How many here expect to have a bigger stache 30 years after retiring?
How many here expect to have a bigger stache 30 years after retiring?
You're doing it wrong.
This means, you should have retired 10 years ago. :)
How many here expect to have a bigger stache 30 years after retiring?
You're doing it wrong.
This means, you should have retired 10 years ago. :)
So... you're probably right. And I'm just as guilty. We pretty much spend about what the earnings are on our investments. Outside of a black swan event, I think we'll have way more than we need. And yeah, it's due to being overly conservative on my FIRE date.
But... this also fits my personality. While it would be optimal to spend your last $10 on the day you take your dying breath, I wouldn't be comfortable doing this. My sister is about to retire on a plan that's really tight. That would make my butt pucker.
How many here expect to have a bigger stache 30 years after retiring?
You're doing it wrong.
This means, you should have retired 10 years ago. :)
So... you're probably right. And I'm just as guilty. We pretty much spend about what the earnings are on our investments. Outside of a black swan event, I think we'll have way more than we need. And yeah, it's due to being overly conservative on my FIRE date.
But... this also fits my personality. While it would be optimal to spend your last $10 on the day you take your dying breath, I wouldn't be comfortable doing this. My sister is about to retire on a plan that's really tight. That would make my butt pucker.
You need some of this:
(https://images-na.ssl-images-amazon.com/images/I/41hjAq4rnEL.jpg)
I have run Firecalc many times.
It says my chances of having more money 30 years after retirement than at retirement is very high.
Do others expect to have more 30 years after retirement than at retirement?
How many here expect to have a bigger stache 30 years after retiring?
You're doing it wrong.
This means, you should have retired 10 years ago. :)
If my monthy spending stays as predicted, which is speculative of course, FIRECalc says I'm 100% success. I'm trying to pull the trigger and go but the healthcare debacle and unknown future debacle has me worried to death. I just had a minor knee surgery (arthroscopic). It was outpatient, the doc was literally inside my knee for 10 minutes, and I was at the facility maybe 5 hours which included the waiting and filling out forms. The cost? $12,000. With my current insurance I paid $175 co-pay (I think, I'm already getting bills of course since our systems are so f'ed up), but yeah. Twelve grand.
I'm trying to go part time first to ease myself into FIRE, build up my stache even more, and keep my healthcare while the whole soap-opera plays out. As someone who thrives on 'extreme' outdoor sports and wants to do more of them in FIRE, my chances of injury are likely higher than others, and I need good healthcare.
If my monthy spending stays as predicted, which is speculative of course, FIRECalc says I'm 100% success. I'm trying to pull the trigger and go but the healthcare debacle and unknown future debacle has me worried to death. I just had a minor knee surgery (arthroscopic). It was outpatient, the doc was literally inside my knee for 10 minutes, and I was at the facility maybe 5 hours which included the waiting and filling out forms. The cost? $12,000. With my current insurance I paid $175 co-pay (I think, I'm already getting bills of course since our systems are so f'ed up), but yeah. Twelve grand.
I'm trying to go part time first to ease myself into FIRE, build up my stache even more, and keep my healthcare while the whole soap-opera plays out. As someone who thrives on 'extreme' outdoor sports and wants to do more of them in FIRE, my chances of injury are likely higher than others, and I need good healthcare.
Just a warning from someone that is a couple of years ahead of you: I also waited for 100%. I think that's probably way too high. Statistically the difference between 95% and 100% is infinitesimally small. And remember that 100% isn't 100%. That's 100% of past cases. It makes chances very good of succeeding in the future, but it makes no 100% guarantees.
I'm looking back and thinking I could have retired several years earlier and had a higher retirement spending rate.
That probably won't dissuade your fears of taking the leap. I doubt it would have me. But I think you'll look back and realize you went longer than needed. There will always be unknown factors.
If my monthy spending stays as predicted, which is speculative of course, FIRECalc says I'm 100% success. I'm trying to pull the trigger and go but the healthcare debacle and unknown future debacle has me worried to death. I just had a minor knee surgery (arthroscopic). It was outpatient, the doc was literally inside my knee for 10 minutes, and I was at the facility maybe 5 hours which included the waiting and filling out forms. The cost? $12,000. With my current insurance I paid $175 co-pay (I think, I'm already getting bills of course since our systems are so f'ed up), but yeah. Twelve grand.
