Want to feel wealthy...or maybe not?

Here’s my story with a positive spin..

Like many, I lost my business in the economic downturn. It was my passion. It gave my life meaning. Since that time I have not been able to put much into retirement investments, and have damaged my health and my marriage with stress. My retirement income will be largely dependent on inheritances, and I am not proud of that. 

But I did do some things right. I had some money in savings. I had made investments faithfully during the years that I could. I had no debt other than my mortgage. I lived well within my means.  I made solid investments in things with residual income.  I am in a better position than most Baby Boomers.

Because of these things, I landed on my feet. We are ok, and will be fine.  I made good decisions, and BECAUSE of that, we did OK when disaster struck. 

Life is good. 

Armitage said:

I just recently started using Mint so I have a rough idea of my expenses over the last 6 months. I wish I had started tracking this stuff years earlier so I would have a better handle on the actual figures. I can't believe I haven't heard of this 25X rule before (just Googled it). Based on that, I guess I could retire now if I wanted to, but I'm still building that big safety buffer for if something bad happens, medical expenses continue to balloon out of control through the next 40-50 years, or I want to live less frugally in retirement.

So, since we're on the subject of early retirement... What would everyone here do with themselves if they could retire next year, assuming your total yearly expenditures had to remain fixed at today's rate?

Let’s assume 25 times yearly living costs is your goal. Is that based on living costs today or 25 years from now?  

Have you gone on the actuarial sites that help you forecast your expected age at dying? 

Then adjusted your income requirements to likely inflation at that point?  What allowances have you made for greater than projected inflation leading up to that point? 

What allowances have you made for life past your projected lifespan?  

Those are the two big variables there is little control over. Inflation and lifespan.  

Then there is the whole issue regarding children. Would you like to create a dynasty? A family that carries your name beyond your lifetime? Or are your children not willing to / capable of assuming your goals?  

If the former ( build a dynasty ) how much is required to do that successfully?  If the later, what will you do with money that remains after your death? 

In short what if your children don’t share your values?  

If SVreX said:

Here’s my story with a positive spin..

Like many, I lost my business in the economic downturn. It was my passion. It gave my life meaning. Since that time I have not been able to put much into retirement investments, and have damaged my health and my marriage with stress. My retirement income will be largely dependent on inheritances, and I am not proud of that. 

But I did do some things right. I had some money in savings. I had made investments faithfully during the years that I could. I had no debt other than my mortgage. I lived well within my means.  I made solid investments in things with residual income.  I am in a better position than most Baby Boomers.

Because of these things, I landed on my feet. We are ok, and will be fine.  I made good decisions, and BECAUSE of that, we did OK when disaster struck. 

Life is good. 

Good for you!  I completely understand the battle you went through. Most of us Baby boomers did too. 

Imagine the Auto worker in Detroit who spent his life working on the line only to have his retirement lost due to the bankruptcy  of his company. 

Instead of the nice retirement he was looking forward to, he’s now on the government payroll forced to remain in Detroit  ( instead of the warm sunny place he’d dreamt of ) because his home isn’t worth much now that Detroit is the murder Capitol. 

The people who bankrupted the company are enjoying great privilege and comfort while their tax obligation is dramatically reduced.  

The worker though didn’t benefit to any degree. His taxes remain nearly  the same. 

Sorry, excuse my bitterness. 

But we baby boomers planned our lives around delayed gratification and the rewards at the end.  

frenchyd said:

Armitage said:

I just recently started using Mint so I have a rough idea of my expenses over the last 6 months. I wish I had started tracking this stuff years earlier so I would have a better handle on the actual figures. I can't believe I haven't heard of this 25X rule before (just Googled it). Based on that, I guess I could retire now if I wanted to, but I'm still building that big safety buffer for if something bad happens, medical expenses continue to balloon out of control through the next 40-50 years, or I want to live less frugally in retirement.

So, since we're on the subject of early retirement... What would everyone here do with themselves if they could retire next year, assuming your total yearly expenditures had to remain fixed at today's rate?

Let’s assume 25 times yearly living costs is your goal. Is that based on living costs today or 25 years from now?  

Have you gone on the actuarial sites that help you forecast your expected age at dying? 

Then adjusted your income requirements to likely inflation at that point?  What allowances have you made for greater than projected inflation leading up to that point? 

What allowances have you made for life past your projected lifespan?  

Those are the two big variables there is little control over. Inflation and lifespan.  

Then there is the whole issue regarding children. Would you like to create a dynasty? A family that carries your name beyond your lifetime? Or are your children not willing to / capable of assuming your goals?  

