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

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

Post by hudson » Sun Mar 17, 2019 10:18 am

smitcat wrote:
Fri Mar 15, 2019 10:33 am
indexonlyplease wrote:
Fri Mar 15, 2019 8:22 am
Jack FFR1846 wrote:
Mon Mar 11, 2019 5:27 pm
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
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Re: Can't see retiring without 15x-30x fixed income

Post by bhsince87 » Sun Mar 17, 2019 12:04 pm

hudson wrote:
Sun Mar 17, 2019 10:18 am
smitcat wrote:
Fri Mar 15, 2019 10:33 am
indexonlyplease wrote:
Fri Mar 15, 2019 8:22 am
Jack FFR1846 wrote:
Mon Mar 11, 2019 5:27 pm
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.
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

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

Post by surfstar » Sun Mar 17, 2019 10:00 pm

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

Post by bayview » Mon Mar 18, 2019 12:42 am

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?
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

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

Post by TheTimeLord » Mon Mar 18, 2019 7:25 am

bayview wrote:
Mon Mar 18, 2019 12:42 am
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.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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seed4great
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Re: Can't see retiring without 15x-30x fixed income

Post by seed4great » Mon Mar 18, 2019 12:24 pm

TheTimeLord wrote:
Mon Mar 18, 2019 7:25 am
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 greatest lesson in life is to know that even fools are right sometimes.

Leesbro63
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Re: Can't see retiring without 15x-30x fixed income

Post by Leesbro63 » Mon Mar 18, 2019 12:40 pm

seed4great wrote:
Mon Mar 18, 2019 12:24 pm
TheTimeLord wrote:
Mon Mar 18, 2019 7:25 am
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.

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seed4great
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Re: Can't see retiring without 15x-30x fixed income

Post by seed4great » Mon Mar 18, 2019 1:14 pm

Leesbro63 wrote:
Mon Mar 18, 2019 12:40 pm
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.
The greatest lesson in life is to know that even fools are right sometimes.

Leesbro63
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Re: Can't see retiring without 15x-30x fixed income

Post by Leesbro63 » Mon Mar 18, 2019 3:12 pm

seed4great wrote:
Mon Mar 18, 2019 1:14 pm
Leesbro63 wrote:
Mon Mar 18, 2019 12:40 pm
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).

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

Post by TheTimeLord » Mon Mar 18, 2019 3:50 pm

Leesbro63 wrote:
Mon Mar 18, 2019 3:12 pm
seed4great wrote:
Mon Mar 18, 2019 1:14 pm
Leesbro63 wrote:
Mon Mar 18, 2019 12:40 pm
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.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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

Post by GoldenFinch » Mon Mar 18, 2019 4:05 pm

TheTimeLord wrote:
Mon Mar 18, 2019 7:25 am
bayview wrote:
Mon Mar 18, 2019 12:42 am
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.
Last edited by GoldenFinch on Tue Mar 19, 2019 5:25 am, edited 1 time in total.

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

Post by CnC » Mon Mar 18, 2019 5:55 pm

TheTimeLord wrote:
Mon Mar 11, 2019 2:51 pm
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
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Re: Can't see retiring without 15x-30x fixed income

Post by bhsince87 » Mon Mar 18, 2019 6:14 pm

CnC wrote:
Mon Mar 18, 2019 5:55 pm
TheTimeLord wrote:
Mon Mar 11, 2019 2:51 pm
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.
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

mak1277
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Re: Can't see retiring without 15x-30x fixed income

Post by mak1277 » Tue Mar 19, 2019 7:36 am

Leesbro63 wrote:
Mon Mar 18, 2019 3:12 pm
seed4great wrote:
Mon Mar 18, 2019 1:14 pm
Leesbro63 wrote:
Mon Mar 18, 2019 12:40 pm
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
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Re: Can't see retiring without 15x-30x fixed income

Post by smitcat » Tue Mar 19, 2019 7:58 am

mak1277 wrote:
Tue Mar 19, 2019 7:36 am
Leesbro63 wrote:
Mon Mar 18, 2019 3:12 pm
seed4great wrote:
Mon Mar 18, 2019 1:14 pm
Leesbro63 wrote:
Mon Mar 18, 2019 12:40 pm
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
Posts: 1224
Joined: Fri Jan 09, 2015 4:26 pm

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

Post by mak1277 » Tue Mar 19, 2019 8:03 am

smitcat wrote:
Tue Mar 19, 2019 7:58 am
mak1277 wrote:
Tue Mar 19, 2019 7:36 am
Leesbro63 wrote:
Mon Mar 18, 2019 3:12 pm
seed4great wrote:
Mon Mar 18, 2019 1:14 pm
Leesbro63 wrote:
Mon Mar 18, 2019 12:40 pm
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
Posts: 4852
Joined: Mon Nov 07, 2016 10:51 am

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

Post by smitcat » Tue Mar 19, 2019 8:12 am

mak1277 wrote:
Tue Mar 19, 2019 8:03 am
smitcat wrote:
Tue Mar 19, 2019 7:58 am
mak1277 wrote:
Tue Mar 19, 2019 7:36 am
Leesbro63 wrote:
Mon Mar 18, 2019 3:12 pm
seed4great wrote:
Mon Mar 18, 2019 1:14 pm

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.

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

Post by TheTimeLord » Tue Mar 19, 2019 11:07 am

bhsince87 wrote:
Mon Mar 18, 2019 6:14 pm
CnC wrote:
Mon Mar 18, 2019 5:55 pm
TheTimeLord wrote:
Mon Mar 11, 2019 2:51 pm
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.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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