I'm trying to go part time first to ease myself into FIRE, build up my stache even more, and keep my healthcare while the whole soap-opera plays out. As someone who thrives on 'extreme' outdoor sports and wants to do more of them in FIRE, my chances of injury are likely higher than others, and I need good healthcare.
Just a warning from someone that is a couple of years ahead of you: I also waited for 100%. I think that's probably way too high. Statistically the difference between 95% and 100% is infinitesimally small. And remember that 100% isn't 100%. That's 100% of past cases. It makes chances very good of succeeding in the future, but it makes no 100% guarantees.
I'm looking back and thinking I could have retired several years earlier and had a higher retirement spending rate.
That probably won't dissuade your fears of taking the leap. I doubt it would have me. But I think you'll look back and realize you went longer than needed. There will always be unknown factors.
Thanks for that input Spork. I realize you're probably correct, but as even you said, you doubt it would have changed your own decision. Damn it's so hard to make that leap. I come from a tiny family that literally has next to nothing, so I also don't have that "if the crap REALLY hit the fan I could get help from mom" kinda thing. I can't. And I'm single on top of it (my own fault :/
It's mainly the healthcare. Talking to a coworker today, her son broke both tibia and fibula (like Joe Theisman) playing football. Two surgeries, tons of metal inserted, etc etc. Now he has compartment syndrom and has to have the harware taken out. Bottom line, she said the running tally on the med bills (before insurance) is $360k. Just, wow. And he's not done. It just makes me shake thinking our politicians could eff us over - even after we supposedly buy something like ACA or whatever. I just have to keep working through the doubt....
By the way, love your message tag-line. Probably my second favorite Rush song after Spirit of the Radio.
Thanks again for the input Spork! Nothing helps as much as info from someone who's there and has the t-shirt to prove it. If you don't mind me asking, how much do you pay for your ACA plan out of pocket?
Thanks again for the input Spork! Nothing helps as much as info from someone who's there and has the t-shirt to prove it. If you don't mind me asking, how much do you pay for your ACA plan out of pocket?
Out of pocket for this year is ~200/month for a ACA bronze plan for a family of 2 - one in 50s one in 40s. It varies wildly by location... and by what insurance providers are around. You have to plan a bit to hit your income targets to get the subsidies you are expecting. We blew it last year when we had unexpected income and had to pay all of 2016 subsidies back. Without subsidies, last years was just under $600/month.
How many here expect to have a bigger stache 30 years after retiring?
You're doing it wrong.
This means, you should have retired 10 years ago. :)
How many here expect to have a bigger stache 30 years after retiring?
You're doing it wrong.
This means, you should have retired 10 years ago. :)
By the way, my post above wasn't intended to make fun of others.
I also struggle with the decision of "how much is enough".
It's hard to calculate with 100% certainty, where you'll stand 30 years from today.
Your monetary future could lie anywhere between,
1. Living your last years in poverty.
2. Dying with a vast sum of money.
For me, point 2 almost disturbs me as much as point 1.
Why? Because this means that I worked (i.e. wasted) 'x' years longer in a (stressful) job than I really needed to.
Those additional 'x' years could have been spent doing those things that I enjoy more.
However, I definitely understand OMY (One More Year) syndrome and people wanting to "make sure" that they have a secure future going forward.
....I'd go crazy giving to charities, starting up cool foundations, going to Africa and giving to the poorest of the poor, and try my best to turn a bad timing decision into as much good as possible.
If my monthy spending stays as predicted, which is speculative of course, FIRECalc says I'm 100% success. I'm trying to pull the trigger and go but the healthcare debacle and unknown future debacle has me worried to death. I just had a minor knee surgery (arthroscopic). It was outpatient, the doc was literally inside my knee for 10 minutes, and I was at the facility maybe 5 hours which included the waiting and filling out forms. The cost? $12,000. With my current insurance I paid $175 co-pay (I think, I'm already getting bills of course since our systems are so f'ed up), but yeah. Twelve grand.
