At What Point Do You Have Enough?

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Random Poster
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At What Point Do You Have Enough?

Post by Random Poster »

Or, said differently, for what are you investing?

I like to save as much as, or maybe slightly more than, the next guy, but at what point do you simply say "I've got enough. Why do I need to keep working any more? Why do I need to keep saving any more?"

After all, if you can live just fine on $20K a year, and you are reasonably sure that you won't outlive your savings, is there any point in saving anything more?
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Post by simplesimon »

When my portfolio can sustain a withdrawal rate that is equal to my expenses.
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Re: At What Point Do You Have Enough?

Post by nisiprius »

Yes, I think it's wise to be the kind of person for whom there is such a thing as "enough." And not to keep revising the goal upward all the time. I wonder why you named $20K a year, though.
Random Poster wrote:After all, if you can live just fine on $20K a year, and you are reasonably sure that you won't outlive your savings, is there any point in saving anything more?
Well, I formulated our "needs" as food, clothing, shelter, communications (phone and internet), and health insurance.

Ah. Health insurance. That.

It appears as if my wife and I will need to pay about $100/month for Medicare Part B, $170/month for Medicare supplemental costs about $170/month, $100/month for Medicare Part D, and goodness knows how much out-of-pocket. That's $8880/year for both of us, and it wouldn't surprise me if out-of-pocket brought it to $10,000 a year.

And here's the scary thing: medical care costs are increasing 6-7% per year. And here's the scarier thing: however worried you are about Social Security, Medicare is in a far more precarious state. I don't have any idea how much we'll be paying for health care in twenty years, but I am certain that the whole pattern of health care will be very different from what it is today, in ways that I can't predict. The current state of affairs can't last. Something's got to give.

I think $20,000 a year might be cutting it a bit fine. Of course I know there are people getting by on less than that.
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Re: At What Point Do You Have Enough?

Post by HomerJ »

Random Poster wrote:After all, if you can live just fine on $20K a year, and you are reasonably sure that you won't outlive your savings, is there any point in saving anything more?
"reasonably sure" is the key phrase here...
simplesimon wrote:When my portfolio can sustain a withdrawal rate that is equal to my expenses
And expenses is the key word here...

Right now, my family lives very comfortably spending 4k a month (not counting our mortgage)...

Now, here's the trick... I'm sure we could live on 3k a month very easily (with the mortgage paid off)... So when my investments generate 3k a month, do I have enough? Or do I want that little extra fun that another $1000 a month can provide?

Plus, how sure am I that my investments will be able to generate 3k or 4k a month for the next 30-40 years? Maybe I should get my investments up to the point where they can generate 5k a month (but only take out 4k a month) for a little extra cushion...

It's a tough question... how much is enough?
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Post by Opponent Process »

I still plan on increasing my lifestyle in retirement, and my wife might want to retire early. I have no idea if I'll be forced to retire earlier than I'd wish. I can't predict the future. And on and on...so it's never "enough" for me. My sacrifices translate to a peace of mind, and peace of mind is all I really care about when it comes down to it.
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Re: At What Point Do You Have Enough?

Post by HomerJ »

nisiprius wrote: Ah. Health insurance. That.
Good point... that's my biggest worry as well... which is why I want a big "cushion" just in case...
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Post by Sidney »

It appears as if my wife and I will need to pay about $100/month for Medicare Part B, $170/month for Medicare supplemental costs about $170/month, $100/month for Medicare Part D, and goodness knows how much out-of-pocket. That's $8880/year for both of us, and it wouldn't surprise me if out-of-pocket brought it to $10,000 a year.

And here's the scary thing: medical care costs are increasing 6-7% per year.
That sounds about right. When I planned my (early) retirement my model was $1,000 per month for medical, dental, eye care, over-the counter. I used an inflation rate of 7% and a real growth rate of 3% to account for increased usage due to age.
I always wanted to be a procrastinator.
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Re: At What Point Do You Have Enough?

