KF's Worst Case Retirement Plan [KlangFool's]

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jjface
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by jjface » Sat Jun 03, 2017 10:53 am

I can't see why you couldn't make it work.

I'm sure a smart and frugal boglehead like yourself can do it comfortably on those figures. $700k with 40k expenses and SS covers you totally in 13 years. Easy.

Seems like a lot of people can't handle the unusual case of only needing to fund retirement for a set number of years. In your case once SS kicks in your expenses are covered assuming you have sufficient flexibility built in.

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sat Jun 03, 2017 10:56 am

willthrill81 wrote:
I mean completely different work, like the local big box stores.
willthrill81,

My wife work at one of those kinds of job in order to occupy her time. It is not worth the effort financially.

KlangFool

delamer
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by delamer » Sat Jun 03, 2017 11:24 am

willthrill81 wrote:
KlangFool wrote:
willthrill81 wrote:
KlangFool wrote:
finite_difference wrote:
Here's a worst case scenario. The day you retire at 54 with $1,000,000, the stock market crashes by 50% and takes 15 years to recover.
finite_difference,

If the stock market crashes and take 15 years to recover, there will be a lot more people in trouble than me. The majority will not survive for more than 2 years. I would not worry about my investment. There will be a worse problem than having enough money to survive. I kept some gold jewelry for that kind of situation.

https://en.wikipedia.org/wiki/1997_Asia ... ial_crisis

I had lived through those kinds of situation before during 97 Asian financial crisis. It was only 2 to 3 years. And, the average saving rate of those countries is much higher than the USA.

KlangFool
That's quite true, but it wouldn't change your level of pain. That happened in Japan and could happen here, though I personally doubt very much that it will.

Frankly, I think that you may be borrowing trouble from tomorrow that may not materialize. If you do lose your job, the economy seems good enough that you shouldn't have any trouble, even at your age, of getting a job making at least half as much as you do now, even if the work is totally different. The beauty of HCOL areas is that even low wages, in this instance, would be enough to give you a enough safety to make $1M work out very nicely.
willthrill81,

<< you shouldn't have any trouble, even at your age, of getting a job making at least half as much as you do now, even if the work is totally different.>>

I was unemployed for more than 1 year until 16 months ago. So, I know that statement is not true. I had applied for many of those jobs. In my case, it is more of a hit or miss. For people that need my area of expertise, money is not the problem. For people that do not need me, they would not give me a chance even with 50% cut in salary.

KlangFool
I mean completely different work, like the local big box stores.
He's SAVING $100,000/year from his earnings at his current job. What big box store is going to pay him even half of what he is saving?

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sat Jun 03, 2017 11:57 am

delamer wrote:
He's SAVING $100,000/year from his earnings at his current job. What big box store is going to pay him even half of what he is saving?
delamer,

I save about 60K per year. My portfolio generates about 30K to 40K of dividend/distribution per year. So, it comes out to be about 100K per year.

KlangFool

delamer
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by delamer » Sat Jun 03, 2017 12:14 pm

KlangFool wrote:
delamer wrote:
He's SAVING $100,000/year from his earnings at his current job. What big box store is going to pay him even half of what he is saving?
delamer,

I save about 60K per year. My portfolio generates about 30K to 40K of dividend/distribution per year. So, it comes out to be about 100K per year.

KlangFool
Thanks for clarifying. My point to willthrill81 regarding big box employment remains the same. (I realize that is not something you are considering regardless.)

qwertyjazz
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by qwertyjazz » Sat Jun 03, 2017 3:58 pm

KlangFool wrote:
willthrill81 wrote:
I mean completely different work, like the local big box stores.
willthrill81,

My wife work at one of those kinds of job in order to occupy her time. It is not worth the effort financially.

KlangFool
KF
Financially it is worth it. But emotionally and economically it is not given your options, hence the confusion.
Imagine you had to make it work living where you do and the only job you and your wife could get where Big Box stores
Let's say that is 20 k each to make math easy. That is 40k. 60-40=20
Ignoring SS, that is a 2% withdrawal rate and definetely safe.
You being a rational utility maximizes do not want that option as you have better ones. But financially it does make sense.
It is nice to be in a situation due to your savings and options that financial considerations do not dominate the considerations.
Regards
QJ
G.E. Box "All models are wrong, but some are useful."

halfnine
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by halfnine » Sat Jun 03, 2017 4:15 pm

I think financially you'd be fine. If risk shows up you have home equity and the option to move where COL inclusive of healthcare is cheaper. Worst case, that would be abroad. I still see two issues, though, unless you are willing to work at at a more menial job down the road.

1. How close do you want to live to family. Whether your wife wants to live farther away from the elderly relative she helps takes care of and potentially, whether both of you would enjoy being a continent away from children and/or potential grand children.

2. If risk shows up you would be awfully dependent on social security and its sustainability.

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sat Jun 03, 2017 4:19 pm

qwertyjazz wrote:
KlangFool wrote:
willthrill81 wrote:
I mean completely different work, like the local big box stores.
willthrill81,

My wife work at one of those kinds of job in order to occupy her time. It is not worth the effort financially.

KlangFool
KF
Financially it is worth it. But emotionally and economically it is not given your options, hence the confusion.
Imagine you had to make it work living where you do and the only job you and your wife could get where Big Box stores
Let's say that is 20 k each to make math easy. That is 40k. 60-40=20
Ignoring SS, that is a 2% withdrawal rate and definetely safe.
You being a rational utility maximizes do not want that option as you have better ones. But financially it does make sense.
It is nice to be in a situation due to your savings and options that financial considerations do not dominate the considerations.
Regards
QJ
QJ,

<<Financially it is worth it. >>

Respectfully, I disagreed. It is my opinion that you do not have the first-hand experience on those kinds of job. Hence, you do not know the actual financial costs of keeping those kinds of jobs. My wife work at that pay level and my 2 kids work at those kinds of jobs over the summer too. So, I have at least 3 first-hand observations in my area.

