Author Topic: Can this be right? It can't be that simple...  (Read 26915 times)

benjenn

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Can this be right? It can't be that simple...
« on: April 28, 2015, 09:26:36 AM »
DH and I are retiring the end of July at 52 and 51 respectively.  That means 7 1/2 years until we can touch his 401K penalty-free, 8 1/2 years for me.  However, we have his very-nice AF retirement (thank you, Sweetie, for your 24 years of service!), which we are confident we can live on next year, no problem. (no mortgage, no debt)  Plus, we have enough cash on hand to add $5,000 a year to that if we need to (we won't) in order to float until he reaches 59 1/2. (We've looked into the Roth ladder conversions to access our 401K money sooner but we're confident we're not going to need to and we'd just as soon wait to pay the taxes on it until we need it. Plus, at our age, it only buys us a couple of years...)

I could have a pension (annuity) but I'm taking a lump sum instead and rolling it into my 401K.  Between the two of us, when we retire we'll have over $650K in those accounts.

He'll turn 59 1/2 in 2022 and then we can take 4% from his 401K.  The next year, we can take that plus 4% from mine if we want/need to (maybe to travel... who knows?).  I don't expect we'll need anywhere near that so I'm just using 4% as an example... but we can do that for 3 years and then DH will be 62 and start receiving SS.  We wouldn't need to take any from 401Ks then.  The next year, I turn 62 and start receiving SS.

Then, even with my budget adjusted for more inflation than we expect, we should have about $2,000 per month more than we need. That's without ever touching our 401K money.

I realize we have to make mandatory withdrawals once we're 70 but it seems a little crazy that we'll be able to live quite nicely without worrying about running out of money, even if we both live for a very long time (which is, of course, the goal!).

It just seems too simple... it makes me wonder if I've missed something.

Oh, and we've decided to tell people we'll be selling Amway whenever these ask us what we're going to be doing once we retire.  :)  LOL.  It shuts them up pretty quickly.

tarheeldan

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Re: Can this be right? It can't be that simple...
« Reply #1 on: April 28, 2015, 09:31:33 AM »
(We've looked into the Roth ladder conversions to access our 401K money sooner but we're confident we're not going to need to and we'd just as soon wait to pay the taxes on it until we need it...

...I realize we have to make mandatory withdrawals once we're 70 but it seems a little crazy that we'll be able to live quite nicely without worrying about running out of money, even if we both live for a very long time (which is, of course, the goal!).

You guys are set!

 I picked up the above stuff just to point out that you can definitely optimize taxes on these issues, doesn't sound like you've run the math on that but maybe you have.

nereo

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Re: Can this be right? It can't be that simple...
« Reply #2 on: April 28, 2015, 09:37:16 AM »
DH and I are retiring the end of July at 52 and 51 respectively.  That means 7 1/2 years until we can touch his 401K penalty-free, 8 1/2 years for me.  ... (We've looked into the Roth ladder conversions to access our 401K money sooner but we're confident we're not going to need to and we'd just as soon wait to pay the taxes on it until we need it. Plus, at our age, it only buys us a couple of years...)

It just seems too simple... it makes me wonder if I've missed something.
From what you've said it all seems to be in order.  One question I have though is why you wouldn't consider starting a ROTH ladder once you retire and no longer have income.  I understand you aren't relishing the idea of paying taxes now, but the advantage may be paying far less in taxes overall, especially since your earned income will be so low and your standard deduction will result in you paying little-to-no federal taxes.  Shrug.

Congrats!  Enjoy selling Amway in your ER :-)

Arktinkerer

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Re: Can this be right? It can't be that simple...
« Reply #3 on: April 28, 2015, 09:39:56 AM »
If you can do the rollovers from the 401K to the Roth at the end of each year with no taxes you should do so to save on taxes.  Even if you would be in the bottom tax bracket it still might make sense depending on what your required withdrawals will be at age 70.

Great job on planning for retirement!  Only criticism might be why did you wait so long!

Retired To Win

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Re: Can this be right? It can't be that simple...
« Reply #4 on: April 28, 2015, 10:01:30 AM »
Looks to me like you've got all your ducks in a row.  And, yes, it does look that simple.

Good luck... and enjoy!

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #5 on: April 28, 2015, 10:15:04 AM »
Great job on planning for retirement!  Only criticism might be why did you wait so long!

We've asked ourselves that, too.  Our first plan was to retire in June 2018, right after DH turns 55.  That way we could access his 401K without penalty.  But we would have had WAY more money than we needed at that point.  Then we backed it all the way up until January 2016... then December 2015, November 2015 and now finally to July 2015.  That's where we are now but I keep telling DH that my tolerance for TBS (tiresome bull shit) is practically non-existent now and I jut hope I can hang on...

We waited this long in order to get our heathen son (it's an affectionate term) through college (although he diverted that plan and will be in New Zealand studying abroad for the next year -- since we paid for his year in New Zealand instead of paying for his last two years in college [would have been about the same cost], we told him he's on his own for that last year!) and get the mortgage paid off on our beach condo in beautiful Gulf Shores, AL.  We'll be leaving Oklahoma and heading to the beach the day after my last day at work.  DH is leaving his job the week before (at the end of a pay period).

We can hardly believe how it's all falling into place even though we know we've worked hard to get to this point.  :)  I'm so happy we found MMM - that really helped get some of the last things into place for us. 

Catbert

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Re: Can this be right? It can't be that simple...
« Reply #6 on: April 28, 2015, 01:09:00 PM »
I strongly recommend that you do Roth conversions once you retire.  Or at least look at what your tax bill will be like at 71.

For example, if you have 500k* today in 401k, tIRAs, TSP it will double in 10 years (assuming 7% growth) to 1M.  In another 10 years it could double again to 2M - about the time you will start RMDs.  RMD on 2M is close to 80K which even accounting for inflation could jump some of the money up 2 tax brackets.

*I don't know how much you have but assume that its substantial.

SailAway

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Re: Can this be right? It can't be that simple...
« Reply #7 on: April 28, 2015, 01:21:19 PM »
Our plan, pensions, final account numbers and ages at retirement are eerily similar to yours. Except I'll start taking my DB pension at 60 and I don't plan on use taking SS early unless we need to. Oh, and we have 11 years to go. Small detail. ;)

I strongly recommend that you do Roth conversions once you retire.  Or at least look at what your tax bill will be like at 71
This is true, but I asume her husband's pension will count as income, which makes it a little more complicated, filling up the tax brackets before the Roth conversions.

