When you reach your number and keep working

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When you reach your number and keep working

Postby Saving$ » Tue Apr 30, 2013 11:48 pm

The recent MMM discussion got me wondering what you would do if you reach your "number" and for whatever reason, continue working. I can think of several possibilities and would like to know the Boglehead's thoughts and/or experience on these (or others).

1. Carry on as usual. Keep being frugal, keep saving, keep AA as is. You will just have more of a cushion.
2. Adjust AA to fewer stocks and more bonds as savings increase. Theoretically more bonds will require a higher "number" to achieve the same SWR, but risk will be lower.
3. Stop being so frugal, and start spending more now, while you are still working
4. Increase your expected SWR due to larger asset base; ie expect to spend more than originally planned in retirement.
5. Some combination of the above.

I think my personal reaction will be option 5, if I get there (LOL).
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Re: When you reach your number and keep working

Postby livesoft » Wed May 01, 2013 1:01 am

6. Start blog claiming you are retired even though you are really working.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: When you reach your number and keep working

Postby bigmantenor » Wed May 01, 2013 1:35 am

livesoft wrote:6. Start blog claiming you are retired even though you are really working.

I got a hearty laugh from this, thanks :beer
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Re: When you reach your number and keep working

Postby 500Kaiser » Wed May 01, 2013 2:13 am

I will use Bill Bernsteins recent "the ages of the investor" ebook as my guide. I will adjust to a very conservative liability matching portfolio to lock in what I have. Then I will start a remaining portfolio that has an entirely different risk profile, since I can afford to take more risk with it. Separating these into 2 distinct elements has been very clarifying for me, since the 2 have very different risk profiles.
Higher risk = higher HOPEFUL returns, not expected returns.
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Re: When you reach your number and keep working

Postby Murdoch » Wed May 01, 2013 4:19 am

My preference would be to continue as is, reducing risk to retirement levels, then plan on a lower withdrawal percentage once retired. Reduces original plan failure potential even more.
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Re: When you reach your number and keep working

Postby TomatoTomahto » Wed May 01, 2013 7:52 am

A combination of 2 and 3, no 6, and something like what 500Kaiser said.
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Re: When you reach your number and keep working

Postby SamGamgee » Wed May 01, 2013 7:57 am

Most people start working because they want money so that you can do fun things. Then the money arrives and they find they've been working for so long that they can't think of any fun things to do with it. I think this is kind of sad.

Volunteer for a charity or something.

Geeze.
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Re: When you reach your number and keep working

Postby stlrick » Wed May 01, 2013 8:07 am

500Kaiser wrote:I will use Bill Bernsteins recent "the ages of the investor" ebook as my guide. I will adjust to a very conservative liability matching portfolio to lock in what I have. Then I will start a remaining portfolio that has an entirely different risk profile, since I can afford to take more risk with it. Separating these into 2 distinct elements has been very clarifying for me, since the 2 have very different risk profiles.


+1

This is exactly what I started doing two years ago, and I am very happy with it.
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Re: When you reach your number and keep working

Postby House Blend » Wed May 01, 2013 11:11 am

Saving$ wrote:The recent MMM discussion got me wondering what you would do if you reach your "number" and for whatever reason, continue working.


IMO, you need clarity of thought about what you really mean by "reaching your number". Using that phrase connotes the idea that there is a precise dollar amount beyond which the marginal utility of wealth is zero. I doubt that is true for most people.

Related to that is how much you enjoy your current work, and the opportunity cost of forgoing other pursuits (remunerative or not).

At least that's what I would be thinking about when deciding whether to dial down the risk level of my portfolio, or to carry on.
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Re: When you reach your number and keep working

Postby Blues » Wed May 01, 2013 11:22 am

500Kaiser wrote:I will use Bill Bernsteins recent "the ages of the investor" ebook as my guide. I will adjust to a very conservative liability matching portfolio to lock in what I have. Then I will start a remaining portfolio that has an entirely different risk profile, since I can afford to take more risk with it. Separating these into 2 distinct elements has been very clarifying for me, since the 2 have very different risk profiles.


+1

Bill's interviews and treatise on the topic within his "Ages Of The Investor" series really helped crystallize my thinking on the subject.