KlangFool

Inframan4712
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by Inframan4712 » Sat Jun 03, 2017 4:46 pm

KlangFool wrote:
qwertyjazz wrote:
KlangFool wrote:
willthrill81 wrote:
I mean completely different work, like the local big box stores.
willthrill81,

My wife work at one of those kinds of job in order to occupy her time. It is not worth the effort financially.

KlangFool
KF
Financially it is worth it. But emotionally and economically it is not given your options, hence the confusion.
Imagine you had to make it work living where you do and the only job you and your wife could get where Big Box stores
Let's say that is 20 k each to make math easy. That is 40k. 60-40=20
Ignoring SS, that is a 2% withdrawal rate and definetely safe.
You being a rational utility maximizes do not want that option as you have better ones. But financially it does make sense.
It is nice to be in a situation due to your savings and options that financial considerations do not dominate the considerations.
Regards
QJ
QJ,

<<Financially it is worth it. >>

Respectfully, I disagreed. It is my opinion that you do not have the first-hand experience on those kinds of job. Hence, you do not know the actual financial costs of keeping those kinds of jobs. My wife work at that pay level and my 2 kids work at those kinds of jobs over the summer too. So, I have at least 3 first-hand observations in my area.

KlangFool
Well, perhaps you are missing that *some* of those jobs provide health insurance. My 55ish neighbor lady took a job at Starbucks mostly for the insurance. She doesn't even like coffee, ha ha. If you did get laid off at age 54, and worked at Starbucks or similar for even a few years, it gets you closer to 62, and in the meantime stops the bleeding. And it gets you out of the house, because being unemployed waiting for the phone to ring sucks. As in major depression sucks.

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sat Jun 03, 2017 5:06 pm

Inframan4712 wrote:
Well, perhaps you are missing that *some* of those jobs provide health insurance. My 55ish neighbor lady took a job at Starbucks mostly for the insurance. She doesn't even like coffee, ha ha. If you did get laid off at age 54, and worked at Starbucks or similar for even a few years, it gets you closer to 62, and in the meantime stops the bleeding. And it gets you out of the house, because being unemployed waiting for the phone to ring sucks. As in major depression sucks.
Inframan4712,

1) I was unemployed for more than 1 year about 16 months ago. So, I have first-hand knowledge.

<<perhaps you are missing that *some* of those jobs provide health insurance.>>

2) You are speaking in general. In my area, the health benefit provided by wife's employer is worse than the ACA health insurance that we were getting while I was unemployed.

KlangFool

smitcat
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Re: KF's Worst Case Retirement Plan

Post by smitcat » Sat Jun 03, 2017 5:17 pm

indexonlyplease wrote:
smitcat wrote:
indexonlyplease wrote:Klangfool, see it this helps,

Maybe if you follow the plan on this webstie it will work. I have been reading this site for a couple of years. The family lives frugal and both retired early. I beleive 40s.. I believe they live off of $30,000yr

http://www.mrmoneymustache.com

Certainly some of the ideas on that site are very good - but he definitely does not live on $30,00/year.
That site was and is a business play that worked out pretty well.
I can't prove it but on his web site he state all the money made form the blog is donated. I am sure this helps with his taxes.
Google it - not to hard to find the truth...here is one of many links....
http://www.dcurbanmom.com/jforum/posts/list/536334.page

Inframan4712
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by Inframan4712 » Sat Jun 03, 2017 5:20 pm

KlangFool wrote:
Inframan4712 wrote:
Well, perhaps you are missing that *some* of those jobs provide health insurance. My 55ish neighbor lady took a job at Starbucks mostly for the insurance. She doesn't even like coffee, ha ha. If you did get laid off at age 54, and worked at Starbucks or similar for even a few years, it gets you closer to 62, and in the meantime stops the bleeding. And it gets you out of the house, because being unemployed waiting for the phone to ring sucks. As in major depression sucks.
Inframan4712,

1) I was unemployed for more than 1 year about 16 months ago. So, I have first-hand knowledge.

<<perhaps you are missing that *some* of those jobs provide health insurance.>>

2) You are speaking in general. In my area, the health benefit provided by wife's employer is worse than the ACA health insurance that we were getting while I was unemployed.

KlangFool
I'm about your age and worked in IT for 20 years before changing careers (purposely). I experienced layoffs and anxiety throughout. During one of those periods, I commuted 1.5 hours each way daily for over a year before finding another job in my home city. So I feel your pain.

But now that you are in your 50s, you don't have to replace your current job. If you don't want to retire with current funds, you just need any job, preferably one with health insurance. [OT comment removed by admin LadyGeek]

I think you're going to be fine, because you have a lot of contingency plans, such as retiring to home country. But if you don't want to change your lifestyle at all and get to stay in your current house, a local retail job is an option for you to consider.

marcopolo
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by marcopolo » Sat Jun 03, 2017 6:55 pm

Inframan4712 wrote: I'm about your age and worked in IT for 20 years before changing careers (purposely). I experienced layoffs and anxiety throughout. During one of those periods, I commuted 1.5 hours each way daily for over a year before finding another job in my home city. So I feel your pain.

Man, when did the IT industry become such dystopian, Mad-max like, waste land?
STEM careers seem to be very popular path for many young people, I hope their experiences are better than what has been portrayed here.
I have been working as an Engineer in the technology sector my entire career and have a very different view of it, maybe i have been luckier than most.

Best of luck,
Marcopolo
Once in a while you get shown the light, in the strangest of places if you look at it right.

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sat Jun 03, 2017 7:15 pm

marcopolo wrote:
Inframan4712 wrote: I'm about your age and worked in IT for 20 years before changing careers (purposely). I experienced layoffs and anxiety throughout. During one of those periods, I commuted 1.5 hours each way daily for over a year before finding another job in my home city. So I feel your pain.

Man, when did the IT industry become such dystopian, Mad-max like, waste land?
STEM careers seem to be very popular path for many young people, I hope their experiences are better than what has been portrayed here.
I have been working as an Engineer in the technology sector my entire career and have a very different view of it, maybe i have been luckier than most.

Best of luck,
Marcopolo
marcopolo,

Please state your industry in order to provide additional context to your experience.