Post by Random Poster »

nisiprius wrote:I wonder why you named $20K a year, though.
Because that is pretty close to what my annual living expenses are, so it is a number that I am reasonably familiar with.
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Re: At What Point Do You Have Enough?

Post by Shawn »

Random Poster wrote: After all, if you can live just fine on $20K a year, and you are reasonably sure that you won't outlive your savings, is there any point in saving anything more?
I ask myself this all the time. I'm 50 and can live just fine on $20K/yr. If I was to retire today, my pension (partial COLA) plus 4% SWR would give me an annual income of over 5 times my current expenses. In fact, my pension alone may allow me to remain in the accumulation phase for the rest of my life. This doesn't even touch on social security income. So why do I keep working and saving when I could have retired several years ago? And trust me. I don't enjoy my job.

The future is unknown. Will inflation destroy the partial COLA on my pension? Will I need to support my parents in their old age? Will there be things I need or want that significantly exceed my current standard of living? I'm not too worried about health care, although it is a factor too.

I had to fend for myself for much of my childhood and adult life. The necessity of independence makes me realize that there is no one to depend on other than myself. I don't know what the future will bring. There are too many variables. Maybe I'm ultraconservative, but for me, it's better to be safe than sorry. Admittedly, though, I do hope to retire within 2 years.
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Post by conundrum »

We felt that we had "enough" when our spending/withdrawal rate was 3% of our portfolio. We have given ourselves a bit of a cushion for healthcare and our spending is also quite flexible as we have minimized our fixed expenses. Even though we have "enough", I have continued to work as my hours are very reasonable and I enjoy my job.

Drum :lol:
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Re: At What Point Do You Have Enough?

Post by nisiprius »

Random Poster wrote:
nisiprius wrote:I wonder why you named $20K a year, though.
Because that is pretty close to what my annual living expenses are, so it is a number that I am reasonably familiar with.
If I may ask, what are you spending on health care? Do you have health insurance? What are your thoughts on this?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: At What Point Do You Have Enough?

Post by Random Poster »

nisiprius wrote:If I may ask, what are you spending on health care? Do you have health insurance? What are your thoughts on this?
I budget $20 or so a month for health care costs. I seldom spend more than $100 a year on health care (outside of health insurance costs).

Through my benevolent employer, I have health care insurance, and dental insurance. Total cost for both is around $70 a month.

I'm reasonably healthy. That will change with time, no doubt. My health insurance costs will rise with time as well.

That being said, I see no reason why I must obtain health care in the United States, and I know that quality, reaonably priced health care can be had in other locales. Likewise, what happens in Washington may make health care insurance quite cheap for those who do some creative income and asset structuring.

While my current living expenses may be around $20K a year, I'm sure that they will rise over time. Let's say that become $30K. Or even $40K. Does it really matter?

The real question I'm asking is at what point do you simply say "I've got enough to live just fine" and decide to, for example, (i) stop saving; (ii) stop working; or (iii) start saving for someone or something else altogether.

Do you stop when you hit a certain number? When you hit a certain multiple of your expenses? When you can't imagine that saving any more is really going to be of any benefit to you or anyone that you care about?

Is having "enough" a mindset or is it number?
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Re: At What Point Do You Have Enough?

Post by richard »

Random Poster wrote:That being said, I see no reason why I must obtain health care in the United States, and I know that quality, reaonably priced health care can be had in other locales.
At the end of the day that's probably the best answer. Move to a civilized country and not have to worry about healthcare.
Random Poster wrote:Is having "enough" a mindset or is it number?
40x budgeted expenses, which means current spending, plus a guess at healthcare, then figuring pre-tax income needed to generate that after-tax number.
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Post by neverknow »

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Re: At What Point Do You Have Enough?

Post by HomerJ »

Random Poster wrote:Do you stop when you hit a certain number? When you hit a certain multiple of your expenses? When you can't imagine that saving any more is really going to be of any benefit to you or anyone that you care about?

Is having "enough" a mindset or is it number?
I think we've made it clear that's a mindset worried about the uncertainity of the future... I don't think many people on this board are saving money just to keep score and buy a yacht...

