Author Topic: Race from $2M to $4M...and Beyond!  (Read 1039998 times)

Fomerly known as something

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Re: Race from $2M to $4M...and Beyond!
« Reply #6300 on: August 17, 2022, 08:53:45 PM »
@Dicey.  Iím sure youíll appreciate one of my RE plans.  To volunteer at the headlands telling people to please donít feed the coyotes.  They are already fat on local small dogs.  Well or give tours at the lighthouse.

Taran Wanderer

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Re: Race from $2M to $4M...and Beyond!
« Reply #6301 on: August 18, 2022, 12:57:56 PM »
Checked valuation on some assets and updated the NW numbers.  A few months ago, I thought we were at risk of dropping back below 3, and now we're up through 3.6.  "Beyond" territory is in sight.  We're up half a million YTD, which is crazy.

I'm having trouble processing these numbers and thinking about what it means for how we choose to live our lives.  DW really wants to invest in a real estate opportunity.  It shows promise and I think it could work out well (lots of due diligence to do yet), but I just can't process more things to do with the new job still stretching my brain.  The other thing I'm feeling is that at this NW, what's the point of more money (through employment or RE development that takes a lot of work) when what I really want is 100% control over my own time?

I used to think my number was 1M.  When we crossed that, I though 2... no 2.5.  Then we blew through that, and now?  No idea.  4?  5?  I feel l still have things to give in the work world, but there's some basic hard work to be done, and entirely unmotivated to do it.

Sob, sob, sob.  We're rich, I'm feeling lazy, and I don't know what to do with myself.  First world problems...

Sorry for the disconnected thoughts.  Just needed to vent.  On with your normal programming...

Watchmaker

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Re: Race from $2M to $4M...and Beyond!
« Reply #6302 on: August 18, 2022, 03:18:16 PM »
I used to think my number was 1M.  When we crossed that, I though 2... no 2.5.  Then we blew through that, and now?  No idea.  4?  5?  I feel l still have things to give in the work world, but there's some basic hard work to be done, and entirely unmotivated to do it.

I had a similar trajectory. First it was 1M. Then 1.4M, 2.0M. When I got to 2.0M it was going up so fast I thought might as well get to 3, but then 4 will just be around the corner...

But then something changed in me this last year and 2.0M is feeling like enough.

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #6303 on: August 18, 2022, 03:38:07 PM »
S&P 500 is down less than 11% YTD, compared to 21% earlier this year.   I expect our net worth will have gone up a bit since the end of last month.

But it really doesn't matter much.  We have plenty. :)

Taran Wanderer

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Re: Race from $2M to $4M...and Beyond!
« Reply #6304 on: August 18, 2022, 10:13:17 PM »
But then something changed in me this last year and 2.0M is feeling like enough.

Yeah, itís changing for me.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #6305 on: August 19, 2022, 08:50:07 AM »
Checked valuation on some assets and updated the NW numbers.  A few months ago, I thought we were at risk of dropping back below 3, and now we're up through 3.6.  "Beyond" territory is in sight.  We're up half a million YTD, which is crazy.

I'm having trouble processing these numbers and thinking about what it means for how we choose to live our lives.  DW really wants to invest in a real estate opportunity.  It shows promise and I think it could work out well (lots of due diligence to do yet), but I just can't process more things to do with the new job still stretching my brain.  The other thing I'm feeling is that at this NW, what's the point of more money (through employment or RE development that takes a lot of work) when what I really want is 100% control over my own time?

I used to think my number was 1M.  When we crossed that, I though 2... no 2.5.  Then we blew through that, and now?  No idea.  4?  5?  I feel l still have things to give in the work world, but there's some basic hard work to be done, and entirely unmotivated to do it.

Sob, sob, sob.  We're rich, I'm feeling lazy, and I don't know what to do with myself.  First world problems...

Sorry for the disconnected thoughts.  Just needed to vent.  On with your normal programming...

As the numbers get bigger, it does become a distraction.  I have plenty of days now where work income is meaningless - 1% market movements increase or decrease my net worth by months of salary.  But I don't have any control over that fluctuation, whereas I can still feel good about putting in a good day of work or being efficient and saving a few bucks.  I do have to focus more on what is important - taxes, asset allocation, and big ticket items - and I just have to be willing to let the little things go.  Tipping generously and stepping up philanthropy has helped maintain this mindset. 

ATtiny85

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Re: Race from $2M to $4M...and Beyond!
« Reply #6306 on: August 19, 2022, 09:34:15 AM »
Here's a little tip that I would offer up, based on what I did today.  I was feeling a little FOMO with respect to the market but yet not at all convinced its picked a direction, so I looked for a stock / ETF (I chose a stock) that I felt good about being at least 10-15% higher in a year.  Then I just bought a little -- a couple thousand $ worth.   Helped me deal mentally with the FOMO urge while not committing more heavily to a potential temporary move higher.  Just my 2 cents for the day --- probably worth the price of admission :-)

I have never felt this urge, but since it was the first of the month, I bought about a thousand bucks worth of the entire equity market. Just like every other month. 401k of course.

Whe you say you had FOMO, does that mean you donít make regular investments and stay in cash? Or that you donít have much equity exposure in general? ETA: I see you put more info here and there, so never mind.