I'm trying to go part time first to ease myself into FIRE, build up my stache even more, and keep my healthcare while the whole soap-opera plays out. As someone who thrives on 'extreme' outdoor sports and wants to do more of them in FIRE, my chances of injury are likely higher than others, and I need good healthcare.
Just a warning from someone that is a couple of years ahead of you: I also waited for 100%. I think that's probably way too high. Statistically the difference between 95% and 100% is infinitesimally small. And remember that 100% isn't 100%. That's 100% of past cases. It makes chances very good of succeeding in the future, but it makes no 100% guarantees.
I'm looking back and thinking I could have retired several years earlier and had a higher retirement spending rate.
That probably won't dissuade your fears of taking the leap. I doubt it would have me. But I think you'll look back and realize you went longer than needed. There will always be unknown factors.
We fully expect that our NW will grow significantly in retirement, primarily because between DH's defined benefit plan and estimated SS, we will be pulling in more than DH earns now.. That's not counting mandatory withdrawals from our retirement accounts. Or rental income. Wow! I see cruises to exotic locales, fancy cars and more fast shiny things in our future. Nah, just kidding. Most of the "extra" will go to our favorite charities.
I just had a minor knee surgery (arthroscopic). It was outpatient, the doc was literally inside my knee for 10 minutes
I have run Firecalc many times.
It says my chances of having more money 30 years after retirement than at retirement is very high.
Do others expect to have more 30 years after retirement than at retirement?
I have run Firecalc many times.
It says my chances of having more money 30 years after retirement than at retirement is very high.
Do others expect to have more 30 years after retirement than at retirement?
You all should, by calculating the real growth in whatever you are invested in for stocks is about 6% per year. I would start tracking your investments monthly and be sure to include costs or money you take out and after three years; you should be able to project where you will be because you will know how you behave financially, most people do not change.
I have run Firecalc many times.
It says my chances of having more money 30 years after retirement than at retirement is very high.
Do others expect to have more 30 years after retirement than at retirement?
You all should, by calculating the real growth in whatever you are invested in for stocks is about 6% per year. I would start tracking your investments monthly and be sure to include costs or money you take out and after three years; you should be able to project where you will be because you will know how you behave financially, most people do not change.
3 years isn't long enough to know, but where you stand after 10 years is a solid predictor:
https://www.kitces.com/blog/understanding-sequence-of-return-risk-safe-withdrawal-rates-bear-market-crashes-and-bad-decades/
I have run Firecalc many times.
It says my chances of having more money 30 years after retirement than at retirement is very high.
Do others expect to have more 30 years after retirement than at retirement?
You all should, by calculating the real growth in whatever you are invested in for stocks is about 6% per year. I would start tracking your investments monthly and be sure to include costs or money you take out and after three years; you should be able to project where you will be because you will know how you behave financially, most people do not change.
3 years isn't long enough to know, but where you stand after 10 years is a solid predictor:
https://www.kitces.com/blog/understanding-sequence-of-return-risk-safe-withdrawal-rates-bear-market-crashes-and-bad-decades/
Great article, Eric, thanks for sharing. Given this, I wonder how many soon-to-be retirees are considering changing their equity allocations to more heavily weight international and emerging markets stocks? There are some notable names suggesting U.S. equity returns will be less than historical averages over the next decade, and the Shiller P/E 10 seems to support that notion. The S&P 500 is at 28.78 currently, which is far, far above the historic median of 16.12.
As a guy who plans to retire in 2 years, I'm thinking it might be time to make the change in equity allocation.
Here's a pretty good resource re: valuations and 10-year expected returns:
https://www.researchaffiliates.com/en_us/asset-allocation/equities.html
I have run Firecalc many times.
It says my chances of having more money 30 years after retirement than at retirement is very high.
Do others expect to have more 30 years after retirement than at retirement?
You all should, by calculating the real growth in whatever you are invested in for stocks is about 6% per year. I would start tracking your investments monthly and be sure to include costs or money you take out and after three years; you should be able to project where you will be because you will know how you behave financially, most people do not change.
