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Old 11-08-2020, 08:31 PM   #161
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My financial planner says more like 3% annual withdrawal. She is fairly conservative though!

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Originally Posted by ksanders View Post
Some here are a bit more optimistic than me regarding their future earnings from saved money.

I use a simple 5% rule.

If I have X dollars I can remove 5% per year and never run out of money.

Many will say I can do better tyhan that, and I hope I can. But I am counting on at least being able to follow my 5% rule.
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Old 11-08-2020, 08:57 PM   #162
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Pensions, north or south of the 49th have been a topic of discussion forever.
Walmart was given as an example. Then it was suggested that not everyone , 50% maybe put money aside and the company matches.

Here is where I see a flaw. Most min wage workers back in the day needed every cent of that min wage just to live. Retirement and pensions were far away in their thoughts. They need to worry about getting by paying the bills, raising a family. Min wage is not enough to be worried about a savings plan.

Any employer knows that $15 min wage is not their total cost per employee, it may be $18, but the employee never sees or appreciates this extra cost, so would it not be better that entry level jobs have a min wage where they take home the extra employer costs?

^^^ perhaps why the underground economy continues to have a reason to continue.
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Old 11-08-2020, 09:34 PM   #163
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Originally Posted by Spinner View Post
My financial planner says more like 3% annual withdrawal. She is fairly conservative though!
and I thought I was being conservative!

The wife and I just discussed this very thing tonight. We looked at the balances, and our income and decided not to make any automatic withdrawals from our savings.


Between our fixed retirements and our business we just do not not need the extra tax burden. At some point we might sell the business but it pays well and takes just a little of our time, none of with requires a physical presense.
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Old 11-09-2020, 12:06 AM   #164
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Originally Posted by Soo-Valley View Post
Pensions, north or south of the 49th have been a topic of discussion forever.
Walmart was given as an example. Then it was suggested that not everyone , 50% maybe put money aside and the company matches.

.
Walmart has far more than 50% participation.
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Old 11-09-2020, 12:17 AM   #165
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[QUOTE=boathealer;938334][QUOTE=syjos;938312]
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Originally Posted by menzies View Post

I cringe when people tell me I am lucky. Luck had nothing to do with. Hard and smart working. Good planning. And not being frivolous or stupid with money was the key.


I get a little bit of that "luck" push back, too.


I made the CHOICE not to smoke pot or do drugs school when all of the other cool kids were
I made the CHOICE not to get anyone pregnant or other things that could destroy my future
I made the CHOICE to sit in the basement of the engineering building night after night at school while everyone else was out partying
I made the CHOICE to work 3 times harder than anyone else at for the last 35 years when it was very easy to slack off and "get by"

DW and I made a DECISION to save 50 to 60% of our income for 30 years, living WELL below our means.
DW and I made a DECISION to raise our family in a 1200sqft house and not buy a $400,000 house when all of our friends were doing so and I could "afford it"
DW and I made a DECISION not to fly to Cancun and the Bahamas twice a year, every year, like most of our friends did
DW and I made a DECISION not to buy the latest Lexus or Mercedes like most of our friends, and instead drive Scions and Mazdas

I made the CHOICE to spend hours researching and studying investment and retirement strategies while everyone else said I was wasting my time.

We all have our limits on what we are willing to live with currently in lieu of future "rewards".
Yes, luck IS involved, but it is ALSO what you do with that luck, the choices you make, and your determination can alter your retirement capabilities.


BINGO IN EACH AND EVERY DECISION, WE COULD BE RETIREE TWINS.
Retired at 59 , now 81+ more $$$ coming in that going out.
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Old 11-09-2020, 07:34 AM   #166
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Originally Posted by Spinner View Post
My financial planner says more like 3% annual withdrawal. She is fairly conservative though!
"My financial planner says more like 3% annual withdrawal"
Curious - is your financial planner compensated by assetts under management by any chance?
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Old 11-09-2020, 07:53 AM   #167
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One of the best threads I have read this year.



My wife and I retired at 61 this year. We actually retired 2 years early due to my company restructuring, but in the end retiring pre-Covid this year became very good for us.


Returning to the OP's original question of "When to retire?". Our answer was to retire debt free when we had sufficient income stream without touching savings for living today and investments that would improve our financial worth as we age. We engaged our tax accountant and a financial planner to validate our financial plan including tax liabilities.



