Poll

Are the majority of mustachians here who WANT to FIRE saving too much?

Yes!
78 (23.2%)
No!
84 (25%)
Maybe!
137 (40.8%)
SHUT UP! I WANT TO RETIRE ON 100% BONDS AND LIVE ON THE INTEREST!
37 (11%)

Total Members Voted: 331

Author Topic: Is it just me, or are people here *overly* cautious about FIREing?  (Read 74267 times)

arebelspy

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #50 on: November 09, 2015, 11:24:04 AM »
I got tired of typing Obamacare.

And wanted to immediately lose a lot of credibility?
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

2lazy2retire

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #51 on: November 09, 2015, 11:24:10 AM »
Anyone know why ACA is referred to here as Hussein-Care, have I missed something?

ACA is also known as ObamaCare.

Obama's full name is Barak Hussein Obama.

So, if you hear Hussein-Care or Barry-Care, the poster most probably does not like Obama.

Most likely has other issues to -

howie29

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #52 on: November 09, 2015, 11:27:36 AM »
I voted yes as well based on my above-described situation.  Better safe than sorry but there is definitely a cost associated with it.

JLee

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #53 on: November 09, 2015, 11:40:33 AM »
he also "camped" in his jeep/tent... I don't imagine that to be comfortable in my late 30s or 40s...

even in my 20s, I camp in a cabin... with a hot shower and bed :D

I do envision myself in an RV... and doing same. But it would be fairly expensive to just get the RV I wanted. Well around $60-100k... about $600-800/month just for RV payments? I don't want to be retired with that kind of "debt" looming over me. I looked at roadtrek vans, none of them seem to swing on the "cheap" side...

The point is travel doesn't have to be expensive.

Sure, if you are the type to bounce from resort to resort in your $100k RV, then yeah...it won't be cheap.

Goldielocks

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #54 on: November 09, 2015, 12:16:23 PM »
I definitely consider decreased spending as I age, risks strategy, and government income when I think of the 4% rule.  I also consider 4% as the rule if you want your money to only last 30 years, 40 years with income fluctuation..

I break down my FIRE like this; 

Phase 1 -- kids living at home  (maybe until the youngest is 20) -- 4% rule does not apply,  need to save up cash to fully fund this phase, on-going temporary contract / work part time is likely needed to ensure ramping up employment on 6 month notice is possible..  Expect cost surprises x 4 persons risk factors.

Phase 2 -- Age 50ish to 60 ish...  No gov't pension.   -- Again, savings strategy does not comply to 4% rule, rather a combo of anticipating DH's modest income and living off savings.    Ability to sell nearly paid for home and downsize in a tremendous down market if choose not to re-income ourselves.  OR - rent out rooms, etc.

Phase 3 -- Age 60 ish to 75is-- gov't income, home paid off, less costs.  SWR of 4% rule applies.
More travel in good years, less spend in bad years.    Need to asset allocate to have at least 3 years in fixed income or cash like accounts to smooth out downfall, especially at start.

Phase 4 - Age 75ish up -- 4% SWR applies.  less spending overall.  Gov't pension sufficient to carry us through if market totally tanks....extra money, if any, spent lavishly on family vacations with grandkids.


Each phase has a different spend / savings number...  I have accomplished my savings needed for phase 2. 3. 4. and working on 1 right now.

The one more year challenge, for me, is DH who sees us finally entering our "Golden Years of Spending"...  (don't get me started.....)


I am not near FI yet and my DH does not really want to FIRE; he wants to work until at least 55 (and maybe more). I like your phased approach Goldielocks. I think I need a plan like this because our situation is similarly complex (and we had kids late so by the time our youngest is 20, we will be 57 and 60, and hopefully long retired). Can you provide some examples of how you do the math for this? Even if it's with fake numbers, it would be super helpful for me.


This is how I approach it:

I work from Phase 4 backward, because I will have few options in Phase 4, other than living on less.  So, I want to secure the farthest out retirement portions first.  The magic of compound interest also means that Phase 4 and then Phase 3, are pretty easy to fund, if you get started when you are in your early 20's.

Phase 4 --

If my government benefits of CPP and OAS will provide my husband and I up to $22k per year, we will want to spend another $30k per year fun money / other expenses.   This is pretty generous for 75 yr to 95 yr, but could afford some nice private nursing supplement or respite caregiving.

At a 4% SWR, need to have $30k/0.04 =$750,000 at the start of Phase 4, or Age 75.
That is 32 years from now.
What amount of money do I need saved today in 2015 to have $750k at the age of 75?

