When did you realize it wasn't enough?

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tampaite
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When did you realize it wasn't enough?

Post by tampaite » Sun May 12, 2019 9:23 pm

Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?

Regattamom
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Re: When did you realize it wasn't enough?

Post by Regattamom » Sun May 12, 2019 9:32 pm

We are on target, but if something happens (which is always a possibility) we would:

1. Not panic
2. Work Longer
3. Cutback
4. seems the same as number 3 to me
5. I would go back to work
6. not start a business

KlangFool
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Re: When did you realize it wasn't enough?

Post by KlangFool » Sun May 12, 2019 9:51 pm

OP,

1) I have plan A, B, C, D, and so on depending on how long my job last. Given that I had no job security over the last 10+ years. It will be enough whenever my job ends.

2) I save 1 year of expense every year. Saving more is not going to matter in my case. It won't move the number by much when my portfolio is at 20 times my current annual expense.

3) I always plan for my job to end the current year. Aka, I would be permanently unemployed next year. This is the only way that I can "Sleep Well At Night" (SWAN).

KlangFool

3504PIR
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Re: When did you realize it wasn't enough?

Post by 3504PIR » Sun May 12, 2019 10:07 pm

I retired from the Army in 2008 the week before the market meltdown really started, but after the fall of the real estate market had already started to kick in. I was lucky to get a check for $26,000 after the sale of my home, which would have been about $200,000 the year before. I wasn’t expecting to sell the home at all and changed course on my post military career with that thought in my head. I originally took a job in the Midwest and our home for sale was in Florida. Long story short, we decided we’d lived long enough with me deployed or away from home and didn’t want to continue that into retirement with me renting a small room in the Midwest and my family in the home in Florida, so I took a job in Europe which would cover all living expenses including rent, so worst case scenario we could leave the home in Florida on the market indefinitely and be together as a family.

We arrived in Europe in 2008 with about a $40,000 net worth including the check for $26k, but we arrived as a family. I was 46 years old then and did some serious soul searching about retirement. I came up with a 10 year plan to get into a situation where we could then begin to see a light at the end of the tunnel and make any final adjustments to meet our goal. I turned 56 last week and begin retirement leave at the end of this month. Our time in Europe without having any living expenses, and no longer having any debt allowed us to save about 80% of our total net income and still live very well. I consider us very fortunate that the sequence of events pushed us into a serious look at ourselves.

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fortfun
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Re: When did you realize it wasn't enough?

Post by fortfun » Sun May 12, 2019 10:15 pm

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?
3 years ago at ages 42 & 44. Thanks in part to this forum.

Following year started save 33% of salary.
Next year 40% of salary.
This year started saving 50% of salary.
Best case scenario, work 4 more years. Worst case scenario work 7 more years (53 &55).
Have cut back on stupid stuff (cable, junk from Amazon, Target, etc.)
Fully funding vacations, in large part with credit card churning bonuses.
Began renting our basement out 2 year ago.
Will have a pension after 30 years of teaching (hopefully, this will cover most living expenses).

SoAnyway
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Re: When did you realize it wasn't enough?

Post by SoAnyway » Sun May 12, 2019 10:30 pm

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60) Sometime in my late 20s. (I'm early 50s now.)
Also:
1. Did you panic? No. I recognized I had a loooonng time horizon....
2. Decided to work until however longer you can? No. Just kept pluggin' away.
3. Cutback on your lifestyle drastically? No. Being the child of a Depression baby, I was already frugal.
4. Or turbo charged savings?(basically turn more frugal) Not really (see above re. frugal lifestyle), but back then I invested a lot of time in (1) getting a whole lot smarter about tax-free and tax-deferred savings (Roth/401k), and (2) once student loan debt was paid off and after a couple missteps founded in youthful arrogance, I accepted the fact that smart as I thought I was, I wasn't going to beat/time the market so I simply focused on lowering investment fees on a well-diversified portfolio of index funds. (THANK YOU, MR. BOGLE! RIP....).
5. Changed jobs that paid significantly higher? No. I was already being paid at the top of the pay scale for my field.
6. Started a new business? No. That came later after I got a bit more sophisticated about the tax code, and was financially secure enough to bear the risks of self-employment.
OP, please see my responses above.
With all due respect, since you've only put out a questionnaire without any sharing of info of your personal situation, it's hard to know how we can help you, not to mention a probable violation of forum rules - I'll let the mods decide that one...