Eleven months later our "actual" retirement costs in an unusual year are on target and that equals low stress for me. We started with a 4% investment withdrawal rate simply because it provided the travel money we wanted while the investments continue to grow. Initially, every 3rd year we intend to increase our annual withdrawal to maintain the 4% rate, more than offsetting inflation.



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Old 11-09-2020, 09:08 AM   #168
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Originally Posted by smitty477 View Post
"My financial planner says more like 3% annual withdrawal"
Curious - is your financial planner compensated by assetts under management by any chance?
3% is the "new normal" for protected long-term safe withdrawal rate according the general consensus of the forum at early-retirement.org (at least at the time I was doing all my planning for retirement). It used to be 4% according to all of the retirement pundits.

We have been averaging 2.5 to 3% annual withdrawals since retiring - living very frugally until we pass a 5-year sequence of returns risk timeframe.
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Old 11-09-2020, 09:24 AM   #169
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3% is the "new normal" for protected long-term safe withdrawal rate according the general consensus of the forum at early-retirement.org (at least at the time I was doing all my planning for retirement). It used to be 4% according to all of the retirement pundits.

We have been averaging 2.5 to 3% annual withdrawals since retiring - living very frugally until we pass a 5-year sequence of returns risk timeframe.

"3% is the "new normal" for protected long-term safe withdrawal rate according the general consensus of the forum at early-retirement.org (at least at the time I was doing all my planning for retirement). It used to be 4% according to all of the retirement pundits."
Yes - I linked a site in post #62 of this thread that has a much more data driven approach to solving for a best fit solution. In addition there are numerous calculators out there that are valuable in figuring out a best approach and many are 'free' to be used by anyone. (IORP extended, RPM , etc)

My question on this most recent post is that if someone has a 'rule' to pull say 3% but they also have an AUM fee of XX% than their real withdrawal rate is 3 + XX.

"We have been averaging 2.5 to 3% annual withdrawals since retiring - living very frugally until we pass a 5-year sequence of returns risk timeframe"
Our goal was to not live frugally before or after any particular year but to strive for balance all along the journey. YMMV
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Old 11-09-2020, 09:25 AM   #170
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On the topic of people working what some might call demeaning jobs in retirement.

We took a pre-retirement course where the instructor crunched the numbers for us and showed some of those workers might be bringing in more money than they did before retiring.

Take us for example...my annual retirement monies, after taxes (including our RIFF) is 88% of my annual take home pay from my job. Granted, we are scraping the bottom of the middle income bracket, but it wouldn’t take much of a job to boost me past what I was bringing in while working.

I don’t look at ‘those guys’ the same way any more.
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Old 11-09-2020, 09:34 AM   #171
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I can highly recommend the following book by Wade Pfau.
It goes into great detail about withdrawal rates (i.e. 4%; 3%, 3.14159%, etc.) and "sequence of returns risk" which is an absolutely critical topic to understand when planning for retirement or navigating through it. Check out the other books by Dr. Pfau too (covering such topics as reverse mortgages and annuities). They're excellent.


"How Much Can I Spend In Retirement?"

https://www.amazon.com/How-Much-Spen.../dp/1945640022
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Old 11-09-2020, 10:06 AM   #172
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Originally Posted by MurrayM View Post
On the topic of people working what some might call demeaning jobs in retirement.

We took a pre-retirement course where the instructor crunched the numbers for us and showed some of those workers might be bringing in more money than they did before retiring.

Take us for example...my annual retirement monies, after taxes (including our RIFF) is 88% of my annual take home pay from my job. Granted, we are scraping the bottom of the middle income bracket, but it wouldn’t take much of a job to boost me past what I was bringing in while working.

I don’t look at ‘those guys’ the same way any more.
I consider no job demeaning simply because it's unskilled or low paying. Many work part time jobs because they want something to do. Others to close the 12% gap you describe. Some to buy presents for the grandkids or to just have some extra money they don't feel a need to save but spend even on frivolous things.

I can say without hesitation that working has really helped us both mentally make it through the pandemic, whether working from home or very protected in our office. We will go back to 2 or 3 days a month when we feel like cruising again is practical, but for now it's a great diversion and with all the things we can't do right now, it's something we can do and enjoy doing.
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Old 11-09-2020, 10:20 AM   #173
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I would caution against use of any given percentage withdrawals without looking at your total picture. Also, one needs to regularly reexamine things.

When we retired, we looked at total funds and then looked at specific expenditures we anticipated including house, cars, boats, business and other. Then we looked at the remaining funds and a comfortable rate for them.