Sure, you can live on 20k today... Will that be true forever? Most of us want a large multiple of expenses, probably beyond what we will end up needing, just to be sure...
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Re: At What Point Do You Have Enough?

Post by Dagwood »

neverknow wrote:
Shawn wrote: I had to fend for myself for much of my childhood and adult life. The necessity of independence makes me realize that there is no one to depend on other than myself. I don't know what the future will bring. There are too many variables. Maybe I'm ultraconservative, but for me, it's better to be safe than sorry.
This describes my views, pretty closely - though I was 16 before I was fending for myself.

"Re: At What Point Do You Have Enough?"

I had enough of being somebodies employee, at age 42. I didn't have enough money to never work again. I will never have enough sun rises.

I'm making a play on these 2 words together "have enough" -- as opposed to "what is enough?".

I have declared "enough" to accumulating money. What I got will have to do. How did I come to this conclusion? Plugged into my spreadsheet, going out to age 90 - earning inflation minus a third for taxes, when the base budget I am projecting has 25% extra in it for unforeseen expenses, and then I added 50% to the entire budget -- and I could still pay my bills, even at age 90 -- before selling the roof over my head.

Is this conservative enough? Perhaps I didn't dream big enough? But what about all of life's unexpected's? It will have to do. I have declared "enough".

What I don't have -- is I sort of dreamed of being able to give it away. I am no Warren Buffet or Bill Gates.

Otherwise - I declare "enough".
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Post by ResNullius »

Ten years ago, I decided that the only real thing I was doing by keeping on working full-time was to increase my son's inheritance and increase the amount the government might get at my death. On top of this, I also decided that I was working more for the government than I was for myself and my family, so why do it. On top of all of this, I had come to truly dislike my firm, my work, and the people I worked with. So I quit. I still do a little part-time consulting, but only on a very limited basis and only doing things I enjoy, and only things that pay really well. In short, I'm mostly retired, and I love it. Even with the massive slow down, my son likely will see an ever growing inheritance, and the government still gets a large bite. Happy trails.
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Post by nisiprius »

So much depends, too, on one's ability to work and to find work at various ages. If one were certain of being healthy and employable for one's entire life, the decision wouldn't be too critical. Retire when you think you have enough; if it turns out you didn't, start working again. But this assumes a little more control of one's career than I think most people really have.

In John D. MacDonald's wonderful mystery novels, his fictional investigator Travis McGee talks about taking his retirement in chunks. That is, after every successful case he knocks off for a while:
In 'The Deep Blue Goodbye,' John D. MacDonald wrote:"Trav, how much work like that do you find lying around when you start to get so broke you need it?"
"So much that I can pick and choose. This is a complex culture, dear.... I like to take fairly good-sized [cases]. And then I can take another piece of my retirement. Instead of retiring at sixty, I'm taking it in pieces as I go along."
I don't know whether that's what MacDonald himself did, but of course a successful writer, especially a genre series writer, can have a long-lasting career, as long as he remains mentally alert. One of the sad things to me about the careers of several such writers of whom I am fans... Dick Francis and Robert Parker, to name two... is that as they aged, the quality of their work slowly declined. I continue to buy and read their books with enjoyment, but with steadily lessening enjoyment as they seemed to lose the energy to be really trying.

Of course, we should not ignore the detail that Travis McGee was fictional. I am not sure how old Travis McGee was at the time of John D. MacDonald's death. I cannot recall McGee ever taking time off for chemotherapy, or conducting his "retrieval" operations from an assisted living center rather than aboard the Busted Flush. Was he able to get individual health insurance in Florida, and how much did it cost?
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Post by Culture »

At one point, "enough" was when my projected expenses in retirement met my income at a 3% WR. My projected expenses were very large.

As I aged, "enough" kept decreasing, as I realized that the freedom or retirement was more important that spending in retirement. This year, it became whatever I have in 4 years, at which point I am retiring, short of a total economic meltdown. I will adjust my expenses at that time as needed to meet my income, although I do not expect to have to do so.