KlangFool

marcopolo
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by marcopolo » Sat Jun 03, 2017 7:30 pm

KlangFool wrote:
marcopolo wrote:
Inframan4712 wrote: I'm about your age and worked in IT for 20 years before changing careers (purposely). I experienced layoffs and anxiety throughout. During one of those periods, I commuted 1.5 hours each way daily for over a year before finding another job in my home city. So I feel your pain.

Man, when did the IT industry become such dystopian, Mad-max like, waste land?
STEM careers seem to be very popular path for many young people, I hope their experiences are better than what has been portrayed here.
I have been working as an Engineer in the technology sector my entire career and have a very different view of it, maybe i have been luckier than most.

Best of luck,
Marcopolo
marcopolo,

Please state your industry in order to provide additional context to your experience.

KlangFool
Due to the dynamic nature of technology, I have changed industries a few times:

Defense Industry
Academia
Satellite communications
Medical imaging
Telecom (cellular communications), most recently.

EE degrees served as base of skills, learned industry specific skills as needed. It has served me well. But, I do recognize that I have been very fortunate, and not everybody has had the same experience. But, I found some of the comments, like suggestions to go take a $20k job in retail, to be an incredibly pessimistic view of the future of the tech industry.

I do wish you the best, and hope that if your current job ends, your prospects are better than you imagine.

Marcopolo
Once in a while you get shown the light, in the strangest of places if you look at it right.

smitcat
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by smitcat » Sat Jun 03, 2017 7:39 pm

KlangFool wrote:
marcopolo wrote:
Inframan4712 wrote: I'm about your age and worked in IT for 20 years before changing careers (purposely). I experienced layoffs and anxiety throughout. During one of those periods, I commuted 1.5 hours each way daily for over a year before finding another job in my home city. So I feel your pain.

Man, when did the IT industry become such dystopian, Mad-max like, waste land?
STEM careers seem to be very popular path for many young people, I hope their experiences are better than what has been portrayed here.
I have been working as an Engineer in the technology sector my entire career and have a very different view of it, maybe i have been luckier than most.

Best of luck,
Marcopolo
marcopolo,

Please state your industry in order to provide additional context to your experience.

KlangFool

I worked in high tech engineering field making systems for DOD, medical, NASA and others. F115, Hubble, JAS nato fighter, patriot missiles, J-stars, particle accelerators, specialized MRi's, weather radar, brilliant pebbles, and others.
We had some great inventions, patents, and products that were very unique at the time - until the mid 90s or so.
It was great till it wasn't and then you could not find a job anywhere within the industry sector we were in.
Never thought it would be possible that this leading edge type of industry/products/research would be in jeopardy.

If you have not lived through it - its hard to describe to others.

danaht
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by danaht » Sat Jun 03, 2017 7:47 pm

I work in IT as well - and also have a long commute (about 1 hour each way). As far as pay goes - IT is still very good. But quality of life in the office is going down every year -
IT quality of life is getting reduced for the following trends:
1) companies are getting rid of cubicles and making people share open small work spaces to reduce cost (not a good trend)
2) benefits (health insurance, 401k match, sick time/vacation etc) , are being reduced every year to help cut costs
3) people are getting outsourced more often for off-shore workers
4) intangible benefits like being able to work from home are slowly being eliminated by some companies ( http://www.mercurynews.com/2017/05/18/i ... ffice/amp/ )
5) companies are asking employees to work additional hours without comp time off.

So in 5 years - it might be a good time to retire from IT. Although - If we have another .com technology boom (like 1997 to 2001) - then perhaps the downward trend will reverse - and you will want to be involved for the better $ and benefits.

NewbieBogle007
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by NewbieBogle007 » Sat Jun 03, 2017 7:57 pm

How will you spend your time while retired?

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sat Jun 03, 2017 8:09 pm

NewbieBogle007 wrote:
How will you spend your time while retired?
NewbieBogle007,

1) Travel.

2) Walking/cycling/Yoga/Tai Chi / Badminton

3) Singing.

4) Take free online courses.

KlangFool

SGM
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by SGM » Sat Jun 03, 2017 8:10 pm

This is how I read your post. If you can continue to work at the same job your assets will go up $100k per year including additional savings and portfolio earnings. The fact that you won't be drawing down while you are working makes gives you additional upside. above the $100k. If your yearly expenses are $40k you are talking about an advantage of $140k per year to continue to work. That is an additional $140k that improves portfolio potential earnings.

Are you already including not drawing down your portfolio in you calculation of the $100k per year?

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sat Jun 03, 2017 8:21 pm

SGM wrote:This is how I read your post. If you can continue to work at the same job your assets will go up $100k per year including additional savings and portfolio earnings. The fact that you won't be drawing down while you are working makes gives you additional upside. above the $100k. If your yearly expenses are $40k you are talking about an advantage of $140k per year to continue to work. That is an additional $140k that improves portfolio potential earnings.

Are you already including not drawing down your portfolio in you calculation of the $100k per year?
SGM,

My kids are going to college now. They spend around 50K to 60K per year. This is about the size of my annual savings. So, essentially, my 100K growth is purely from my existing portfolio of about 1.2 million. I am living paycheck to paycheck now.

But, it had been crazy this year. My portfolio is up 100K year to date over the past 5 months.

KlangFool

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willthrill81
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by willthrill81 » Sat Jun 03, 2017 8:23 pm

Inframan4712 wrote:
KlangFool wrote:
Inframan4712 wrote:
Well, perhaps you are missing that *some* of those jobs provide health insurance. My 55ish neighbor lady took a job at Starbucks mostly for the insurance. She doesn't even like coffee, ha ha. If you did get laid off at age 54, and worked at Starbucks or similar for even a few years, it gets you closer to 62, and in the meantime stops the bleeding. And it gets you out of the house, because being unemployed waiting for the phone to ring sucks. As in major depression sucks.
Inframan4712,

1) I was unemployed for more than 1 year about 16 months ago. So, I have first-hand knowledge.

<<perhaps you are missing that *some* of those jobs provide health insurance.>>

2) You are speaking in general. In my area, the health benefit provided by wife's employer is worse than the ACA health insurance that we were getting while I was unemployed.