For the general thread topic, we only update our ďofficialĒ spreadsheet once a year, but I eyeball things now and then and we should be getting back close to where we were this time last year. Ok, maybe Spring of last year.
« Last Edit: August 19, 2022, 09:36:11 AM by ATtiny85 »

couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #6307 on: August 19, 2022, 03:20:53 PM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #6308 on: August 20, 2022, 01:03:52 AM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.
I hope he was impressed with your efforts.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #6309 on: August 20, 2022, 03:53:54 AM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.

That feeling of unreality of the numbers in the brokerage account statements never goes away completely! For people who have accumulated their savings over a long period of time, like most of us here, the numbers won't feel concrete until you actually start spending money.

Here is when I really started top understand how much we had saved: We did a big (over $125k) home renovation project right after I retired in 2020. We finally fixed a number of lingering problems with our house that had been annoyances for the twenty five years we have lived here. Also, I got a proper basement workshop for my hobbies. We paid for this project entirely out of savings. After the project was over, I updated my spreadsheets found that it had no discernible impact on our retirement...


ATtiny85

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Re: Race from $2M to $4M...and Beyond!
« Reply #6310 on: August 20, 2022, 05:43:54 AM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.
I hope he was impressed with your efforts.

Sounds like their efforts.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #6311 on: August 20, 2022, 06:34:10 AM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.

That feeling of unreality of the numbers in the brokerage account statements never goes away completely! For people who have accumulated their savings over a long period of time, like most of us here, the numbers won't feel concrete until you actually start spending money.

Here is when I really started top understand how much we had saved: We did a big (over $125k) home renovation project right after I retired in 2020. We finally fixed a number of lingering problems with our house that had been annoyances for the twenty five years we have lived here. Also, I got a proper basement workshop for my hobbies. We paid for this project entirely out of savings. After the project was over, I updated my spreadsheets found that it had no discernible impact on our retirement...

Some of that has also been due to the relentlessly bullish market.  We'll get a taste of $125k in spending have more effect if we get in to a 'real' bear market and not just the froth being blown off the top!  I'm thinking a 2008 - 2009 style drop.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #6312 on: August 20, 2022, 01:17:44 PM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.

That feeling of unreality of the numbers in the brokerage account statements never goes away completely! For people who have accumulated their savings over a long period of time, like most of us here, the numbers won't feel concrete until you actually start spending money.

Here is when I really started top understand how much we had saved: We did a big (over $125k) home renovation project right after I retired in 2020. We finally fixed a number of lingering problems with our house that had been annoyances for the twenty five years we have lived here. Also, I got a proper basement workshop for my hobbies. We paid for this project entirely out of savings. After the project was over, I updated my spreadsheets found that it had no discernible impact on our retirement...

Some of that has also been due to the relentlessly bullish market.  We'll get a taste of $125k in spending have more effect if we get in to a 'real' bear market and not just the froth being blown off the top!  I'm thinking a 2008 - 2009 style drop.

This is true and I guess points to the fact that you need sufficient "safe" investments to carry you through. If I remember right 2008 was a 4 year event (i.e 4 years between, the top of the market in 2007 to when when it crossed the same point). So in theory if you have 2 years of cash and another 2 to 5 years in bonds you should be able to avoid spending any stocks which of course take a major pounding in a bear market... "Captain Obvious" statement I know..:)

couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #6313 on: August 20, 2022, 04:37:15 PM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.
I hope he was impressed with your efforts.

Sounds like their efforts.
I think she meant my statements monthly vs earning efforts. LOL!

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #6314 on: August 21, 2022, 03:42:56 AM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.

That feeling of unreality of the numbers in the brokerage account statements never goes away completely! For people who have accumulated their savings over a long period of time, like most of us here, the numbers won't feel concrete until you actually start spending money.

Here is when I really started top understand how much we had saved: We did a big (over $125k) home renovation project right after I retired in 2020. We finally fixed a number of lingering problems with our house that had been annoyances for the twenty five years we have lived here. Also, I got a proper basement workshop for my hobbies. We paid for this project entirely out of savings. After the project was over, I updated my spreadsheets found that it had no discernible impact on our retirement...

Some of that has also been due to the relentlessly bullish market.  We'll get a taste of $125k in spending have more effect if we get in to a 'real' bear market and not just the froth being blown off the top!  I'm thinking a 2008 - 2009 style drop.

That may all be true but its orthogonal to the point I was trying to make :-)

My observation is this: if you have been a mustachian and have been living frugally and investing diligently for a long time, the numbers in your account statements start to feel abstract after a while. If you have overshot your savings goals, its not a bad idea to spend some money so you get a better understanding of what you could do with your savings.

When I started working in the early 1990s, my wife and I thought it would be a good achievement if we could somehow afford to retire at 65. I just updated my retirement model and we are on track for a 1% withdrawal rate. We have wildly overshot our savings goals - we could retire comfortably solely based on our taxable accounts.

Incidentally, let me give a plug for the Pralana retirement calculator which is one of the tools that I use. Since it does tax calculations, I find it more useful than many of the other retirement calculators that make the simplistic assumption that you have all of your money in a Roth IRA.




2Birds1Stone

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Re: Race from $2M to $4M...and Beyond!
« Reply #6315 on: August 21, 2022, 04:12:54 AM »
@2sk22, is the Bronze version worth checking out? Or only the paid version?

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #6316 on: August 21, 2022, 06:39:36 AM »
@2sk22, is the Bronze version worth checking out? Or only the paid version?