Using my favorite, Excel.    Present Value Function.  I use 5% interest rate, which is IN ADDITION to inflation / year assumption of 3%.  e.g., I assume 8% total return rate, but I want to use current dollars to estimate income needed...

  = PV(rate, nper, pmt, fv, beg/end)
 = PV(0.05, 32, 0, -$750000,0)
PHASE 4 $ Required Today= $157,400.

Phase 3 -- Age 60 to 75  Travelling years not on a budget?
For various reasons, I have not broken this at 65, which is CPP benefits standard age, or 67, which is age for OAS. 
I want to have income of $60,000 per year, in addition to Government benefits adding up to $15,000 per year.   Very little taxes at these income rates, BTW.

Money needed to fund 15 years at $60,000, with the total invested at 4% moderate conservative asset mix, net of inflation.
How much money do I need at age 60 to fund $60,000/yr withdrawls at 4% net interest invested rate, leaving $0 at age 75 (when phase 4 kicks in?)

= PV(rate, nper, pmt, FV, beg/end)
=PV(0.04,15,-60000,0,0)
= $667,100 at age 60.

But wait -- how much do I need TODAY, to get $667,100 at age 60?   
Repeat the phase 4 calculation, with only 17 years to age 60, but the rate should be 5% average, again.

  = PV(rate, nper, pmt, fv, beg/end)
 = PV(0.05, 17, 0, -$667100,0)
PHASE 3 $ Required Today= $291,055

Phase 2 -- Age 50 to 60, DH working.

Desired income after tax is $75,000 per year, DH earning between $60,000 and $75,000 --> Average $55,000 after tax.  High income needed is because of mortgage.  grr.
He will probably make more, as he is just recently back in the workforce after 12 years out.  AND he therefore wants to work for a long time, as he likes his new career very much. (Robotics / Mechatronix)

Money needed to pull from savings:  $20,000 per year.
I will drop this back down to 2% interest, net, during the years of withdrawl I will asset allocate more conservatively.  You could split this into $60k as CASH buffer  and the remainder invested

Money needed at age 50, to last 10 years at 2% interest net of inflation...
=PV(0.02, 10, -$20000,0)
= $154,000

Money in today's dollars : (has 7 years to compound until age 50)... note, I am ok with more risk at 5% until I pull the trigger to use the money.
=PV(0.05, 7,-$154000,0)

PHASE 2 -- Money needed in today's dollars: =$109,754


Phase 1 -- for simplicity, a straight calculation, given short term.
We spend on expenses and cashflow (including accelerated mortgage which is principal), say $75000 per year. 

7 years x $75000 = 525000.
How much will come from employment (which is taxed?) -- Assume $50,000/yr of after tax dollars.
Required is therefore $175,000

 -- Where does the  money come from :  Tax deferred or tax paid accounts?
-- Let's assume it is tax paid accounts, like a ROTH or investment account.  (I could pull from my RRSP, because I don't need to wait until 59.5...  but others can't, and I am saving the RRSP for later anyway...)

Phase 1 $ Required today-- Need $175,000 in Cash.  Prefer lower taxed investments, such as dividends, but look at asset allocation best for you.  May be GIC's or other.


Totals -- needed today, in investments,   Phase 2, and 1 need to be in taxable accounts or I need more to pay for taxes.  Phase 3/4 the income is split and lower, so taxes are minor.

Phase 4 $157,400
Phase 3 $291,055
Phase 2 $109,754
Phase 1 $175,000


Total $733, 209


Now of course, this will vary widely depending on what spend rate my DH and I agree to, and how much part time work is captured in Phase 1 and Phase 2. How much tax rates vary from now to then, etc..

Also, using a 4% SWR starting at age 75 is a bit nuts (conservative) as I don't think we will live past 105 years. DOH!   But I would rather hedge to the conservative on far out numbers that I will have very little income alternatives for.  Changing it to 6% only drops TODAY's dollars by $88k.

To that end, I did not include estate legacy of my $, nor any inheritance that we will likely get, and have left the HCOL paid off house by age 60 as a separate  pool of money to be conservative.  With the workshop we have, likely DH will not want to move until he is done with it -- age 75 perhaps?

« Last Edit: November 09, 2015, 12:27:44 PM by goldielocks »

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #55 on: November 09, 2015, 12:22:02 PM »
I got tired of typing Obamacare.

And wanted to immediately lose a lot of credibility?

Meh, unless you all want to start quoting whatever the full formal name the legislation bears, abbreviations must suffice.  And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?

2lazy2retire

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #56 on: November 09, 2015, 12:27:49 PM »
I got tired of typing Obamacare.

And wanted to immediately lose a lot of credibility?

Meh, unless you all want to start quoting whatever the full formal name the legislation bears, abbreviations must suffice.  And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?