SoAnyway, my point: The more detail you provide about your own situation - without any info that would reveal your identity, of course - the more the collective wisdom here - and it's substantial(!), not to mention free - can help you.

I'll go out on a limb and offer this: If you yourself are in your late 40s to late 50s and have recently realized that the current amount of money you're saving won't be enough when you intend to retire (say at 60), OP, it's NEVER too late to get started. Seriously. This board is full of such posts and tons of helpful (non-judgy) guidance to those who suddenly made the realization you speak of in their 40s/50s. The key is to START. I doubt that anyone here would recommend a "head in the sand" approach.... Help us help you!
Last edited by SoAnyway on Sun May 12, 2019 10:41 pm, edited 1 time in total.
Nothing in this post constitutes legal or medical advice. | Consult your attorney or physician to verify if/how anything stated might or might not be applicable to your specific situation.

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Raybo
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Re: When did you realize it wasn't enough?

Post by Raybo » Sun May 12, 2019 10:39 pm

I was in a support business that cratered after the 2000 tech wreck. I was 47 and decided to retire. Soon thereafter, I discovered the Bogleheads forum at Morningstar and realized I didn’t have enough for the length of retirement I was planning. So, after some planning, I sold my paid for house and moved in with my now wife. The proceeds of that sale gave me enough to feel comfortable about my SWR. I haven’t worried since.
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

SantaClaraSurfer
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Re: When did you realize it wasn't enough?

Post by SantaClaraSurfer » Mon May 13, 2019 12:38 am

We were in debt, and decided to move steadily towards increasing income. It worked.

There was a key moment when we realized that we could do it, and we pushed forward and stretched to repay a 401(k) loan when one of us took a new job and was forced to choose or lose. That decision (repay, save more based on new income, increase savings rate), looking back, was crucial for us.

Back when I had much less income, I knew many folks who came to that realization about retirement after the fact. One thing that I thought of, when I was single and looking at how my older friends handled being low income in retirement, was to purchase a set amount of savings bonds per month to create a small supplemental income stream stretching forward. It's not a horrible idea.

It seemed to me that it was the folks who "just didn't want to look at it" and didn't subsequently do anything concrete, even if small, who later found that what they wanted the most was just having some extra cash for the small niceties (going to a cafe, a meal out with friends).

carolinaman
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Re: When did you realize it wasn't enough?

Post by carolinaman » Mon May 13, 2019 6:47 am

I have been retired for 8+ years. I never saved much for retirement until late 40s. Prior to that our focus was eliminating all debt, getting kids through school, paying for a wedding, etc. Fortunately, savings plus pension and SS are more than adequate. I have always planned conservatively to allow for the unexpected. I never had to deal with your issue, but there are only so many things you can do when your realize you do not have enough and others have cited those choices.

One of the keys to retirement planning is to do it early enough in your career so that if you realize you do not have enough, you can more easily make mid course adjustments. The adjustment choices are more painful for people who realize they do not have enough late in their career.

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Re: When did you realize it wasn't enough?

Post by abuss368 » Mon May 13, 2019 7:22 am

Regattamom wrote:
Sun May 12, 2019 9:32 pm
We are on target, but if something happens (which is always a possibility) we would:

1. Not panic
2. Work Longer
3. Cutback
4. seems the same as number 3 to me
5. I would go back to work
6. not start a business
Agreed and well said.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Watty
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Re: When did you realize it wasn't enough?

Post by Watty » Mon May 13, 2019 8:06 am

tampaite wrote:
Sun May 12, 2019 9:23 pm
3. Cutback on your lifestyle drastically?
I would not call it drastic but I was in late 40s when the 2008 financial crisis hit so I increased my savings percentage by maybe 5 to 10 percent to help make up the hit my 401k had taken.

"Enough" is sort of a tricky word. Compared to many of the posters here I am pretty middle class but I have always planned on having more than "enough" retirement money so that if there shortfall I will still have "enough".

The Wizard
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Re: When did you realize it wasn't enough?

Post by The Wizard » Mon May 13, 2019 8:20 am

I retired at 63 in 2013.
Thinking back two decades to age 50, I don't think any of the OP's questions were on my list.
I had started saving for retirement with my first employment at age 23, so at age 50 I was in decent shape financially but not close to retiring yet.

In 2007 at my age 57, my youngest finished college, so I was able to increase my retirement savings a chunk while still spending a decent amount on vehicles and vacation travel.

