Can't see retiring without 15x-30x fixed income

[hudson]

With money over 50X, I plan to buy a stupid car (as in a 6 figure car).

I like the stupid car idea. Please tell the car. I also, have been looking at stupid cars I don't need. But want.

I would buy the stupid car now - do not wait.

Interesting idea...over 50X, splurge! Someday, I'll sit down and do the math. Finding X might take some work.

[bhsince87]

With money over 50X, I plan to buy a stupid car (as in a 6 figure car).

I like the stupid car idea. Please tell the car. I also, have been looking at stupid cars I don't need. But want.

I would buy the stupid car now - do not wait.

Interesting idea...over 50X, splurge! Someday, I'll sit down and do the math. Finding X might take some work.

Well, we're at 50X, and I just retired around age 54.

We have no plans to spend any of it on anything splurgy at this point.

[surfstar]

Can't buy back your time, so we will never know what a 50x splurge would be (unless you count pulling the cord at "enough" and having years more of free time at your youngest possible retirement age. Yes, that will be our splurge)

[bayview]

OP, I truly don’t understand your dilemma.

Why don’t you determine the $ figure of what you want in fixed income to help you deal with a bad retirement timing, put that in some combination of safe FI investments that you’re happy with, put everything else in some AA that makes you happy, and get on with your life?

That is completely separate from your other struggle of whether to retire and when. At least you will know that you have some degree of FI, and that will allow you to evaluate your other options more easily.

btw (apologies, as I haven’t made it through all the threads), do you have a spouse/SI who might have a legitimate POV on all this?

[TheTimeLord]

OP, I truly don’t understand your dilemma.

Why don’t you determine the $ figure of what you want in fixed income to help you deal with a bad retirement timing, put that in some combination of safe FI investments that you’re happy with, put everything else in some AA that makes you happy, and get on with your life?

That is completely separate from your other struggle of whether to retire and when. At least you will know that you have some degree of FI, and that will allow you to evaluate your other options more easily.

btw (apologies, as I haven’t made it through all the threads), do you have a spouse/SI who might have a legitimate POV on all this?

No dilemma from my perspective. I have a set dollar amount I keep in safe fixed income which is primarily derived by calculating XX years of expenses each month. The rest is invested in equities. My struggle on whether or not to retire is not connected to finances rather how I would occupy my time in retirement.

[seed4great]

No dilemma from my perspective. I have a set dollar amount I keep in safe fixed income which is primarily derived by calculating XX years of expenses each month. The rest is invested in equities. My struggle on whether or not to retire is not connected to finances rather how I would occupy my time in retirement.

It is sad to acknowledge, but most people love to occupy their time spending money. I believe this is the major problem. Without it, nobody really need to look at 50X or even 25X: 15X - 20X would be fair enough.

[Leesbro63]

No dilemma from my perspective. I have a set dollar amount I keep in safe fixed income which is primarily derived by calculating XX years of expenses each month. The rest is invested in equities. My struggle on whether or not to retire is not connected to finances rather how I would occupy my time in retirement.

It is sad to acknowledge, but most people love to occupy their time spending money. I believe this is the major problem. Without it, nobody really need to look at 50X or even 25X: 15X - 20X would be fair enough.

The first part of your comment is often true and I get your overall point that most of us could get by while spending less. But there’s something wrong with the math in the second part of your comment. Even a lower spending level still requires a minimum multiple of that low spending for a “safe” withdrawal rate.

[seed4great]

But there’s something wrong with the math in the second part of your comment. Even a lower spending level still requires a minimum multiple of that low spending for a “safe” withdrawal rate.

I assume 15X - 20X is just a part of income. Most people would also have other income like SS, pension, rental.

[Leesbro63]

But there’s something wrong with the math in the second part of your comment. Even a lower spending level still requires a minimum multiple of that low spending for a “safe” withdrawal rate.

I assume 15X - 20X is just a part of income. Most people would also have other income like SS, pension, rental.

Fair enough. I think that people with higher incomes and higher savings ignore SS, for instance, because it's only a small part of their income. And if changes do occur to SS, it probably won't hit those with lower incomes or at least not as much. So I guess what you are saying is that if you can learn to spend less, "guaranteed" income, like SS, becomes a bigger part of your income, thus a double benefit (lower spending and more of it guaranteed-on-autopilot).

[TheTimeLord]

But there’s something wrong with the math in the second part of your comment. Even a lower spending level still requires a minimum multiple of that low spending for a “safe” withdrawal rate.

I assume 15X - 20X is just a part of income. Most people would also have other income like SS, pension, rental.

Fair enough. I think that people with higher incomes and higher savings ignore SS, for instance, because it's only a small part of their income. And if changes do occur to SS, it probably won't hit those with lower incomes or at least not as much. So I guess what you are saying is that if you can learn to spend less, "guaranteed" income, like SS, becomes a bigger part of your income, thus a double benefit (lower spending and more of it guaranteed-on-autopilot).