Along the way, many things changed. The one we didn't figure on was our small hobby business growing and producing income. But then we didn't figure on operating a school or on buying and building small homes in SC and we most definitely didn't figure on a pandemic which put very significant funds at risk. On the other hand, this year, our boating and travel expenses have been way down.

It's not a one size fits all nor a constant, fixed number. It changes as a result of everything that happens along the way. That also means it's key to understand how you arrived at the number beyond just read it in a book, so you'll know when changes have occured which impact it. The most common change to impact huge numbers of people is a recession. That brings me to one other part of planning and that is contingency plans, basically thinking about what you'd do if this or that happened. Major medical costs is definitely something to think about and have a contingency for. I know one couple that was very comfortably retired until they had a three year old grandchild diagnosed with brain cancer. That changed everything and they sold some things and went back to work but the only thing that really matters to them is that 15 years later they went to their granddaughter's high school graduation. No plan should ever be inflexible.
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Old 11-09-2020, 10:22 AM   #174
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I would caution against use of any given percentage withdrawals without looking at your total picture. Also, one needs to regularly reexamine things. [snip] ...No plan should ever be inflexible.
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Old 11-09-2020, 10:45 AM   #175
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Nope. She is a for fee only, fiduciary.
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Old 11-09-2020, 11:06 AM   #176
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I never pay anyone to play with my money.
Some advisors have churned the account, leaving you busted.
My broker got rid of me because I was not buying and selling in the market.
I manage my own stock portfolio and in the last 10 years my net worth has increased 3 times and meanwhile pays a very nice dividend while sitting on my hands.
My advice, retire early because we never know when we will check out. If I live 4 more years and remain active, I will have established a new family record.
My older brother (2 years older) had a significant stroke, cant talk, sits in a wheel chair all day.
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Old 11-09-2020, 11:55 AM   #177
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I never pay anyone to play with my money.
Some advisors have churned the account, leaving you busted.
My broker got rid of me because I was not buying and selling in the market.
I manage my own stock portfolio and in the last 10 years my net worth has increased 3 times and meanwhile pays a very nice dividend while sitting on my hands.
My advice, retire early because we never know when we will check out. If I live 4 more years and remain active, I will have established a new family record.
My older brother (2 years older) had a significant stroke, cant talk, sits in a wheel chair all day.
One of my goals was to be retired AT LEAST as long as I was working - ................which means I will need to last until I am 93!
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Old 11-09-2020, 12:29 PM   #178
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Originally Posted by OldDan1943 View Post
I never pay anyone to play with my money.
Some advisors have churned the account, leaving you busted.
My broker got rid of me because I was not buying and selling in the market.
I manage my own stock portfolio and in the last 10 years my net worth has increased 3 times and meanwhile pays a very nice dividend while sitting on my hands.
My advice, retire early because we never know when we will check out. If I live 4 more years and remain active, I will have established a new family record.
My older brother (2 years older) had a significant stroke, cant talk, sits in a wheel chair all day.

Totally agree. I think financial planners are risky. If they were that smart, they would be rich... or at least above average. For one, I don't invest in the market and do everything on my own, with no regrets.



I'd agree with Band B.... setting a percentage as to what you take out is probably not wise. (Now, there are some IRAs that require a min distribution, personally don't like them)



One simply needs:
1. Enough to live on
2. Some inflation proof assets that will provide for No. 1 in the future.
3. A plan B, should major shxx hit the fan.



The actual numbers and percentages will vary a LOT between folks of different needs.
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Old 11-09-2020, 12:33 PM   #179
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This is a great thread. Keep the info coming.

That said, I actually like my work. I'm early 50s and have no desire to retire "early". As long as I find a job that is challenging and rewarding, I don't see a lot of incentive to retire. After 3 or 4 weeks of vacation, I'm ready to go back to work.

I really don't see any of my current hobbies as meaningful replacement. Bought the boat at 40 and kind of bored of it most recently. Still enjoy international travel ( up until this year), hiking and motorcycling.

Mind you, I have changed occupations and locations several time in my working life, which keeps things fresh. Always take ample time off between jobs. Most recently I take on short duration focused projects that keep me engaged.

Luckily my wife feels similarly and would like to work for another 10 years. 65 seems appropriate. We'll reassess year to year.

Great set of hikers you got there Murray. Very considerate of your co-workers. I'm sure you will use them a lot.
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Old 11-09-2020, 12:35 PM   #180
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...The actual numbers and percentages will vary a LOT between folks of different needs.
(Bold type mine).

Interesting word, 'needs' vs 'wants'
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