post-retirement portion of our combined expenses. With a very conservative draw (<2%), if any at all, the stash should grow to exceed a million when she gets around to retiring (probably 6-7 years after I do).
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Eeek, this makes me realize I am way more conservative than many here; or should that be pessimistic.
~1.1M without equity, and without pension. My pension won't kick in till 2040, and that's sort of scary to be looking that far away.
I consider myself 2-4 years away from FI though.
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1.1M in investments, 1.1M house (paid for, so I'm including but not counting it), 1 rental property (soon to be two), pension at age 60 + SS.
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Its curious to me that we focus on the size of the stash but in reality its the size of the income that stash generates... Focusing on the stash makes sense though because when working we want to know when we can RE.. and that question inevitably becomes "hey I got $xxxk, do I have enough to retire?
My mind didn't -- and doesn't -- work that way. I always asked myself instead "hey, I have $xxx passive income do I have enough to retire?" And I still gauge the value of my stash to my in-progress earlier retirement that way.
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I included the guesstimated value of a future federal pension since it offsets the amount of a stash that is needed.
I have the same situation. How did you calculate the cash equivalent value of your pension?
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I included the guesstimated value of a future federal pension since it offsets the amount of a stash that is needed.
I have the same situation. How did you calculate the cash equivalent value of your pension?
http://forum.mrmoneymustache.com/investor-alley/accounting-question-pension-as-an-asset/
http://forum.mrmoneymustache.com/welcome-to-the-forum/value-of-a-pension/
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[/quote]
http://forum.mrmoneymustache.com/investor-alley/accounting-question-pension-as-an-asset/
http://forum.mrmoneymustache.com/welcome-to-the-forum/value-of-a-pension/
[/quote]
Thank you.
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Sure!
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Surprised folks can make it on <$500k. That would be hard long-term.
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Surprised folks can make it on <$500k. That would be hard long-term.
Don't visit the ERE forums.
;)
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Surprised folks can make it on <$500k. That would be hard long-term.
I paid off my house before I started accumulating a stache. With my expenses cut by about 13,000 a year, I found making it on a stash under 500k was trivial. I just passed 500k for the first time this week with Tuesday's close. A raging bull market helps a lot.
I had originally planned to pick up a 10-15 hour a week minimum wage job "to keep busy" but found I needed neither the money nor to be busy.
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Surprised folks can make it on <$500k. That would be hard long-term.
I had originally planned to pick up a 10-15 hour a week minimum wage job "to keep busy" but found I needed neither the money nor to be busy.
2nd.
i do understand for the few, that continuing their career is what they want to do most; for most; there should be plenty of other things to occupy your time.
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We're planning on about $650K in 401Ks, plus a paid off mortgage, plus a $30K annual pension. We really think we can make it on the pension alone and leave the 401Ks to grow for the next 8 years when we can get to them penalty free. :)
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Surprised folks can make it on <$500k. That would be hard long-term.
I'm surprised there are so many on these boards that waited until they were over $2MM! That's $80k/year by the 4% rule and $60k at a super safe 3%.
I figured most would be in the $500k to $1.0MM range. I believe MMM himself was in the $500k to $1MM category so I figured most other fans of his would be similar.
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1.5M that is our magic #.
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1.5M that is our magic #.
Yep, that was mine.
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Not FIRE yet, but the target is something like $700,000 in investments plus a mostly paid-off house.
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I like your post. However, since the largest number of replies are between 500k and 1M, it would be interesting to see that bracket in more detail (500k-750k, example). My guess is that many hit FIRE with 600k-800k. Since some people seem discouraged by the continued brain washing of needing multiple millions to retire, that info would be comforting.
I agree with other postings about net worth/investable assets vs. income. Personally, we only use about half of our investable assets for income-the rest is liquid reserves or non-income producing real estate (held for capital gains). If you ever revise the post, maybe asking about the amount of investable assets used for income purposes to FIRE instead of total investable assets. Gold is an investable asset, but not income producing unless liquidated.