Don't let this sound like I am making some giant sacrifice to retire, I expect my post-retirement income at 3% WR to be about 120-130% of my pre-retirement income.
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Re: At What Point Do You Have Enough?

Post by MWCA »

Random Poster wrote:Or, said differently, for what are you investing?

I like to save as much as, or maybe slightly more than, the next guy, but at what point do you simply say "I've got enough. Why do I need to keep working any more? Why do I need to keep saving any more?"

After all, if you can live just fine on $20K a year, and you are reasonably sure that you won't outlive your savings, is there any point in saving anything more?
We can live on 39k a year. We want to travel extensively. We figure another 15 to 20k a year to do so. That is how much we want.

Do we NEED another 15 to 20k a year for travel to live a great retirement.

No we do not. ;)

Bottom line. If you are enjoying what you are doing. Someone is paying you to do it and you can do other things. Why stop doing it? For this obscure holy grail of "early retirement" that these early retired authors pump out... ok ;)

When you do not enjoy what you are doing. RETIRE. :)
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Post by VictoriaF »

I knew this had something to do with Kahneman and Tversky, but some Googling enabled me to place the name on it.
[url=http://en.wikipedia.org/wiki/Simulation_heuristic]Wikipedia[/url] wrote:The simulation heuristic is a psychological heuristic, or simplified mental strategy, first theorized by Daniel Kahneman and Amos Tversky as a specialized adaptation of the availability heuristic to explain counterfactual thinking and regret.
Essentially, if you make a decisive action and it turns out badly you think that you will have an over-sized regret. The same outcome without an action would be easier to take.

And so when we imagine some plausible devastating outcomes of running out of money we continue working. We don't imagine the devastating outcomes of running out of health (or mind, or both) before we run out of desire.

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Post by tibbitts »

I'm amazed at the numbers being discussed. To add a spouse to our employer provided health care costs about $7k/yr, plus we spend the max $3600 we are allowed to contribute to a flex spending account. So even with a 100% employer subsidy for one person, we're at $10.6k/yr if nothing goes wrong with our health. Without employment the subsidy ends, so the same level of insurance would double in cost if it were available, which it wouldn't be since we couldn't medically qualify.

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Post by dayzero »

8 figures in today's dollars
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Post by kellyfj »

When I have enough money that if I invested it in 4 week T-bills it would yield $200k a year. I think that's 20 million or so :-)
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Post by baw703916 »

kellyfj wrote:When I have enough money that if I invested it in 4 week T-bills it would yield $200k a year. I think that's 20 million or so :-)
At current interest rates (0.13% for 3 month, I couldn't find them for 1 month), you'd need about $153 million. :shock:

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Post by elgob.bogle »

Neverknow - Satis est

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Post by scrabbler1 »

The two key pieces to my early retirement puzzle enabling me to reitre in November, 2008, at age 45, was (1) when my ESOP was worth $300k, and (2) when I found an individual HI policy for under $500 a month.

In (2), the HI policy then fit well into my ER budget. In (1), I could invest $300k in a high-yield (not junk, just most of it slightly below investment grade) bond fund and live off the dividends. My expenses were $20.5k in 2009 and will rise to about $21.5k in 2010, mainly due to a 20% increase in my HI.

In my long-term budget, I will run surpluses for about 10 years then run deficits for a few years before I can tap into my IRA, my pension, and SS in my 60s. I do not include any health insurance reform, nor do I include any likely inheritance along the way. Then again, I did not include a 20% increase in my HI every year, either.
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Post by Gekko »

$5M x 4% Tax Free Muni Bond Fund Yield = $200K Tax Free per Year. (in 2010 Dollars)

that tax free yield should be enough to live on and protect against the wild cards of inflation and health care.
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Post by daytona084 »

Informal survey: In reading a large number of Bogleheads postings I've seen a recurring sentiment: "I retired and couldn't be happier" or words to that effect. I have not seen one that said "I retired and now I'm really worried about outliving my money".