KlangFool
I'm about your age and worked in IT for 20 years before changing careers (purposely). I experienced layoffs and anxiety throughout. During one of those periods, I commuted 1.5 hours each way daily for over a year before finding another job in my home city. So I feel your pain.

But now that you are in your 50s, you don't have to replace your current job. If you don't want to retire with current funds, you just need any job, preferably one with health insurance. [OT comment removed by admin LadyGeek]

I think you're going to be fine, because you have a lot of contingency plans, such as retiring to home country. But if you don't want to change your lifestyle at all and get to stay in your current house, a local retail job is an option for you to consider.
That was my point in suggesting that even a run-of-the-mill retail job would at least reduce his effective WR to a very manageable and safe level, especially if it provided health insurance. I suspect that KlangFool has skills that would qualify for a significantly better job than this, but since he pointed out his prior difficulty in securing this, I hinted that even a low paying job could be an effective stop-gap measure for a few years.

When you easily see the light at the end of the tunnel before you even go into it, it really reduces the darkness of the tunnel.

Just my opinion. I wish the OP the best.

P.S. If necessary, the kids can get loans for their education, but you cannot get a loan for your retirement.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Inframan4712
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by Inframan4712 » Sat Jun 03, 2017 8:43 pm

marcopolo wrote:
Inframan4712 wrote: I'm about your age and worked in IT for 20 years before changing careers (purposely). I experienced layoffs and anxiety throughout. During one of those periods, I commuted 1.5 hours each way daily for over a year before finding another job in my home city. So I feel your pain.

Man, when did the IT industry become such dystopian, Mad-max like, waste land?
First came the run-up to Y2K, with a frenzy of updating old software, and buying new software, with the lull that came afterwards because the updated/new systems were going to last for many years.

Then employers figured out they could outsource everything, and even if the result was crap, the managers still got their bonuses.

Not Law
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by Not Law » Sat Jun 03, 2017 8:53 pm

KlangFool,

I was in a similar position 4 years ago. I began drawing from the "sacred" retirement funds to meet needs, rather than scramble to find more income from whatever source. And, not so surprisingly, the market has more than replaced whatever has been withdrawn. I suppose if there had been a market drop, I would have become anxious - but there was not a drop and I did not become anxious.

If over the next few years a drop occurs, I might become anxious and seek other sources of funds. But for the time being, I am covering my costs of living with earnings from my portfolio - isn't that why we saved in the years that we did? I manipulate my MAGI to get the maximum from the ACA subsidies, drawing from taxable, tax deferred and Roth funds to do so.

I think you need to relax about trying to be in the "ultimately perfect position", and accept that your potential employment change will perhaps be just a blip in your cash flow stream. In the event that it is more than a blip, you have multiple options available to lessen the problem.

From 2007 to 2009, my retirement funds were cut in half. Since 2009 they have tripled - even though I have drawn about 10% of their current value to cover living expenses over the last 4 years.

If the projections show an 80% chance of success, that is more than enough to feel comfortable with you current circumstances.

hoops777
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by hoops777 » Sat Jun 03, 2017 10:02 pm

Just hope that you do not experience a stock market like no other.I would never feel comfortable if I had to depend on stocks for my retirement.If you are good at your job it is difficult to believe that you can not get another similar one.Even if you have to take a big pay cut, you would still be making more money than 90 pct of people earn.I am just not buying the fact that at 54 there is not a good paying position in your field if you are good at what you do,and it sounds like you are.
K.I.S.S........so easy to say so difficult to do.

HAL 9000
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by HAL 9000 » Sat Jun 03, 2017 10:23 pm

hoops777 wrote:Just hope that you do not experience a stock market like no other.I would never feel comfortable if I had to depend on stocks for my retirement.If you are good at your job it is difficult to believe that you can not get another similar one.Even if you have to take a big pay cut, you would still be making more money than 90 pct of people earn.I am just not buying the fact that at 54 there is not a good paying position in your field if you are good at what you do,and it sounds like you are.
I too thought that being good at what you do was enough but now I see that things like that matter little. There is extreme prejudice against older male tech workers. Its all about connections, relationships, and who you know that will hire you. Without those, once you are out...good luck, its over. That was your career.
By failing to prepare, you are preparing to fail. - Ben Franklin

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sun Jun 04, 2017 8:39 am

hoops777 wrote:Just hope that you do not experience a stock market like no other.I would never feel comfortable if I had to depend on stocks for my retirement.If you are good at your job it is difficult to believe that you can not get another similar one.Even if you have to take a big pay cut, you would still be making more money than 90 pct of people earn.I am just not buying the fact that at 54 there is not a good paying position in your field if you are good at what you do,and it sounds like you are.
hoops777,

<< If you are good at your job it is difficult to believe that you can not get another similar one.Even if you have to take a big pay cut, you would still be making more money than 90 pct of people earn.>>

<< I am just not buying the fact that at 54 there is not a good paying position in your field if you are good at what you do,and it sounds like you are.>>

1) Taking a pay cut to take a lower position.

How you ever tried this before? Aka actually applying and interviewing for those jobs? I did over my multiple periods of extended unemployment. The problem over here is the hiring manager would not hire you. Their reasoning is you will take a better job as soon as you found one. And, since you are that good, it would not take that long. So, why waste their effort to give you an offer?

2) Discrimination because you are too good and older than the hiring manager

Would you hire a person that are more capable than you? Not many people will. The first thing that a younger hiring manager will think about is whether this new person is a threat to my position.

3) How old are you?

KlangFool

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sun Jun 04, 2017 8:45 am

Not Law wrote:KlangFool,

I was in a similar position 4 years ago. I began drawing from the "sacred" retirement funds to meet needs, rather than scramble to find more income from whatever source. And, not so surprisingly, the market has more than replaced whatever has been withdrawn. I suppose if there had been a market drop, I would have become anxious - but there was not a drop and I did not become anxious.

If over the next few years a drop occurs, I might become anxious and seek other sources of funds. But for the time being, I am covering my costs of living with earnings from my portfolio - isn't that why we saved in the years that we did? I manipulate my MAGI to get the maximum from the ACA subsidies, drawing from taxable, tax deferred and Roth funds to do so.