OddOne

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Re: Can this be right? It can't be that simple...
« Reply #8 on: April 28, 2015, 01:24:04 PM »
Congratulations and.... Amway, love it!

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #9 on: April 28, 2015, 01:26:16 PM »
I strongly recommend that you do Roth conversions once you retire. 

So explain how you'd do this... I'm not sure I understand.  From my calculations, we could only move $15,000 a year into a Roth without incurring additional taxes.  We were just thinking we'd rather pay taxes on 401K withdrawals down the road than pay them now to convert to a Roth.  If we only moved $15,000 a year, would it make that much difference?

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #10 on: April 28, 2015, 01:30:26 PM »
This is true, but I asume her husband's pension will count as income, which makes it a little more complicated, filling up the tax brackets before the Roth conversions.

Yes, DH's pension will definitely count as income and that's where I came up with the $15,000 we could move into a Roth without adding taxes over what's already being withheld from him pension.  It just didn't seem like enough to mess with really.  If we make it 71 and have a $2 million stash, I don't think we'll worry too much about the taxes we pay... we'll be happy to be able to cover it.  :)

MarciaB

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Re: Can this be right? It can't be that simple...
« Reply #11 on: April 28, 2015, 01:32:54 PM »
If you don't need the Social Security income, then wait until you're 66 (or 67) or whenever your full retirement age is. Or better yet, wait until 70 to begin taking SS.

Nice job on getting your finances in such good order!

nereo

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Re: Can this be right? It can't be that simple...
« Reply #12 on: April 28, 2015, 02:03:58 PM »
I strongly recommend that you do Roth conversions once you retire. 

So explain how you'd do this... I'm not sure I understand.  From my calculations, we could only move $15,000 a year into a Roth without incurring additional taxes.  We were just thinking we'd rather pay taxes on 401K withdrawals down the road than pay them now to convert to a Roth.  If we only moved $15,000 a year, would it make that much difference?
I think you answered your own question here.  If you can move $15k/year into a Roth without incurring additional taxes, then you should definitely move at least $15k/year into a Roth so that you never pay taxes on that money.  Do this over the next 7 years and you can have over $100k in your ROTH, plus appreciation, which can later be withdrawn tax free.  You can continue to do this regardless of your age.

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #13 on: April 28, 2015, 02:22:24 PM »
I think you answered your own question here.  If you can move $15k/year into a Roth without incurring additional taxes, then you should definitely move at least $15k/year into a Roth so that you never pay taxes on that money.  Do this over the next 7 years and you can have over $100k in your ROTH, plus appreciation, which can later be withdrawn tax free.  You can continue to do this regardless of your age.

Well, we're still paying taxes on it... it's just that DH already has taxes withheld from him pension.  If we didn't transfer to the Roth, we'd get a good refund (or we could lower his withholding because we hate to get a big refund) - but if we do transfer, we won't feel the taxes because they're already withheld.  I was just thinking about doing it in order to access the money before we're 59 1/2 but I can see where if we just kept doing it each year, it would add up.  When she first made that suggestion, I thought she was suggesting we convert it all to Roth and I couldn't see how that would work without paying a LOT in taxes to convert it.

I think that's definitely something we should pursue - just not for the reason I think it was originally suggested to us (early access).  Still, that will be a plus, too, if we needed it.

So... now another question.  If we do that... when do we STOP converting to the Roth?  Or do we just keep doing it?  I sure appreciate how helpful everyone is on this forum.  :)

fartface

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Re: Can this be right? It can't be that simple...
« Reply #14 on: April 28, 2015, 02:36:38 PM »
"We'll be leaving Oklahoma and heading to the beach the day after my last day at work.  DH is leaving his job the week before (at the end of a pay period).

We can hardly believe how it's all falling into place even though we know we've worked hard to get to this point.  :)  I'm so happy we found MMM - that really helped get some of the last things into place for us."


Aahhh...I LOVE reading stuff like this..."heading to the beach condo the day after my last day of work..."

Inspiring! Beautiful. Just beautiful.
« Last Edit: April 28, 2015, 02:38:17 PM by fartface »

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #15 on: April 28, 2015, 02:57:35 PM »
Thanks, Fartface (love the name!)!  And it gets even better... here's our view.  :)


nereo

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Re: Can this be right? It can't be that simple...
« Reply #16 on: April 28, 2015, 03:10:32 PM »
When she first made that suggestion, I thought she was suggesting we convert it all to Roth and I couldn't see how that would work without paying a LOT in taxes to convert it.

I think that's definitely something we should pursue - just not for the reason I think it was originally suggested to us (early access).  Still, that will be a plus, too, if we needed it.

So... now another question.  If we do that... when do we STOP converting to the Roth?  Or do we just keep doing it?  I sure appreciate how helpful everyone is on this forum.  :)
No, don't convert everything all at once.  Convert a chunk every year and keep doing that until it's all converted (you will probably be doing this well into your 60s).  The main advantage YOU will get out of it is tax optimization - you will pay very little in taxes to convert it, and then no taxes to withdraw it later.
"How much" each year is going to depend on your own tax situation, but given that your standard deduction is at least $12,400, and the first $18,400 (joint) is taxed at 10%, and you have some cash on hand, you have a lot of headroom to pay a bare minimum in taxes on a conversion.

In case I didn't say it before, congrats on approaching this milestone!

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #17 on: April 28, 2015, 03:29:06 PM »
No, don't convert everything all at once.  Convert a chunk every year and keep doing that until it's all converted (you will probably be doing this well into your 60s).  The main advantage YOU will get out of it is tax optimization - you will pay very little in taxes to convert it, and then no taxes to withdraw it later.
"How much" each year is going to depend on your own tax situation, but given that your standard deduction is at least $12,400, and the first $18,400 (joint) is taxed at 10%, and you have some cash on hand, you have a lot of headroom to pay a bare minimum in taxes on a conversion.

In case I didn't say it before, congrats on approaching this milestone!

Thank you for your help - that's the first time anyone has said it that way and I feel like "duh!" -- why didn't I see it that way before?  Sheesh.. I was only thinking of converting to a Roth to get penalty-free access.  I also didn't know we could keep converting, like you said, into our 60s.  That's definitely what we'll do.  :)

And thank you for the congratulations, too.  We've been working on it pretty hard for the last few years and now that it's getting so close, it doesn't seem real that it's going to happen in just 3 short months.  :)  I have an app that tells me how many days until retirement and I was so thrilled recently when it went below 100.  :)  I can't imagine how excited I'll be when it's in the single digits!  I can hear that beach calling to me....