Here's a link for the OP to an interview with Bill that gives a very nice thumbnail sketch of his thoughts:

http://money.cnn.com/2012/09/04/retirement/investing-mistakes.moneymag/index.html
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Re: When you reach your number and keep working

Postby Dulocracy » Wed May 01, 2013 11:35 am

I see myself doing number 1: continuing to be frugal. I do not like waste, and I love efficiency. I take vacations, go out to eat, and enjoy life, but I do so with purpose. I do not drink coke with dinner at restaurants because of the cost and health reasons, but if I really want a coke, I get one. I cut out the habits that bring no joy, but still purchase when there is joy to be had from the purchase. My habit of saving allowed me to take my wife on a $15,000 honeymoon to Japan. Because being thrifty for me is more about spending money only when it is worth spending, I do not see that changing in the future.

As far as my asset allocation, I am going to look into the ebook referenced above before deciding. My original stance would be to change from a 120 - age as percent in equity to a 100 - age as percent in bonds at that point in life. The e-book referenced above sounds like a good read, however, so I will keep an open mind to it.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.
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Re: When you reach your number and keep working

Postby enderland » Wed May 01, 2013 11:37 am

I could see myself getting to that point and donating 50% or more of my income.

I imagine, if you had a charity you really cared about, it would be a bit easier to get excited about going to work when you didn't have to if you were working for the cause of the charity.
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Re: When you reach your number and keep working

Postby Blues » Wed May 01, 2013 11:51 am

I wrote to Bill Bernstein and he gave permission for me to quote an excerpt from "The Ages Of The Investor" regarding how to address hitting your "number" during your working years before retirement.

Markets fluctuate, so I suggest another path. If, at any point a bull market pushes your portfolio over the LMP (liability matching portfolio) "magic number" of 20 to 25 times your annual cash-flow needs beyond Social Security and pensions, you've won the investing game. Why keep playing? Start bailing. After you've put enough TIPS, plain vanilla Treasuries, and CDs into your mental LMP, you're free to start adding again to your RP (risk portfolio). If stocks continue their rise, you can slowly transfer even more assets into a separate low-risk pool earmarked for emergencies, RP equity purchases at lower prices, nice-to-have luxuries and travel, and purchase of the corner lot owned by your impecunious neighbor who suddenly sorely needs some cash.
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Re: When you reach your number and keep working

Postby wesleymouch » Wed May 01, 2013 11:57 am

My thinking is in line with Larry Swedroe. Beyond a certain amount, wealth has a marginal utility. You can give it away or use "challenge grants" to instill savings in children or start flying first class.
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Re: When you reach your number and keep working

Postby VictoriaF » Wed May 01, 2013 11:58 am

There is a strong temptation to keep working even after reaching "the number." It would be useful to consider retirement as a highly desirable state and postponing it as a detrimental state and to be strict about complying with the self-imposed "numbers." There could be one or more so called numbers, e.g., the value of the assets, the amount of income, the eligibility for retirement benefits, etc. But once the trigger events and numbers are reached they must be respected.

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Re: When you reach your number and keep working

Postby zed » Wed May 01, 2013 12:09 pm

Dulocracy wrote:I see myself doing number 1: continuing to be frugal. I do not like waste, and I love efficiency. I take vacations, go out to eat, and enjoy life, but I do so with purpose. I do not drink coke with dinner at restaurants because of the cost and health reasons, but if I really want a coke, I get one. I cut out the habits that bring no joy, but still purchase when there is joy to be had from the purchase. My habit of saving allowed me to take my wife on a $15,000 honeymoon to Japan. Because being thrifty for me is more about spending money only when it is worth spending, I do not see that changing in the future.

As far as my asset allocation, I am going to look into the ebook referenced above before deciding. My original stance would be to change from a 120 - age as percent in equity to a 100 - age as percent in bonds at that point in life. The e-book referenced above sounds like a good read, however, so I will keep an open mind to it.



I think you meant "100 - age as percent in equity" ? Or maybe you meant "age in bonds"

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Re: When you reach your number and keep working

Postby leonard » Wed May 01, 2013 12:09 pm

If you want to keep working, you haven't reached the number yet :happy .
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Re: When you reach your number and keep working

Postby chaz » Wed May 01, 2013 12:21 pm

"There is a strong temptation to keep working even after reaching "the number.""

I enjoyed my work, but I retired at age 74.
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Re: When you reach your number and keep working

Postby VictoriaF » Wed May 01, 2013 12:24 pm

chaz wrote:"There is a strong temptation to keep working even after reaching "the number.""

I enjoyed my work, but I retired at age 74.