I think you need to relax about trying to be in the "ultimately perfect position", and accept that your potential employment change will perhaps be just a blip in your cash flow stream. In the event that it is more than a blip, you have multiple options available to lessen the problem.

From 2007 to 2009, my retirement funds were cut in half. Since 2009 they have tripled - even though I have drawn about 10% of their current value to cover living expenses over the last 4 years.

If the projections show an 80% chance of success, that is more than enough to feel comfortable with you current circumstances.
Not Law,

Please do not interpret my thread as a pessimistic view of my position. I am more of a prepper. There are 2 goals here.

1) I am running through the worst that could happen to me. And, if this is the worst that could happen to me, then, I am doing very well.

2) What else that I could do and prepared now to make the plan better? What else that I did not prepare for.

KlangFool

bayview
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Location: WNC

Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by bayview » Sun Jun 04, 2017 8:52 am

It's interesting the number of people who don't believe that age discrimination is blatant and common, especially in some fields. I guess until you see it start happening in your own life, it's too bizarre to believe.

DH watched everyone with experience in his company get laid off over the years, whenever his company wanted to boost the stock price. Some were hired back as contractors, but most were gone for good. His turn came when he was in his early 60's. A new manager decided to require that he work from a different office 2 hours away, among some other fun stuff. After a few months of nonsense, DH left, and the company immediately reversed every change they had forced on him. Meanwhile, the accumulated knowledge and understanding and corporate memory held by all the long-termers was pretty much lost. He worked another year in a similar role for a miserable startup and finally left for good, with the same experience as KF in terms of interviewing for new jobs. He had to take SS far sooner than we had planned.

There are days that my federal job makes me want to bark at the moon, but at least this isn't the huge issue there that it is elsewhere.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

vested1
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by vested1 » Sun Jun 04, 2017 8:53 am

KlangFool wrote:
bhough wrote:Dear KlangFool,

Thank you for your comments on this board. They are all very insightful. I look forward to seeing your name when I read a post in the reply portion.

I sympathize with your situation as I have my own sense of job insecurity. My wife feels that my job is more secure than I think it is. I wonder what your wife thinks. She probably has more insight than we do to your situation.

In my mind, if you are clever enough to have three kids in college, save all that money, work in IT and live on only $40,000, you are adaptable enough for any future setbacks. Future setbacks may include: losing your job. Having your job change. Having your boss change. Having your house change. Having the country where you live change. Living in an apartment rather than a house. Living in the backroom of your grown kids' houses instead of your own. Having less money each month. If they fire you tomorrow, you may not have enough money to go golfing everyday for the next 50 years and buy a new car every two years, but is that really important to you? I also suspect that your kids are like my kids. They love you because you are nice to them and love them. While you don't want to depend on them, they will be there if you need them.

In brief, I can tell that you are smart, resourceful, persistent and wise. You have more than enough money. As my father says, "relax and keep working". Don't forget the relax part. Hope this helps. It probably won't. But your anxiety is what has caused you to save so diligently. This is a problem we all face, especially on this board-turning off the emotion that has caused us to be financially successful/frugal when it starts to bother us,...

B
bhough,

1) I have 2 kids in college.

2) I had to be resourceful in order to survive. Throughout my working lives of 30+ years, I did not have any long stretch of a good time. I was in Houston during Houston 80s Oil Bust. I was in Texas during Texas Saving & Loan crisis. I was in Asia during Asian currency crisis. Then, I was in Telecom during Telecom bust.

KlangFool
(In bold) This attitude is your ace in the hole and will serve you nicely in your "worst case scenario". You have already displayed a resilience that most don't possess, and having gone through the fire, you have adapted well. This attribute won't disappear magically if belt tightening is required.

However, if you have not already done so, I would sit my kids down and let them know that they will need to defray their expenses for college somewhat if you get laid off. Even though you have isolated the amount projected to complete their education, that extra savings may be needed in order to make your plan viable should you lose your job. After all, a child's education is not entirely obtained in academia, and you may be doing them a favor by asking them to be more self-reliant.

The same goes for your desired support of your wife's mother. Consider the possibility of taking her with you if you relocate abroad, as long as she is open to that option. I can tell you from experience that the responsibility of caring for an aged MIL can take a toll on your plans. You may find that flexibility is needed from all those involved during life changing events.

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sun Jun 04, 2017 9:07 am

vested1 wrote:
KlangFool wrote: bhough,

1) I have 2 kids in college.

2) I had to be resourceful in order to survive. Throughout my working lives of 30+ years, I did not have any long stretch of a good time. I was in Houston during Houston 80s Oil Bust. I was in Texas during Texas Saving & Loan crisis. I was in Asia during Asian currency crisis. Then, I was in Telecom during Telecom bust.

KlangFool
(In bold) This attitude is your ace in the hole and will serve you nicely in your "worst case scenario". You have already displayed a resilience that most don't possess, and having gone through the fire, you have adapted well. This attribute won't disappear magically if belt tightening is required.

However, if you have not already done so, I would sit my kids down and let them know that they will need to defray their expenses for college somewhat if you get laid off. Even though you have isolated the amount projected to complete their education, that extra savings may be needed in order to make your plan viable should you lose your job. After all, a child's education is not entirely obtained in academia, and you may be doing them a favor by asking them to be more self-reliant.

The same goes for your desired support of your wife's mother. Consider the possibility of taking her with you if you relocate abroad, as long as she is open to that option. I can tell you from experience that the responsibility of caring for an aged MIL can take a toll on your plans. You may find that flexibility is needed from all those involved during life changing events.
vested1,

1) I had started my children to work during summer since they were in high school. They are working this summer too. They were being told that they may need to take a student loan if I am laid off. Or, they may need to support me during retirement. But, at this stage, I am comfortable enough to pay for their last 2/3 years.

<<The same goes for your desired support of your wife's mother.>>

2) Sorry for not being clear. The support is not financial. Her older son aka my brother-in-law is a multi-millionaire. So, money is not an issue. My wife would like to spend time with her mother. So, one of the possibility is to stay in Virginia but move a bit further out from this expensive neighborhood.

<<You have already displayed a resilience>>

3) I survived because I was willing to plan and prepare for the worst case.