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I think over the last year and half to two years I have come to realize that people can retire at all different number and be very happy. There are so many variables and really wants, needs , desire are all part of it. Also where you are in your life as well as if you have a family. Knowing what you need , add your must have wants and afford yourself a margin for some unknowns and it will be easier to establish that number.
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Surprised folks can make it on <$500k. That would be hard long-term.
I'm surprised there are so many on these boards that waited until they were over $2MM! That's $80k/year by the 4% rule and $60k at a super safe 3%.
I figured most would be in the $500k to $1.0MM range. I believe MMM himself was in the $500k to $1MM category so I figured most other fans of his would be similar.
+1
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I think over the last year and half to two years I have come to realize that people can retire at all different number and be very happy. There are so many variables and really wants, needs , desire are all part of it. Also where you are in your life as well as if you have a family. Knowing what you need , add your must have wants and afford yourself a margin for some unknowns and it will be easier to establish that number.
i agree with that, but i still have a hard time figuring people need more than a million if you can let go of the consumerism that is the usa. if you dont have car payments and just a house payment and living expenses; you can live pretty cheaply depending upon where your house is.
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@Bruce - I'm seeing the largest grouping at >2MM myself, would be more interested to see a further >3MM bracket. I was also surprised by all the relatively HNW ER's, given the younger skew of this crowd, but there is also some confusion on PV of expected benefits, which certainly are valuable too, but throw off things due to assumptions on inflation, etc.
@soccerluv - +1 In fact, I would go even further to say, the more I read about FI and RE, the more individual it becomes. I would also add, it is not so much the size of the stache at RE as it is the returns in the market post RE. For example, if I RE'd in 2009 figuring I can live on 3-4% SWR, I'd be in hog heaven with the annual returns since, and even have buffer for extra spending or a downturn. On the flip side, if you'd retired in 1999, returns (even with dividends, on S&P) were -9.1%, -11.9%, and -22.1%. That probably would've sucked, especially in Early retirement, without pension or SS.
(ref - http://en.wikipedia.org/wiki/S%26P_500).
So the best generalization I can come up with is that there are conservative folks who pad the stash for various reasons (like their job, good work/life balance, golden handcuffs/benefits, have kids and want to pay for college, nervous about a market downturn, etc.) and there are ER at 4% folks (hate their job, don't have kids, got laid off and 'giving it a shot', entrepreneurial endeavors are more rewarding, etc.).
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So the best generalization I can come up with is that there are conservative folks who pad the stash for various reasons (like their job, good work/life balance, golden handcuffs/benefits, have kids and want to pay for college, nervous about a market downturn, etc.) and there are ER at 4% folks (hate their job, don't have kids, got laid off and 'giving it a shot', entrepreneurial endeavors are more rewarding, etc.).
You forgot those of us who love our jobs and are ERing above a 4% WR. ;)
It certainly is individualized.
(That doesn't make each one necessarily equally admirable.)
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I consider my Stache to be an almost "impossible to screw up" number. And when I say "screw up" I mean any incompetent investing decisions on my part or unexpected global events which may sink my investments resulting in a worst case scenario for me - having to get a job again. *shudders*
I am a big believer in having more than you likely need.
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Are you all voting on size of stache 'per person' or per couple? I think that makes a big difference.
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Are you all voting on size of stache 'per person' or per couple? I think that makes a big difference.
Sure, it does matter, but two people doesn't double your expenses, so it wouldn't make sense to cut a stache in half if you're married (or in 4ths if you have a spouse and two kids).
It'd make more sense to do some sort of calculation whereby you calculate how much you spend divided by your stache. So a single person spending 20k with 500k would get the same number as a couple spending 30k with 750k.
We could call it... hmm.. a withdrawal rate?