I keep hearing this yet a higher income couple at FRA is likely to be receiving something like $50,000-$72,000/year. Just seems unlikely to be a small part of their retirement income.

[GoldenFinch]

OP, I truly don’t understand your dilemma.

Why don’t you determine the $ figure of what you want in fixed income to help you deal with a bad retirement timing, put that in some combination of safe FI investments that you’re happy with, put everything else in some AA that makes you happy, and get on with your life?

That is completely separate from your other struggle of whether to retire and when. At least you will know that you have some degree of FI, and that will allow you to evaluate your other options more easily.

btw (apologies, as I haven’t made it through all the threads), do you have a spouse/SI who might have a legitimate POV on all this?

No dilemma from my perspective. I have a set dollar amount I keep in safe fixed income which is primarily derived by calculating XX years of expenses each month. The rest is invested in equities. My struggle on whether or not to retire is not connected to finances rather how I would occupy my time in retirement.

TheTimeLord quote: “My struggle...how I would occupy my time during retirement.”

Probably a good idea to focus on this aspect of retirement planning.

[CnC]

Maybe it is because I want to retire in my 50s and not my 30s or 40s or that I feel the value of my human capital falls off a cliff the day I retire but I have trouble understanding why anyone would want to retire without having somewhere between 15x-30x in safe fixed income. From my perspective if I couldn't do that it would mean I would have too high a need to take risk. I guess I just don't want to feel like every year I need my equity holdings to have a good year. So I would like to understand the other perspective on this.

If that's the way you feel then so be it. Just know that it is feelings only it has nothing to do with actual data. It's just like saying I don't feel comfortable lump sum investing. I want to dca instead.

25x in a 70/30 portfolio is good 95% of the time for 30 years.

[bhsince87]

Maybe it is because I want to retire in my 50s and not my 30s or 40s or that I feel the value of my human capital falls off a cliff the day I retire but I have trouble understanding why anyone would want to retire without having somewhere between 15x-30x in safe fixed income. From my perspective if I couldn't do that it would mean I would have too high a need to take risk. I guess I just don't want to feel like every year I need my equity holdings to have a good year. So I would like to understand the other perspective on this.

If that's the way you feel then so be it. Just know that it is feelings only it has nothing to do with actual data. It's just like saying I don't feel comfortable lump sum investing. I want to dca instead.

25x in a 70/30 portfolio is good 95% of the time for 30 years.

You are talking about a probability based approach. Timelord is talking about a safety based approach.

Both are accepted in the industry. It mostly comes down to personal preference and comfort levels.

[mak1277]

But there’s something wrong with the math in the second part of your comment. Even a lower spending level still requires a minimum multiple of that low spending for a “safe” withdrawal rate.

I assume 15X - 20X is just a part of income. Most people would also have other income like SS, pension, rental.

Fair enough. I think that people with higher incomes and higher savings ignore SS, for instance, because it's only a small part of their income. And if changes do occur to SS, it probably won't hit those with lower incomes or at least not as much. So I guess what you are saying is that if you can learn to spend less, "guaranteed" income, like SS, becomes a bigger part of your income, thus a double benefit (lower spending and more of it guaranteed-on-autopilot).

Personally speaking, my reason for "ignoring" SS is just to have it as a layer of cushion, rather than something I have to rely on. As someone who wants to retire before 45, I want to make sure I can do it without counting on SS...if/when I receive SS it will just be a nice bonus.

[smitcat]

But there’s something wrong with the math in the second part of your comment. Even a lower spending level still requires a minimum multiple of that low spending for a “safe” withdrawal rate.

I assume 15X - 20X is just a part of income. Most people would also have other income like SS, pension, rental.

Fair enough. I think that people with higher incomes and higher savings ignore SS, for instance, because it's only a small part of their income. And if changes do occur to SS, it probably won't hit those with lower incomes or at least not as much. So I guess what you are saying is that if you can learn to spend less, "guaranteed" income, like SS, becomes a bigger part of your income, thus a double benefit (lower spending and more of it guaranteed-on-autopilot).

Personally speaking, my reason for "ignoring" SS is just to have it as a layer of cushion, rather than something I have to rely on. As someone who wants to retire before 45, I want to make sure I can do it without counting on SS...if/when I receive SS it will just be a nice bonus.