My current situation: my wife and I can live comfortably (including health care) on a 3% withdrawal rate. I guess I will work one more year for an additional "cushion". I'm starting to worry that the "one more year" mentality will continue and rob me of retirement years.
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Post by Norris »

VictoriaF wrote:And so when we imagine some plausible devastating outcomes of running out of money we continue working. We don't imagine the devastating outcomes of running out of health (or mind, or both) before we run out of desire.

Victoria
Well put!
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Post by Curlyq »

.....
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Post by HomerJ »

scrabbler1 wrote:Then again, I did not include a 20% increase in my HI every year, either.
Yeah, I'd be pretty worried about that..
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Post by Opponent Process »

wjwhitney wrote:Informal survey: In reading a large number of Bogleheads postings I've seen a recurring sentiment: "I retired and couldn't be happier" or words to that effect. I have not seen one that said "I retired and now I'm really worried about outliving my money".
this is a classic problem with boards like this one; it is no where near a normal population. survivorship bias is off the charts, and you no doubt have more privileged folks to begin with. for one thing, the people in your second group probably can't afford an internet connection.
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Post by Buckeye »

wjwhitney wrote:My current situation: my wife and I can live comfortably (including health care) on a 3% withdrawal rate. I guess I will work one more year for an additional "cushion". I'm starting to worry that the "one more year" mentality will continue and rob me of retirement years.
A relative of mine was in a similar situation back in 1996 except he actually pulled the plug and moved to Florida. About a year later he missed working so much that he got a full time job and has been with it ever since.

He's one of those types that will probably work till he physically can't no more.
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Post by mkatz »

Gekko wrote:$5M x 4% Tax Free Muni Bond Fund Yield = $200K Tax Free per Year. (in 2010 Dollars)

that tax free yield should be enough to live on and protect against the wild cards of inflation and health care.
Where would one find a 4% muni bond fund yield without going long term in this climate?
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Post by dayzero »

mkatz wrote:
Gekko wrote:$5M x 4% Tax Free Muni Bond Fund Yield = $200K Tax Free per Year. (in 2010 Dollars)

that tax free yield should be enough to live on and protect against the wild cards of inflation and health care.
Where would one find a 4% muni bond fund yield without going long term in this climate?
VWLTX has a distribution yield of 4.33% with a duration of 7.0 years.

However really you'd want to reserve 2.5% - 3.0% of that yield for inflation and live off the rest. So you'd need a lot more than $5M.

4.33% - 3.0% = 1.33%. 200k / 1.33% = ~15M
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Post by unclemick »

After I was layed off at age 49 - did not want to sell and move to another city for something silly like a job AND take the chance she could quit and find another 'equivalent' job as well.

Cut expenses to fit what you have and retire. It being the 90's didn't hurt.

heh heh heh - 8)
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Post by Gekko »

mike_slc wrote:
mkatz wrote:
Gekko wrote:$5M x 4% Tax Free Muni Bond Fund Yield = $200K Tax Free per Year. (in 2010 Dollars)

that tax free yield should be enough to live on and protect against the wild cards of inflation and health care.
Where would one find a 4% muni bond fund yield without going long term in this climate?
VWLTX has a distribution yield of 4.33% with a duration of 7.0 years.

However really you'd want to reserve 2.5% - 3.0% of that yield for inflation and live off the rest. So you'd need a lot more than $5M.

4.33% - 3.0% = 1.33%. 200k / 1.33% = ~15M
that was my point. $200K TAX FREE annual income in 2010 dollars is more than i can spend. that's like earning $400K GROSS. i don't know about you, but i'd have a hard time spending $200K TAX FREE per year. hence, much of that would be reinvested and compounding at least in the earlier years well before inflation had a chance to catch up. hence, having $5M in 2010 dollars generating $200K TAX FREE annually should be plenty. in my scenario, you'd never have to touch principal and you wouldn't have to touch much of the yield at least in the beginning years. i don't need $15M. $5M would be plenty to live like a king.
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Post by bobbyrx »

Thank you Victoria for putting a name to a similar thought process that I had gone through before finally pulling the plug and retiring.

Did I have enough to cover all necessary basic expenses? Absolutely.