The_path_less_taken

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Re: Can this be right? It can't be that simple...
« Reply #18 on: April 28, 2015, 08:58:46 PM »
"selling Amway"...love it!   ;-0

There's a book by Jim Dodge called "Not Fade Away" that has the funniest opening chapter I've ever read (the book kinda fades out, ironically).

But in the opening chapter (from memory) a guy gets in a wreck on a deserted road at night in the rain...a random dude in a tow truck stops to help him, hands him a baggie of pain killers and a bag with dry clothes in it saying "go ahead and change, I'll try and secure your vehicle" then reaches across the guy's lap to open the glovebox and yank a baseball cap out, which he jams onto his head.

It reads: "Gay Bikers For Jesus". He sees the guy staring at it in shock and grins and says something like: "It discourages questions, big time."

I literally fell out of a chair reading it.... rolflmao for real. When my friend asked I couldn't even speak and spurted out "Gay Nazi Bikers for Jesus" and he started laughing...and had a shirt printed up with that for my birthday.

It truly does discourage questions. Congrats on your retirement!

caseyzee

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Re: Can this be right? It can't be that simple...
« Reply #19 on: April 29, 2015, 02:20:14 PM »
May I ask what you are doing for health insurance?  Does that come with the military pension?

Enjoy your retired life!
-Casey

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #20 on: April 29, 2015, 02:22:29 PM »
May I ask what you are doing for health insurance?  Does that come with the military pension?

Enjoy your retired life!
-Casey
Yes, we have Tri-Care Insurance for only $558 per year premium. That was a huge part of our retirement plan having that covered.

Bateaux

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Re: Can this be right? It can't be that simple...
« Reply #21 on: April 30, 2015, 04:01:45 AM »
I'm in a simular situation.   Waiting on son number 1 to graduate college.   Son numer 2 has decided against college and took a mechanical job that he loves and pays about 75k if he sticks with it.  I've been moving retirement closer last few years.  2023, 2020, 2018 now I'm thinking 2017 or even 2016.  Just don't know how to make it from my scattered accounts and health care would have to be ACA.  Assets are going up about $10,000 or more a month right now and just don't want to kill the goose with the golden eggs. 

aj_yooper

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Re: Can this be right? It can't be that simple...
« Reply #22 on: April 30, 2015, 04:31:39 AM »
I would strongly consider converting tax advantaged accounts to Roths, as mentioned earlier upstream; you will save on the compounding effects on the investments, but, of course, pay the same tax rate on them (uncompounded) you are currently paying.  You also decreased your required minimums from your TSA.  I would also look into Social Security strategies, like file and suspend, and claiming a spousal benefit.   It might work for you. 

I think Amway is a way better line than the baseball hat tag.

Enjoy your freedom!

Bbqmustache

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Re: Can this be right? It can't be that simple...
« Reply #23 on: April 30, 2015, 06:06:00 AM »
When you get your conversion plans in place, and understand the why's behind them, take your plans to a CPA (outside of tax time) and pay for an hour of her/his time to review them.  IRS rules can be complicated!

G-dog

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Re: Can this be right? It can't be that simple...
« Reply #24 on: April 30, 2015, 04:40:09 PM »
Congratulations! I hope you will still hang around here post-FIRE.
It is hard to believe that it could be true, but it is - enjoy.

Nords

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Re: Can this be right? It can't be that simple...
« Reply #25 on: May 02, 2015, 01:25:03 PM »
It just seems too simple... it makes me wonder if I've missed something.
Heh-- I felt the same way 13 years ago when I retired and I asked the same questions.  Congratulations!  It really is that simple.

Of course so few military understand the concept of financial independence, let alone the methods of reaching it, that we eventually wrote a book.

By late 2001 I'd already done all of the planning websites and other retirement calculators.  At one point I started shopping around to CFPs to see whether I'd forgotten anything.  One of them had a comprehensive data package for us to fill out before we came in for our free first hour, and that data package convinced me that I knew more about my military retirement finances than they did.  Another CFP asked questions and said "Well, if you have a military pension and if you can spend less than 4% of your assets every year then you should be fine." 

If you have questions then I can answer them for you or recommend a military retiree who's a fee-only CFP.  He will not sell you products-- only his labor & time-- and he completely understands military pensions & benefits.

If you want to tweak your plan (and have more money to work with) then here are a few ideas.

Since you have your own annuity/401(k) income, you could make a thoughtful choice on the Survivor Benefit Plan.  You might prefer to cover a few years of his pension with term life insurance instead of shelling out 6.5% of his pension every month for 30 years.  But SBP is a great program to pay for if you feel you already have enough income.

I'll give you another reason to consider a Roth IRA conversion now instead of later:  hassle factor.  If you convert everything to Roths over the next 15+ years then when RMD time rolls around you won't have to take any.  Your Social Security benefits will not be subject to taxation.  Your Medicare premiums will be less subject to means testing (IRMAA). 

And, of course, you'll be converting your tax-deferred accounts into Roths during a time when your income-tax bracket will be 10%-15%.  (Jeremy and Winnie at GoCurryCracker are doing their Roth conversions in the zero percent tax bracket.)  With your current financial lineup, when you two start RMDs and Social Security then you'll easily be in the 25% income-tax bracket.

Ideally your spouse would submit his VA claim as part of his retirement physical.  I'll just say that as much of a hassle that may seem to be now, it's an even bigger hassle later.

If your situation allows for it, I'd recommend taking terminal leave (possibly including BAS and BAH) instead of selling it back for "only" the base pay.  But if you decide to sell back leave then check your tax withholding and be ready to make an estimated tax payment in September.

iamsoners

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Re: Can this be right? It can't be that simple...
« Reply #26 on: May 02, 2015, 01:39:08 PM »
I am too young to know many details about Social Security (it seems like a dream-land fairy tale that my generation will never actually benefit from) BUT, I think it might make sense to consider delaying taking your benefits until older--it seems to work as a good low cost sort of annuity.  Especially consider for you since women have longer life expectancies. YMMV.

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #27 on: May 04, 2015, 09:02:31 AM »
It just seems too simple... it makes me wonder if I've missed something.
Heh-- I felt the same way 13 years ago when I retired and I asked the same questions.  Congratulations!  It really is that simple.

Thanks for the great post.  :)  DH has been retired from the AF for gosh, almost 10 years now and has been working for a large government contractor from whom he will retire early (really just quit working for).  We didn't take the SBP because it was so much cheaper to get long term life insurance instead.  We've got 18 years left on that.

