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

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tampaite
Posts: 476
Joined: Wed Feb 18, 2015 9:29 pm

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

Post by tampaite » Mon Jun 05, 2017 12:32 pm

KlangFool wrote: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
I think based on what you've shared so far, I have a sense that you can do it with what you are planning.

It's unnecessary to plan for all disasters(worse case scenarios) since you have no control on them(war, stock market crash) but not everyone focuses on their life expectancy.

Average life expectancy in US is 78 years so if you have assets(401k, pension, real estate, SS etc) that will provide you the level of lifestyle you are looking for until 78, that's step #1.

Step #2 - you only need assets that will provide you with necessary(adequate) income that SS may not cover or provide and if you have it, I think you are good to go.

Trying to accumulate more during your productive years while you could do more with your time(other than work), I would give that a priority.

A dear family friend(more of an acquaintance) recently turned 71 and he has symptoms that looks like Parkinson’s. He and his wife both used to make good money(500K+ as Surgeons at a major hospital) and have guarantted pensions and probably have networth around $2M - $5M(my guess based on prior discussions) but now, he will be unable to drive in near future depending on the onsent of the disease and the last time I met, he was concerned that he had to give up his freedom of driving so the millions he has won't do much.

so at 54, if you think you can make-do with the amount you would have by then - go for it.

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

Post by spammagnet » Mon Jun 05, 2017 8:08 pm

tampaite wrote:Average life expectancy in US is 78 years ...
According to the Social Security administration, once you get to retirement age range, life expectancy is in the mid-80's. That doesn't invalidate your statement but does revise the target a bit.

SSA Actuarial Life Table (2013)

Code: Select all

Age	Life Expectancy
   	(rounded)
0 	81
45	38
55	29
65	20

jjface
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Joined: Thu Mar 19, 2015 6:18 pm

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

Post by jjface » Mon Jun 05, 2017 9:03 pm

KlangFool wrote: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
KF - you have a better grip of your finances than most and give out good advice. I think you know deep down your plan is sound and are getting a bit swayed by the crowd here - many of which have less control over their expenses than you. There is no way you need $2m to retire for sure. If I posted what you did in the OP I imagine you would think I was in good shape already.

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

Post by KlangFool » Mon Jun 05, 2017 9:29 pm

jjface wrote:
KlangFool wrote: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
KF - you have a better grip of your finances than most and give out good advice. I think you know deep down your plan is sound and are getting a bit swayed by the crowd here - many of which have less control over their expenses than you. There is no way you need $2m to retire for sure. If I posted what you did in the OP I imagine you would think I was in good shape already.
jjface,

For better or worse, I would not have 2 million unless I have some kind of windfall. I would early retire at 1.5 million as soon as I have it. Life is too short to be wasted in getting more money.

KlangFool

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

Post by hoops777 » Tue Jun 06, 2017 10:08 am

Yes life is too short to be wasted getting more money.....that you do not need.Only you knows your real lifestyle and money needs and what you really need to live comfortably.I think most people here are well off and think they need way more money than they actually do,but each person has to decide how important the activities that cost the most money are to their full enjoyment of life.I honestly believe that real security only comes if you can live off safe money.I believe Bernstein has it right.
K.I.S.S........so easy to say so difficult to do.

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

Post by KlangFool » Tue Jun 06, 2017 10:19 am

hoops777 wrote:Yes life is too short to be wasted getting more money.....that you do not need.Only you knows your real lifestyle and money needs and what you really need to live comfortably.I think most people here are well off and think they need way more money than they actually do,but each person has to decide how important the activities that cost the most money are to their full enjoyment of life.I honestly believe that real security only comes if you can live off safe money.I believe Bernstein has it right.
hoops777,

<<I honestly believe that real security only comes if you can live off safe money.>>

There is no real security. We could only do our best and take the necessary risk. Plus, preparing the best that we could.

For example, I kept some gold jewelry. I do not believe that money is absolutely safe.

KlangFool

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

Post by Admiral » Tue Jun 06, 2017 10:23 am

hoops777 wrote:Yes life is too short to be wasted getting more money.....that you do not need.Only you knows your real lifestyle and money needs and what you really need to live comfortably.I think most people here are well off and think they need way more money than they actually do,but each person has to decide how important the activities that cost the most money are to their full enjoyment of life.I honestly believe that real security only comes if you can live off safe money.I believe Bernstein has it right.
I agree with this. That said, nobody wants to worry about "having enough" in retirement. I don't think one needs to plan for a worst-case scenario in order to be prudent. One need only make a list, in descending order of importance, of what one needs to bring them joy/happiness, and then put a monetary value (if appropriate) on them. If the top five things don't cost much, then you don't need much. If they do, then you need more.