3 years isn't long enough to know, but where you stand after 10 years is a solid predictor:
https://www.kitces.com/blog/understanding-sequence-of-return-risk-safe-withdrawal-rates-bear-market-crashes-and-bad-decades/
Great article, Eric, thanks for sharing. Given this, I wonder how many soon-to-be retirees are considering changing their equity allocations to more heavily weight international and emerging markets stocks? There are some notable names suggesting U.S. equity returns will be less than historical averages over the next decade, and the Shiller P/E 10 seems to support that notion. The S&P 500 is at 28.78 currently, which is far, far above the historic median of 16.12.
As a guy who plans to retire in 2 years, I'm thinking it might be time to make the change in equity allocation.
Here's a pretty good resource re: valuations and 10-year expected returns:
https://www.researchaffiliates.com/en_us/asset-allocation/equities.html
I'm weighted more heavily towards EM and international than most here. To date it has cost me money vs the S&P. If I extrapolated out over the next 50 years, it would probably make me sick. Here's hoping the article it right.
I have run Firecalc many times.
It says my chances of having more money 30 years after retirement than at retirement is very high.
Do others expect to have more 30 years after retirement than at retirement?
You all should, by calculating the real growth in whatever you are invested in for stocks is about 6% per year. I would start tracking your investments monthly and be sure to include costs or money you take out and after three years; you should be able to project where you will be because you will know how you behave financially, most people do not change.
3 years isn't long enough to know, but where you stand after 10 years is a solid predictor:
https://www.kitces.com/blog/understanding-sequence-of-return-risk-safe-withdrawal-rates-bear-market-crashes-and-bad-decades/
Great article, Eric, thanks for sharing. Given this, I wonder how many soon-to-be retirees are considering changing their equity allocations to more heavily weight international and emerging markets stocks? There are some notable names suggesting U.S. equity returns will be less than historical averages over the next decade, and the Shiller P/E 10 seems to support that notion. The S&P 500 is at 28.78 currently, which is far, far above the historic median of 16.12.
As a guy who plans to retire in 2 years, I'm thinking it might be time to make the change in equity allocation.
Here's a pretty good resource re: valuations and 10-year expected returns:
https://www.researchaffiliates.com/en_us/asset-allocation/equities.html
I'm weighted more heavily towards EM and international than most here. To date it has cost me money vs the S&P. If I extrapolated out over the next 50 years, it would probably make me sick. Here's hoping the article it right.
Then you're looking at WAY too short of a time frame. EM hasn't done nearly as well at the S&P 500 over the past few months, but last year it had a spectacular run. Developed international, especially Europe has matched and in some cases exceeded the US markets for about the past year. Unless you've been buying hedged currency funds. In which case I would ask why you'd be doing that with a strong dollar? Besides instead of hedging your international allocation, just reduce your % (buy more domestic). Same thing effectively.
I'm 40% international including EM and I could not be happier with the performance of them all so far. My EM is up only like 6% over the past 6 or 8 months...no where near as good as the S&P 500. But you know what? 6% in that time frame ain't bad at all!
cfiresim has us ending up with somewhere between 500K and 30M...with that kind of variance, and the fact that we don't know what the future holds, I'm not into making such a prediction about whether we have more or less...
cfiresim has us ending up with somewhere between 500K and 30M...with that kind of variance, and the fact that we don't know what the future holds, I'm not into making such a prediction about whether we have more or less...
That's a rather large range.... what caused the extreme $30m gain?
How common, do you think it is for your net worth to continue to grow after retiring early?
Very, very common.
The longer your ER, and more aggressive your investment strategy (i.e. more equities), the more likely it is.
For example, using cFIREsim default numbers (40k spend, 1MM portfolio for a 4% SWR, 75/25 allocation, 30 year retirement--95.69% success rate), out of 116 total 30-year periods, after 30 years:
In nominal dollars, 19 of them ended with less than the 1,000,000 you started with. 97 ended with more.
In real (inflation adjusted dollars), 41 ended with less, 75 ended with more.