I looked at it as a journey. Think of a 400-mile car trip with the kid in the back seat: Are we there yet?
I got there in due course just fine...
Attempted new signature...

THY4373
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Re: When did you realize it wasn't enough?

Post by THY4373 » Mon May 13, 2019 9:29 am

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?

I have a lot saved but what has changed is my desire to retire earlier so in that sense I have not enough. My divorce also led to a slightly later retirement date not because I lost money compared to being single my whole life but because ex made what I made so we had basically twice the assets as either of us individually. Since two can live nearly as cheaply as one that would have made both of our retirement dates sooner.

1. No panic I am better off than 99% of the folks out there. If I were to lose my job I could probably worst case "barista FI" and take a lower paying job to cover my living expenses and hopefully provide health insurance while I let the miracle of compounding work on my savings.
2. For the moment yes. I'll still likely retire pretty early but it will likely be about five years from now.
3. Post divorce I did cut back my lifestyle to save more but honestly it doesn't make much difference to when I can retire. I save about 40% of my income which is about 1-1.25x my current spend (not counting son's private school which won't be around when I retire).
4. Really same answer as above. I save 40% of my income but I have so much saved that the market overwhelms my additions. At this point it is more a waiting game especially because we are probably "overdue" for a correction so I'd rather that be behind us before I retire.
5. No I make good money and I have even avoided taking on higher level jobs at work because unless I got some crazy raise it wouldn't make much difference as to when I could retire.
6. This could make a difference (I have a friend who does very well with a side business) but my issue is my employer has issues with outside business and employment and I need to focus the next few years on getting my son into college. So this doesn't seem to be a great time to start business.

DrGoogle2017
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Re: When did you realize it wasn't enough?

Post by DrGoogle2017 » Mon May 13, 2019 9:45 am

I never worried about not having enough because my family survived in the Bay Area on $25k(2003) plus mortgage payment. Nobody noticed any problem. Even today my kids told us they were not aware of it. We vacationed, the kids had dance and music lessons. We ate well. We paid for our own health insurance even. Once you have a control of your expense, you can retire.
I could retire 20 minutes from where I am with 20% less in housing. So there’s a lot of slacks to manage.

wolf359
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Re: When did you realize it wasn't enough?

Post by wolf359 » Mon May 13, 2019 10:48 am

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?
You and I seem to have very different worldviews. I am presuming that you are defining "enough" as the minimum amount of money that you need to meet a goal.

I define "enough" as meaning I've met all my material goals and don't need any more.

Your variables are how much you earn, how much you save, how long you save, and what risks you take.

Stephen Covey has an excellent book called, "The Seven Habits of Highly Effective People." In it, he discusses the concept of "Circle of Concern," which is everything that matters to you, and "Circle of Control," which are the things that you have influence over.

1. Did you panic? (This is under your control.)
2. Decided to work until however longer you can? (The decision is under your control. Whether or not you can get a job, how much it pays, and whether or not it is even in your current field is under someone else's control. You may very well be unemployable depending on age and career choice.)
3. Cutback on your lifestyle drastically? (This is under your control.) (I view this as lowering your lifestyle expectations permanently.)
4. Or turbo charged savings?(basically turn more frugal) (This is under your control.) (I view this as lowering your lifestyle expectations during the accumulation stage, but not permanently. For example, I may be willing to cut back to meet a goal, but not for the rest of my life.)
5. Changed jobs that paid significantly higher? (Trying to change careers is a choice. Being able to actually do so may be under someone else's control.)
6. Started a new business? (The decision, skills, and effort are under your control. The results depend upon many external factors.)

You may just need to adjust:
1) The amount of money you have to live on. You will ALWAYS have the ability to retire. People live on less than you do all the time. Just like you can always find someone with MORE to be envious of, you can also always find someone with LESS, who is envious of YOU. What you want to avoid is a "Cliff retirement," in which your high income paycheck-to-paycheck lifestyle is severely reduced.
2) Whether or not you need to work or have an income stream in retirement.
3) When you retire. 60 is early. Is it really the end of the world if you have to wait until 61? Or 62?

Create a plan for what you would have to do if you were forced to retire right now, based on your current level of assets. (This is my job loss plan).
Create a plan for what you would have to do if you were forced to retire right now, based on half your current level of assets. (This is my 2008/Great Depression plan, where assets are cut in half AND you lose your job.)
Create a plan for your ideal retirement. (This is your planned retirement. It's the most flexible, because you can always adjust the amount and the age.)
Create a plan for a minimum acceptable retirement. (This is a fall-back plan.)
Create a plan for abundance. (This is "enough." Anything more and I'm working for the sake of working. There's nothing wrong with this; I know people who are working for the pure pleasure. I also know people who would never reach this level. The idea is to limit One More Year (OMY) syndrome, where you can no longer use the excuse that you're just increasing the safety margins.