I took a quick look on the website and I found that the bronze package missing the section in which you enter the details of your financial assets. This seems like a significant deficiency but since it's free, it should be worth trying it out.

tooqk4u22

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Re: Race from $2M to $4M...and Beyond!
« Reply #6317 on: August 21, 2022, 12:14:28 PM »
I showed my husband the NW statements I update monthly, and have been updating monthly for a long time. It took what felt like forever to get to $1M, and only 5 years to get from $1.3M to $3.0M. So I donít think the change in net worth amounts have actually sunk in. We still feel like $1M people. Of course our dream house is probably $1.8M in CA, so we have some realignment or additional earning to do.

That feeling of unreality of the numbers in the brokerage account statements never goes away completely! For people who have accumulated their savings over a long period of time, like most of us here, the numbers won't feel concrete until you actually start spending money.

Here is when I really started top understand how much we had saved: We did a big (over $125k) home renovation project right after I retired in 2020. We finally fixed a number of lingering problems with our house that had been annoyances for the twenty five years we have lived here. Also, I got a proper basement workshop for my hobbies. We paid for this project entirely out of savings. After the project was over, I updated my spreadsheets found that it had no discernible impact on our retirement...

It is unreal and sometimes feel like it could all evaporate in a blink of an eye.....so my stupid way to fake myself out is to just assume I have 25% less than I do and see how I feel.   

CANStache

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Re: Race from $2M to $4M...and Beyond!
« Reply #6318 on: August 25, 2022, 12:54:21 PM »
I took a quick look on the website and I found that the bronze package missing the section in which you enter the details of your financial assets. This seems like a significant deficiency but since it's free, it should be worth trying it out.

Significant deficiency is the most polite way of putting that :)  If that's truly the case, I don't see how the bronze is useful.  And I (still) hesitate to send someone $100 for an XLS that looks more comprehensive than my own, but....how much more?

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #6319 on: August 26, 2022, 02:47:08 PM »
I took a quick look on the website and I found that the bronze package missing the section in which you enter the details of your financial assets. This seems like a significant deficiency but since it's free, it should be worth trying it out.

Significant deficiency is the most polite way of putting that :)  If that's truly the case, I don't see how the bronze is useful.  And I (still) hesitate to send someone $100 for an XLS that looks more comprehensive than my own, but....how much more?

If you already have a good spreadsheet, you may not really need Pralana Gold. The one big reason to use Pralana is if you have a big taxable portfolio. In my household, we have as much in taxable accounts as we do in tax advantaged accounts. I had a couple of goals in using Pralana: 1. To see how much we would need to withdraw from our taxable accounts and 2. How much headroom is there for Roth conversions? I think I was able to get answers for both questions.

I also feel that this application is really pushing the limits of what you can do in the form of an Excel spreadsheet. It helps that Excel offers a huge library of financial functions which probably greatly reduces the amount of code which has to be written. On the other hand, the user interface is pretty bad.

If you have an M1 Mac, there is one more constraint which is that you need to be aware of: to run Pralana, you have to run Excel under Rosetta as there is a Mac Excel bug that Microsoft has apparently been refusing to fix. I was able to run Pralana on my M1 MacBook Air but it was a nuisance to remember to turn on Rosetta on each time I ran Pralana. I found it easier to run Pralana on a cheap compact PC with Windows that I had lying around.

The biggest problem with all of these retirement planning tools is that they are unable to explain their calculations. Ideally I would like to be able to click on a number and have the app explain exactly how it was computed. I am toying with the idea of writing my own retirement modeling app that would provide this feature and be able to handle scenarios like mine where there are amounts in taxable accounts. I am pretty sure I could write such an app to meet my own personal needs but it would be a lot of work to package it up and distribute it.

arcturus

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Re: Race from $2M to $4M...and Beyond!
« Reply #6320 on: August 29, 2022, 06:45:03 AM »
Maybe this week presents an opportunity for those of us with a *little* cash on the sidelines to start putting some of it to work....think we can thank Powell for this opportunity.

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Re: Race from $2M to $4M...and Beyond!
« Reply #6321 on: August 30, 2022, 07:34:13 AM »
Ok, finally, a retirement article that I enjoyed.  For those interested, search for "Here's what a $2 million retirement looks like in America" by the Wall Street Journal.  The article gives 4 case studies from 4 people in different walks of life, with the common thread that they were all in the $2-4M net worth range at the time of their retirement.

Although its impossible to extrapolate too much from it, because everyone's circumstance is different, I thought it was an interesting read.   For me there seemed to be a few takeaways: (1) all seemed to be successful in becoming engaged in other activities, hobbies, interests since their retirement; (2) all seemed to have a comfortable lifestyle -- not extravagant, but comfortable; (3) 2 of the four had second homes, which I'm sure is an added expense that I don't *plan* on having; and (4) although some did have supplemental sources of income in retirement to help, most had retirement account balances that had not gone down too appreciably since their retirement.

Would be curious to get the reactions from those in this thread that have already pulled the trigger on retirement.  I found the article somewhat assuring, that all the spreadsheets and retirement calculators etc don't seem to be far off. 

Turtle

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Re: Race from $2M to $4M...and Beyond!
« Reply #6322 on: August 30, 2022, 08:30:40 AM »
Ok, finally, a retirement article that I enjoyed.  For those interested, search for "Here's what a $2 million retirement looks like in America" by the Wall Street Journal.  The article gives 4 case studies from 4 people in different walks of life, with the common thread that they were all in the $2-4M net worth range at the time of their retirement.