So if you're just looking at straight dollar amounts (which most of us tend to do, we don't naturally, intuitively discount for inflation), about 84% of the time your portfolio would have risen (and, in real dollars, 65% of the time it would have risen).
That's with you spending down on it year after year, not earning another dollar, not adjusting your withdrawals down in bad years (down markets) or as you get older and spend less.
The majority of the time, portfolios go up if you're using a 4% WR and have a decent (> 33%) amount in equities, with us doing nothing (and we tend to do something if things start going wrong).
If my net worth wasn't growing (not every year, but over multi-year periods), I'd look at that as a caution sign to take a closer look.
If my monthy spending stays as predicted, which is speculative of course, FIRECalc says I'm 100% success. I'm trying to pull the trigger and go but the healthcare debacle and unknown future debacle has me worried to death. I just had a minor knee surgery (arthroscopic). It was outpatient, the doc was literally inside my knee for 10 minutes, and I was at the facility maybe 5 hours which included the waiting and filling out forms. The cost? $12,000. With my current insurance I paid $175 co-pay (I think, I'm already getting bills of course since our systems are so f'ed up), but yeah. Twelve grand.
I'm trying to go part time first to ease myself into FIRE, build up my stache even more, and keep my healthcare while the whole soap-opera plays out. As someone who thrives on 'extreme' outdoor sports and wants to do more of them in FIRE, my chances of injury are likely higher than others, and I need good healthcare.
Just a warning from someone that is a couple of years ahead of you: I also waited for 100%. I think that's probably way too high. Statistically the difference between 95% and 100% is infinitesimally small. And remember that 100% isn't 100%. That's 100% of past cases. It makes chances very good of succeeding in the future, but it makes no 100% guarantees.
I'm looking back and thinking I could have retired several years earlier and had a higher retirement spending rate.
That probably won't dissuade your fears of taking the leap. I doubt it would have me. But I think you'll look back and realize you went longer than needed. There will always be unknown factors.
The thing about the 4% rule is that by guaranteeing you won't run out of money in 30 years even in the worst case,...
The thing about the 4% rule is that it's not a ruleby guaranteeingbut an observation based on historical data, in which you won't run out of money in 30 yearseven in the worst caseabout 95% of the time, assuming the future isn't worse than the past and that you increase your draw by inflation like a mindless robot. ...
I see a lot of people using firecalc and cfiresim to calculate how much they need for retirement. My question is if I use the 4% rule and say I want 40k a year for spending then I need 1M dollars and that will last 30 years. But when I go into those simulators, I still have 100% success rate when using much lower starting amount- 850k,750k etc. So what's the deal?I just tried it, and CFireSim doesn't seem to be working right - the statistics aren't showing up. But if I enter 850k and hit go, the graph clearly shows failure cases.
I don't know. Typically, if you aim for 95% chance of success (95% chance of not running out of money by the time you die, which is a reasonable target) in tools such as cfiresim or firecalc, then you get a decent chance (50%~ish ?) of ending up with more than what you had when you started.How many here expect to have a bigger stache 30 years after retiring?
You're doing it wrong.
This means, you should have retired 10 years ago. :)
I see a lot of people using firecalc and cfiresim to calculate how much they need for retirement. My question is if I use the 4% rule and say I want 40k a year for spending then I need 1M dollars and that will last 30 years. But when I go into those simulators, I still have 100% success rate when using much lower starting amount- 850k,750k etc. So what's the deal?
I'm surprised that I haven't seen much discussion of sequence of returns risk in this thread. If your portfolio experiences a big, extended bear market early in retirement, you may not fail (run out of money) but your chances of building a larger portfolio in retirement decrease dramatically. If you are retiring today, with valuations near all-time highs, you are probably looking at low or negative returns in the near term. This is especially problematic if you are planning a very lean retirement budget and don't have a lot of room to cut back or be flexible. If you are forced to withdraw 4% when your portfolio is way down, it could take a very long time to recover. Having said all that, I chose to retire three years ago.
I have run Firecalc many times.
It says my chances of having more money 30 years after retirement than at retirement is very high.
Do others expect to have more 30 years after retirement than at retirement?