Did I have enough more to cover some travel, hobbies, etc? Almost certainly.

How about enough to do all that and handle one big emergency? Probably.

How about all of the above plus everything I could imagine going wrong all happening? No way.

Therefore, better work until age 95.

Then I came to my senses.
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Post by Gekko »

"Your number may be as little as $100,000 or as much as $15 million. Your number will also change as you age. What seems like a fortune in your 20s may be laughable at age 50. The number is about self-worth, too. For many people, it's a scorecard in life. One man's million-dollar fortune is another man's club dues."

"Many high-net-worth clients have one house too many, perhaps as a function of years of low interest rates. A couple with less than $5 million or $6 million should think twice about owning more than one house, given the costs associated with maintaining a home. These costs are often underestimated. Ideally, a couple should have around $10 million if they want to own two luxury properties and not house themselves into a corner. If you want three houses - a pied-a-terre in the city, a place in Florida, a flat in London - you should have a $20 million Number or greater."

"More formidable are "the sharks". Number sharks, according to the bestiary, are continuously in money motion, hungry to accumulate, confident there's another meal coming up, always feeding, taking bites. People who approach the Number the way a shark would - never look inward."

- Lee Eisenberg - "The Number"

http://www.amazon.com/Number-What-Need- ... 994&sr=1-3
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Post by PatrickS »

Buckeye wrote:About a year later he missed working so much that he got a full time job and has been with it ever since.

I've seen two attempted early retirements. My brother and a close friend. Neither one worked out. Not because of finances, but because of boredom. I'm glad I saw them because I might have tried it myself if I hadn't seen them both return to work. When all your friends are working and your kids are out of the house I think it's pretty easy to get bored.

Unless someone really hates their career or has some other passion they want to follow, I think early retirement might not be all it's cracked up to be for many.
yakers
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Post by yakers »

This is a great board for crunching numbers and certainly one has to do that to retire successfully but there are 'events' which can clarify one's thinking, like a night in the cardiac ward. Not too serious but some folks ignore these events, a few successfully. I looked at the pensions & financial resources and they covered basic expenses and said this is it. Told my wonderful wife that if the accounts go well we go to Tahiti and if not Tijuana but I'm not going back to work. Dad had a stroke @60 and died @70. I am 59 now and going to do a bunch of stuff on the bucket list. If I have to do them on the cheap, so be it.
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Chas
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Post by Chas »

I loved my work all my life with just a few exceptions for short periods. What most people don't understand is that you are a different person when you are over sixty, and vastly different again when you are over seventy. Yet everyone seems to think they will live life at age eighty just like when they were thirty. My work ceased to be fun when I hit 55 or so and, thus, I decided to retire at age 62. To my way of thinking, whatever I had financially then was all that I was going to need because money wasn't going to control my life. If my means were in excess, I could always spend more, but I might not even feel like it then. If I had less, well then, I would just adjust down until I am financially comfortable. There is more to life than maintaining some arbitrary standard you think you must have when you are seventy or eighty years old. Some people worry about when they will be ninety-five, believe me, you won't really need to have the income at that age that you think you will need when you are thirty or forty. So, finally, enough is what you have when you know it is time to get off the thread mill.
Chas | | The course of true love never did run smooth. Shakespeare
SP-diceman
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Post by SP-diceman »

$6,298,472.25

Wll be enough. (give or take $100 bucks)


Thanks
SP-diceman
Torg Fadum
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Kudos for John D. McDonald, Dick Francis & Robert B. Par

Post by Torg Fadum »

nisiprius wrote:
In John D. MacDonald's wonderful mystery novels, his fictional investigator Travis McGee talks about taking his retirement in chunks. That is, after every successful case he knocks off for a while:
In 'The Deep Blue Goodbye,' John D. MacDonald wrote:"Trav, how much work like that do you find lying around when you start to get so broke you need it?"
"So much that I can pick and choose. This is a complex culture, dear.... I like to take fairly good-sized [cases]. And then I can take another piece of my retirement. Instead of retiring at sixty, I'm taking it in pieces as I go along."
I don't know whether that's what MacDonald himself did, but of course a successful writer, especially a genre series writer, can have a long-lasting career, as long as he remains mentally alert. One of the sad things to me about the careers of several such writers of whom I am fans... Dick Francis and Robert Parker, to name two... is that as they aged, the quality of their work slowly declined. I continue to buy and read their books with enjoyment, but with steadily lessening enjoyment as they seemed to lose the energy to be really trying.