Although its impossible to extrapolate too much from it, because everyone's circumstance is different, I thought it was an interesting read.   For me there seemed to be a few takeaways: (1) all seemed to be successful in becoming engaged in other activities, hobbies, interests since their retirement; (2) all seemed to have a comfortable lifestyle -- not extravagant, but comfortable; (3) 2 of the four had second homes, which I'm sure is an added expense that I don't *plan* on having; and (4) although some did have supplemental sources of income in retirement to help, most had retirement account balances that had not gone down too appreciably since their retirement.

Would be curious to get the reactions from those in this thread that have already pulled the trigger on retirement.  I found the article somewhat assuring, that all the spreadsheets and retirement calculators etc don't seem to be far off.

I second the recommendation.  The article is available in Apple News even if you are not a WSJ subscriber.

farmecologist

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Re: Race from $2M to $4M...and Beyond!
« Reply #6323 on: August 30, 2022, 09:05:19 AM »
Interesting article...but some things.

"Mr. Fitzgerald considers himself fortunate as he also has a roughly $6,900 monthly pension after taxes and insurance."

Uhh...I'd be willing to bet 99.9% of the population won't see a pension that large...and most no pension whatsoever.  And we wonder why governments are having trouble paying pension obligations, etc...


"As interest rates have risen, heís ( James Compton) concerned about the $200,000 adjustable-rate mortgage heís still paying off on his three-bedroom Chicago townhome. He is unsure what the loanís rate will be when it resets next year so he is considering his options including eventually selling his home.

ďDonít go into retirement with a mortgage,Ē he said."


I'd second that...but others here will disagree, for sure. 

And all of them are relatively old...I wish they would have had at least one 'early' retiree in the group.





2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #6324 on: August 30, 2022, 09:12:05 AM »
Ok, finally, a retirement article that I enjoyed.  For those interested, search for "Here's what a $2 million retirement looks like in America" by the Wall Street Journal.  The article gives 4 case studies from 4 people in different walks of life, with the common thread that they were all in the $2-4M net worth range at the time of their retirement.

Although its impossible to extrapolate too much from it, because everyone's circumstance is different, I thought it was an interesting read.   For me there seemed to be a few takeaways: (1) all seemed to be successful in becoming engaged in other activities, hobbies, interests since their retirement; (2) all seemed to have a comfortable lifestyle -- not extravagant, but comfortable; (3) 2 of the four had second homes, which I'm sure is an added expense that I don't *plan* on having; and (4) although some did have supplemental sources of income in retirement to help, most had retirement account balances that had not gone down too appreciably since their retirement.

Would be curious to get the reactions from those in this thread that have already pulled the trigger on retirement.  I found the article somewhat assuring, that all the spreadsheets and retirement calculators etc don't seem to be far off.

This article was interesting but none of the people seem to be particularly relevant to this group. The retired policeman is a case in point:

Quote
In total, Mr. Fitzgerald estimates they pay about $12,000 in monthly expenses including mortgage payments for their Maryland home and a Delaware beach house. The couple has about $400,000 in debt including mortgages and car loans. 

This seems like a very high burn rate! But maybe that's the Boglehead in me speaking :-)

I am fat FIREd and our annual expenses are only about $90,000 (excluding daughters college costs which comes from a separate non-retirement account)

farmecologist

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Re: Race from $2M to $4M...and Beyond!
« Reply #6325 on: August 30, 2022, 09:18:06 AM »
Ok, finally, a retirement article that I enjoyed.  For those interested, search for "Here's what a $2 million retirement looks like in America" by the Wall Street Journal.  The article gives 4 case studies from 4 people in different walks of life, with the common thread that they were all in the $2-4M net worth range at the time of their retirement.

Although its impossible to extrapolate too much from it, because everyone's circumstance is different, I thought it was an interesting read.   For me there seemed to be a few takeaways: (1) all seemed to be successful in becoming engaged in other activities, hobbies, interests since their retirement; (2) all seemed to have a comfortable lifestyle -- not extravagant, but comfortable; (3) 2 of the four had second homes, which I'm sure is an added expense that I don't *plan* on having; and (4) although some did have supplemental sources of income in retirement to help, most had retirement account balances that had not gone down too appreciably since their retirement.

Would be curious to get the reactions from those in this thread that have already pulled the trigger on retirement.  I found the article somewhat assuring, that all the spreadsheets and retirement calculators etc don't seem to be far off.

This article was interesting but none of the people seem to be particularly relevant to this group. The retired policeman is a case in point:

Quote
In total, Mr. Fitzgerald estimates they pay about $12,000 in monthly expenses including mortgage payments for their Maryland home and a Delaware beach house. The couple has about $400,000 in debt including mortgages and car loans.

This seems like a very high burn rate! But maybe that's the Boglehead in me speaking :-)

I am fat FIREd and our annual expenses are only about $90,000 (excluding daughters college costs which comes from a separate non-retirement account)

Very high burn rate...However, I'd bet the property taxes on those two properties are QUITE high.  Prop taxes are insane out there.  I'd stress again that he has a $6900 a month pension...that also seems pretty insane...




2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #6326 on: August 30, 2022, 09:37:04 AM »
Very high burn rate...However, I'd bet the property taxes on those two properties are QUITE high.  Prop taxes are insane out there.  I'd stress again that he has a $6900 a month pension...that also seems pretty insane...