Between his small retirement from his current company (lump sum) and a portion I'm holding out in a lump sum, we've got all our taxes covered for this year (with the mortgage almost paid off, we've lost all our deductions!).  Next year, even moving $15,000 into a Roth, we'll be in the 15% bracket and the current withholding from his pension will have that covered.  Now we just have to look into what it's going to take to start the Roth.  My understanding is that we can't do it this year because we're over the maximum income limit, even retiring in July.

87 days to go!  :)

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #28 on: May 04, 2015, 09:05:00 AM »
I am too young to know many details about Social Security (it seems like a dream-land fairy tale that my generation will never actually benefit from) BUT, I think it might make sense to consider delaying taking your benefits until older--it seems to work as a good low cost sort of annuity.  Especially consider for you since women have longer life expectancies. YMMV.

We've had several people recommend waiting to take the Social Security but both DH and I had parents who didn't live long lives.  While we're doing everything we can to stay as healthy as we can for as long as we can, we would rather take less from SS for a longer time than postpone it and risk losing out if something happened.  My goal is to live to be 115 so I hope to take it for a very long time.  :)

OldPro

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Re: Can this be right? It can't be that simple...
« Reply #29 on: May 04, 2015, 09:23:53 AM »
It's easier than a lot of people who post here think it is.  I FIRED 26 years ago with less planning than pretty much any 'plan' I've read here yet.  I haven't gone broke yet and in fact my income has risen steadily over the years.  My advice is to be flexible and just keep looking at what you are doing every year.  How I invest and derive my income now is nothing like it was 26 years ago.

I never understand people who think they can plan it for the next 25+ years.  To me that's a joke.  No one can predit the future.  What you can predict however is that things will change.   I could never have anticipated the changes in my life (that affect finances) that have occurred in the last 26 years.  If I could have, it would have had to be the most boring 26 years of my life. 

When you FIRE, all you can really expect to have an answer to is, 'do we have enough for next year and probably a few years beyond that?'  No one can KNOW beyond that.  People may WANT to think they have a plan that will last till they die but they're kidding themselves.     

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #30 on: May 04, 2015, 09:37:22 AM »
When you FIRE, all you can really expect to have an answer to is, 'do we have enough for next year and probably a few years beyond that?'  No one can KNOW beyond that.  People may WANT to think they have a plan that will last till they die but they're kidding themselves.   

Exactly!  And that's one reason we're retiring as early as we are... we realize all we need is enough and we know we will have enough for the next few years.  If it ever stops being enough, we'll figure it out then. In the meantime, we'll be at the beach, enjoying every single day we get to spend together and we won't be tied to an office, office politics and all the other TB (tiresome bullshit) that goes along with it.  :)

sol

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Re: Can this be right? It can't be that simple...
« Reply #31 on: May 04, 2015, 09:51:37 AM »
all you can really expect to have an answer to is, 'do we have enough for next year and probably a few years beyond that?'  No one can KNOW beyond that. 

This answer seems to lack imagination.  Can you really not think of any circumstances in which a person would confidently know they would never need to work again?

Some examples:

1.  Bill Gates.  Has too much money to spend it all himself.

2.  Senior military retiree with a generous pension, continues to get paid for life.

3.  Terminal cancer patient, only has $1m but also only has three months to live.

I'm sure you can think of others, but those three came to me pretty easily as solid counterexamples to your assertion that nobody can ever retire with certainty.




OldPro

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Re: Can this be right? It can't be that simple...
« Reply #32 on: May 04, 2015, 10:01:50 AM »
Gee, now why didn't I think of things like that?  Which one applies to you Sol? 

Tell me how YOU KNOW that you have enough to confidently say you will never need to work again.

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Re: Can this be right? It can't be that simple...
« Reply #33 on: May 04, 2015, 10:19:51 AM »
Tell me how YOU KNOW that you have enough to confidently say you will never need to work again.

You didn't assert that sol can't confidently know, you said nobody could confidently know. 

It doesn't matter which one(s) of those apply to me personally, I was just highlighting that your blanket statement was full of unwarranted pessimism.  I think there certainly ARE people for whom the possibility of having to go back to work no longer even enters their mind.  I think some of them are here on this forum.

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Re: Can this be right? It can't be that simple...
« Reply #34 on: May 04, 2015, 10:43:28 AM »
OldPro - any chance you'll do a summary post about your FIRE history? I'm really interested to hear how your income has gone up - it sounds a bit like MMM's post "Retire, then Get Rich."

Nords

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Re: Can this be right? It can't be that simple...
« Reply #35 on: May 04, 2015, 10:49:10 AM »
Between his small retirement from his current company (lump sum) and a portion I'm holding out in a lump sum, we've got all our taxes covered for this year (with the mortgage almost paid off, we've lost all our deductions!).  Next year, even moving $15,000 into a Roth, we'll be in the 15% bracket and the current withholding from his pension will have that covered.  Now we just have to look into what it's going to take to start the Roth.  My understanding is that we can't do it this year because we're over the maximum income limit, even retiring in July.
You might have enough taxable income this year that doing a Roth IRA conversion would boost you up out of the 15% income-tax bracket to the 25% income-tax bracket. 

When I started this process years ago I was confused about the best way to work out how much to convert, and a CPA finally put me out of my misery by advising "Stop thinking about the math and just fill out Form 8606".

When you start the conversion process next year, keep in mind that you might also have to send in an estimated tax payment after you do the conversion.  That depends on whether you meet the requirements for estimated tax payments-- your withholding might already be high enough to avoid any penalties.  That starts in Chapter 2 of IRS Pub 505:
http://www.irs.gov/pub/irs-pdf/p505.pdf

I am too young to know many details about Social Security (it seems like a dream-land fairy tale that my generation will never actually benefit from) BUT, I think it might make sense to consider delaying taking your benefits until older--it seems to work as a good low cost sort of annuity.  Especially consider for you since women have longer life expectancies. YMMV.

We've had several people recommend waiting to take the Social Security but both DH and I had parents who didn't live long lives.  While we're doing everything we can to stay as healthy as we can for as long as we can, we would rather take less from SS for a longer time than postpone it and risk losing out if something happened.  My goal is to live to be 115 so I hope to take it for a very long time.  :)
Social Security claims that their actuarial analysis is neutral-- you'll get about the same amount of money whether you start at age 62 or age 70-- because you have to live to roughly 88 years of age to beat the payout totals.  Of course there are several variables in that calculation, and they're all hotly debated on personal-finance blogs.  The main issue is that nobody wants a widow's Social Security survivor benefits to be permanently lower because the thoughtless husband started SS at age 62.  But you already have enough assets & income to not worry about that.