If the former ( build a dynasty ) how much is required to do that successfully?  If the later, what will you do with money that remains after your death? 

In short what if your children don’t share your values?  

Hi, I’m mike. I’ve studied for 2 of the actuarial exams, although only attempted one of them once and the other not at all (FM and P, respectively). 

Stop with the negativity that you disguise as realism. It is wrong, even on a factual level.

Inflation has been relatively steady for the past... 100ish? years at 3%, give or take. The total stock market, or else sp500 index, returns about 7% annually AFTER inflation. These are facts—I’m not exactly on the mark, but it’s pretty close. The 3%, or 4% withdrawal rule (aka the x25 rule) holds true at that. 

Anyone reading this forum needs to ignore anything Frenchy says on personal finances. I don’t care about changing his mind, just warning anyone else that might read his posts. 

Plus, the 25X rule ACCOUNTS for inflation. 

Withdraw 4% in the first year, then increase it (or decrease it) annually by the rate of inflation. 

That’s pretty simple.  (Perhaps over-simplified)

In reply to mtn :

The frustrating thing to me is he sits in his 6,000sf House, in a high cost of living area, on a lake, with a boat, after having lost much of his money due to highly speculative investments and high cost lifestyle, and says there’s no help in planning for the future. He is not an example of careful planning. He’s comparable to the people with three mortgages in 2008 complaining that they did everything right but still lost their homes. Except he kept his home!!

mtn said:

frenchyd said:

Armitage said:

I just recently started using Mint so I have a rough idea of my expenses over the last 6 months. I wish I had started tracking this stuff years earlier so I would have a better handle on the actual figures. I can't believe I haven't heard of this 25X rule before (just Googled it). Based on that, I guess I could retire now if I wanted to, but I'm still building that big safety buffer for if something bad happens, medical expenses continue to balloon out of control through the next 40-50 years, or I want to live less frugally in retirement.

So, since we're on the subject of early retirement... What would everyone here do with themselves if they could retire next year, assuming your total yearly expenditures had to remain fixed at today's rate?

Let’s assume 25 times yearly living costs is your goal. Is that based on living costs today or 25 years from now?  

Have you gone on the actuarial sites that help you forecast your expected age at dying? 

Then adjusted your income requirements to likely inflation at that point?  What allowances have you made for greater than projected inflation leading up to that point? 

What allowances have you made for life past your projected lifespan?  

Those are the two big variables there is little control over. Inflation and lifespan.  

Then there is the whole issue regarding children. Would you like to create a dynasty? A family that carries your name beyond your lifetime? Or are your children not willing to / capable of assuming your goals?  

If the former ( build a dynasty ) how much is required to do that successfully?  If the later, what will you do with money that remains after your death? 

In short what if your children don’t share your values?  

Hi, I’m mike. I’ve studied for 2 of the actuarial exams, although only attempted one of them once and the other not at all (FM and P, respectively). 

Stop with the negativity that you disguise as realism. It is wrong, even on a factual level.

Inflation has been relatively steady for the past... 100ish? years at 3%, give or take. The total stock market, or else sp500 index, returns about 7% annually AFTER inflation. These are facts—I’m not exactly on the mark, but it’s pretty close. The 3%, or 4% withdrawal rule (aka the x25 rule) holds true at that. 

 

 

Anyone reading this forum needs to ignore anything Frenchy says on personal finances. I don’t care about changing his mind, just warning anyone else that might read his posts. 

Yes over a 100 year period inflation may be relatively steady. 

Except when it’s not! Post war inflation here in America tends to run higher, as high as 19% annually. 

Look at the cost of things prior to WW2  and then after WW2  prior to Vietnam and after Vietnam 

Look at inflation prior to depressions or recessions.  And after. 

The fluctuations that occur affect everyone’s life.  If you bridge those fluctuations  without dramatic changes in your life, good for you.  Too many people fail and are hurt. 

In reply to frenchyd :

Silence is golden. 

frenchyd said:

But we baby boomers planned our lives around delayed gratification and the rewards at the end.  

 

Umm.  I've read a number of investment articles that would very much disagree with that statement. The majority of Baby Boomers chose instant gratification in lieu of planning for the future.  Of course, I'm not sure Gen-X (my generation) are doing any better.  Personally, I save a lot.  More than 20% of my gross salary each year. But I also recognize I am in a more fortunate situation than most are.

OK, since this thread has run the typical course I am shutting it down. Thank you to all that contributed with constructive advice.