If I were to find that I needed to work an extra year or two to make my non-working years more secure and less stressful, I would not hesitate to do so. But, I like my job, some people don't.

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

Post by AmericaFirst » Tue Jun 06, 2017 10:38 am

$30k per year is more than enough for a comfortable lifestyle.

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

Post by delamer » Tue Jun 06, 2017 10:47 am

AmericaFirst wrote:$30k per year is more than enough for a comfortable lifestyle.
Except when it isn't.

What if you have high medical bills from a chronic condition or are supporting an elderly parent or want to live near your grandchildren but they are in a high-cost-of-living area?

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

Post by KlangFool » Tue Jun 06, 2017 10:56 am

Admiral wrote:
hoops777 wrote:Yes life is too short to be wasted getting more money.....that you do not need.Only you knows your real lifestyle and money needs and what you really need to live comfortably.I think most people here are well off and think they need way more money than they actually do,but each person has to decide how important the activities that cost the most money are to their full enjoyment of life.I honestly believe that real security only comes if you can live off safe money.I believe Bernstein has it right.
I agree with this. That said, nobody wants to worry about "having enough" in retirement. I don't think one needs to plan for a worst-case scenario in order to be prudent. One need only make a list, in descending order of importance, of what one needs to bring them joy/happiness, and then put a monetary value (if appropriate) on them. If the top five things don't cost much, then you don't need much. If they do, then you need more.

If I were to find that I needed to work an extra year or two to make my non-working years more secure and less stressful, I would not hesitate to do so. But, I like my job, some people don't.
Admiral,

Good for you since you have a choice. But, for many of us, we may not get to choose. Hence, we would like to know if we are forced to retire earlier whether we can survive.

KlangFool

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

Post by Admiral » Tue Jun 06, 2017 11:17 am

KlangFool wrote:
Admiral wrote:
hoops777 wrote:Yes life is too short to be wasted getting more money.....that you do not need.Only you knows your real lifestyle and money needs and what you really need to live comfortably.I think most people here are well off and think they need way more money than they actually do,but each person has to decide how important the activities that cost the most money are to their full enjoyment of life.I honestly believe that real security only comes if you can live off safe money.I believe Bernstein has it right.
I agree with this. That said, nobody wants to worry about "having enough" in retirement. I don't think one needs to plan for a worst-case scenario in order to be prudent. One need only make a list, in descending order of importance, of what one needs to bring them joy/happiness, and then put a monetary value (if appropriate) on them. If the top five things don't cost much, then you don't need much. If they do, then you need more.

If I were to find that I needed to work an extra year or two to make my non-working years more secure and less stressful, I would not hesitate to do so. But, I like my job, some people don't.
Admiral,

Good for you since you have a choice. But, for many of us, we may not get to choose. Hence, we would like to know if we are forced to retire earlier whether we can survive.

KlangFool
KF--

You did not appear to be asking about "survival." You asked if you had (or will have, based on the parameters you noted) enough to retire. If you only want to "survive" rather than have a comfortable retirement (which is what most of us strive for) then yes... you likely have enough. Certainly if nothing else you have wealthy family members who will see you don't end up on the street.

You seem to constantly (consistently) post about being out of work; obviously not working for a while has scared and scarred you. But, correct me if I'm wrong, you are currently working and making a very good living, such that you are socking away a lot of money.

Might you lose your job at some point? Maybe. So might many of us. But how about this: as long as you HAVE a job, keep doing it until you have enough so you can retire comfortably, not just survive.

If and when you lose your job AND you cannot find a replacement (which in itself is nothing more than conjecture at this point), then your retirement choice will be made for you.

Keep a positive attitude and stay with it!

Dasnyc
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Joined: Wed Oct 16, 2013 6:51 pm

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

Post by Dasnyc » Tue Jun 06, 2017 11:40 am

AmericaFirst wrote:$30k per year is more than enough for a comfortable lifestyle.
I don't know where you live, but where I am, $30K is NOT enough for a comfortable retirement. I live a frugal lifestyle, and need almost double that.

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

Post by hoops777 » Tue Jun 06, 2017 11:53 am

KF to say there is no safe money is pessimistic beyond reason.If you have a million dollars invested in CDs,treasuries and i bonds that is safe money.You at least know that 5 years from now you will have x amount depending upon inflation adjustments.A million in stocks could be worth anything.That is just a basic reality unless you are talking about an end of the world scenario where the country collapses in which case nothing matters anyway.To say there is no safe money is pushing the envelope way beyond any relevance to your situation.
The admiral is also correct in stating the difference between surviving and living.When I was agonizing over my retirement I always said ok we can survive on this,but this amount will allow us to live a much more enjoyable life.As you said some people have no choice but from everything you have posted you do have a choice to work longer because you are a very capable 54 year old.Yes you may lose your current job and may have to settle for something different and a lot less money,but that is a choice only you can make.Would I take a job I hate just for more money?No way in hell.....unless the extra money served a purpose that was important enough to me.
K.I.S.S........so easy to say so difficult to do.