Unless all of your grandparents lived into their 100s then you should take Social Security at an age where it'll make you feel better-- if that's at age 62 because you want to have the extra money for extra fun, then do that.  If it's age 70 because it'll motivate you to survive past 88, then do that.  If your spouse wants to give you maximum survivor benefits (at the risk of reducing the number of years of SS benefits that he gets to enjoy) then he should do that too.

When my spouse left active duty for the Reserves, one piece of well-meaning advice was "Just suck it up for a few more years and take the active-duty pension!"  But when I did the math for her rank in her community, I was able to come up with a spreadsheet showing that the Reserve pension was a better deal as long as she lived to age 90.  That conclusion suited our confirmation bias, she has the family genes on her side, and she's stubborn enough to make it happen.

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Re: Can this be right? It can't be that simple...
« Reply #36 on: May 04, 2015, 10:52:46 AM »

When you FIRE, all you can really expect to have an answer to is, 'do we have enough for next year and probably a few years beyond that?'  No one can KNOW beyond that.  People may WANT to think they have a plan that will last till they die but they're kidding themselves.   
I can see what Sol is getting at here though - statements like this have moved a bit to far into the ridiculous-zone (RZ) for my tastes.  To be sure, we can't KNOW almost anything (notice I used big uppercase letters too!). I can't KNOW that humanity won't blink out of existence next week; an uncharted Texas-sized asteroid could slam into Earth tomorrow.  But for the purposes of sane discussion I think we can afford to assume a bit more, and ignore the extremely improbable.

To say that people can only be comfortable that they have 'enough for next year and probably a few years beyond that' is, IMO, silly. Imagine a person had diversified investments of $1MM, a reasonable pension, SS just a few years down the road and they owned their own home, and that this person spent about $25k/year.* We would have to go into such nut-ball, apocalyptic scenarios for that person to run out of money within a few years that it's absurd to even suggest. Could they run out of money in 10-15 years?  sure.  But a few.... common!  Such collapse-of-modern-society scenarios are likely to be impossible to predict and completely out of our control... like get out the guns and head for the hills type scenarios.


* such people are commonplace both in RL and on this forum. 

« Last Edit: May 04, 2015, 10:55:31 AM by nereo »

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Re: Can this be right? It can't be that simple...
« Reply #37 on: May 04, 2015, 12:08:27 PM »
We would have to go into such nut-ball, apocalyptic scenarios for that person to run out of money within a few years that it's absurd to even suggest.
Or we could just refer to William Bernstein's old post about why human history shows that any success rate over 80% is just self-delusional:
http://www.efficientfrontier.com/ef/901/hell3.htm

The practical way to handle nut-ball apocalyptic financial scenarios (the 20% possibility of failure) is with some amount of annuitized income, both for longevity insurance as well as to support a minimal safety-net standard of living. 

As for society's collapse... one of the books I read during my last trip is an indie novel called "The Jakarta Pandemic" about the H16N1 virus sweeping through the globe.  Sort of like the Great Influenza, only with automatic weapons.  Sensationalistic drama?  Sure, it's a commercial novel and that tactic sells books.  Realistic?  Pretty much.  Compelling enough to make me apply for a firearms permit?  Not just yet.
« Last Edit: May 04, 2015, 12:52:00 PM by Nords »

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #38 on: May 04, 2015, 12:59:31 PM »

You might have enough taxable income this year that doing a Roth IRA conversion would boost you up out of the 15% income-tax bracket to the 25% income-tax bracket. 

We will barely be under the 33% bracket this year but we'll have our taxes covered.  Next year, even with a $15,000 Roth conversion, we'll be comfortably in the 15% bracket.

« Last Edit: May 04, 2015, 01:04:37 PM by benjenn »

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #39 on: May 04, 2015, 01:32:20 PM »

 The main issue is that nobody wants a widow's Social Security survivor benefits to be permanently lower because the thoughtless husband started SS at age 62.  But you already have enough assets & income to not worry about that.


DH and I are both fortunate to make just over $100K per year and our salaries are within $3,000 of one another. My SS is going to be about $150 per month more than his because he didn't start making that kind of money until after getting out of the military.  We don't need to worry about survivor's benefits there either.

OldPro

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Re: Can this be right? It can't be that simple...
« Reply #40 on: May 04, 2015, 02:53:31 PM »
NICE I could do a summary but since it doesn't include believing in indexed funds, 4% SWR or even include the stock market at all, not to mention not doing ridiculous things like  using a bicycle with a milk crate bungied onto the back carrier, I've found that some posters here tend to think I can't possibly know anything relevant or worth knowing.

Nereo, what I see sol 'getting at' as a lot of people 'get at', is a fear of FIRE.  Commonly expressed as 'what happens if I don't have enough' when they are honest enough to express it.  They don't want to hear anything that suggests they cannot safely predict they will not.

I agree with you on, "Could they run out of money in 10-15 years?  sure."   I also consider that a 'few' years down the road if you retire at an age when you can reasonably hope to last another 25-50 years.  When I FIRED I figured I had enough to last around 16 years if all things remained equal which of course they never do.  In other words, the equivalent of people today suggesting if you have 25 years plus of income you're good to go.

What I knew was that I had enough to FIRE but as I could not predict the future, who knew whether it would be enough to last the distance or not.  Now here's the difference nereo.  I FIREd anyway.  I didn't NEED to believe I had enough to last forever.  My actual thought at the time was that 16 years was a long time and no doubt things would change along the way.  I was right, they did.  Some predictions can be made.  Change is inevitable.

I've tried to couple of times here to explain the difference between someone who thinks if they use index funds and a 4% SWR, they can safely predict they have enough to last till they die.  I consider that self-delusional.  I understand where it comes from, the word 'safe' and 'till they die' and the fear of not having enough.

I never saw FIREing as an end, I saw it as a beginning of a different way of life.  Once you have found a way to turn the capital you have into the income you want for next year, you have enough to FIRE as far as I am concerned.  If I was able to figure out how to invest the capital 26 years ago to give me the income I wanted for the next year then I had the self-confidence to believe I would be able to figure out how to continue doing that without having to go back to work.  Here I am 26 years later still not working so I figure that 'the proof is in the pudding' as they say.

It really is an entirely different paradigm nereo.  The way people here seem to look at it is that you must believe you have enough to last till you die or at least a very high percentage chance of that according to some formula some geek came up with.  Do you know what Warren Buffett once said, 'never trust GEEKS bearing formulas'.  I like the classical allusion of that.