Why would the name Hussein be considered a "cowpie"

arebelspy

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #57 on: November 09, 2015, 12:29:46 PM »
I got tired of typing Obamacare.

And wanted to immediately lose a lot of credibility?

Meh, unless you all want to start quoting whatever the full formal name the legislation bears, abbreviations must suffice.  And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?

I think the common abbreviation, "ACA," is pretty easy to type and sufficient.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #58 on: November 09, 2015, 12:30:58 PM »
I got tired of typing Obamacare.

And wanted to immediately lose a lot of credibility?

Meh, unless you all want to start quoting whatever the full formal name the legislation bears, abbreviations must suffice.  And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?

Why would the name Hussein be considered a "cowpie"

I did not say it was.  Obviously some of the more excitable readers interpreted it as such.  Perhaps "Milhous-care" would be better?

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #59 on: November 09, 2015, 12:33:27 PM »
I got tired of typing Obamacare.

And wanted to immediately lose a lot of credibility?

Meh, unless you all want to start quoting whatever the full formal name the legislation bears, abbreviations must suffice.  And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?

I think the common abbreviation, "ACA," is pretty easy to type and sufficient.

Whatever peels your banana.  I'd bet dollars to doughnuts that everyone knows what we are referring to regardless of which acronym we use.

I am curious, though: assuming nobody repeals this law/set of laws (and my guess that such repeal is very unlikely except for maybe some bit pieces around the edges like the Cadillac tax), do you see this as sustainable over the long term?

arebelspy

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #60 on: November 09, 2015, 12:42:05 PM »
Yes.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

beltim

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #61 on: November 09, 2015, 12:51:04 PM »
Perhaps "Milhous-care" would be better?

Ha!  It's certainly more entertaining.

frompa

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2lazy2retire

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #63 on: November 09, 2015, 12:53:44 PM »
I got tired of typing Obamacare.

And wanted to immediately lose a lot of credibility?

Meh, unless you all want to start quoting whatever the full formal name the legislation bears, abbreviations must suffice.  And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?

Why would the name Hussein be considered a "cowpie"

I did not say it was.  Obviously some of the more excitable readers interpreted it as such.  Perhaps "Milhous-care" would be better?

You defence to using the name Hussein was "And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?" therefore you implied it , seems to be a theme of your's along with this other gem "Canuckistani"

FrugalFan

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #64 on: November 09, 2015, 01:15:46 PM »

This is how I approach it: ...


Thank you, that is super helpful! I will try a similar approach to see how things go. We have a similar situation in that DH does want to work longer than I do. But I don't know when I can stop working. If I quit right now, I would only get $900 per YEAR of CPP (thanks to a crazy long education and short time on the job market). So I guess I need to try different scenarios with different numbers of years working (for me). Our mortgage throws a wrench into things as well. We could move into a cheaper paid off house, but our current house is perfect for raising our kids in. It's still on the table though.

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #65 on: November 09, 2015, 01:29:04 PM »
I got tired of typing Obamacare.

And wanted to immediately lose a lot of credibility?

Meh, unless you all want to start quoting whatever the full formal name the legislation bears, abbreviations must suffice.  And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?

Why would the name Hussein be considered a "cowpie"

I did not say it was.  Obviously some of the more excitable readers interpreted it as such.  Perhaps "Milhous-care" would be better?

You defence to using the name Hussein was "And if we groundlings cannot throw cowpies at the Elect once in a while, what is the point?" therefore you implied it , seems to be a theme of your's along with this other gem "Canuckistani"

The one who denied it supplied it?

Bicycle_B

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #66 on: November 09, 2015, 01:48:04 PM »
he also "camped" in his jeep/tent... I don't imagine that to be comfortable in my late 30s or 40s...

even in my 20s, I camp in a cabin... with a hot shower and bed :D

I do envision myself in an RV... and doing same. But it would be fairly expensive to just get the RV I wanted. Well around $60-100k... about $600-800/month just for RV payments? I don't want to be retired with that kind of "debt" looming over me. I looked at roadtrek vans, none of them seem to swing on the "cheap" side...

On the topic of cost vs comfort in travel, Go Curry Cracker is a fun blog (gocurrycracker.com; I'm just a reader).  The writers are a couple in their 30s who travel the world in what appears to be comfort and thrifty luxury following their self-funded early retirement. They post their expenses in detail.  It's less than one might think...though admittedly more than $1000/month. 

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #67 on: November 09, 2015, 01:49:46 PM »
Yes.