;)
(This is obviously tongue-in-cheek. Any method will be flawed, so whether a single person is voting, or a couple, it doesn't make sense to combine the couple's numbers, but nor does it make sense to cut it in half. Any method is simplistic and flawed, and that's okay.)
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I think over the last year and half to two years I have come to realize that people can retire at all different number and be very happy. There are so many variables and really wants, needs , desire are all part of it. Also where you are in your life as well as if you have a family. Knowing what you need , add your must have wants and afford yourself a margin for some unknowns and it will be easier to establish that number.
i agree with that, but i still have a hard time figuring people need more than a million if you can let go of the consumerism that is the usa. if you dont have car payments and just a house payment and living expenses; you can live pretty cheaply depending upon where your house is.
I don't think so..
Taking Escape Velocity's comments about a market down turn and heck some of us just need that number. In our case we spent $28k last year and thats with NO house payment and no other debt. Thats for a couple and we certainly lived pretty frugally.
Now, that was with employer's health coverage.. when we both retire and Go on the ACA I bet our costs will go up by $5k.. So thats $33k in Western Oregon where costs are not that high.. Try that in California or New York.
Before you ask, yes I had whittled down our monthly payments as far as we could.. no cellphone data, no cable, RE taxes $1700 a year, best deals on car insurance blah blah.
So 33k is $825k at 4%.. but 4% is not a number I would feel comfortable going forward with.. nearer 3% for an extended period... which means we would need $1.1M..
Remember also that number does not allow for things you never had time for while working.. Some travel for example?
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Surprised folks can make it on <$500k. That would be hard long-term.
At 4% SWR, $500K will yield $20,000 a year. For one person with no house payment, that's not that bad. I mean, MMM runs a 3-person household with just $24K a year, including lots of travel.
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I had expected more of a bell shaped outcome, but it's interesting to see a somewhat even distribution among the categories. If you combine 1-2 million as a single category, the distribution is +/- 30% each for the 500-1, 1-2, and 2+ respondents. These results, IMO, speak to the diversity of forum members. Having so many perspectives is valuable because it causes us to keep challenging our assumptions. It would get kind of lame around here if we all agreed on the same number!
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Surprised folks can make it on <$500k. That would be hard long-term.
I paid off my house before I started accumulating a stache. With my expenses cut by about 13,000 a year, I found making it on a stash under 500k was trivial. I just passed 500k for the first time this week with Tuesday's close. A raging bull market helps a lot.
I had originally planned to pick up a 10-15 hour a week minimum wage job "to keep busy" but found I needed neither the money nor to be busy.
This will be me too later this year, so thanks for the inspiration. :) I'm single with my brother as a roommate, so I need less of a stash for one person and his rent keeps expenses down.
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Well mine is currently a bit under $200 k, but DH doesn't want to stop working any time soon so I figure after the next baby (3) I'll RE ing and will let DH continue to work till he wants to and we are fully FI as a family. For that we are aiming for about $1.25 M, and paid off house, but could probably make IT work quite well at 750k-1m.
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So the best generalization I can come up with is that there are conservative folks who pad the stash for various reasons (like their job, good work/life balance, golden handcuffs/benefits, have kids and want to pay for college, nervous about a market downturn, etc.) and there are ER at 4% folks (hate their job, don't have kids, got laid off and 'giving it a shot', entrepreneurial endeavors are more rewarding, etc.).
You forgot those of us who love our jobs and are ERing above a 4% WR. ;)
It certainly is individualized.
(That doesn't make each one necessarily equally admirable.)
I think escape nailed it, as one who falls into the more conservative description.
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So the best generalization I can come up with is that there are conservative folks who pad the stash for various reasons (like their job, good work/life balance, golden handcuffs/benefits, have kids and want to pay for college, nervous about a market downturn, etc.) and there are ER at 4% folks (hate their job, don't have kids, got laid off and 'giving it a shot', entrepreneurial endeavors are more rewarding, etc.).