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

Post by remomnyc » Tue Jun 06, 2017 1:31 pm

The best time to find a job is while you have one. If you think a layoff may be imminent, start looking.

If you find yourself unemployed, another work option may be as tech temp, which will defray your withdrawal rate and also introduce you to other companies. They will welcome your experience.

Once unemployed, I would ask your children to take out loans to the extent possible and save your powder. If things turn out fine, you can pay their loans off. As others have said, they can borrow for their education but you cannot borrow for your retirement.

Finally, if there is a bad sequence of events and you've blow through your fixed income, rather than sell stocks when they are down, I would sell your house and move farther out to a LCOL part of VA (if your kids are still in school and your MIL is still in the area) or out of the country.

I enjoy your posts and I think you have enough flexibility to survive if the worst case happens.

sjt
Posts: 91
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by sjt » Tue Jun 06, 2017 2:36 pm

KlangFool,

I don't have much to add except that I enjoy your posts. It's interesting to read the responses on this thread, and compare with other retirement sites (ahem, MMM). Bogleheads are quite conservative, but there is wisdom behind it. I will be interested to see what happens going forward!
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

bhsince87
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by bhsince87 » Tue Jun 06, 2017 2:58 pm

In my opinion, you would be OK. Not an A+ financially, but probably a B or B+.

Another option to consider is the availability of a government backed reverse mortgage at age 62, or later, if needed.

If you are forced to retire, you might also get some sort of severance package. And possibly unemployment benefits. That might not be much, but might cover a year or so of living expenses.

And although you might not find another well paying job in IT, you should be able to find SOME kind of work. Even at $10 an hour, you could cover a large part of your living expenses. And you might only need to do that for a few years as you allow your nest egg to continue to grow.
Retirement: When you reach a point where you have enough. Or when you've had enough.

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

Post by KlangFool » Tue Jun 06, 2017 3:07 pm

bhsince87 wrote:
And although you might not find another well paying job in IT, you should be able to find SOME kind of work. Even at $10 an hour, you could cover a large part of your living expenses. And you might only need to do that for a few years as you allow your nest egg to continue to grow.
bhsince87,

Please note that I could not find IT works at $10 per hour. It is either $60 to $100 per hour or nothing. I was unemployed for 1 year about 16 months ago. So, I have been through this. The employer could find the younger worker to work at below $60 per hour.

KlangFool

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

Post by scottinmet » Tue Jun 06, 2017 8:36 pm

KF,
I like reading your posts and this thread has been very interesting. The way I see it is you are very close to being able to retire with little worry but there are two things that increase your risk to an unacceptable level, your mortgage and your kids' educational expenses. If one or both of those were out of the way you would probably be able to retire now with little difficulty. You have 2-3 years more for educational expenses and 24 more years for your mortgage.

I think to retire now you should reduce your yearly mortgage outlay to around $10k and have your kids assume their own educational expenses. That may seem draconian to your kids but they have a long working life ahead of them to shoulder the debt whereas you do not. Doing both frees up your entire portfolio and reduces your yearly estimated expenses. Plus, the kids don't lose out in the long term, they will inherit what you have accumulated and the risk of them having to support you in your old age is greatly reduced.

The benefit is you will be close to a 4% withdrawal rate for the first 8 years, after which you and your wife's social security should reduce your withdrawal rate significantly. Your 60/40 investment should protect you against most any downturn that happens between now and age 62.

I'm in my early 50's and about 5 years behind you in terms of realistically looking at retiring. I have kids and one is in college now. If I was laid off I would have them assume as much of the expenses as they could. Long term planning has to take precedence.

Hopefully you can keep your job for at least the next 2-3 years but if that doesn't happen I think you will still be fine.

ClaycordJCA
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Location: SF Bay Area

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

Post by ClaycordJCA » Wed Jun 07, 2017 2:40 am

KlangFool wrote:
bhsince87 wrote:
And although you might not find another well paying job in IT, you should be able to find SOME kind of work. Even at $10 an hour, you could cover a large part of your living expenses. And you might only need to do that for a few years as you allow your nest egg to continue to grow.
bhsince87,

Please note that I could not find IT works at $10 per hour. It is either $60 to $100 per hour or nothing. I was unemployed for 1 year about 16 months ago. So, I have been through this. The employer could find the younger worker to work at below $60 per hour.