See, I think I see the central problem with the system.  There were a lot of things done to improve access, which always increases costs.  Additional measures (expansion of medicare, subsidies) were put into place to try to mitigate the effects of those expenses on the schmucks who buy through the exchange (provided your income is low, since we apparently don't care about people living in HCOL areas and the slightly more prosperous than average).  All well and good.  What the system seems to be short on is cost controls.  In fact, there is a huge in-built incentive for the insurers to ramp up the size of premiums as much as they possibly can.  They are required to have an 80% benefit ratio.  So what is the best way to increase revenue and profit if you are forced to pay out at least 80% of premiums?  Grow the absolute level of premiums and leverage fixed costs to make money on a grand scale.  This is fine until the premiums get so big that they crash the system.  I don't see how the system avoids ending up in this corner unless changes are made at some point.  Barring a real emergency or a groundswell change in who is running things, I don't see any material changes being made any time soon.

Since I depend upon the exchange for my policy, I take no glee in spotting the fatal flaw.  I wish we had gone to universal care when the topic was on the table.  The powers that be went down a different fork in the road, and we little people have to try to avoid the worst of the consequences.

mancityfan

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #68 on: November 09, 2015, 01:58:11 PM »
'Hussein- care" - pathetic. Grow up.

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #69 on: November 09, 2015, 02:05:36 PM »
'Hussein- care" - pathetic. Grow up.

You have some sort of problem with the middle name of the President?

Bearded Man

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #70 on: November 09, 2015, 02:18:34 PM »
I agree with the OP. I've noticed on the ERE forums, the exact opposite is true. Many of the people there are going to retire on 300K or less.

I happen to think it is better too have too much than just enough for bare minimum. I know you can get a job again, but how hard is it going to be going back to work after all those years? Starting at the bottom or near it? Easier said for a plumber than an IT professional, probably.

FrugalToque

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #71 on: November 09, 2015, 02:20:29 PM »
Well, when I saw "Hussein-care", I assume you referred to health care and other social programs Saddam Hussein had offered to the people of Iraq.

So, yeah, it is confusing.

Also, it's what douchebags do on Fox News and elsewhere when they want to dog whistle about the President's skin colour.  I'm in Canada, and even I know that.  So keep in mind what company you're keeping when you do things like that.

Toque out.

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #72 on: November 09, 2015, 02:54:04 PM »
Well, when I saw "Hussein-care", I assume you referred to health care and other social programs Saddam Hussein had offered to the people of Iraq.

So, yeah, it is confusing.

Also, it's what douchebags do on Fox News and elsewhere when they want to dog whistle about the President's skin colour.  I'm in Canada, and even I know that.  So keep in mind what company you're keeping when you do things like that.

Toque out.

Uh huh.  And throwing Fox News out suggests you would do well to avoid associating with the leftist thought police.

Shit, I don't even have a cable subscription.  How would I even know what is on Fox News?

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #73 on: November 09, 2015, 02:59:04 PM »
As an aside, is it a fair assumption that the Canadian system has cost controls that are effective?  Since healthcare is at least a partial monopsony, I would assume that the price gets set by the single payer, no?

2lazy2retire

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #74 on: November 09, 2015, 03:30:30 PM »
'Hussein- care" - pathetic. Grow up.

You have some sort of problem with the middle name of the President?

You clearly do, but hey if nothing else hopefully you will think twice about been so offensive in the future, otherwise there is a home for you at Fox, they are online ( as you have no cable) and you would be a hero over there with your little "funnies"

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #75 on: November 09, 2015, 03:33:17 PM »
'Hussein- care" - pathetic. Grow up.

You have some sort of problem with the middle name of the President?

You clearly do, but hey if nothing else hopefully you will think twice about been so offensive in the future, otherwise there is a home for you at Fox, they are online ( as you have no cable) and you would be a hero over there with your little "funnies"

Yeah, yeah.  Care to make a comment of substance re: the sustainability of the program? 

2lazy2retire

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #76 on: November 09, 2015, 03:39:22 PM »
'Hussein- care" - pathetic. Grow up.

You have some sort of problem with the middle name of the President?

You clearly do, but hey if nothing else hopefully you will think twice about been so offensive in the future, otherwise there is a home for you at Fox, they are online ( as you have no cable) and you would be a hero over there with your little "funnies"

Yeah, yeah.  Care to make a comment of substance re: the sustainability of the program?

No - others are better placed to discuss the finer points of the ACA, I came here for info purposes and just happened upon your comments and decided to call you out for what you are.

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #77 on: November 09, 2015, 03:44:54 PM »
'Hussein- care" - pathetic. Grow up.

You have some sort of problem with the middle name of the President?