I just don't get the desire to own multiple houses. Why have the hassle of maintaining and paying for a second home. Instead, why not just use AirBnB or VRBO and find a rental whenever you want one? There are some fantastic deals out there - we just got back from a wonderful short vacation in New Hampshire. We loved the house we rented via AirBnB but have zero desire to own it.

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Re: Race from $2M to $4M...and Beyond!
« Reply #6327 on: August 30, 2022, 09:48:22 AM »

Would be curious to get the reactions from those in this thread that have already pulled the trigger on retirement.  I found the article somewhat assuring, that all the spreadsheets and retirement calculators etc don't seem to be far off.

Stocks, bonds, cash, mortgage notes = ~$1.6m at end of May of 2018, ~$1.54m end of July, 2022.

But we also transferred some of that wealth into real estate.   

Total net worth ~$2.75m end of May, 2018, ~$3.66m end of July, 2022.    To be fair, ~$500k of that is due to getting more accurate valuations on farmland, and so it's possible our net worth back in May, 2018 was ~$3.25m instead.

Either way, we have no complaints.  Our income has gone up with SS and rents and expenses have gone down with ACA and Medicare. 

Fru-Gal

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Re: Race from $2M to $4M...and Beyond!
« Reply #6328 on: August 30, 2022, 09:58:43 AM »
I enjoyed that article and some of the comments. Iím in this thread because for a minute there between the house and my retirement accounts we were at 2 million. But my investments have dropped significantly. That said the article makes me so glad I retired this year at age 51. It would be interesting to see a similar article with people retiring with around $1 million in investments (my million is now well in the rearview, but I expect it to return). I have only sold $10,000 in stock so far. I actually need to sell a little bit more to make enough income to keep my ACA coverage for the family where I want it.

Owning two houses seems like insanity. The entire reason Iím able to do all this is because my property taxes and mortgage payment are incredibly low given my high cost of living area.

I remember reading that white coat investor guy talking about physician retirement and the rule was one practice, one house, one spouse 😂 .


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Re: Race from $2M to $4M...and Beyond!
« Reply #6329 on: August 30, 2022, 10:01:50 AM »
Very high burn rate...However, I'd bet the property taxes on those two properties are QUITE high.  Prop taxes are insane out there.  I'd stress again that he has a $6900 a month pension...that also seems pretty insane...

I just don't get the desire to own multiple houses. Why have the hassle of maintaining and paying for a second home. Instead, why not just use AirBnB or VRBO and find a rental whenever you want one? There are some fantastic deals out there - we just got back from a wonderful short vacation in New Hampshire. We loved the house we rented via AirBnB but have zero desire to own it.

The article doesn't do a good job of saying whether or not they have rented out these second properties or not.  I have friends who have a coastal second house in a SC beach town, but they rent it out and have only used it for themselves a few times.

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Re: Race from $2M to $4M...and Beyond!
« Reply #6330 on: August 30, 2022, 10:14:58 AM »
Our second home costs about $8,500 per year to own. I would get rid of it, but one long weekend in an air BnB is going to be $6,000 for a Die With Zero 50th birthday experience. In retirement I will be able to spend time at my $8,500 per year second home while renting my regular house for Die With Zero folks money. Renting my main home for ridiculous amounts on occasions will hopefully pay dividends. 

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Re: Race from $2M to $4M...and Beyond!
« Reply #6331 on: August 30, 2022, 05:50:08 PM »

I remember reading that white coat investor guy talking about physician retirement and the rule was one practice, one house, one spouse 😂 .

Reminds me of that other rule....if it F*#KS, flies or floats then rent it!

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Re: Race from $2M to $4M...and Beyond!
« Reply #6332 on: August 30, 2022, 06:09:36 PM »

Would be curious to get the reactions from those in this thread that have already pulled the trigger on retirement.  I found the article somewhat assuring, that all the spreadsheets and retirement calculators etc don't seem to be far off.

Stocks, bonds, cash, mortgage notes = ~$1.6m at end of May of 2018, ~$1.54m end of July, 2022.

But we also transferred some of that wealth into real estate.   

Total net worth ~$2.75m end of May, 2018, ~$3.66m end of July, 2022.    To be fair, ~$500k of that is due to getting more accurate valuations on farmland, and so it's possible our net worth back in May, 2018 was ~$3.25m instead.

Either way, we have no complaints.  Our income has gone up with SS and rents and expenses have gone down with ACA and Medicare.

Hearing experiences like this gives a wannabe like me some courage that this is doable.  Although I don't have any rental properties, pension etc. to offset cash burn in retirement (other than the hope of Social Security at some point in the future), it is still encouraging to hear stories about people who have been retired for several years and their invested assets have not even gone down by any appreciable amount!

Now, I'm not sure that I'm as frugal as others on this thread, but it still brings confidence that this is all controllable once I hit a reasonable starting point.  At about $2.1 invested and $2.6 nw, I'm still not there IMO.

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Re: Race from $2M to $4M...and Beyond!
« Reply #6333 on: August 30, 2022, 06:33:29 PM »
Although I don't have any rental properties, pension etc. to offset cash burn in retirement (other than the hope of Social Security at some point in the future), it is still encouraging to hear stories about people who have been retired for several years and their invested assets have not even gone down by any appreciable amount!

I retired in 2016.  Since that time I have paid for all my living expenses and 30 semesters of private high school and college for my three kids.  My net worth is approximately double what it was the day I retired (and it was more than double earlier this year before the market pull back).