Then your "number" was work until I stop enjoying it. There is nothing wrong with that, in general. Specifically, I know many cases in which people "enjoy" work, because they do not have the energy or imagination to enjoy something else.

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Re: When you reach your number and keep working

Postby The Wizard » Wed May 01, 2013 12:27 pm

leonard wrote:If you want to keep working, you haven't reached the number yet :happy .

Not sure I agree with this.
Numerous billionaires fall into this category...
Attempted new signature...
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Re: When you reach your number and keep working

Postby MGBGTV8 » Wed May 01, 2013 12:47 pm

Blues wrote:I wrote to Bill Bernstein and he gave permission for me to quote an excerpt from "The Ages Of The Investor" regarding how to address hitting your "number" during your working years before retirement.

Markets fluctuate, so I suggest another path. If, at any point a bull market pushes your portfolio over the LMP (liability matching portfolio) "magic number" of 20 to 25 times your annual cash-flow needs beyond Social Security and pensions, you've won the investing game. Why keep playing? Start bailing. After you've put enough TIPS, plain vanilla Treasuries, and CDs into your mental LMP, you're free to start adding again to your RP (risk portfolio). If stocks continue their rise, you can slowly transfer even more assets into a separate low-risk pool earmarked for emergencies, RP equity purchases at lower prices, nice-to-have luxuries and travel, and purchase of the corner lot owned by your impecunious neighbor who suddenly sorely needs some cash.


I agree with taking on less risk in the portfolio. Letting money work for us isn't just about maximizing return. In fact, the push to include some equities in retirement is based on addressing the risks of longevity, inflation, etc. To some there is value in decreasing risk, but that is a subjective thing. Once the risk is down to whatever level is deemed "safe," building up another portfolio for taking risks for whatever purpose is probably just responsible use of resources.
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Re: When you reach your number and keep working

Postby letsgobobby » Wed May 01, 2013 1:02 pm

Blues wrote:I wrote to Bill Bernstein and he gave permission for me to quote an excerpt from "The Ages Of The Investor" regarding how to address hitting your "number" during your working years before retirement.

Markets fluctuate, so I suggest another path. If, at any point a bull market pushes your portfolio over the LMP (liability matching portfolio) "magic number" of 20 to 25 times your annual cash-flow needs beyond Social Security and pensions, you've won the investing game. Why keep playing? Start bailing. After you've put enough TIPS, plain vanilla Treasuries, and CDs into your mental LMP, you're free to start adding again to your RP (risk portfolio). If stocks continue their rise, you can slowly transfer even more assets into a separate low-risk pool earmarked for emergencies, RP equity purchases at lower prices, nice-to-have luxuries and travel, and purchase of the corner lot owned by your impecunious neighbor who suddenly sorely needs some cash.


I haven't read this book but isn't 20-25x needs only sufficient with some exposure to risky assets? Ie, 20-25x needs all invested in T-bills probably isn't enough for most people. That 25x needs comes from the Trinity study conclusions, right? And that presupposed some risk exposure?
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Re: When you reach your number and keep working

Postby Blues » Wed May 01, 2013 1:05 pm

Bobby, I think you missed some of what Bill said in the interview and the quoted material I posted. He does address the need and uses for a "risk" portfolio and I totally agree that having an investment in equities will help counter the effects of inflation (especially in this severely low interest environment).
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Re: When you reach your number and keep working

Postby fareastwarriors » Wed May 01, 2013 1:09 pm

My number is More.
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Re: When you reach your number and keep working

Postby mptfan » Wed May 01, 2013 1:13 pm

VictoriaF wrote:Specifically, I know many cases in which people "enjoy" work, because they do not have the energy or imagination to enjoy something else.

It is possible for someone to have the energy or imagination to enjoy something else, but they still enjoy what they do for a living.
I eat risk for breakfast. :)
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Re: When you reach your number and keep working

Postby VictoriaF » Wed May 01, 2013 1:22 pm

mptfan wrote:
VictoriaF wrote:Specifically, I know many cases in which people "enjoy" work, because they do not have the energy or imagination to enjoy something else.

It is possible for someone to have the energy or imagination to enjoy something else, but they still enjoy what they do for a living.


It is possible. Salient examples include tenured professors, Supreme Court Justices, and the poster chaz. That does not contradict my observation that many people don't know how to retire.