KlangFool
Klang Fool -

I also enjoy your posts. I believe bhsince87 is suggesting some type of work other than IT. With your very low expenses, making $10 an hour even if in another field would cover most of your living expenses and help preserve your retirement fund.

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

Post by lazydavid » Wed Jun 07, 2017 5:26 am

KlangFool wrote: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.
This wasn't pointed at me, but absolutely. That's my primary goal. The better the caliber of the people I hire, the less of their work I can do, and the more of my own--and the better I look. I get compliments on my team all the time, which I take as a reflection on my management of said team. And if I never hire/develop someone who could replace me (or be a "threat to my position", to use your words), I'm un-promotable. I like my job, but don't want it to be the last one I ever have, so I need to hire or build bench for myself. I tried like hell just last week to hire a brilliant older (probably about your age) architect who--at least based on the interview--is way better than I've ever been. But alas, somebody else could afford to pay more than I could. :(

I don't know what scale you were referring to by "younger", but I'm 39, and have been managing the IT Infrastructure/Operations department for 5 years.

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

Post by KlangFool » Wed Jun 07, 2017 7:13 am

lazydavid wrote:
KlangFool wrote: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.
This wasn't pointed at me, but absolutely. That's my primary goal. The better the caliber of the people I hire, the less of their work I can do, and the more of my own--and the better I look. I get compliments on my team all the time, which I take as a reflection on my management of said team. And if I never hire/develop someone who could replace me (or be a "threat to my position", to use your words), I'm un-promotable. I like my job, but don't want it to be the last one I ever have, so I need to hire or build bench for myself. I tried like hell just last week to hire a brilliant older (probably about your age) architect who--at least based on the interview--is way better than I've ever been. But alas, somebody else could afford to pay more than I could. :(

I don't know what scale you were referring to by "younger", but I'm 39, and have been managing the IT Infrastructure/Operations department for 5 years.
lazydavid,

Good for you.

KlangFool

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

Post by KlangFool » Wed Jun 07, 2017 7:20 am

Folks,

Non-IT job for $10 per hour. Okay. I believe this deserve a proper response and it may be useful for others when they face this kind of situation.

Unless I want to abandon the IT field totally when I am unemployed,

A) I have to look for job

B) I have to study and keep up-to-date with the latest technology and events

C) I have to explore and move into a different IT field if necessary

So, where and how can I find time to keep a $10 per hour job?

Furthermore, I did find some contract work at $60 to $100 per hour. I earned 10K to 15K from those work while I am free to do (A) to (C).

In summary, for some of us, it is a one-way street to $10 per hour job. If we get into those jobs, we will not get out.

KlangFool

why3not
Posts: 187
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by why3not » Wed Jun 07, 2017 7:27 am

I confess I haven't read the entire thread, but when I consider my worst case (ie: being involuntarily unemployed for life), I usually include a scenario where I sell my house and move from my HCOLA to a LCOLA.

I can sell my house, move about 30 miles inland and use the built up equity in my current home to buy a house way beyond my minimum needs in cash while decreasing my "basic life costs" by about $3k/month (getting rid of the mortgage is on top of that). If I moved back to where my wife and I grew up, a 1.5% withdrawal rate is in excess of what my parents get monthly from SSI & pension.

This isn't palatable right now due to lifestyle changes I don't wish to make. It is easier to consider once the kids are out of the nest. Not sure it makes a difference in your life, but it sure does in mine. If I were willing to make these changes, I would consider myself FI. I'm not, so I don't. But it is there as a worst-case, fall-back position which seems to be what you are considering.

tampaite
Posts: 476
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by tampaite » Wed Jun 07, 2017 7:46 am

spammagnet wrote:
tampaite wrote:Average life expectancy in US is 78 years ...
According to the Social Security administration, once you get to retirement age range, life expectancy is in the mid-80's. That doesn't invalidate your statement but does revise the target a bit.

SSA Actuarial Life Table (2013)

Code: Select all

Age	Life Expectancy
   	(rounded)
0 	81
45	38
55	29
65	20
Am not sure how SSA actuarial got the numbers but I think SSA would likely be biased. After all, if they show you'll die sooner, you'll more likely to collect sooner than later.

jjface
Posts: 2568
Joined: Thu Mar 19, 2015 6:18 pm

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

Post by jjface » Wed Jun 07, 2017 8:00 am

tampaite wrote:
spammagnet wrote:
tampaite wrote:Average life expectancy in US is 78 years ...
According to the Social Security administration, once you get to retirement age range, life expectancy is in the mid-80's. That doesn't invalidate your statement but does revise the target a bit.