You clearly do, but hey if nothing else hopefully you will think twice about been so offensive in the future, otherwise there is a home for you at Fox, they are online ( as you have no cable) and you would be a hero over there with your little "funnies"

Yeah, yeah.  Care to make a comment of substance re: the sustainability of the program?

No - others are better placed to discuss the finer points of the ACA, I came here for info purposes and just happened upon your comments and decided to call you out for what you are.

Help me out here, but I am guessing name calling other people is against the forum rules, right?

daverobev

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #78 on: November 09, 2015, 04:36:00 PM »
Regulator, in the nicest possible way, please GTFO... you're adding precisely nothing to this thread. No need to derail it into your personal dislike of the ACA; if you want to talk about that, feel free to start another thread, appropriately titled.

Thanks.

fattest_foot

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #79 on: November 09, 2015, 04:41:05 PM »
I intend to retire at about a 5% WR so I don't think that I am overly cautious. I don't though include my paid off home in my net worth and I figure I could easily downsize and gain some money there. I also believe that I will have paid leave for a year at half pay which should cover 2 years expenses. I then intend to work part time for another 3 years or have this as additional savings so that I don't draw down for the first 5 years.

Those points are my buffer for why I intend to retire at a 5% WR.

I'm planning on a 5% WR as well (and don't include housing equity). Mostly this is because I'm counting on social security and what should be a 10 year federal government pension (could also buyback 6 years of military time). So essentially we just need enough to get us to "retirement age." Once we're that old, our 5% WR becomes something like a 2-3% WR. Now, in 7 years or so when we're almost to our goal will I maybe do OMY? Possibly.

A SS: Again, many people that are "middle age" and probably should be FIRE'd (myself included) were brought up on the concept that SS "may not be there for us" and so we have always counted on NOT having it. Relying on the government for that sort of funding is a risk many are not willing to take.

You were brought up with a lie. It's up to you to educate yourself on why it's a lie and why fear-mongering should be ignored. I look at people afraid that SS will go away as the same types that think managing your own portfolio is too difficult.

So why shouldn't you be afraid of Social Security disappearing? Look no further than your most recent paystub! Every paycheck for every (legitimate) employee has FICA taken out. That money pays out to current retirees. The only reason the SS Trust Fund was developed was because SS was taking in too much money. If the trust fund disappears though, the government isn't going to just stop collecting FICA. As someone else said, unless you think the government just wants millions of homeless elderly, the system isn't going anywhere.
« Last Edit: November 09, 2015, 04:43:24 PM by fattest_foot »

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #80 on: November 09, 2015, 04:46:22 PM »
Regulator, in the nicest possible way, please GTFO... you're adding precisely nothing to this thread. No need to derail it into your personal dislike of the ACA; if you want to talk about that, feel free to start another thread, appropriately titled.

Thanks.

You know, you could have just suggested the mods split off the Barrockare discussion to a separate thread.  Instead of, well, being less than pleasant, shall we say.

You may be spoiled with universal care in Canada.  Count yourself lucky.  Those of us in the US remain at the mercy of health insurance companies.  For Americans, this is easily the biggest stumbling block for retiring early.  We can save up plenty, have a side or part time gig, and live frugally, but if you cannot obtain affordable health insurance with good coverage in the individual market, you are eventually going back to work.  So yes, discussion of aca/barricade/ppaca/whatevercare is on topic and relevant to why many people are leery of taking the plunge to er.

nawhite

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #81 on: November 09, 2015, 09:56:16 PM »
he also "camped" in his jeep/tent... I don't imagine that to be comfortable in my late 30s or 40s...

even in my 20s, I camp in a cabin... with a hot shower and bed :D

I do envision myself in an RV... and doing same. But it would be fairly expensive to just get the RV I wanted. Well around $60-100k... about $600-800/month just for RV payments? I don't want to be retired with that kind of "debt" looming over me. I looked at roadtrek vans, none of them seem to swing on the "cheap" side...

Just like everything in Mustacianism, pay for what meets your needs, not what society thinks something should cost. Buy RV's the way MMM recommends buying cars. Buy something used that meets your most common needs and buy it in cash. I just bought a 1989 RV that we're planning on living full time out of for $6500. Everything works and the engine just had an overhaul. I'll probably put a couple grand into improvements but so what, I won't have a payment. Even if I were going to go for something newer and bigger, I'd probably be looking at $25k for a used geyhound bus conversion or something. Better build quality, better engine, more storage than the RV's you can buy new.

$60k - 100k (or 200k like some diesel pushers get up to) on a new RV instead of a used high quality one is as silly as 40k on a new SUV when a $10k used hatchback does everything you'll use it for just as well.