KlangFool

delamer
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by delamer » Sun Jun 04, 2017 11:36 am

bayview wrote:It's interesting the number of people who don't believe that age discrimination is blatant and common, especially in some fields. I guess until you see it start happening in your own life, it's too bizarre to believe.

DH watched everyone with experience in his company get laid off over the years, whenever his company wanted to boost the stock price. Some were hired back as contractors, but most were gone for good. His turn came when he was in his early 60's. A new manager decided to require that he work from a different office 2 hours away, among some other fun stuff. After a few months of nonsense, DH left, and the company immediately reversed every change they had forced on him. Meanwhile, the accumulated knowledge and understanding and corporate memory held by all the long-termers was pretty much lost. He worked another year in a similar role for a miserable startup and finally left for good, with the same experience as KF in terms of interviewing for new jobs. He had to take SS far sooner than we had planned.

There are days that my federal job makes me want to bark at the moon, but at least this isn't the huge issue there that it is elsewhere.
As a fairly-recently-retired fed, I second your "bark at the moon" feeling! And, like you, this laying off of senior people was not something that I had to contend with.

My husband's organization has started shedding some senior, better-paid people but fortunately -- so far -- they only are forcing out certain staff who have qualified for regular retirement. So while people are having to leave before they intended, they are eligible for unreduced pensions and retiree health insurance. As these things go, it is a pretty compassionate approach.

In a couple cases they are being replaced by the younger-and-cheaper, in many cases there seems to be no immediate plan to fill the vacancy.

davidsorensen32
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by davidsorensen32 » Sun Jun 04, 2017 11:47 am

I strongly agree with the comments about age discrimination in tech. It is impossible to find employment after 40 unless you know the hiring manager really well. It's time
We do something about it.

indexonlyplease
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Re: KF's Worst Case Retirement Plan

Post by indexonlyplease » Sun Jun 04, 2017 11:48 am

smitcat wrote:
indexonlyplease wrote:
smitcat wrote:
indexonlyplease wrote:Klangfool, see it this helps,

Maybe if you follow the plan on this webstie it will work. I have been reading this site for a couple of years. The family lives frugal and both retired early. I beleive 40s.. I believe they live off of $30,000yr

http://www.mrmoneymustache.com

Certainly some of the ideas on that site are very good - but he definitely does not live on $30,00/year.
That site was and is a business play that worked out pretty well.
I can't prove it but on his web site he state all the money made form the blog is donated. I am sure this helps with his taxes.
Google it - not to hard to find the truth...here is one of many links....
http://www.dcurbanmom.com/jforum/posts/list/536334.page
I knew it was to good to be true. His website was just deleted for me.

Thanks for the information.

rai
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by rai » Sun Jun 04, 2017 11:56 am

KlangFool wrote:Folks,

This is my worst-case retirement scenario. Please review and criticize.

1) Retire at 54 years old with a portfolio of 1 million and the AA of 60/40

2) 300K Mortgage. 6 years into 30 years 3.49% fixed rate mortgage.


KlangFool
I fail to see why the need to retire at 54 with so much left to chance. You could have easily 30-40 years to live off of a small amount of money.

I mean you'd be 8+ years from SS income, years away from Medicare, 24 years left ton your home mortgage.

what's the problem with working another 6-8 years, retire at 60-62 so much closer to SS and Medicare and maybe $2M in savings?

The people I see as really ER candidates are into the *several* million dollar range and no house payments.
Last edited by rai on Sun Jun 04, 2017 12:13 pm, edited 1 time in total.
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair

protagonist
Posts: 5391
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Re: KF's Worst Case Retirement Plan

Post by protagonist » Sun Jun 04, 2017 12:05 pm

KlangFool wrote:
livesoft wrote:OK, ...

You and your wife get sick at age 55. Medical expenses become $40,000 a year after insurance pays for everything else. And your property taxes go up to $20,000 a year. But, fortunately, your kids and other families members take care of you for the rest of your lives.
livesoft,

LOL!!

I can laugh about this because

A) Many of my family members are millionaires.

B) My family has a history of taking care of each other. For example, we, uncles and aunties, sponsored many of our nephews and nieces through colleges.

KlangFool
Worst case scenario should always include divorce (50% hit plus possible child support/alimony) or unexpected health problems.
That said, if I were you, I would work on paying off your $300K mortgage as early as possible, especially in these days of hefty investment returns. Others may disagree, but besides the potential financial security, you will have the psychological advantage of not only being retired but also debt-free. Freedom is hard to put a dollar figure on.

I disagree with those who think you are foolish to retire at 54 with $1M in savings, especially if you can pay off your house before then (which I would make a priority). If you are spending $60K/yr now, you will probably be spending less after you retire (unless you will be paying college tuitions).

KlangFool
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Sun Jun 04, 2017 12:13 pm

rai wrote:
KlangFool wrote:Folks,

This is my worst-case retirement scenario. Please review and criticize.

1) Retire at 54 years old with a portfolio of 1 million and the AA of 60/40

2) 300K Mortgage. 6 years into 30 years 3.49% fixed rate mortgage.


KlangFool
I fail to see why the need to retire at 54 with so much left to chance. You could have easily 30-40 years to live off of a small amount of money.
rai,

I am aiming for Financial Independent (FI). Then, I get to choose whether I actually retire or not.

KlangFool

KlangFool
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Re: KF's Worst Case Retirement Plan

Post by KlangFool » Sun Jun 04, 2017 12:19 pm

protagonist wrote:
KlangFool wrote:
livesoft wrote:OK, ...

You and your wife get sick at age 55. Medical expenses become $40,000 a year after insurance pays for everything else. And your property taxes go up to $20,000 a year. But, fortunately, your kids and other families members take care of you for the rest of your lives.
livesoft,

LOL!!

I can laugh about this because

A) Many of my family members are millionaires.

B) My family has a history of taking care of each other. For example, we, uncles and aunties, sponsored many of our nephews and nieces through colleges.

KlangFool
Worst case scenario should always include divorce (50% hit plus possible child support/alimony) or unexpected health problems.
That said, if I were you, I would work on paying off your $300K mortgage as early as possible, especially in these days of hefty investment returns. Others may disagree, but besides the potential financial security, you will have the psychological advantage of not only being retired but also debt-free. Freedom is hard to put a dollar figure on.