SSA Actuarial Life Table (2013)

Code: Select all

Age	Life Expectancy
   	(rounded)
0 	81
45	38
55	29
65	20
Am not sure how SSA actuarial got the numbers but I think SSA would likely be biased. After all, if they show you'll die sooner, you'll more likely to collect sooner than later.
The above shows the remaining life. The expected age of death is increasing as one would expect to happen the older you are.

goblue100
Posts: 672
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by goblue100 » Wed Jun 07, 2017 9:13 am

jjface wrote:
The above shows the remaining life. The expected age of death is increasing as one would expect to happen the older you are.
Yes, 80 year olds don't like to be told their life expectancy is 78. :D
Can't take it with you when you're gone | But I want enough to get there on - Rollin with the flow - Jerry Hayes

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

Post by jjface » Wed Jun 07, 2017 10:09 am

goblue100 wrote:
jjface wrote:
The above shows the remaining life. The expected age of death is increasing as one would expect to happen the older you are.
Yes, 80 year olds don't like to be told their life expectancy is 78. :D
I don't know that sounds pretty good - sounds like you've won the game. Better than being told I am expected to only have a few years left to live!

bhsince87
Posts: 1823
Joined: Thu Oct 03, 2013 1:08 pm

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

Post by bhsince87 » Wed Jun 07, 2017 10:33 am

KlangFool wrote:Folks,

Non-IT job for $10 per hour. Okay. I believe this deserve a proper response and it may be useful for others when they face this kind of situation.

Unless I want to abandon the IT field totally when I am unemployed,

A) I have to look for job

B) I have to study and keep up-to-date with the latest technology and events

C) I have to explore and move into a different IT field if necessary

So, where and how can I find time to keep a $10 per hour job?

Furthermore, I did find some contract work at $60 to $100 per hour. I earned 10K to 15K from those work while I am free to do (A) to (C).

In summary, for some of us, it is a one-way street to $10 per hour job. If we get into those jobs, we will not get out.

KlangFool
Yes, I understand completely. I'm in engineering, and it's the same way.

But the point I was trying to make (but failed) is that you don't need to study anymore or look for a job in IT. You could essentially "retire" from the IT field. You don't really need "IT wages" anymore. Just something to give you some extra breathing room by for a few years.

I was thinking of a friend who was early-outed from his engineering job over 10 years ago. He was making $80k at the time. He took a temporary job cutting meat in a grocery store chain. He actually enjoyed it. After a year or so, the store put him in charge of maintaining equipment at all of their local stores. He didn't like that as much, so he went back to cutting meat full time. I think he's still doing that.

In the meantime, his retirement savings have continued to compound because he hasn't needed to tap into them. It seems like your situation is very similar.
Retirement: When you reach a point where you have enough. Or when you've had enough.

hoops777
Posts: 2312
Joined: Sun Apr 10, 2011 12:23 pm

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

Post by hoops777 » Wed Jun 07, 2017 10:51 am

It is human nature to rationalize when you do not want to do something :D
K.I.S.S........so easy to say so difficult to do.

KlangFool
Posts: 10203
Joined: Sat Oct 11, 2008 12:35 pm

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

Post by KlangFool » Wed Jun 07, 2017 11:09 am

bhsince87 wrote:
KlangFool wrote:Folks,

Non-IT job for $10 per hour. Okay. I believe this deserve a proper response and it may be useful for others when they face this kind of situation.

Unless I want to abandon the IT field totally when I am unemployed,

A) I have to look for job

B) I have to study and keep up-to-date with the latest technology and events

C) I have to explore and move into a different IT field if necessary

So, where and how can I find time to keep a $10 per hour job?

Furthermore, I did find some contract work at $60 to $100 per hour. I earned 10K to 15K from those work while I am free to do (A) to (C).

In summary, for some of us, it is a one-way street to $10 per hour job. If we get into those jobs, we will not get out.

KlangFool
Yes, I understand completely. I'm in engineering, and it's the same way.

But the point I was trying to make (but failed) is that you don't need to study anymore or look for a job in IT. You could essentially "retire" from the IT field. You don't really need "IT wages" anymore. Just something to give you some extra breathing room by for a few years.

I was thinking of a friend who was early-outed from his engineering job over 10 years ago. He was making $80k at the time. He took a temporary job cutting meat in a grocery store chain. He actually enjoyed it. After a year or so, the store put him in charge of maintaining equipment at all of their local stores. He didn't like that as much, so he went back to cutting meat full time. I think he's still doing that.