Bateaux

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #82 on: November 09, 2015, 10:03:05 PM »
My Fire date is 841 days away.  I'll be 49, I'm more conservative and plan to use 3% withdrawl.   Current total net worth is 1.6M or so including real estate. Shooting for 2M by FIRE but could go with less if necessary.  Current investments are 1.3M+ so that would be 40k annually.  I don't want to just not run out of money after Fire, I want my portfolio to continue to grow.

arebelspy

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #83 on: November 09, 2015, 11:43:58 PM »
MOD NOTE: Get back on topic, please.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

Squirrel away

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #84 on: November 10, 2015, 06:55:40 AM »
Some people are aiming for huge amounts which is strange to me as I know we won't need that much but we are childfree with a small mortgage so I can't say if they are overly cautious or just being sensible. It's different in the UK as we have free healthcare and if I lived in the US health insurance would be a worry.

FI40

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #85 on: November 10, 2015, 08:00:49 AM »
I think people are overly cautious on this forum. That's no surprise; the type of person who would try to become financially independent at all, let alone so early, is clearly a planner and has discipline.

I think some of us that will end up "working" in FIRE doing something we enjoy, could probably have done it from the start with 0 net worth, since often side gigs can pay enough to get by. But we worry about the bad scenarios where the earning stops for whatever reason, and build a huge net worth to prevent that from happening. All the while, some more ballsy folks just started doing what they loved right away, and might not earn much but are living the dream from day one.

rtrnow

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #86 on: November 10, 2015, 08:07:29 AM »
As therebelspy has recently pointed out elsewhere on the forum, the tenor of this place has changed considerably as it has grown.  The early audience was a little more serious about retiring early, and the new larger audience wants generic financial guidance but they're not really interested in leaving their jobs with less than $2million at age 55.

But that's the price you pay for growth of the community, I think.  The message is necessarily diluted by bringing in folks beyond your core target audience.

Part of is just that people see frugality as a virtue, even when they are extravagantly wasteful, so they want to feel like part of this movement without actually participating.  People like londonbanker and mrpercentage should have retired a decade ago, yet continue to tell us how risky it is to retire on only $4 million.  Meanwhile our host and his predecessor both retired with well under a million dollars, and seem much happier about it than those wealthy forum participants who continue to fret about never having enough.  For some people, security will never come.

+100

Maybe I would have hung on longer if I wasn't over my job. I left a bit over a year ago with 4% covering my expenses without any big frills. A year later, side income has just shown up here and there. I do things for fun that also tend to pay a couple hundred bucks here and there. At the end of my first year, I was pleasantly surprised to realize I had not used savings at all. I made enough to cover my expenses without really trying.

Gone Fishing

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #87 on: November 10, 2015, 08:20:50 AM »
If I recall correctly, MMM retired with a net worth of around $800k, which would be almost $1,000k today if adjusted for inflation.

(http://data.bls.gov/cgi-bin/cpicalc.plcost1=800000&year1=2005&year2=2015)

After his retirement, his wife continued to work, he started his own carpentry business, and they stopped at one child.  Sure, the blog probably exceeded his expectations, but it is quite possible that he has never withdrawn one cent from his portfolio.  If that isn't overly cautious, I don't know what is.   

If someone with 2-3 children planned to quit working entirely, I don't think a stache of $1.5-$2 million in today's dollars would be any more or less cautious than MMM himself.

I think people gravitate towards the various ER forums depending on their personal comfort levels for income and risk.  The MMM level or there about just feels about right for me and my family.  Unless someone is enduring a soul crushing job to amass 30x+ (Francis the pharmacist comes to mind), is pushing 60-65 years old with more than enough assets and just can't pull the trigger, or has everything in cash, I'm not going to throw any facepunches for being *overly* cautious.
« Last Edit: November 10, 2015, 08:53:58 AM by So Close »

ash7962

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #88 on: November 10, 2015, 08:42:49 AM »
I voted yes, but I understand why and think most have good reasons for doing so.  Do what you're comfortable with.  I'm on the other end of the spectrum since I'm considering quitting my cushy high paying, full time job even before I'm FI.  I live in a HCOL area so part of my FIRE plan is to move to a LCOL area.  I don't have a great idea of how much I'll spend so when I "FIRE" it'll be more of a trial FIRE.  I also foresee some of my hobbies generating income, I don't mind having a long term part time job to bridge a spending gap, I intend to be flexible with living expenses (e.g. willing to slow travel at low costs, or take a homestead internship where I work for free room/board), and I'm confident I could get another full time job if it became necessary.  I think the 4 things I just listed are enough safety nets for me.  I've been thinking around 300k would be enough for me to feel comfortable starting a trial FIRE.  I would rather FIRE too early and risk failure rather than risk working a full time job longer than necessary.