quote]

Nisiprius, I don't often submit posts, but I want to tell you I really enjoyed your post mentioning three of my favorite authors. Though I don't agree with all of John D. McDonald's views, he was exceptional and communicated many thoughtful ideas through his fiction.

I think a case in point (consumption today vs delayed gratification) is this dialog from The Scarlet Ruse (1973):

"... all too many of them are screwed by the consumer advertising. Spend, spend, spend. Live for today. So they lived out their lives up to their glottis in time payments. They blew it all on boats and trailers and outboard motors, binoculars and hunting rifles and department store high fashion. They lived life to the hilt, like the ads suggest. Not to the hilt of pleasure, but to the hilt of spending. They had bureau drawers of movie cameras, closets full of record players and slide projectors. Buy the wall-to-wall carpeting. Buy the great big screen. Visit all the national parks in America. Funny thing. They had all started to lay away some dollars for old-age income, but when Social Security payments got bigger and the dollar started shrinking, they said to hell with it. Blow it all. Now their anger is directed outward at society, because they don't dare look back and think of how pathetically vulnerable they were, how many thousands they blew on toys that broke before they were paid for, and how many thousands on the interest charges to buy those toys. They don't know who screwed them. They did what everybody else was doing. Look at the tabulation on my last question. 'If you had it to over again, how much would you put aside each month, expressed as a percentage of income, and what would you give up?' Read the things they'd give up, my friend. It would break your heart."

Regards,
Torg
MWCA
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Post by MWCA »

You have enough when you think you have enough.. Not when a book or someone else tells you ;)
We are all worms. But I believe that I am a glow-worm.
conundrum
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Post by conundrum »

Torg and nisiprius

I also fondly remember the Travis McGee series of books by John D. MacDonald. Who would have thought we would look back and consider Travis to be such a philosopher? Shoot, he'd probably be a Boglehead. Maybe he's logged on right now......

Drum :wink:
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auntie
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Post by auntie »

I had enough when I noticed I could probably live at my present level as long as I live, and I could almost certainly have a roof and food no matter how bad things get.

I live a very simple life, so a net worth of around a million, including the value of my house, is enough.

If I use up my investments I can sell the house and rent, or get a roommate to share expenses, so I include the house in my figuring.

It takes a very small amount to live if you don't need to keep up with the Joneses.
High risk does not equal high reward. It equals high risk of no reward.
swyck
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Re: At What Point Do You Have Enough?

Post by swyck »

Random Poster wrote:
nisiprius wrote:I wonder why you named $20K a year, though.
Because that is pretty close to what my annual living expenses are, so it is a number that I am reasonably familiar with.
I assume that doesn't include irregular events that should be planned for, e.g. hot water heater breaks, roof needs fixing, and most of all health issues. We will ALL have health issues eventually, unless we just suddenly keel over some day.

So my point would be that while 20k may be what you spend and all you need year to year, I would not be happy without an added cushion. What that cushion should be is debatable and can't really be know for certain. IMO if 20k is fine, an extra 10k cushion would be reasonable to my mind.
Valuethinker
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Re: At What Point Do You Have Enough?

Post by Valuethinker »

Random Poster wrote:Or, said differently, for what are you investing?

I like to save as much as, or maybe slightly more than, the next guy, but at what point do you simply say "I've got enough. Why do I need to keep working any more? Why do I need to keep saving any more?"

After all, if you can live just fine on $20K a year, and you are reasonably sure that you won't outlive your savings, is there any point in saving anything more?
Being somewhat fatuous...

on the day your doctor tells you you have 6 months left to live.

You will then have enough money, by definition, but not enough time.
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