In the meantime, his retirement savings have continued to compound because he hasn't needed to tap into them. It seems like your situation is very similar.
bhsince87,

1) My wife is working on one of those $10 per hour job making 15K to 20K per year.

2) My son and daughter is working 30 hours per week during summer and maybe 10 hours per week during Fall and Spring semester. The plan is if I am employed and my portfolio is doing well, they get to keep their money and I will contribute to their Roth IRAs. If I am unemployed and need extra money, they need to use their income to cover some part of their college expenses. And, each one of them has about 10K to 20K of their own savings to cover any shortfall.

3) So, in my case, there are at least 3 persons in the household working on $10 per hour job. We do not need another one. It makes more financial sense for me to get a good paying job/contract or do nothing.

KlangFool

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

Post by keystone » Wed Jun 07, 2017 12:12 pm

KlangFool wrote:
3) So, in my case, there are at least 3 persons in the household working on $10 per hour job. We do not need another one. It makes more financial sense for me to get a good paying job/contract or do nothing.
Yes, but by your own admission you could be unemployed for a very long period of time in IT. If you get to the point where you lose your current job and are almost ready to retire financially but not quite, maybe the simplest and most stress free option is to find a $10 per hour job outside of IT to minimize the portfolio withdrawals.

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

Post by KlangFool » Wed Jun 07, 2017 12:20 pm

keystone wrote:
KlangFool wrote:
3) So, in my case, there are at least 3 persons in the household working on $10 per hour job. We do not need another one. It makes more financial sense for me to get a good paying job/contract or do nothing.
Yes, but by your own admission you could be unemployed for a very long period of time in IT. If you get to the point where you lose your current job and are almost ready to retire financially but not quite, maybe the simplest and most stress free option is to find a $10 per hour job outside of IT to minimize the portfolio withdrawals.
keystone,

Sorry for not getting straight to the point.

1) With 3 persons in the household working at $10 per hour, I have enough income plus emergency fund to cover the income gap for about 2 to 3 years.

2) After 3 years, my son and daughter are graduated. If they find employment and willing to share household expense, I will stay at my current house since they could cover the gap.

3) If they could not cover the gap, I would rather sell the house move to a lower cost area either in the Virginia or somewhere else.

4) Or after 3 years, my portfolio's size grew to a point that it is no longer an issue.

5) Fundamentally, I do not see a reason to stay at this high cost of living area with a $10 per hour job.

KlangFool

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

Post by hoops777 » Wed Jun 07, 2017 12:40 pm

KF.
See how great this forum is.You just performed a great mental exercise with countless feedback from smart people and answered your questions and reaffirmed your beliefs.If you had put your last 2 posts at the beginning about your wife and kids jobs it would have eliminated a lot of posts but you definitely have your answers.Best of luck to you.
K.I.S.S........so easy to say so difficult to do.

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

Post by KlangFool » Wed Jun 07, 2017 12:44 pm

hoops777 wrote:KF.
See how great this forum is.You just performed a great mental exercise with countless feedback from smart people and answered your questions and reaffirmed your beliefs.If you had put your last 2 posts at the beginning about your wife and kids jobs it would have eliminated a lot of posts but you definitely have your answers.Best of luck to you.
hoops777,

Yes. But, I would like to know whether I need to count on those jobs in order for the numbers to work out.

KlangFool

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

Post by knpstr » Wed Jun 07, 2017 1:26 pm

KlangFool wrote:Yes. But, I would like to know whether I need to count on those jobs in order for the numbers to work out.
I honestly don't mean to be rude, but why can't you figure this out on your own? No one here can give you any kind of guarantee, it is just their opinion.
we would like to know if we are forced to retire earlier whether we can survive.
None of us know any better than you. We can give you our opinions on your situation but that really doesn't mean anything. The boglehead stamp of approval doesn't mean you can survive.

Bottom Line: I think human adaptability will make it so you can survive. With $1,000,000+ I trust you could find a way if you needed, whatever that entails.
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius

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

Post by hoops777 » Wed Jun 07, 2017 1:52 pm

KF you know the answer by now.There is no 100 pct certainty when you are borderline in terms of assets and you are subject to depending on the stock market to be your friend.
K.I.S.S........so easy to say so difficult to do.

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

Post by KlangFool » Wed Jun 07, 2017 2:04 pm

knpstr wrote:
KlangFool wrote:Yes. But, I would like to know whether I need to count on those jobs in order for the numbers to work out.
I honestly don't mean to be rude, but why can't you figure this out on your own? No one here can give you any kind of guarantee, it is just their opinion.
knpstr,

Honestly, this had been useful to me. It is hard to be critical to your own belief and thinking. It takes someone else to challenge my own unstated assumptions. For example, in the back of my mind, I always assume that implicitly that the kids will live with us and share the household expenses. This is part and parcel of the Asian culture.