I disagree with those who think you are foolish to retire at 54 with $1M in savings, especially if you can pay off your house before then (which I would make a priority). If you are spending $60K/yr now, you will probably be spending less after you retire (unless you will be paying college tuitions).
protagonist,

1) My kids are in college now. So, no child support problem.

2) I am paying college tuition now. With 2 kids, 2 years/3 years to go.

<< Others may disagree, but besides the potential financial security, you will have the psychological advantage of not only being retired but also debt-free. Freedom is hard to put a dollar figure on.>>

3) I disagreed. How does using up most of my taxable account of 450K to pay off 300K mortgage make any sense? In fact, this will put me in serious liquidity risk.

4) There is no freedom until a person reaches the FI number. People with a paid off mortgage but fall short of FI has an additional liquidity risk.

KlangFool

hoops777
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by hoops777 » Sun Jun 04, 2017 12:37 pm

KF I am 65.I am not a tech guy so I will defer to your experience saying that you cannot get another job because of blatant age discrimination,as absurd as that appears to me.With all the many companies and different philosophies and different people in charge of hiring in each company,etc.,it sounds like a full blown conspiracy which is difficult to believe.I get the hire the younger guy for less pay mentality along with being overqualified for a lesser paying position,but it is still difficult to believe that it goes 100 pct through every company out there.However,others have said the same so I guess it is true in the majority of cases.My wife and I went to a street fair in Sunnyvale,in Silicon Valley yesterday,and stopped at the Costco there on the way home.There must have been a couple thousand people in the store and probably 95 pct were from Asian countries.I was stunned but I wonder about how you might be getting shafted because of the work visas.
In terms of your numbers for retirement,as I said,I would not put myself in a position that I needed stocks to perform well to fund my retirement at age 54 if I could avoid it.I don't care what anyone says,stock returns are unknowable,especially so when retiring at 54 with all of the vulnerabilities that come with that.You are right on the edge with little margin of error.If you were my age it would be a lot more positive.You seem very adaptable and you have options which others do not have like moving to another country comfortably so I am sure it will all work out,but I few more years of working seems more prudent and less stressful to me.Of course it helps that you have a lot of rich family as well :D
Last edited by hoops777 on Sun Jun 04, 2017 2:26 pm, edited 1 time in total.
K.I.S.S........so easy to say so difficult to do.

protagonist
Posts: 5391
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Re: KF's Worst Case Retirement Plan

Post by protagonist » Sun Jun 04, 2017 12:54 pm

KlangFool wrote: 3) I disagreed. How does using up most of my taxable account of 450K to pay off 300K mortgage make any sense? In fact, this will put me in serious liquidity risk.
KlangFool
I didn't mean to imply that you should pay your mortgage in one fell swoop....rather that you should pay it off as early as you can comfortably. I was not suggesting that you take liquidity risk. Right now your interest payments at 3.49%, depending on your tax bracket...let's say you are paying 2% after taxes, if inflation is 2% then you are losing 4% to inflation per year in interest. Whereas you can probably beat inflation by investing, there is no guarantee. So it is an individual decision. I am really happy to be debt-free.
Last edited by protagonist on Sun Jun 04, 2017 11:22 pm, edited 1 time in total.

amitb00
Posts: 426
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by amitb00 » Sun Jun 04, 2017 2:34 pm

Klangfool,
I read your responses in many threads and look forward to them. You have nice insights and know what you are talking about. I am pretty sure you know the answer. Knowing about you, I am definite that you will be able to work out. I have no advise which will be new to you (work as long as you can, have little more if you can etc)
I am also in IT and can understand how tricky it is to survive there with do many changes and outsourcing etc.
Best wishes,
Amit

tnr
Posts: 65
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by tnr » Mon Jun 05, 2017 8:27 am

There are 2 goals here.

1) I am running through the worst that could happen to me. And, if this is the worst that could happen to me, then, I am doing very well.
2) What else that I could do and prepared now to make the plan better? What else that I did not prepare for.


Klangfool:

Regarding 1), I agree. You are in very good shape if this is the worst that could happen.
Regarding 2), Two suggestions: 1. Look visit around your state (I think you said it was Virginia) for lower cost of living but still close to your family. I am guessing you are in the DC area which means virtually the rest of the state is lower cost of living. Surely, there are places around Richmond or Roanoke which are nice and would cost less. 2. Consider what areas in IT you could change to which would be more enjoyable for you and provide greater job security. I am in biostatistics and the need for statistical analysts is very great. Perhaps a few online courses in biostatistics (U Florida Biostatistics Dept has a new MS online program) plus certification in SAS would put in you better position.

Good luck.

KlangFool
Posts: 10205
Joined: Sat Oct 11, 2008 12:35 pm

Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Mon Jun 05, 2017 8:29 am

amitb00 wrote:Klangfool,
I read your responses in many threads and look forward to them. You have nice insights and know what you are talking about. I am pretty sure you know the answer. Knowing about you, I am definite that you will be able to work out. I have no advise which will be new to you (work as long as you can, have little more if you can etc)
I am also in IT and can understand how tricky it is to survive there with do many changes and outsourcing etc.
Best wishes,
Amit
Thanks.

KlangFool

KlangFool
Posts: 10205
Joined: Sat Oct 11, 2008 12:35 pm

Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Mon Jun 05, 2017 8:35 am

tnr wrote:There are 2 goals here.

1) I am running through the worst that could happen to me. And, if this is the worst that could happen to me, then, I am doing very well.
2) What else that I could do and prepared now to make the plan better? What else that I did not prepare for.


Klangfool:

Regarding 1), I agree. You are in very good shape if this is the worst that could happen.
Regarding 2), Two suggestions: 1. Look visit around your state (I think you said it was Virginia) for lower cost of living but still close to your family. I am guessing you are in the DC area which means virtually the rest of the state is lower cost of living. Surely, there are places around Richmond or Roanoke which are nice and would cost less. 2. Consider what areas in IT you could change to which would be more enjoyable for you and provide greater job security. I am in biostatistics and the need for statistical analysts is very great. Perhaps a few online courses in biostatistics (U Florida Biostatistics Dept has a new MS online program) plus certification in SAS would put in you better position.