Thegoblinchief

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #89 on: November 10, 2015, 01:19:55 PM »
I'll be honest and say I have no fucking clue when we will retire and how cautious our final number will end up being. So many things up in the air.

That said, I think we will be on the side of a very high WR because my wife will likely feel engaged by taking contract/consulting work periodically and I will probably have surplus produce or livestock to sell to significantly offset living expenses.

A lot of grey area comes in with the kids, how old they will be when we're nearing FI, how much support we want to give them, etc. Travel is another major expense that we're still evaluating the importance for ourselves personally.

Health insurance is something I'm NOT worried about. Even a lavish lifestyle (to us) will be well below the current ACA subsidy cliffs. We might even end up below the Medicare line depending on the COL of our final homesteading area.

CryingInThePool

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #90 on: November 10, 2015, 02:44:25 PM »
I answered maybe; crystal ball and all that.   OMY syndrome is real and very much where I'm living these days and while i think there is some tendency towards risk aversion at work in my financial modeling I also think quitting just takes more effort.

Having the heavy lifting of getting my financial life in order 5+ years in the rearview mirror and the last few years on autopilot of save, save, save, makes doing the work to retire feel more daunting than another day at the office.  Plus the old adage about how the office doesn't suck as much once you can walk away at anytime.  Am I a SWAMI or just downshifting from FIRE race to FIRE dawdle?

If I felt about my job today the way I did when I first googled 'really early retirement' I'd be gone tomorrow.  But I don't hate my life like I did then mostly because I got control of a lot of the wastefulness on this path to FIRE.   

Threads like this help shift the balance in root causing my OMY from 50/50 overly cautious risk aversion and RE laziness to more like 20/80 so thanks for that!


Squirrel away

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #91 on: November 10, 2015, 03:11:07 PM »
I live in a HCOL area so part of my FIRE plan is to move to a LCOL area.

Yes, I have that at the back of my mind also as I know if we ever had money worries that we could just move to a different (and cheaper) part of England.

honeybbq

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #92 on: November 10, 2015, 03:31:41 PM »
I intend to retire at about a 5% WR so I don't think that I am overly cautious. I don't though include my paid off home in my net worth and I figure I could easily downsize and gain some money there. I also believe that I will have paid leave for a year at half pay which should cover 2 years expenses. I then intend to work part time for another 3 years or have this as additional savings so that I don't draw down for the first 5 years.

Those points are my buffer for why I intend to retire at a 5% WR.

I'm planning on a 5% WR as well (and don't include housing equity). Mostly this is because I'm counting on social security and what should be a 10 year federal government pension (could also buyback 6 years of military time). So essentially we just need enough to get us to "retirement age." Once we're that old, our 5% WR becomes something like a 2-3% WR. Now, in 7 years or so when we're almost to our goal will I maybe do OMY? Possibly.

A SS: Again, many people that are "middle age" and probably should be FIRE'd (myself included) were brought up on the concept that SS "may not be there for us" and so we have always counted on NOT having it. Relying on the government for that sort of funding is a risk many are not willing to take.

You were brought up with a lie. It's up to you to educate yourself on why it's a lie and why fear-mongering should be ignored. I look at people afraid that SS will go away as the same types that think managing your own portfolio is too difficult.

So why shouldn't you be afraid of Social Security disappearing? Look no further than your most recent paystub! Every paycheck for every (legitimate) employee has FICA taken out. That money pays out to current retirees. The only reason the SS Trust Fund was developed was because SS was taking in too much money. If the trust fund disappears though, the government isn't going to just stop collecting FICA. As someone else said, unless you think the government just wants millions of homeless elderly, the system isn't going anywhere.

Mentally, I agree. But there are also arguments for the other foot; people now are crippled with student loan debt, working for minimum wage, or just part time. There's also less workers in the field than in the baby boomer generation. For the first time, kids are doing "less well" than their parents. It IS possible there won't be enough money to go around.

I don't run the USA government budget, so I can't be sure of what they'll give me. I don't like unknowns. There's a a big difference in getting 3k a month for life or only getting 1k. I want to provide for myself independent of what the government decides to return to me in 20 or 30 more years.

honeybbq

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #93 on: November 10, 2015, 03:32:33 PM »
You may be spoiled with universal care in Canada.  Count yourself lucky.  Those of us in the US remain at the mercy of health insurance companies.  For Americans, this is easily the biggest stumbling block for retiring early.  We can save up plenty, have a side or part time gig, and live frugally, but if you cannot obtain affordable health insurance with good coverage in the individual market, you are eventually going back to work.  So yes, discussion of aca/barricade/ppaca/whatevercare is on topic and relevant to why many people are leery of taking the plunge to er.