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Re: When you reach your number and keep working

Postby twist101 » Wed May 01, 2013 1:38 pm

I think part of the consideration of hitting your number and continuing working is what age you hit your number.

I think the answer could be potentially different if you hit your number in your mid 30s vs mid 50s.
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Re: When you reach your number and keep working

Postby Clearly_Irrational » Wed May 01, 2013 1:53 pm

If you hit your number and keep working then all I can think of is:

1) You just flat out enjoy what you do, nothing wrong with that.
2) Your "number" wasn't actually your number since obviously you're still too nervous to quit.
3) You've been working so long you've forgotten that there are other things you could be doing with your time.
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Re: When you reach your number and keep working

Postby Batousai » Wed May 01, 2013 2:06 pm

The Wizard wrote:
leonard wrote:If you want to keep working, you haven't reached the number yet :happy .

Not sure I agree with this.
Numerous billionaires fall into this category...

No, there are numerous billionaires who's hobby is seeing how much money they can put in the bank, that's not the same as work.
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Re: When you reach your number and keep working

Postby jon-nyc » Wed May 01, 2013 2:12 pm

I was FI many years before I retired. WHat prevented me from pulling the plug earlier was uncertainty of availability of health care coverage. While anything may happen in the future, the SCOTUS decision on ACA gave me the confidence to pull the plug. I pulled the plug with assets well over 40x expenses, not including primary residence and not including a fully-funded 529.


I adjusted my AA, but didn't really decrease my equity allotment. The reason is I'm now investing partly for heirs as well as for my own retirement, thus the timeframe of my investing has increased.

My major adjustment was to shift most of the bond allocation to a TIPs ladder, which, in conjunction with I-Bonds and EE-Bonds, will provide an adequate baseline income throughout retirement. Thus the equity investment becomes something for extras, potential lifestyle increases, or inheritance.
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Re: When you reach your number and keep working

Postby epilnk » Wed May 01, 2013 2:22 pm

Saving$ wrote:The recent MMM discussion got me wondering what you would do if you reach your "number" and for whatever reason, continue working. I can think of several possibilities and would like to know the Boglehead's thoughts and/or experience on these (or others).

1. Carry on as usual. Keep being frugal, keep saving, keep AA as is. You will just have more of a cushion.
2. Adjust AA to fewer stocks and more bonds as savings increase. Theoretically more bonds will require a higher "number" to achieve the same SWR, but risk will be lower.
3. Stop being so frugal, and start spending more now, while you are still working
4. Increase your expected SWR due to larger asset base; ie expect to spend more than originally planned in retirement.
5. Some combination of the above.

All of the above, but in the short term 3, mostly. There is no longer any need to save aggressively for retirement, and no real need or desire to retire while we're still tied to the school schedule anyway. And health care is still tied to employment, so retirement is scary with an expensive medical needs kid. Given the ages of our children, good family vacations are the first luxury we're awarding ourselves. Also I'm replacing the decomposing carpet in the family room and the rusting sinks in the bathrooms.
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Re: When you reach your number and keep working

Postby chaz » Wed May 01, 2013 4:50 pm

VictoriaF wrote:
mptfan wrote:
VictoriaF wrote:Specifically, I know many cases in which people "enjoy" work, because they do not have the energy or imagination to enjoy something else.

It is possible for someone to have the energy or imagination to enjoy something else, but they still enjoy what they do for a living.


It is possible. Salient examples include tenured professors, Supreme Court Justices, and the poster chaz. That does not contradict my observation that many people don't know how to retire.

Victoria

But I have enjoyed retirement more than the work that I also enjoyed.
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Re: When you reach your number and keep working

Postby VictoriaF » Wed May 01, 2013 4:56 pm

chaz wrote:
VictoriaF wrote:
mptfan wrote:
VictoriaF wrote:Specifically, I know many cases in which people "enjoy" work, because they do not have the energy or imagination to enjoy something else.

It is possible for someone to have the energy or imagination to enjoy something else, but they still enjoy what they do for a living.


It is possible. Salient examples include tenured professors, Supreme Court Justices, and the poster chaz. That does not contradict my observation that many people don't know how to retire.

Victoria

But I have enjoyed retirement more than the work that I also enjoyed.


Chaz, you are difficult to please! Please tell us: If you had known that retirement would be as great for you as it was, would you have retired earlier?