KlangFool

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

Post by nanosour » Wed Jun 07, 2017 3:34 pm

This has been an interesting read. I retired 4 years ago at age 49 with 3 children at home ages 10, 11, 14. The first is heading off to college in the fall. I left at the peak of my career pulling in north of 200K with a 38K gov't pension and roughly 750K in cash assets split 50/50 taxable/tax-advantaged.

In the 4 years we've spent 66k/year and the assets have grown to 900k, so it's been pretty good, and hopefully we're past the sequence of returns pitfall. If I was to give you any advice, it would be to throw down a couple hundred bucks on ESPlanner (or something similar) and spend a month getting to know how it works. It was crucial to my decision to pull the plug.

Good luck and remember it's your own happiness that matters and not what others think. Forgive my preachiness :sharebeer

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

Post by KlangFool » Wed Jun 07, 2017 3:54 pm

nanosour wrote:This has been an interesting read. I retired 4 years ago at age 49 with 3 children at home ages 10, 11, 14. The first is heading off to college in the fall. I left at the peak of my career pulling in north of 200K with a 38K gov't pension and roughly 750K in cash assets split 50/50 taxable/tax-advantaged.

In the 4 years we've spent 66k/year and the assets have grown to 900k, so it's been pretty good, and hopefully we're past the sequence of returns pitfall. If I was to give you any advice, it would be to throw down a couple hundred bucks on ESPlanner (or something similar) and spend a month getting to know how it works. It was crucial to my decision to pull the plug.

Good luck and remember it's your own happiness that matters and not what others think. Forgive my preachiness :sharebeer
Thank you for your post.

KlangFool

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

Post by HomerJ » Wed Jun 07, 2017 4:45 pm

KlangFool wrote:For example, in the back of my mind, I always assume that implicitly that the kids will live with us and share the household expenses. This is part and parcel of the Asian culture.
You don't live in Asia anymore.

But it's a non-issue. If they don't live with you, then you are free to downsize to a cheaper house. Either way, the numbers will work.

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

Post by KlangFool » Wed Jun 07, 2017 5:05 pm

HomerJ wrote:
KlangFool wrote:For example, in the back of my mind, I always assume that implicitly that the kids will live with us and share the household expenses. This is part and parcel of the Asian culture.
You don't live in Asia anymore.

But it's a non-issue. If they don't live with you, then you are free to downsize to a cheaper house. Either way, the numbers will work.
HomerJ,

You are right.

KlangFool

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

Post by Leemiller » Wed Jun 07, 2017 5:17 pm

I don't see why making $10 is the goal here. If income is the goal plenty of jobs pay more than $10 an hour. A nanny/ babysitter can earn from 15-25 for instance. Unless the job for your kids is related to their career paths, $10 is low.

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

Post by Traveler » Wed Jun 07, 2017 6:24 pm

You have plenty of options. If you can't retire even right now, how do people do it at 62 with only social security? And there are plenty who manage with only that. I'm concerned that in due time, those of us who have been responsible, lived below our means, saved accordingly and invested wisely, will be asked to help those who didn't have as much or didn't care about the future and squandered every penny they made. I don't have sympathy for any of them, but fear what their carelessness will do to the rest of us.

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

Post by bhsince87 » Wed Jun 07, 2017 9:44 pm

If there would be no benefit to you working a $10 an hour job, then you have your answer: your "worst case forced retirement scenario" would not be a problem!

You have plans A, B, C, D, E and beyond already thought out, and they all sound reasonable and likely to succeed.

You have planned ahead, sacrificed, and worked hard. The next few years might not be what you hoped for in an ideal case, but it sounds like smooth sailing nonetheless.

Congratulations! Relax and sleep well.
Retirement: When you reach a point where you have enough. Or when you've had enough.

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

Post by KlangFool » Thu Jun 08, 2017 7:34 am

Leemiller wrote:I don't see why making $10 is the goal here. If income is the goal plenty of jobs pay more than $10 an hour. A nanny/ babysitter can earn from 15-25 for instance. Unless the job for your kids is related to their career paths, $10 is low.
Leemiller,

1) My daughter is working in the Art business. She is an Art major.

2) My son is working on an engineering research project at the college. His major is in the Mechanical Engineering.