In my paradigm, I look at it that if you could figure out how to invest your capital to provide the income once, you can figure it out again and again and again and again.  Each and every year you just figure it out.  When you FIRE, you don't suddenly lose the ability to figure out how to make money.  And I can tell you that without a doubt nereo if I had told this forum my plan 26 years ago, there is no doubt I would have got all kinds of responses telling me I didn't have enough to FIRE.  Yet here I am.
« Last Edit: May 04, 2015, 03:06:12 PM by OldPro »

nereo

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Re: Can this be right? It can't be that simple...
« Reply #41 on: May 05, 2015, 06:00:30 AM »

Nereo, what I see sol 'getting at' as a lot of people 'get at', is a fear of FIRE.  Commonly expressed as 'what happens if I don't have enough' when they are honest enough to express it.  They don't want to hear anything that suggests they cannot safely predict they will not.

I agree with you on, "Could they run out of money in 10-15 years?  sure."   I also consider that a 'few' years down the road if you retire at an age when you can reasonably hope to last another 25-50 years.  [...snip]
What I knew was that I had enough to FIRE but as I could not predict the future, who knew whether it would be enough to last the distance or not.  Now here's the difference nereo.  I FIREd anyway.  I didn't NEED to believe I had enough to last forever.  My actual thought at the time was that 16 years was a long time and no doubt things would change along the way.  I was right, they did.  Some predictions can be made.  Change is inevitable.

Thanks for responding OldPro.  I think your viewpoint and my own are actually fairly close together.  It was the "a few years" that I believe I (and perhaps Sol) interpreted differently.  Generally I think of a "few" as being ~3 -5.  And to say a person can't reasonably know their retirement will survive 5 years is absurd to me.  I completely agree with you that the future is unknowable, that history is at best an imperfect guide and that the best strategy is to be adaptable and be willing and able to apply some combination of reducing spending, creating income or moving to a more favorable location when things go bad.  That's deeply entrenched in my own FI strategy and I feel like I'm constantly bickering with people here that want the longest retirement possible (40+ years in many cases) but they want a 'stach so large that they believe they will never have to adapt to new situations.

Thanks for sharing a bit of your story.  I see a lot of people (including many of my own family members) get struck by "One-More-Year" (OMY) syndrome and watch them work for a decade+ longer than they needed to in jobs that made them miserable because they wanted a bomb-proof retirement nest egg.  Now that I've watched many in my parents generation retire, they lament the years spent extra hard with overtime when they really didn't need to.  In one instance, I watched a family member who had worked so hard so he'd "never be forced to move" from his large suburban home willingly downsize because the home in retirement was too far away from where he wanted to be and required more maintenance than he wanted to spend on it. He worked for years to be immune from the 'adaptability' that he naturally embraced post-retirement.

So it's when I hear things like "no one can KNOW [beyond a few years]" it automatically gets my defenses up, because I can see people using such statements to keep working longer than they need to out of fear of the unknown. 

benjenn

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Re: Can this be right? It can't be that simple...
« Reply #42 on: May 05, 2015, 06:24:16 AM »

So it's when I hear things like "no one can KNOW [beyond a few years]" it automatically gets my defenses up, because I can see people using such statements to keep working longer than they need to out of fear of the unknown.

DH and I have been wondering why on earth more people don't retire earlier... do you think this is it? Just fear of the unknown?  I know so many people who are unhappy in their jobs and yet they just keep working.  And buying stuff.... which makes me think they buy stuff trying to make themselves feel better because they're so miserable working and it's just a terrible spiral.  I'm so thankful we are not in that loop!

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Re: Can this be right? It can't be that simple...
« Reply #43 on: May 05, 2015, 06:50:20 AM »

So it's when I hear things like "no one can KNOW [beyond a few years]" it automatically gets my defenses up, because I can see people using such statements to keep working longer than they need to out of fear of the unknown.

DH and I have been wondering why on earth more people don't retire earlier... do you think this is it? Just fear of the unknown?  I know so many people who are unhappy in their jobs and yet they just keep working.  And buying stuff.... which makes me think they buy stuff trying to make themselves feel better because they're so miserable working and it's just a terrible spiral.  I'm so thankful we are not in that loop!

I think it's partially that, the aspect of "how would I afford anything?", and just pure ignorance. Not some sort of stupidity, it's just plain ol' not knowing what you don't know. If you accept middle class living as the predominant culture and don't go looking for alternatives or alternative methods of achieving the same result then you'll be stuck in the same path. It's generally an inability to see/accept alternatives. That's probably the first why. The second why is where it starts splintering into fear or ignorance or comfort.

nereo

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Re: Can this be right? It can't be that simple...
« Reply #44 on: May 05, 2015, 07:37:28 AM »

So it's when I hear things like "no one can KNOW [beyond a few years]" it automatically gets my defenses up, because I can see people using such statements to keep working longer than they need to out of fear of the unknown.

DH and I have been wondering why on earth more people don't retire earlier... do you think this is it? Just fear of the unknown?  I know so many people who are unhappy in their jobs and yet they just keep working.  And buying stuff.... which makes me think they buy stuff trying to make themselves feel better because they're so miserable working and it's just a terrible spiral.  I'm so thankful we are not in that loop!
I'm sure it's different for everyone, but in my reading about all things retirement, the number one reason people give why they don't retire sooner is often fear of running out of money. Read into the data a bit further and you notice that most people assume they will need more money in retirement than they actually do, they assume they will get less than the historical average on investments, they plan on never earning another cent, and (increasingly common) they discount the amount that they will get from SS (probably due to fear over its solvency). 

Of course there are other reasons - the "not knowing what to do after quitting work" is a big one cited, as well as the need for the social interactions provided by working, and not wanting to miss out on prime earning years (which in itself can be an insecurity about the amount of $ saved).
But yeah... I think "fear" is the biggest driver of OMY syndrome.

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Re: Can this be right? It can't be that simple...
« Reply #45 on: May 05, 2015, 08:20:02 AM »
NICE I could do a summary but since it doesn't include believing in indexed funds, 4% SWR or even include the stock market at all, not to mention not doing ridiculous things like  using a bicycle with a milk crate bungied onto the back carrier, I've found that some posters here tend to think I can't possibly know anything relevant or worth knowing.

I think you'd be surprised, a lot of people would want to read it. Yeah, you'll get a ton of questions and definitely some non-believers, but there are many people here who aren't heavy in the markets.

+1.

I want to hear about it. Start a new thread and link it here so we can all check it out. I'm starting to strongly consider pulling the plug long before I reach a Safe Withdrawal Rate. Within a year or two I should have half the passive income I need to stop the grind. I should have no problem filling in the gaps with a few little ventures.