You forgot those of us who love our jobs and are ERing above a 4% WR. ;)
It certainly is individualized.
(That doesn't make each one necessarily equally admirable.)
I think escape nailed it, as one who falls into the more conservative description.
So even though Escape defined it fairly narrowly and for more conservative positions, since you fit that, he "nailed" the definition?
Got it! :)
(http://i676.photobucket.com/albums/vv126/plumkat/Funny/magic.gif)
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Last time I checked, forum meant 'open discussion'. I hope for these contributions when I post - stating what may be my own narrow observations as best I can, and then seeing who agrees with or challenges my observation, in order to make it a more broad and applicable understanding.
There is a lot to be learned from the 'conservative ER' crowd. Apparently, those that step into the breech (or the others that are plenty rich) get easy attention, but what about us that are a little less bold; those of us stuck in the middle, maybe being too conservative...?
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I hope for these contributions when I post - stating what may be my own narrow observations as best I can, and then seeing who agrees with or challenges my observation, in order to make it a more broad and applicable understanding.
Yup, cool!
There is a lot to be learned from the 'conservative ER' crowd.
Totally agree. But pigeonholing people via a definition doesn't get us much, IMO. I may be wrong.
I do learn lots from the E-R.org folks, who are way more conservative, and would balk at my ER plans (and also are quite anti-real estate as an acceptable form of "retirement"--lots of IRP there). :)
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Well, ultimately, people 'retiring' before 50 are still the 1% (or 1.5%, although I think at least 0.6% recently is attributable to rich kids and/or people who wanted to ER and will go back to work if the markets don't cooperate).
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So the best generalization I can come up with is that there are conservative folks who pad the stash for various reasons (like their job, good work/life balance, golden handcuffs/benefits, have kids and want to pay for college, nervous about a market downturn, etc.) and there are ER at 4% folks (hate their job, don't have kids, got laid off and 'giving it a shot', entrepreneurial endeavors are more rewarding, etc.).
You forgot those of us who love our jobs and are ERing above a 4% WR. ;)
It certainly is individualized.
(That doesn't make each one necessarily equally admirable.)
I think escape nailed it, as one who falls into the more conservative description.
So even though Escape defined it fairly narrowly and for more conservative positions, since you fit that, he "nailed" the definition?
Got it! :)
(http://i676.photobucket.com/albums/vv126/plumkat/Funny/magic.gif)
Ultimately this is all "custom" to the individual, this description, narrow in your view, just rang true for me. May we all get to where we want to go, however the route may take us.
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Seems like the variable to all of this is whether or not you have or will have a pension, especially if it's one that includes medical (i.e. military folks).
Actually kind of surprised to see how many people here do have or will have a pension. I think of my career military officer friends who have retired recently after 25 years in mid-late 40s with pension. I would consider that FIRE with my existing stache. But I've never been in the military or any other pension-producing field. So I'm aiming for a bigger number -- 3M.
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Does semi-RE count in this thread?
We will be drawing on a stash of about $900k for our living expenses once we sell our current home and a month ago bought a home for cash in a different city. Moving to a less expensive city (Salt Lake vs Issaquah, a Seattle suburb) will help with living expenses. My husband, who's been laid off from his job in Seattle, is a hobby photographer and intends to start a real estate photography business. I'm completely quitting work in the tech field. It was a lucrative run for about 17 years, but now I'm thoroughly sick of it and the confinement to cubicle-life and hours, and as someone mentioned in another thread, the Sunday dreads.
I hope my husband's business brings in some income but our primary goal will be not to accumulate more money but to enjoy our lives which means skiing, mountain biking and travel. Also we look forward to the pleasure of getting involved in whatever we have interests in, ie volunteer work (I'm interested in environmental/sustainability issues) or hobbies (love cooking and baking with a passion). If we need extra money for ski passes or travel, we'll be finding work to support that. We also have to keep in mind fluctuations in the market that could affect our invested stash.