"Personally speaking, my reason for "ignoring" SS is just to have it as a layer of cushion"
And that is fine but when you have a plan that optimizes where you save and how you will pay taxes in retirement it may send you in some wrong directions ignoring this income category.
I would suggest an alternative which can also provide similar and perhaps more clear 'sandbagging' of your plan(we do the same):
- reasonably estimate all incomes at various future times (SS , pension, etc)
- reasonably estimate earnings and future value of your various holdings by categories (Roth, 401K, after tax etc)
- reasonably estimate your future desired expenses in retirement
When the total picture is in hand then 'sandbag' however you want and however deeply you want with the knowledge of what that can do to taxes and spendable funds within the accounts and the entire picture over time.

[mak1277]

But there’s something wrong with the math in the second part of your comment. Even a lower spending level still requires a minimum multiple of that low spending for a “safe” withdrawal rate.

I assume 15X - 20X is just a part of income. Most people would also have other income like SS, pension, rental.

Fair enough. I think that people with higher incomes and higher savings ignore SS, for instance, because it's only a small part of their income. And if changes do occur to SS, it probably won't hit those with lower incomes or at least not as much. So I guess what you are saying is that if you can learn to spend less, "guaranteed" income, like SS, becomes a bigger part of your income, thus a double benefit (lower spending and more of it guaranteed-on-autopilot).

Personally speaking, my reason for "ignoring" SS is just to have it as a layer of cushion, rather than something I have to rely on. As someone who wants to retire before 45, I want to make sure I can do it without counting on SS...if/when I receive SS it will just be a nice bonus.

"Personally speaking, my reason for "ignoring" SS is just to have it as a layer of cushion"
And that is fine but when you have a plan that optimizes where you save and how you will pay taxes in retirement it may send you in some wrong directions ignoring this income category.
I would suggest an alternative which can also provide similar and perhaps more clear 'sandbagging' of your plan(we do the same):
- reasonably estimate all incomes at various future times (SS , pension, etc)
- reasonably estimate earnings and future value of your various holdings by categories (Roth, 401K, after tax etc)
- reasonably estimate your future desired expenses in retirement
When the total picture is in hand then 'sandbag' however you want and however deeply you want with the knowledge of what that can do to taxes and spendable funds within the accounts and the entire picture over time.

optimization is not my goal in any way shape or form. If I end up paying high taxes because of RMDs sometime in the future I"ll consider that a good problem to have.

[smitcat]

I assume 15X - 20X is just a part of income. Most people would also have other income like SS, pension, rental.

Fair enough. I think that people with higher incomes and higher savings ignore SS, for instance, because it's only a small part of their income. And if changes do occur to SS, it probably won't hit those with lower incomes or at least not as much. So I guess what you are saying is that if you can learn to spend less, "guaranteed" income, like SS, becomes a bigger part of your income, thus a double benefit (lower spending and more of it guaranteed-on-autopilot).

Personally speaking, my reason for "ignoring" SS is just to have it as a layer of cushion, rather than something I have to rely on. As someone who wants to retire before 45, I want to make sure I can do it without counting on SS...if/when I receive SS it will just be a nice bonus.

"Personally speaking, my reason for "ignoring" SS is just to have it as a layer of cushion"
And that is fine but when you have a plan that optimizes where you save and how you will pay taxes in retirement it may send you in some wrong directions ignoring this income category.
I would suggest an alternative which can also provide similar and perhaps more clear 'sandbagging' of your plan(we do the same):
- reasonably estimate all incomes at various future times (SS , pension, etc)
- reasonably estimate earnings and future value of your various holdings by categories (Roth, 401K, after tax etc)
- reasonably estimate your future desired expenses in retirement
When the total picture is in hand then 'sandbag' however you want and however deeply you want with the knowledge of what that can do to taxes and spendable funds within the accounts and the entire picture over time.

optimization is not my goal in any way shape or form. If I end up paying high taxes because of RMDs sometime in the future I"ll consider that a good problem to have.

Absolutely - if you do not want to optimize your plans and/or your taxes then there is no reason to plan the SS.

[TheTimeLord]

Maybe it is because I want to retire in my 50s and not my 30s or 40s or that I feel the value of my human capital falls off a cliff the day I retire but I have trouble understanding why anyone would want to retire without having somewhere between 15x-30x in safe fixed income. From my perspective if I couldn't do that it would mean I would have too high a need to take risk. I guess I just don't want to feel like every year I need my equity holdings to have a good year. So I would like to understand the other perspective on this.

If that's the way you feel then so be it. Just know that it is feelings only it has nothing to do with actual data. It's just like saying I don't feel comfortable lump sum investing. I want to dca instead.

25x in a 70/30 portfolio is good 95% of the time for 30 years.

You are talking about a probability based approach. Timelord is talking about a safety based approach.

Both are accepted in the industry. It mostly comes down to personal preference and comfort levels.

My goal is to have 23x in safe fixed income assets at FRA, while this is more years than I currently have in safe fixed income assets it will be a lower dollar amount at FRA than I currently am maintaining thanks to SS and a small pension.