There are several reasons for this:

1.  I kept a high stock allocation (generally over 90%) during that period of time and stocks have done well.
2.  I have had a very low withdrawal rate (generally under 2%, and often under 1%) during that period of time.  I'm just not a big spender.
3.  I have a variety of small income streams that are not related to my portfolio that I did not include in my FIRE readiness checks.  Individually they are not big, but in aggregate add up to about half of my annual spending.
4.  Because I am not a big spender, I can keep my taxable income relatively low.  As a result, I really pay little to nothing in income taxes.(*)

(*) Yes, I'm aware of Roth conversions and the tax torpedo later in life.  I'm managing this as well as I can; however with the numerous tax breaks that phase in and out at various income levels, I end up hitting a high effective marginal tax rate at quite a low income, so Roth conversions beyond a modest level don't pencil out.

tooqk4u22

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Re: Race from $2M to $4M...and Beyond!
« Reply #6334 on: August 30, 2022, 08:04:03 PM »
Interesting article...but some things.

"Mr. Fitzgerald considers himself fortunate as he also has a roughly $6,900 monthly pension after taxes and insurance."

Uhh...I'd be willing to bet 99.9% of the population won't see a pension that large...and most no pension whatsoever.  And we wonder why governments are having trouble paying pension obligations, etc...

Ignore for a moment that it is AFTER Taxes AND
Insurance at 4% rule that's like $2.07M, I get that PV o pension not same as 4% on investment portfolio but it is also guaranteed.  But yeah fat FIRE, which I am a fan of btw

arcturus

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Re: Race from $2M to $4M...and Beyond!
« Reply #6335 on: August 31, 2022, 06:23:51 AM »
Interesting article...but some things.

"Mr. Fitzgerald considers himself fortunate as he also has a roughly $6,900 monthly pension after taxes and insurance."

Uhh...I'd be willing to bet 99.9% of the population won't see a pension that large...and most no pension whatsoever.  And we wonder why governments are having trouble paying pension obligations, etc...

Ignore for a moment that it is AFTER Taxes AND
Insurance at 4% rule that's like $2.07M, I get that PV o pension not same as 4% on investment portfolio but it is also guaranteed.  But yeah fat FIRE, which I am a fan of btw

Pensions are an amazing thing.  And its amazing that they still exist without bankrupting every company / govt that had a pension plan.  But good for those who are on the receiving end!  I just wonder how many people have been done a dis-service by the pension plan by thinking that's all they needed, only to have their employer recognize that they can no longer pay it and change the terms.

To make myself feel a bit better about not having a pension, I took a look at our (mine + DW) "expected" social security payouts, once we hit 67.  If I say that payout will continue for 20 years, and adjust for ~2.5% annual inflation increases, the present value at 7% (inflation + 4%) is around $725K before taxes.   Not $2M by any stretch, but better than $0.   Of course, I know the "expected" benefit above will come down by virtue of retiring early.   I have not factored that math into the equation, nor do I know how to. 

Turtle

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Re: Race from $2M to $4M...and Beyond!
« Reply #6336 on: August 31, 2022, 07:12:04 AM »

Would be curious to get the reactions from those in this thread that have already pulled the trigger on retirement.  I found the article somewhat assuring, that all the spreadsheets and retirement calculators etc don't seem to be far off.

Stocks, bonds, cash, mortgage notes = ~$1.6m at end of May of 2018, ~$1.54m end of July, 2022.

But we also transferred some of that wealth into real estate.   

Total net worth ~$2.75m end of May, 2018, ~$3.66m end of July, 2022.    To be fair, ~$500k of that is due to getting more accurate valuations on farmland, and so it's possible our net worth back in May, 2018 was ~$3.25m instead.

Either way, we have no complaints.  Our income has gone up with SS and rents and expenses have gone down with ACA and Medicare.

Hearing experiences like this gives a wannabe like me some courage that this is doable.  Although I don't have any rental properties, pension etc. to offset cash burn in retirement (other than the hope of Social Security at some point in the future), it is still encouraging to hear stories about people who have been retired for several years and their invested assets have not even gone down by any appreciable amount!

Now, I'm not sure that I'm as frugal as others on this thread, but it still brings confidence that this is all controllable once I hit a reasonable starting point.  At about $2.1 invested and $2.6 nw, I'm still not there IMO.

I'm about .5 behind you.  NW is close to peeking into this thread, but I want the invested over the line before I pull the plug.

farmecologist

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Re: Race from $2M to $4M...and Beyond!
« Reply #6337 on: August 31, 2022, 10:19:10 AM »
Interesting article...but some things.

"Mr. Fitzgerald considers himself fortunate as he also has a roughly $6,900 monthly pension after taxes and insurance."

Uhh...I'd be willing to bet 99.9% of the population won't see a pension that large...and most no pension whatsoever.  And we wonder why governments are having trouble paying pension obligations, etc...

Ignore for a moment that it is AFTER Taxes AND
Insurance at 4% rule that's like $2.07M, I get that PV o pension not same as 4% on investment portfolio but it is also guaranteed.  But yeah fat FIRE, which I am a fan of btw

Pensions are an amazing thing.  And its amazing that they still exist without bankrupting every company / govt that had a pension plan.  But good for those who are on the receiving end!  I just wonder how many people have been done a dis-service by the pension plan by thinking that's all they needed, only to have their employer recognize that they can no longer pay it and change the terms.