I could qualify for early Social Security (my husband still has a ways to go before he can) but don't really want to go there unless we really needed the extra cash, plus don't want to pay taxes on it if we make too much income. But being frugal, low on the consumerism scale, and DIY'ers I think we won't have need for too much. Also, we don't have kids so won't be needing to support any others or leave an inheritance.
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We each have a pension so also had a smaller stash with a paid off house. WE are waiting to 70 to claim SS as it will be alot bigger then. We are also semi-retired by choice. I noticed in another thread someone saying that people they know that retired on SS only in their early 60's are now sick of the very frugal lifestyle they need to lead in their 70's. I sure would not want to be in that position.
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Not to rain on your poll but unless you have some way of adjusting it based on how long each respondent has been retired, it is pretty useless.
For example, I retired in 1989 on under $500k. That is of no use to you if you are looking at how big a stash someone might need today for the equivalent. I didn't vote by the way.
I also agree with comments regarding it is not the stash that matters. It is the income you believe you need that matters. That again will vary a good deal by individual. So even if you polled that, it would tell you nothing of much use either.
For what it is worth, I guesstimated the income I would need back in 1989 and it is nothing like the income I need today. Any guess (and that is all anyone is doing) today is only relevant for a few short years at best. Beyond that, it's all crystal ball time.
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New category...I RE with sub 500k. Seems I passed 500k liquid nw sometime last week. I put in several hours research a week but it is paying off in fat options premiums that are allowing me to slowly increase my allocation to municipal bonds.
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Old pro, I am curious-how much more $ do you need now to live then when your first retired?
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oldpro: I appreciate that - adjusting for today's dollars is not something I considered when creating the poll. The size of stash is just one of many data points I was interested in seeing. I agree that income is the most important factor. This poll isnt meant to be all encompassing or provide any definitive answers. I was just curious, mostly.
I'd also be interested to hear about how your expenses have shifted over time.
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REing 3 months from now, but about $500K in the stache', $60K/year in pension + paid off mortgage. It really is hard to nail down the value because of all the variables. The pension is a combination of VA/military so much of it is untaxed and it is inflation adjusted each year so it could be well north of $100k/year 30 years from now when I'm in my 60's. Also because of the VA rating/retired military status, we don't pay prop. taxes, get very reasonable health care, get free tax prep, will/legal services, tax free shopping, free national parks passes, fishing/hunting licenses etc, free international/domestic space available fights, substantial contributions towards kids' education etc. I couldn't even begin to put a value on it.
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I'm retiring now, at 47. My wife retired in 2008 (we're the same age). We have a house, fully paid for, worth at least $1M (bought it in 2010 for $900,000 and invested at least $100,000K in renovations), we have $900,000 in my mom's accounts (she's not well and 87 and I'm the only heir, she has full time care in her own house, she lives abroad, her costs are essentially paid for by SS and my dad's pension, still going at almost 40 years), about $400,000 in ours, and we are selling a family property that I have managed for 17 years for $4.5 million this year. I was going to take the property and do a 1031 exchange, but I'm not sure anymore. Maybe I should just stick it in index funds plus a little gambling (on specific stocks and sectors in the market). I've gotten lucky, although also done things well too. My father wanted me to sell that building when it was worth $1.5 million. That was only a decade ago. There's a lesson with my building btw, which is that private real estate funds pay crazy money that makes no sense according to traditional real estate metrics.
We aren't full MMM types by any means, but I'm pretty sure that with a $200,000 draw, we will be fine into our 90s.
There's one thing that I don't see in any of these posts and that's kids. I want to leave something to my kids, ideally about the same amount of cash, divided by two. They don't need to get most of it until their 40s, when we are in our 80s, but I think of this as dynasty building. We don't want to die broke. So if you're going to leave cash for your kids, you need to have quite a bit more.
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Is this for individual or half the household or total household?
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Total household (of 4).