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Re: When you reach your number and keep working

Postby chaz » Wed May 01, 2013 5:05 pm

VictoriaF wrote:
chaz wrote:
VictoriaF wrote:
mptfan wrote:
VictoriaF wrote:Specifically, I know many cases in which people "enjoy" work, because they do not have the energy or imagination to enjoy something else.

It is possible for someone to have the energy or imagination to enjoy something else, but they still enjoy what they do for a living.


It is possible. Salient examples include tenured professors, Supreme Court Justices, and the poster chaz. That does not contradict my observation that many people don't know how to retire.

Victoria

But I have enjoyed retirement more than the work that I also enjoyed.


Chaz, you are difficult to please! Please tell us: If you had known that retirement would be as great for you as it was, would you have retired earlier?

Victoria

No, that would amount to timing. :)
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Re: When you reach your number and keep working

Postby Blues » Wed May 01, 2013 5:17 pm

chaz wrote:No, that would amount to timing. :)


We have a winner!!! :sharebeer
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Re: When you reach your number and keep working

Postby leonard » Wed May 01, 2013 6:17 pm

Batousai wrote:
The Wizard wrote:
leonard wrote:If you want to keep working, you haven't reached the number yet :happy .

Not sure I agree with this.
Numerous billionaires fall into this category...

No, there are numerous billionaires who's hobby is seeing how much money they can put in the bank, that's not the same as work.


Exactly.
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Re: When you reach your number and keep working

Postby backofbeyond » Wed May 01, 2013 7:18 pm

In my case, while on paper, I may already be close to my "number", I have to wait until my assets can be converted to cash. I won't bore you with the details, but it mirrors the saying House Rich, Cash poor. I imagine there are similar folks waiting for stock options to "ripen" as well. Or perhaps Trust babies, waiting on that magical date when the assets are turned over to them?

So it is an “event” that we are waiting on, not the actual $ if that makes sense?

OBTW, I plan on working anyway, as I DO love my job. But want to get my ducks in a row incase I hit bad health in the years ahead.
The question isn't at what age I want to retire, it is at what income. - George Foreman
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Re: When you reach your number and keep working

Postby Peter Foley » Wed May 01, 2013 9:19 pm

Blues wrote:

I wrote to Bill Bernstein and he gave permission for me to quote an excerpt from "The Ages Of The Investor" regarding how to address hitting your "number" during your working years before retirement.



Markets fluctuate, so I suggest another path. If, at any point a bull market pushes your portfolio over the LMP (liability matching portfolio) "magic number" of 20 to 25 times your annual cash-flow needs beyond Social Security and pensions, you've won the investing game. Why keep playing? Start bailing. After you've put enough TIPS, plain vanilla Treasuries, and CDs into your mental LMP, you're free to start adding again to your RP (risk portfolio). If stocks continue their rise, you can slowly transfer even more assets into a separate low-risk pool earmarked for emergencies, RP equity purchases at lower prices, nice-to-have luxuries and travel, and purchase of the corner lot owned by your impecunious neighbor who suddenly sorely needs some cash.


This is essentially the #2 option posted by the OP. I hit my number somtime in early 2008. That was about a year earlier than I had hoped to retire (that date was pension eligibility related). I had not yet changed my AA when the recession hit. I made it back to my number some time in late 2009 or perhaps early 2010. Work was interesting so I dialed back my AA a bit and continued working until May of 2012. From 2008 through May of 2012 my equity AA went from 70% to 45% through rebalancing in bands and moving toward age in bonds with each rebalancing sequence. I was able to reduce risk as the market improved. Then I went from about 55% equity to 45% equity in the few months before I retired (again the good fortune of a rising market). A rising market in the last few years before retirement makes up for a lot of bad investment decisions made earlier in life. A good year in the market in the first year of retirement ain't bad either. :D
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Re: When you reach your number and keep working

Postby Dulocracy » Thu May 02, 2013 12:10 am

zed wrote:
Dulocracy wrote:I see myself doing number 1: continuing to be frugal. I do not like waste, and I love efficiency. I take vacations, go out to eat, and enjoy life, but I do so with purpose. I do not drink coke with dinner at restaurants because of the cost and health reasons, but if I really want a coke, I get one. I cut out the habits that bring no joy, but still purchase when there is joy to be had from the purchase. My habit of saving allowed me to take my wife on a $15,000 honeymoon to Japan. Because being thrifty for me is more about spending money only when it is worth spending, I do not see that changing in the future.