KlangFool

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

Post by KlangFool » Thu Jun 08, 2017 7:46 am

Traveler wrote:You have plenty of options. If you can't retire even right now, how do people do it at 62 with only social security? And there are plenty who manage with only that. I'm concerned that in due time, those of us who have been responsible, lived below our means, saved accordingly and invested wisely, will be asked to help those who didn't have as much or didn't care about the future and squandered every penny they made. I don't have sympathy for any of them, but fear what their carelessness will do to the rest of us.
Traveler,

I am a prepper. If I am worried enough about something, I will plan and prepared for it. I always ask what I "Can Do" to make my odds better. I am not willing to accept "Nothing" as the answer.

1) I kept some gold jewelry. Protect me from total collapse.

2) I donate money to the food bank. Help others so that we would not get to that stage.

3) Some folks go to the extreme of keeping some portion of their IRAs as physical gold coins.

KlangFool
Last edited by KlangFool on Thu Jun 08, 2017 8:22 am, edited 1 time in total.

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

Post by KlangFool » Thu Jun 08, 2017 7:47 am

bhsince87 wrote:If there would be no benefit to you working a $10 an hour job, then you have your answer: your "worst case forced retirement scenario" would not be a problem!

You have plans A, B, C, D, E and beyond already thought out, and they all sound reasonable and likely to succeed.

You have planned ahead, sacrificed, and worked hard. The next few years might not be what you hoped for in an ideal case, but it sounds like smooth sailing nonetheless.

Congratulations! Relax and sleep well.
bhsince87,

Thanks.

KlangFool

goblue100
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by goblue100 » Thu Jun 08, 2017 8:48 am

nanosour wrote:This has been an interesting read. I retired 4 years ago at age 49 with 3 children at home ages 10, 11, 14. The first is heading off to college in the fall. I left at the peak of my career pulling in north of 200K with a 38K gov't pension and roughly 750K in cash assets split 50/50 taxable/tax-advantaged.
It's been an interesting read for me as well, as my situation and KF's are somewhat similar. I am a couple of years older, have close to the same portfolio, and am in a technical job for a company whose technology is slowly being superseded by the internet. My plan is to work here until they lay me off. We lose one or two a year, and there are only 10 of us left in my department. I waffle between many of the thoughts in this thread. I've thought if they laid me off I could find a simple bridge job, but then I think if I'm going to work why not make as much as possible? I probably have enough money, but what if there is really bad market for a couple of years, or even longer? Worst fear for me is health insurance until medicare kicks in. I'm curious what the poster above does for health insurance?
Can't take it with you when you're gone | But I want enough to get there on - Rollin with the flow - Jerry Hayes

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

Post by KlangFool » Thu Jun 08, 2017 8:59 am

goblue100 wrote:
nanosour wrote:This has been an interesting read. I retired 4 years ago at age 49 with 3 children at home ages 10, 11, 14. The first is heading off to college in the fall. I left at the peak of my career pulling in north of 200K with a 38K gov't pension and roughly 750K in cash assets split 50/50 taxable/tax-advantaged.
It's been an interesting read for me as well, as my situation and KF's are somewhat similar. I am a couple of years older, have close to the same portfolio, and am in a technical job for a company whose technology is slowly being superseded by the internet. My plan is to work here until they lay me off. We lose one or two a year, and there are only 10 of us left in my department. I waffle between many of the thoughts in this thread. I've thought if they laid me off I could find a simple bridge job, but then I think if I'm going to work why not make as much as possible? I probably have enough money, but what if there is really bad market for a couple of years, or even longer? Worst fear for me is health insurance until medicare kicks in. I'm curious what the poster above does for health insurance?
goblue100,

1) If I survive long enough in this job (57/58), I qualify for retiree health care coverage. This is 3 to 4 years from now. But, this is a very long shot. I know that I can last this year. As for next year?

2) If and when I am laid off, I get 18 months of COBRA coverage.

3) My wife is applying to be a substitute teacher at the local school. Their health benefit might be good.

4) The ACA medical plan in my area is affordable. But, it may or may not be around when I am laid off.

5) The healthcare cost at my home country is low and the health care quality is good enough. This will be the last ditch option.

I am exploring all options. No final answer yet.

KlangFool

P.S.: I am glad that this thread is useful to others too.

goblue100
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by goblue100 » Thu Jun 08, 2017 10:37 am

For me, when I'm laid off it is 12 weeks severance and insurance. I can cobra, but I believe it is cost prohibitive. My wife is same age as me, and is ready to ditch her job. So health insurance is the big unknown for me. Still, I think I have at least two more years of employment which leaves me 5'ish years to bridge. That should be do-able, especially with no stock market upset.
Can't take it with you when you're gone | But I want enough to get there on - Rollin with the flow - Jerry Hayes

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