Nords

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Re: Can this be right? It can't be that simple...
« Reply #46 on: May 05, 2015, 08:23:06 AM »

So it's when I hear things like "no one can KNOW [beyond a few years]" it automatically gets my defenses up, because I can see people using such statements to keep working longer than they need to out of fear of the unknown.

DH and I have been wondering why on earth more people don't retire earlier... do you think this is it? Just fear of the unknown?  I know so many people who are unhappy in their jobs and yet they just keep working.  And buying stuff.... which makes me think they buy stuff trying to make themselves feel better because they're so miserable working and it's just a terrible spiral.  I'm so thankful we are not in that loop!
Ooh, I can answer that one from the U.S. military perspective.  People may have one or more of these attitudes:

1.  Servicemembers (and their families) don't save enough.  (Only about half of the servicemembers have even signed up for the TSP, let alone contribute regularly.)  They feel that they have job security:  it's much easier to live in base housing (or on your BAH), spend all your pay & allowances, and not worry about "layoffs".  (Yeah, I know, the drawdown is changing that attitude.)  They feel that when the time comes to leave the military then they'll have a few years to save up, make the transition, and find a job.  They'll start saving tomorrow.

2.  A combination of fatalism and ignorance.  "Why save for retirement?  I could be killed tomorrow, and besides nobody can save enough for retirement in today's economy.  I'll just work until I die."  These people might not even try to save.

3.  Obstinacy.  "I'm not going to compromise my quality of life just to be able to sit on the porch and rust.  Dammit, I've worked too hard and sacrificed too much.  Life is too short to drink cheap wine.  I'll hit it big at work here soon with that certification/promotion/bonus and then I'll be able to put aside the money we need for retirement."

4.  Military inferiority complex.  We're regularly admonished that we're barely capable of performing at our current rank, let alone getting promoted.  It's a vicious world out there and we don't have the skills to make it in the corporate world.  Unemployment is high, pay is low, civilians don't understand what we did or what we can do.  It's just easier to sign up for another military obligation and then hope that a defense contractor knows what a retired E-7 (or O-5) is worth.

5.  More obstinacy.  "I want to see whether I can hack it in the corporate world.  I'm going to climb the ladder for a few more years and show these people what a military veteran can do."

6.    Commitment to service.  Most U.S. military veterans still want to have a mission, be part of a team, and take care of people.  This is generally a very good thing, but in some cases it causes them to help others at the expense of helping themselves.  They feel that they'll be working forever for a cause that they love, and they never see a reason to save more.


A separate issue, very common among everyone (not just military) is the desire to squeeze out every last percentage point of the SWR and the success rate.  4%/80% just isn't good enough, even though all of us would be thrilled to encounter a blackjack table with an 80% chance of paying off.  Instead we want 3% or 2.9347986%:  because you just don't know how long you'll live or whether future returns will equal the last 80 years or <insert reasonable-sounding caveat here>.  We want a 100.00000% success rate because we don't want to worry for the rest of our lives that we'll be bag ladies (with cats).  And clearly the only 100% successful retirement is based on building enough passive income (interest, dividends, rent checks) to never need to touch the principal.  Although maybe we should make that principal a little larger, "just in case".  Maybe Just One More Year.

Hell, even Joe Dominguez retired early on a portfolio of U.S. Treasuries.  Paul & Vicki Terhorst started their early retirement on 100% CDs.  They wanted to avoid risk of principal and portfolio failure.

But even today people still don't know enough about the analysis and simulations behind the SWR and the success rate, and they're using the wrong tactics to avoid failure.  Most people don't even know that the Trinity Study assumed high investment expense ratios, fixed (inflation-adjusted) spending, and no Social Security.  At the very least, a variable spending rate (perhaps with a declining rate later in life) and an annuity will fill all the gaps which we so obsessively worry about.  Reducing your expense ratios from 1% to 0.25% might be all that's needed.

As humans, our behavioral financial psychology makes us take loss aversion to extremes.  It's not good enough to have a 4/5 chance of our money lasting longer than we do.  We'll literally reduce our life expectancy in the pursuit of guarantees by using up all of our human capital chasing paychecks instead of letting our investments do the work.

I got an e-mail the other day from a guy who I've known since 1966, in first grade.  (We went our own directions after high school but have re-united on Facebook.)  Here's what he says:
Quote
Unlike you I decided to make my government retirement my primary means of retirement, with O-6 as my goal and 30 years.  What I didn't count on is the impact that stress and a sedentary life would yield.  Ironically I ended up as a flag/general officer (with an obligation to stay four more years ) but with emerging health problems that may be unresolvable. Sort of dampens the retirement plan.  I'm thinking my major focus will be on health and an exit plan maybe in two years if I can swing it.
BTW I tell your story to my daughters.  At the end of the day life is about, well, enjoying life.  Sitting behind a computer at the beck and call of my bosses is not my idea of the stress-free life I was hoping to achieve. 
Please feel free to let your readers/subscribers know that rank does not equal quality of life.  Quality of life is the absence of insane stressors and enjoying life while you have health to do so. While I'm fairly certain I could retire and be an executive or administrator, I think retiring and teaching kayak lessons is more my speed.
Career comes with a price tag. It impacts family.  From relationships to uprooting everyone to go to the new duty station.   Family is very important.  Some guys strike a good balance.  Tours and late nights at the office can result in bad outcomes. I managed to get out of the tail spin...  I think I might retire for good once this is over.  At least take a six month mental health deployment.
Well thanks for listening/reading I need to get back to the computer monitor.
« Last Edit: May 05, 2015, 08:38:21 AM by Nords »

nereo

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Re: Can this be right? It can't be that simple...
« Reply #47 on: May 05, 2015, 08:58:45 AM »
NICE I could do a summary but since it doesn't include believing in indexed funds, 4% SWR or even include the stock market at all, not to mention not doing ridiculous things like  using a bicycle with a milk crate bungied onto the back carrier, I've found that some posters here tend to think I can't possibly know anything relevant or worth knowing.

I think you'd be surprised, a lot of people would want to read it. Yeah, you'll get a ton of questions and definitely some non-believers, but there are many people here who aren't heavy in the markets.

+1.

I want to hear about it. Start a new thread and link it here so we can all check it out. I'm starting to strongly consider pulling the plug long before I reach a Safe Withdrawal Rate. Within a year or two I should have half the passive income I need to stop the grind. I should have no problem filling in the gaps with a few little ventures.
I'd also be interested in hearing more about your strategy.  If I've learned anything about ER it's that there isn't one single method of going about it.  Our own strategy hinges more on occasional contract work (don't tell the Internet Retirement Police!), travel, leveraging our home to generate income and above all flexibility/adaptability.  I still rely on index-fund investing for the bulk of my 'stach, and I am one of those 'ridiculous' people riding their bike 3 miles to work each day but am interested in other methods.