To make myself feel a bit better about not having a pension, I took a look at our (mine + DW) "expected" social security payouts, once we hit 67.  If I say that payout will continue for 20 years, and adjust for ~2.5% annual inflation increases, the present value at 7% (inflation + 4%) is around $725K before taxes.   Not $2M by any stretch, but better than $0.   Of course, I know the "expected" benefit above will come down by virtue of retiring early.   I have not factored that math into the equation, nor do I know how to.

I won't get a pension either...but my wife will.  However, it won't *anywhere near* $6,900 a month.  That example in the article is straight up insane...lol.  Any pension funds will most likely be earmarked to go towards health insurance.  Also, we are planning taking social security at 62.  I've done the math, multiple times, and the crossover where waiting is beneficial is such that it isn't work taking the risk, especially due to the fact my wife has a chronic medical condition.

« Last Edit: August 31, 2022, 10:21:11 AM by farmecologist »

Fomerly known as something

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Re: Race from $2M to $4M...and Beyond!
« Reply #6338 on: August 31, 2022, 11:54:34 AM »
My Pension will be +/- that Gross a month not net for the first 15 years when I a $1,500 a month social security supplement.  But Iím a highest ďnormalĒ Fed salary Special category employee.  (People like Dr Fauci have even more special pay scales).

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #6339 on: September 01, 2022, 08:44:26 AM »
Market drops means the net worth is down $45k since July.   No big deal.   

arcturus

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Re: Race from $2M to $4M...and Beyond!
« Reply #6340 on: September 02, 2022, 02:52:27 PM »
@SwordGuy , yeah, I'm not sure how much I'm down since July, but the past week has been a regression for sure.  Treading water in the $2.0 to $2.1 range depending on the day.  I optimistically think that this is the last roar from the bear market, unclear when this one ends, but it is giving me a chance to put what little cash I have on the sidelines back in the market.  Have been dribbling a little in here and there.  So its been good for that, I guess.

couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #6341 on: September 03, 2022, 08:03:58 AM »
@SwordGuy are in the same boat. Treading water, but grateful to be at the tale end of the accumulation phase versus the beginning phase.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #6342 on: September 04, 2022, 08:16:36 AM »
Very high burn rate...However, I'd bet the property taxes on those two properties are QUITE high.  Prop taxes are insane out there.  I'd stress again that he has a $6900 a month pension...that also seems pretty insane...

I just don't get the desire to own multiple houses. Why have the hassle of maintaining and paying for a second home. Instead, why not just use AirBnB or VRBO and find a rental whenever you want one? There are some fantastic deals out there - we just got back from a wonderful short vacation in New Hampshire. We loved the house we rented via AirBnB but have zero desire to own it.

I'm not sure if it is related to a certain point in life (e.g. empty nest), economic conditions (increased real estate equity), or maybe inflation hedging / portfolio diversification...  but many of our friends that sold their primary homes this past year are now on to buying second homes while they figure out their primary situation.  They have gone real estate crazy!  Time will tell if this was a good idea or if the bubble will burst, but they are renting out their 'second' homes for outrageous amounts right now and could make a tidy profit if they wanted to sell.

I'm not opposed to the idea of having a second home someday, my Dad has a modest cabin near a lake and there is something special about making it your own and building a relationship with the community.  It'll be a fun retirement project and could serve as a transition when we are ready to move out of Houston.  If we get another real estate collapse a la 2009 I might move my timeline up.  I view having high interest rates as being a good thing as long as I buy a home I could pay off.  I did pretty well last time getting a good deal on our current home and refinancing as rates dropped...  Wouldn't mind doing that again.

farmecologist

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Re: Race from $2M to $4M...and Beyond!
« Reply #6343 on: September 06, 2022, 10:50:02 AM »
Very high burn rate...However, I'd bet the property taxes on those two properties are QUITE high.  Prop taxes are insane out there.  I'd stress again that he has a $6900 a month pension...that also seems pretty insane...

I just don't get the desire to own multiple houses. Why have the hassle of maintaining and paying for a second home. Instead, why not just use AirBnB or VRBO and find a rental whenever you want one? There are some fantastic deals out there - we just got back from a wonderful short vacation in New Hampshire. We loved the house we rented via AirBnB but have zero desire to own it.

I'm not sure if it is related to a certain point in life (e.g. empty nest), economic conditions (increased real estate equity), or maybe inflation hedging / portfolio diversification...  but many of our friends that sold their primary homes this past year are now on to buying second homes while they figure out their primary situation.  They have gone real estate crazy!  Time will tell if this was a good idea or if the bubble will burst, but they are renting out their 'second' homes for outrageous amounts right now and could make a tidy profit if they wanted to sell.

I'm not opposed to the idea of having a second home someday, my Dad has a modest cabin near a lake and there is something special about making it your own and building a relationship with the community.  It'll be a fun retirement project and could serve as a transition when we are ready to move out of Houston.  If we get another real estate collapse a la 2009 I might move my timeline up.  I view having high interest rates as being a good thing as long as I buy a home I could pay off.  I did pretty well last time getting a good deal on our current home and refinancing as rates dropped...  Wouldn't mind doing that again.

I've seen several high net worth individuals where a second home is more of a 'mid life crisis' thing than anything else.  They often end up regretting the purchase.