As far as my asset allocation, I am going to look into the ebook referenced above before deciding. My original stance would be to change from a 120 - age as percent in equity to a 100 - age as percent in bonds at that point in life. The e-book referenced above sounds like a good read, however, so I will keep an open mind to it.



I think you meant "100 - age as percent in equity" ? Or maybe you meant "age in bonds"

zed


You are correct... 100 - age as percent in equity.
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Re: When you reach your number and keep working

Postby Bengineer » Fri May 03, 2013 12:30 am

I'm pretty certain I've reached & now exceeded my number. Wasn't so sure in '08-'09. I'm naturally frugal in that I seek to spend the least amount I can to get the value I want. That said, there are always more & better tools. :) I'm still working as a consultant. I love what I do and will probably will keep on doing it as long as clients really value my contribution. That said, I'm really happy knowing I don't need to make X this year, or next, or ever and that I have time to live life. I'm shifting my AA, as I don't need to take on risk to achieve a higher expected return to get to my number and I want to be sure my number holds up through the first years of retirement even in the face of the next unforseen financial disaster. I think I view "retirement" more as doing more of what I want to do and less that generates significant income. After I get to the point that I haven't been bringing in significant income for a few years and admit I'm actually retired, I'll reevaluate my AA. If there appears to be excess, I'll see what kind of impact I can have with it. Bottom line, I think it's 1&2. 3&4 not so much. I think I'll spend less to get the things I want rather than more, as I've gotten a lot smarter about getting value for my dollar over the years.
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Re: When you reach your number and keep working

Postby BrandonBogle » Fri May 03, 2013 12:58 am

Dulocracy wrote:I see myself doing number 1: continuing to be frugal. I do not like waste, and I love efficiency. I take vacations, go out to eat, and enjoy life, but I do so with purpose. I do not drink coke with dinner at restaurants because of the cost and health reasons, but if I really want a coke, I get one. I cut out the habits that bring no joy, but still purchase when there is joy to be had from the purchase. My habit of saving allowed me to take my wife on a $15,000 honeymoon to Japan. Because being thrifty for me is more about spending money only when it is worth spending, I do not see that changing in the future.


My behavior is as Dulocracy's above, though at times I am avoiding trips or skipping meals or certain items I want because of the cost. Once I hit my number, I would imagine I would be a bit more # 3, but only to the point Dulocracy describes.
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Re: When you reach your number and keep working

Postby VictoriaF » Fri May 03, 2013 7:19 am

chaz wrote:
VictoriaF wrote:
chaz wrote:
VictoriaF wrote:
mptfan wrote:
    VictoriaF wrote:
    Specifically, I know many cases in which people "enjoy" work, because they do not have the energy or imagination to enjoy something else.

It is possible for someone to have the energy or imagination to enjoy something else, but they still enjoy what they do for a living.


It is possible. Salient examples include tenured professors, Supreme Court Justices, and the poster chaz. That does not contradict my observation that many people don't know how to retire.

Victoria

But I have enjoyed retirement more than the work that I also enjoyed.


Chaz, you are difficult to please! Please tell us: If you had known that retirement would be as great for you as it was, would you have retired earlier?

Victoria

No, that would amount to timing. :)

Your humor is timeless. Cheers,
Victoria
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
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Re: When you reach your number and keep working

Postby tylerherman » Fri May 03, 2013 7:16 pm

Habits are powerful things.

You spend 30 years doing something it is hard to stop regardless of if you want to or have to.
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Re: When you reach your number and keep working

Postby chaz » Fri May 03, 2013 9:46 pm

tylerherman wrote:Habits are powerful things.

You spend 30 years doing something it is hard to stop regardless of if you want to or have to.

You got that right!
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
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Re: When you reach your number and keep working

Postby afan » Fri May 03, 2013 11:25 pm

#1, for sure.

I don't enjoy my work, but I am good at it and it pays well.

I am not frugal to accumulate enough money to retire. I am frugal because I am frugal. I dislike spending money and I dislike most things on which people spend large amounts- expensive restaurants, travel, wine, fancy clothes or cars. I avoid those things. By most measures I could retire now, but I have no intention of doing so.