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We were at $3M back five years ago, but now are at about $4.5M with a monthly income of $18K (pension + deferred comp). Spouse will inherit ~$1.5M+ upon death of his parents (they lived like they were poor all their life yet have over $5M in investments - so sad). Anyways, we do NOT have kids, which is why we were ahead of most of our friends/family.
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I voted $500K - 1MM...
'Stache is at about $650K now, paid off house is at $600K. But I'm planning to go back to work after I take this summer off. I just want a few months to think about things...
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We were at $3M back five years ago, but now are at about $4.5M with a monthly income of $18K (pension + deferred comp). Spouse will inherit ~$1.5M+ upon death of his parents (they lived like they were poor all their life yet have over $5M in investments - so sad). Anyways, we do NOT have kids, which is why we were ahead of most of our friends/family.
MONTHLY income of $18K?! Holy shit. $216,000/year in retirement, before ever touching your huge portfolio? Not too shabby. So why are you lurking on MMM?
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These people are why I become stache-insecure. :)
Just remember, you can't take it with you!!!
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I also included paid off home and other assets as well as investment accounts. And I still work PT some - consulting when it's a project I like.
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We each have a pension so also had a smaller stash with a paid off house. WE are waiting to 70 to claim SS as it will be alot bigger then. We are also semi-retired by choice. I noticed in another thread someone saying that people they know that retired on SS only in their early 60's are now sick of the very frugal lifestyle they need to lead in their 70's. I sure would not want to be in that position.
This is so hard for me to understand. When we start joint SS, 5 yrs after my dh retires, it will be more than what we currently live on. We're frugal but not excessively so and are expenses are higher than many others here. Even without joint SS, I would do just fine on his SS (not mine). I'm guessing those people didn't lead a frugal lifestyle prior to SS and thus it truly is a transition time for them. We're looking forward to having more money in retirement!
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We were at $3M back five years ago, but now are at about $4.5M with a monthly income of $18K (pension + deferred comp). Spouse will inherit ~$1.5M+ upon death of his parents (they lived like they were poor all their life yet have over $5M in investments - so sad). Anyways, we do NOT have kids, which is why we were ahead of most of our friends/family.
MONTHLY income of $18K?! Holy shit. $216,000/year in retirement, before ever touching your huge portfolio? Not too shabby. So why are you lurking on MMM?
We actually lived on 1/2 of hubby's paycheck for many years since his employer offered "deferred compensation" plan - it now pays out $10K/month for 15 years straight. We still have 10 years left. His pension will remain the same forever. We don't nearly spend the $18K/mo we bring in - so we send about $10K back to Schwaab.
I enjoy "lurking" here and on other financial blogs to see how people are either blowing their hard earned money or saving it! I've always been on the frugal side, and just enjoy reading/talking about finances.
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I replied 500k - 1M but that doesn't include my spouse. Together we have $1.35M.
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Surprised folks can make it on <$500k. That would be hard long-term.
I'm surprised there are so many on these boards that waited until they were over $2MM! That's $80k/year by the 4% rule and $60k at a super safe 3%.
I figured most would be in the $500k to $1.0MM range. I believe MMM himself was in the $500k to $1MM category so I figured most other fans of his would be similar.
When I factor in the value of my pension, my projected stash at planned retirement is essentially $2mil. I would/could go on less than that if it were not for the fact that we have a long way to go on our mortgage. So my stash has to cover the mortgage payment. When the mortgage payment goes away (which it's likely to do w/in 10 years of retiring), then I'll be flush with cash; once SS kicks in, I'll have a stupid amount of money. Hopefully I'll find a way to put it to good use.
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When I factor in the value of my pension, my projected stash at planned retirement is essentially $2mil. I would/could go on less than that if it were not for the fact that we have a long way to go on our mortgage. So my stash has to cover the mortgage payment. When the mortgage payment goes away (which it's likely to do w/in 10 years of retiring), then I'll be flush with cash; once SS kicks in, I'll have a stupid amount of money. Hopefully I'll find a way to put it to good use.
dude...can you describe how you valued your pension?