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Re: Can this be right? It can't be that simple...
« Reply #48 on: May 05, 2015, 10:01:28 AM »
Nereo, my only 'strategy' is to do what makes sense at the time.  As I have said, how I derive my income today looks nothing like how I derived it 26 years ago.  So I don't have a 'formula' to suggest or a 'this is the way to do it'.  My way continues to evolve and change all the time.

I started out with $200k in capital plus half-ownership of a house.  The other half belonged to my 'other half' who said, 'just one more year' to me, one year too many(3 times) and that ended that.  It was actually an example of yet another aspect of the 'fear' factor in the decision to FIRE.  Her fear I believe was centred around her position in 'the world'.  As one of probably 2% of women in Canadian business in terms of income, she did not want to lose that 'position power.'

It can be very hard for some people to give up their 'position' in life.  They see their self-worth as connected to what they do.  Without their 'position' they are nothing.  Or so they see it.

Regarding subsidizing income while retired, I have 'fallen into' several ventures over the years.  I sometimes joke that I have 'retired' 4 or 5 times.  When I first retired and was waiting for my wife to get past 'one more year', a consulting company asked me to facilitate management seminars for them.  I did around 3-6 days a month and billed my time at $1200 per day (in 1989-92). 

Travel was always a big part of my life and it also played a part in some of my ventures.  After leaving Canada, I travelled for a while before ending up in Greece.  I went to the island of Rhodes expecting to spend a week or so seeing the island before moving on.  I stayed for 7 years.  That's one of the things FI will allow you to do.

During my first winter there, a few friends I had made asked me what I planned to do when the 'season' (tourism) started in the spring.  I said I had no plans to do anything other than enjoy life.  They told me that I couldn't do that.  I would end up hanging out in bars, drinking and chasing tourist women and wasting my money.  I couldn't see anything particularly wrong with that (I had no fear of drinking, I'm comfortable as a social drinker).  But they kept pestering me so I asked myself, 'OK, how can I hang out in a bar, have a social drink and chase women, while making money at the same time and appearing to be 'working?'  The answer was obvious, open my own bar.

So I asked a friend who worked in his family's bar if he wanted to open a bar with me.  He had the experience and knowledge necessary to run a bar and I had the start up capital.  The first year was fun, the second year was OK and the third year it was just a job.  I sold out to my partner.  That's another one of the things FI can do for you.  You have the ability to do something right up until you no longer enjoy it and then stop.

I was living in what was by island standards a 'luxury' apartment.  A small, quiet complex of 15 units with a swimming pool.  But the rent was high by local standards.  So when I got out of the bar,  I told my landlord I would need to leave and find something a bit less costly.  He asked if I knew how to build a garage.  Huh?  I said I supposed so, I was fairly handy.  He then offered to let me stay rent free if I would spend 2-3 hours a day first helping him build a garage and then continuing on to help with maintenance around the property.  I lived rent free for 4 years.

At the same time, I met an English (nationality) English teacher.  She moved in and bought the groceries.  Hearing I had sold my share of the bar, another friend who owned a bar asked me to spend my evenings in the tourist season at his bar.  He wanted me to just socialize with the tourists, play pool with them (and let them win) and just generally be a kind of Public Relations person.  In return, my drinks were free and he paid me pocket money.  So with free rent, food and pocket money, I lived for those 4 years, basically cost free.

Also at the same time, an Australian friend who owned a hotel was having a birthday during the winter off-season.  As you can imagine it is not easy to find an English language birthday card on a Greek island.  So I used a desktop publishing program to design and print a birthday card to give her.  I had a kangaroo on the front and the Sydney Opera House on the inside etc. 

She liked it so much she asked if I could design and print menus for her bar and restaurant.  Not wanting to just say no and offend her, I said I supposed I could and then I quoted her what I thought would be a high price that would disaude her from the idea.  She ordered 50 menus.  After I delivered them a friend of her's saw them and asked about them.  Next thing I knew, I was in the menu business.  Simply by word of mouth I had more business than I could handle.

Fortunately, there is only around a 6 week window just before the season starts, when anyone wants new menus.  So it was good in that the work period was limited to that and the quantity I could handle was limited by how many pages a printer could print out per hour.  It was a nice little moneymaker for me for the last 3 years I lived on the island.

I left because of a woman (ain't it always the way).  Short story, I moved to Scotland in 1999 and married in 2000.  One day, I was at a local building supply store getting some bits for a maintenance chore on my 'honey do list'.  I got into converstation with another customer who it turned out owned a deck company.  You know, backyard decks.  Decks were a relatively new thing in the UK and they had some funny ideas about what they should be like.  So after a bit of discussion, I found myself being offered a job to design and sell decks. 

I spent around 10-15 hours per week going out on appointments and designing and selling decks.  My work background is in sales and in fact that is what I used to do seminars on as a consultant.  So I think it is fair to say I have some experience selling.  My closing rate for any sales types reading this was 2 in 3 for decks.  I was only interested in being paid cash and it earned me enough in commissions to pay for 2-3 vacations a year in Europe as well as most household expenses.  I did that for 4 years.  It seems like 3-4 years is about as long as something remains interesting for me.

One more point relative to your own outlined plans nereo.  Instead of bicycles which I am not adverse to as a recreation (I used to do a lot of biking including bike touring when I was younger), I prefer classic cars for transportation.  They have several advantages over other cars.  Insurance is usually cheaper for a classic; the value of the car can often remain stable or even increase;  most maintenance can be done by yourself if you want to; it's just more fun.

I think going to extremes to reduce expenses is like anything else done to the extreme.  I believe in all things in moderation.  So while I do want to find the cheapest cellphone cost and use the same phone for years (current one is 9 years old), I do nto want to do without a phone.  Similarly, while I don't want to spend more than necessary on a car, I do want to have a car.  Some posters here just go to far towards the extreme in my opinion.

I should add less anyone think I have spent the last 26 years working rather than being retired, the 'jobs' I've explained above, never took up any real amount of time and often were separated by a few years.  I've done nothing at all for the last 9 years and am firmly committed (yet again) to not 'fall into' anything else.

« Last Edit: May 05, 2015, 10:35:34 AM by OldPro »

Cheddar Stacker

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Re: Can this be right? It can't be that simple...
« Reply #49 on: May 05, 2015, 10:27:50 AM »
Thanks for sharing OldPro. Sounds like you have some great friends. Good example of being creative and flexible.