I have no idea what I would do with myself if I were not working. I suppose I might cut back to 5 days/week, but below that, what use would I be? I figure I will work as long as I am able- that is can find work, and I am capable of doing it. If that means dropping dead at my desk, so be it. My heirs will be better off.
"We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either." | | --Larry Swedroe
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Re: When you reach your number and keep working

Postby dmcmahon » Sat May 04, 2013 6:17 am

House Blend wrote:IMO, you need clarity of thought about what you really mean by "reaching your number". Using that phrase connotes the idea that there is a precise dollar amount beyond which the marginal utility of wealth is zero. I doubt that is true for most people.


I agree. It's not a precise target. I know that I'm "in the ballpark". It's empowering at work knowing I can probably retire at any time. Retiring a bit later adds to a margin of safety. And, yes I guess I can be a bit less frugal now - higher donations, a bit more into college funds, maybe remodel part of the house. Then there's the negative side - I've gotten to this position while riding through two market crashes during my peak earning years, and see a great deal of uncertainty re. inflation looking forward, which could be very troublesome to an early retiree.
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Re: When you reach your number and keep working

Postby Random Musings » Sat May 04, 2013 7:58 am

For some, it is a labor of love, for others, it is a habit that they can't unchain themselves from.

RM
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Re: When you reach your number and keep working

Postby lwfitzge » Sat May 04, 2013 8:21 am

I think age matters, at least to me.. hitting my number at 48 yrs and not working at all again seemed too much of a cliff especially since I still enjoy some of it. I'm taking more of a glide path approach probably until age 58. I have and needed a more balanced and diverse life, no longer shackled to a 5 day a week corporate life where it was a weekly challenge to put my family first. Now I take on gigs/projects that pay but are interesting to me. I discriminate what I do, when I do it. My work schedule is reduced to about 2 days/week and use the rest time for family, hobbies and volunteering. When will I stop working, when it's no longer fun. I've not changed my allocation and I'm accumulating at a far reduced rate (commensurate w my decreased income). My wife works full time (+ provide health insurance) and she still is in accumulation phase. Not sure if we now go more "spender" mode since it's the frugal life that got us here combined w great incomes..habits are hard to break.
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Re: When you reach your number and keep working

Postby Scooter57 » Sat May 04, 2013 10:12 am

My parents were both highly educated professionals. When I observed them and their friends aging, I was struck by how many deteriorated as soon as they gave up their jobs. In that generation, many were forced to do this at 70. They embraced retirement with enthusiastic plans to write books, take courses, get more involved in charity work. But as the years stretched out, they didn't. Most of them indulged in Trophy Travel--long and very expensive world cruises where they spent most of their time exchanging reminiscences with other well-off retirees very much like themselves . Some bought new homes which they decorated obsessively. Some golfed.

The people who stayed vibrant and lived the longest, healthiest lives were those who had either started out with or been able to segue to some kind of part time consulting gig that they could pursue enough to keep their minds sharp and, more importantly, the feeling that they were still involved in the world, rather than watching it.

Now that my own generation is hitting their mid-60s, I'm hearing the same refrains. Everyone is going to write a book. Everyone is going to travel. Or get involved in working with charities. But here's the thing. If you haven't written a book or two already by the time you are 65, the chances you are going to write one then are next to nil. It doesn't have to have been a good book, or a book anyone else would want to read. But if you haven't acted on the desire to write a book while actively involved in other pursuits, you have pretty much demonstrated that you don't really want to write a book.

The same is true with volunteering. The people who volunteer enthusiastically in retirement tend to be the people who, surprise, surprise, made time in their busy lives before retiring to volunteer--because volunteering was always a big part of their personalities.

The golfers who golfed happily through retirement were those who golfed happily BEFORE retirement.

You don't magically change into a different person when you retire. You keep doing what it is you enjoy doing, and if you can't do that any more because it is something like working a job someone else controls, you are very likely to disconnect with life in a way that leads to a sad decline during your later years.

So if working is what you love, it makes sense to keep doing it as long as you can regardless of how much money you have. If you hate your job, it's advisable to find something you love BEFORE you leave the job behind, so that you go into retirement with more to do than listlessly consume goods and services.
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Re: When you reach your number and keep working

Postby VictoriaF » Sat May 04, 2013 11:00 am

Scooter57 wrote:You don't magically change into a different person when you retire. You keep doing what it is you enjoy doing, and if you can't do that any more because it is something like working a job someone else controls, you are very likely to disconnect with life in a way that leads to a sad decline during your later years.


You don't magically change into a different person, but you get more time and much more control over that time to be what you always wanted to be and do what you always wanted to do.

Victoria
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
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