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dude...can you describe how you valued your pension?
Typically one would do one of these two things:
1) Take the NPV of the payment stream based on life expectancy
2) Price an annuity - what lump sum would it cost to buy you that annual payout?
More discussion on this:
http://forum.mrmoneymustache.com/investor-alley/accounting-question-pension-as-an-asset/
http://forum.mrmoneymustache.com/welcome-to-the-forum/value-of-a-pension/
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We were at $3M back five years ago, but now are at about $4.5M with a monthly income of $18K (pension + deferred comp). Spouse will inherit ~$1.5M+ upon death of his parents (they lived like they were poor all their life yet have over $5M in investments - so sad). Anyways, we do NOT have kids, which is why we were ahead of most of our friends/family.
MONTHLY income of $18K?! Holy shit. $216,000/year in retirement, before ever touching your huge portfolio? Not too shabby. So why are you lurking on MMM?
Ha Ha - my thoughts too. I'm always impressed (astonished!) at the income levels of the people here and wonder why they don't FIRE when it's so high. Not judging, just questioning...
Could be another typical case of OMY (One More Year) Syndrome. It's always gonna be "safer" with one more year on the job. Of course, it's also going to result in one LESS year of living free because doing OMY does not somehow extend the length of your life. :(
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We were at $3M back five years ago, but now are at about $4.5M with a monthly income of $18K (pension + deferred comp). Spouse will inherit ~$1.5M+ upon death of his parents (they lived like they were poor all their life yet have over $5M in investments - so sad). Anyways, we do NOT have kids, which is why we were ahead of most of our friends/family.
MONTHLY income of $18K?! Holy shit. $216,000/year in retirement, before ever touching your huge portfolio? Not too shabby. So why are you lurking on MMM?
Ha Ha - my thoughts too. I'm always impressed (astonished!) at the income levels of the people here and wonder why they don't FIRE when it's so high. Not judging, just questioning...
Could be another typical case of OMY (One More Year) Syndrome. It's always gonna be "safer" with one more year on the job. Of course, it's also going to result in one LESS year of living free because doing OMY does not somehow extend the length of your life. :(
second. i've got omy syndrone in spades.
i could go fire now if i lived like retired to win, on around 15k yearly and i can do that; but i justify it with things like i need a bigger cushion; need more just in case my sister and her husband have to move in because they're always broke and will likely need somewhere to live in their 60s after theyre no longer employable anymore, etc., etc.
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I always like to contrast what an expense reduction translates to in terms of needing less of a stash. At a 4% SWR, every $1000 cut from living expenses results in a $25,000 reduction in one's required stash. Do a few of those and it will quickly turn into real money... and most importantly, into real reductions in the time required to get to FIRE.
Just a thought!
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I always like to contrast what an expense reduction translates to in terms of needing less of a stash. At a 4% SWR, every $1000 cut from living expenses results in a $25,000 reduction in one's required stash. Do a few of those and it will quickly turn into real money... and most importantly, into real reductions in the time required to get to FIRE.
Just a thought!
That always had the opposite effect on me.
You mean I can spend an extra 1k/year, forever, just by saving up a merely 25k? Awesome!
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So my pension was offered to be bought out yesterday for a little over $400k.
So I guess I can add that to my NW right?
That put me just under $2M.. in addition my Wife's pension kicks in in 8 years... and not counting the house.
Now I did say I would buy a new Dodge Charger at liquid NW of $2M.. Hmmmmm...:)
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at liquid NW
Does that mean you chose the cash out option?
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Actually no.. or not yet anyway.
I think the fees are too high and the pension is fairly well protected by the UK Government.
I'll poke around at it a bit more.. Maybe I can set up my own scheme without paying these advisors 1.5%.