Good luck.
tnr,

1) Location. In my case, it will be further away from DC in the Leesburg/Winchester direction.

2) I enjoy my job. It just that it is a downward trend in term of opportunity. I did take some courses in data science. It looks interesting.

Thanks.

KlangFool

KlangFool
Posts: 10205
Joined: Sat Oct 11, 2008 12:35 pm

Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Mon Jun 05, 2017 8:37 am

Folks,

Look like

1) 1 million to 1.3 million need major adjustment/adaptation to make it work.

2) 1.3 million to 1.5 million need minor adjustment/adaptation to make it work.

3) 2 million -> retire now.

KlangFool

10YearPlan
Posts: 246
Joined: Tue Dec 22, 2015 2:58 pm

Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by 10YearPlan » Mon Jun 05, 2017 8:45 am

qwertyjazz wrote:
KlangFool wrote:
willthrill81 wrote:
I mean completely different work, like the local big box stores.
willthrill81,

My wife work at one of those kinds of job in order to occupy her time. It is not worth the effort financially.

KlangFool
KF
Financially it is worth it. But emotionally and economically it is not given your options, hence the confusion.
Imagine you had to make it work living where you do and the only job you and your wife could get where Big Box stores
Let's say that is 20 k each to make math easy. That is 40k. 60-40=20
Ignoring SS, that is a 2% withdrawal rate and definetely safe.
You being a rational utility maximizes do not want that option as you have better ones. But financially it does make sense.
It is nice to be in a situation due to your savings and options that financial considerations do not dominate the considerations.
Regards
QJ
I have a lot of first hand experience in retail and I agree these kinds of jobs can be "worth it" for a few reasons, not all of them financial. That said, retail/customer service roles are not for everyone -- you kind of have to like people as a starting point. However, there are other things one can do that aren't retail/customer service oriented and still bring in a little cash. Temp/contractor work in a related field is one example. Or one of dozens of gig-economy roles. Again, none of these are comparable to the KF's current position or income, I am guessing. But if one needs to work to offset a few bills, reduce the sting of decumulation or needs a social outlet, there are lots and lots of options out there.

lostdog
Posts: 1188
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by lostdog » Mon Jun 05, 2017 8:58 am

KlangFool,

What about semi-retirement instead of full retirement? A part time job can cover insurance expenses and the portfolio can cover everything else. You could look for a part time job you enjoy.
If you fully retire and the market turns south for a few years you could get a part time job during the bear market.

Another option is you could work and pay off the mortgage. After that then semi-retired to something you enjoy. My point is you can leave the rat race and still work.

KlangFool
Posts: 10205
Joined: Sat Oct 11, 2008 12:35 pm

Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Mon Jun 05, 2017 9:02 am

lostdog wrote:KlangFool,

What about semi-retirement instead of full retirement? A part time job can cover insurance expenses and the portfolio can cover everything else. You could look for a part time job you enjoy.
If you fully retire and the market turns south for a few years you could get a part time job during the bear market.

Another option is you could work and pay off the mortgage. After that then semi-retired to something you enjoy. My point is you can leave the rat race and still work.
lostdog,

Thanks for the information. I am looking for my FI number. I may or may not retire when I reached that number. Or, I may be forced to retire when I reached that number. I am trying to find out what are my FI numbers.

KlangFool

KlangFool
Posts: 10205
Joined: Sat Oct 11, 2008 12:35 pm

Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by KlangFool » Mon Jun 05, 2017 10:30 am

Folks,

The following might be educational and useful for others.

For better of worse, I was unemployed for the whole year in 2015. So, I experienced the financial cost living with my portfolio for a year.

1) COBRA -> I received 18 months of COBRA health coverage. So, part of the time, I was in COBRA. Then, the rest of the time in ACA coverage. I was pleasantly surprised to find that the ACA coverage in this area was good and fair valued. Most of the medical providers are available under the plan. This is due to a big non-profit medical provider in this area. I spent about 20K this year due to expensive cataract surgery and I opted for more expensive implants.

2) My portfolio generates about 20K of dividend per year. So, I do not need to sell in order to generate income.

3) My wife started a low-end job just to keep her occupied due to the empty nest. Kids left for college. That deliver about 15K to 20K per year.

4) There are not many side gigs for my area. But, whenever it shows up, I could charge about $60 to $100 per hour. Money is not an issue when someone needs my expertise. I could make about 10K to 20K per year on those side contracts. I had to terminate those contracts when I started my new job at 2016.

5) For 2015, my portfolio stays at the same level as 2014 even after paying about 50K to 60K for my kids' college tuition and unemployed for 1 year.

The good and bad about never having job security is that you had experienced unemployment and learned to deal with it.

KlangFool

Admiral
Posts: 1369
Joined: Mon Oct 27, 2014 12:35 pm

Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by Admiral » Mon Jun 05, 2017 10:42 am

KF--

My view is that your plan is doable... but would be too close for (at least my) comfort. If you begin with that $1m number at the start of a very bearish market, you might (MIGHT) be ok with those withdrawal rates and expenses.

But if this is your view, then we have a different perspective on retiring. I don't want a stress-filled retirement where each morning I see the market selling off and I worry about depleting my portfolio. That's not living, in my opinion. Nor would I want to have to sell my house and move in order to live. That does not strike me as an enjoyable choice to have to make.

If you feel that you will be happy and relaxed with those assets in that type of situation, then you are probably ok. I would not. Nor would I be comfortable with a mortgage with those assets unless it was very close to the end of its term.

I also plan to travel a LOT... much more than I do now (and I do travel quite a bit). You said you like to travel also. Travel is expensive. How relaxing would your trips be if you were worrying about their cost all the time, relative to your annual expenses? I don't want to live like that in retirement. You have saved very well for a long time and deserve the fruits of your labors in retirement...not the daily stresses of walking a fine financial line.

Assuming you are able to remain employed, I would not recommend retiring under those parameters, unless you were willing to go back to work.

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