I'd agree that a 'modest cabin'. isn't in the same category as a 'second home'.   The problem is, in my neck of the woods (Minnesota), modest cabins don't exist anymore.  They *used* to exist....but any modest cabins that exist physically don't exist at modest cabin prices anymore.  And far too many well to do folks have purchased land that *had* a modest cabin, and then proceeded to tear it down and build CabinMcMansion on the land.  Pretty sad stuff.   If you don't already have a cabin in your family, your are pretty much SOL at this point.

On a personal note, my grandparents had a cabin up to the point where I was in my late teens and I have many fond memories of it.  Unfortunately, it is long since sold. Apparently my mother and her siblings couldn't afford to take it over at the time my grandparents were forced to sell. I *really* wish it was still in the family.

« Last Edit: September 06, 2022, 10:55:10 AM by farmecologist »

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #6344 on: September 07, 2022, 06:25:11 PM »
Decided to recategorize how we calculate net worth.  I've all but decided that I will take the annuity style pension vs the lump sum.  I've still got about 250 days to decide.  The annuity with 100/100 employee/survivor will be about $4500 a month.  There will be no COLA.  Yes interest rates will eat that value over time.  But, Social Security will be kicking in hopefully about that time.  So now I'm reducing our liquid net worth to 2.4 million dollars.  We stay in the club here, but I'm not counting that big lump sum payment anymore.  I don't include houses, cars boats or other crap either.  So now that I'm nearly broke 😂, gonna have to bootstrap.  I think we'll still be fine as long as we recover by next summer.  Taking out that lump sum amount from NW, also increases my current percent down from old highs. 
Just some mental games to make myself think poor.
« Last Edit: September 07, 2022, 06:27:07 PM by Bateaux »

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Re: Race from $2M to $4M...and Beyond!
« Reply #6345 on: September 07, 2022, 06:30:11 PM »
So now I'm reducing our liquid net worth to 2.4 million dollars.  ...
Just some mental games to make myself think poor.

Horror of horrors!   True poverty indeed!   Almost six American households out of every one hundred will be wealthier!   Definitely time to hang your head in shame.  :)

couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #6346 on: September 07, 2022, 09:18:40 PM »
A $4,500 pension is SWEET. Given how much you have accumulated, I doubt you are even going to need to touch the stash for awhile and it will just keep growing.

farmecologist

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Re: Race from $2M to $4M...and Beyond!
« Reply #6347 on: September 08, 2022, 11:42:25 AM »
Decided to recategorize how we calculate net worth.  I've all but decided that I will take the annuity style pension vs the lump sum.  I've still got about 250 days to decide.  The annuity with 100/100 employee/survivor will be about $4500 a month.  There will be no COLA.  Yes interest rates will eat that value over time.  But, Social Security will be kicking in hopefully about that time.  So now I'm reducing our liquid net worth to 2.4 million dollars.  We stay in the club here, but I'm not counting that big lump sum payment anymore.  I don't include houses, cars boats or other crap either.  So now that I'm nearly broke , gonna have to bootstrap.  I think we'll still be fine as long as we recover by next summer.  Taking out that lump sum amount from NW, also increases my current percent down from old highs. 
Just some mental games to make myself think poor.

I won't get a pension...but my wife will.  However, it won't be anywhere near $4500 a month unless she sticks with the job until 'retirement age' ( i.e. - mid 60s or so )...which isn't going to happen.  However, we feel blessed to even have it at all.  The current thought is to earmark the pension income towards healthcare costs. 





arcturus

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Re: Race from $2M to $4M...and Beyond!
« Reply #6348 on: September 08, 2022, 07:30:37 PM »
A $4,500 pension is SWEET. Given how much you have accumulated, I doubt you are even going to need to touch the stash for awhile and it will just keep growing.

Agreed -- guesstimate is ~$650,000 in pre-tax present value.   I can understand why you might exclude it from your net worth calc @Bateaux , but I could also see a case for including it as it will make a huge difference in your future withdrawal rate.   Fortunately (er, UN-fortunately) I don't have this financial dilemma, given that I'm pension-less (definition -- a state or condition of being without a stable source of income in retirement, placing the individual's early retirement almost entirely subject to the whims of the stock market :-)  ).

 @Exflyboy and others from the UK or expats thereof, so sorry to hear of the passing of QE II today.  A huge loss for all.
« Last Edit: September 08, 2022, 07:45:46 PM by arcturus »

rmorris50

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Re: Race from $2M to $4M...and Beyond!
« Reply #6349 on: September 08, 2022, 11:42:21 PM »
Decided to recategorize how we calculate net worth.  I've all but decided that I will take the annuity style pension vs the lump sum.  I've still got about 250 days to decide.  The annuity with 100/100 employee/survivor will be about $4500 a month.  There will be no COLA.  Yes interest rates will eat that value over time.  But, Social Security will be kicking in hopefully about that time.  So now I'm reducing our liquid net worth to 2.4 million dollars.  We stay in the club here, but I'm not counting that big lump sum payment anymore.  I don't include houses, cars boats or other crap either.  So now that I'm nearly broke , gonna have to bootstrap.  I think we'll still be fine as long as we recover by next summer.  Taking out that lump sum amount from NW, also increases my current percent down from old highs. 
Just some mental games to make myself think poor.
If you were to do the lump sum would you take the after tax cash and invest or roll into an IRA and take periodic distributions?

This shows why a household cash flow projection analysis is more meaningful than looking at NW to determine retirement readiness .

Congrats on your decision. Iím still havenít decided what to do with mine pension, will more depend on what life throws at me over the next 10 years.


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