There are plenty of issues with the Canadian system, too, don't kid yourself.

Goldielocks

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #94 on: November 10, 2015, 03:35:22 PM »

This is how I approach it: ...


Thank you, that is super helpful! I will try a similar approach to see how things go. We have a similar situation in that DH does want to work longer than I do. But I don't know when I can stop working. If I quit right now, I would only get $900 per YEAR of CPP (thanks to a crazy long education and short time on the job market). So I guess I need to try different scenarios with different numbers of years working (for me). Our mortgage throws a wrench into things as well. We could move into a cheaper paid off house, but our current house is perfect for raising our kids in. It's still on the table though.
It is nice to know that you are funding lifestyle choices, such as keeping the home, rather than 'I HAVE to work' , though, isn't it?

regulator

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #95 on: November 10, 2015, 03:37:15 PM »
You may be spoiled with universal care in Canada.  Count yourself lucky.  Those of us in the US remain at the mercy of health insurance companies.  For Americans, this is easily the biggest stumbling block for retiring early.  We can save up plenty, have a side or part time gig, and live frugally, but if you cannot obtain affordable health insurance with good coverage in the individual market, you are eventually going back to work.  So yes, discussion of aca/barricade/ppaca/whatevercare is on topic and relevant to why many people are leery of taking the plunge to er.

There are plenty of issues with the Canadian system, too, don't kid yourself.

There are issues with every system.  But just for kicks, you cannot afford $500+ a month for premiums and go without.  You are in a car accident and brought to the nearest hospital.  Who is most likely to be bankrupted, the 'Merkin or the Canuck?

Freedomin5

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #96 on: November 10, 2015, 03:48:13 PM »
As therebelspy has recently pointed out elsewhere on the forum, the tenor of this place has changed considerably as it has grown.  The early audience was a little more serious about retiring early, and the new larger audience wants generic financial guidance but they're not really interested in leaving their jobs with less than $2million at age 55.

But that's the price you pay for growth of the community, I think.  The message is necessarily diluted by bringing in folks beyond your core target audience.

Part of is just that people see frugality as a virtue, even when they are extravagantly wasteful, so they want to feel like part of this movement without actually participating.  People like londonbanker and mrpercentage should have retired a decade ago, yet continue to tell us how risky it is to retire on only $4 million.  Meanwhile our host and his predecessor both retired with well under a million dollars, and seem much happier about it than those wealthy forum participants who continue to fret about never having enough.  For some people, security will never come.

+10. Especially the last sentence.

FenderBender

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #97 on: November 10, 2015, 03:56:39 PM »
my job is just too easy to quit plus i work from home.   

Cressida

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #98 on: November 10, 2015, 04:48:13 PM »
In fact, there is a huge in-built incentive for the insurers to ramp up the size of premiums as much as they possibly can.  They are required to have an 80% benefit ratio.  So what is the best way to increase revenue and profit if you are forced to pay out at least 80% of premiums?  Grow the absolute level of premiums and leverage fixed costs to make money on a grand scale.

I know this was deemed off topic, and it kind of is, although my intent is to allay any fears that comments like these might instill in those who will be relying on the ACA in FIRE.

The above is a fundamental misunderstanding of the 80%* rule. The driving factor are claims costs, not premiums. An insurer has members who get care from providers, incurring claims. The providers are reimbursed for the cost of those claims by the members (subject to significant limits, because that's how insurance works) and by the insurer (subject to the terms of the contract).

It's only then that the 80% rule kicks in. Say the insurer pays providers $80M in claims during 2014. In that case, the insurer was allowed to charge its members NO MORE than $100M in premiums in 2014. If it turns out that the insurer charged more than that, it has to turn around and reimburse its members, retroactively, for violating the 80% rule in 2014.

Note that "fixed costs" and other admin expenses are NOT relevant here. You can drive those costs as low as you want to, and you'll drive up your net income by doing so, but it has NO impact on how much you're allowed to charge for premiums.

The easiest way around the 80% rule is to keep your premiums LOW. Please do not listen to regulator. If the ACA fails, it won't be for the reasons given.


*It's 85% in some cases, but that's not important right now.

daverobev

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Re: Is it just me, or are people here *overly* cautious about FIREing?
« Reply #99 on: November 10, 2015, 04:53:38 PM »
Threads like this help shift the balance in root causing my OMY from 50/50 overly cautious risk aversion and RE laziness to more like 20/80 so thanks for that!

One of my thoughts when posting this was, "If I get one person to seriously consider retiring earlier from a job they don't like through reading this, it'll probably be the most helpful thing I've done all year"!