If you then rank these plans in order of desirability, you now have Plans A, B, C, D, etc.

Godot
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Re: When did you realize it wasn't enough?

Post by Godot » Mon May 13, 2019 11:51 am

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?
All of the above except 5 & 6. Not sure how many people actually have the luxury of finding higher paying jobs in their late 50s.
“Estragon: I can't go on like this. | Vladimir: That's what you think.” ― Samuel Beckett, Waiting for Godot

Cody6136
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Re: When did you realize it wasn't enough?

Post by Cody6136 » Mon May 13, 2019 12:03 pm

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?

*Initial panic...laid bare for all those who follow this board
*Decided to lengthen employ-- already had this in mind but now see this as much more fraught.
*Hard to cut back any further -- frugality to extreme frugality
*Turbo'd
*Got a 20k raise at 55 years of age, pretty proud/happy about that
*Started a "side hustle" which has been more trouble than it is worth.

Thanks for starting this thread. I'm a runner - quite a slow one-- and sometimes my race times make me discouraged when I compare them to others at the front of the pack, but then I think about the folks at home on their couches. This is my analogy about my financial life. I'm plodding along but I'm better off than some of my leveraged, financially illiterate friends. And every day I learn more.

Maybe, in the end, it WILL be enough.

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HomerJ
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Re: When did you realize it wasn't enough?

Post by HomerJ » Mon May 13, 2019 12:07 pm

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?
3-4 are the wise choices. 5 too, if possible.

Don't depend on 2. It's not always up to you how long you can work.

1 won't help.
The J stands for Jay

Topic Author
tampaite
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Re: When did you realize it wasn't enough?

Post by tampaite » Mon May 13, 2019 1:43 pm

Morning all. Lots of interesting replies from everyone here. Thanks for sharing your thoughts and am hoping this will help others as well.

I don't know what "enough" is - so everyone decides what's "enough", it could be 500k, 1M or 2M, upto you.

My own situation: coasting right now. Although, when I tend to compare(which i shouldn't but will come to it in a bit) against my age group and where we need to be, we are behind the curve(prioritized paying down mortage vs contributing max into 401k an example).
Now, if am comparing to how we were doing in the past, we are savings a little more than the year before so I feel we are on-track but if there is a life altering event such as a job loss etc then again, it's a set-back to our plans.

It's easy to fall for comparison when read-up on this board how others are making or earning lot higher or lower. it's beneficial to compare against yourself as in, I make $10 in a year and am saving $4 a year and this gives you a good brushmark to paint yourself year over year as opposed to total networth against your peer group.

we all panic and it's a good thing except hopefully you don't make a rash decision.

I understand changing jobs in late 40s or 50s is not an option for some and starting business but you gotta make hard choicess but I wanted to hear from others what choices they made and hopefully that'll be a motivation for someone in the same situation.

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Phineas J. Whoopee
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Re: When did you realize it wasn't enough?

Post by Phineas J. Whoopee » Mon May 13, 2019 3:36 pm

I was acutely aware it wasn't enough from the outset.

Not to get all biblical referential here, but I had a series of lean years, followed by a series of fat years, followed by a series of lean years, followed again by a series of fat years, and then finally lean years again but by that time the asset base made it less important.

I like to think I would have behaved reasonably rationally anyway, but looking back, despite my personal discomfort at the time it can't have hurt that the first series of years were very lean indeed. By the time the first series of fat years began I was deep in school debt. I kept living like a starving student (except for a suitable business wardrobe) until I had paid it all off. Then I devoted what I had been repaying to saving and investing.

Today, I believe it probably is enough. I've stress tested it, trying to find a non-extreme way to break it, with zero real long-term return, a twenty five percent reduction in social security retirement benefits, and just for fun a one-time fifty percent permanent drop in equities. They fall once, then resume their more usual behavior but from the lower base.

My plan survives all of that happening simultaneously.

Most likely my results will be higher, and my social security, if it's reduced at all, will go down by less than a quarter of what the formulas say. Should that constellation of events happen I'll be able to increase my spending if I want to, but at this early date I'm not ready to assume it will.

PJW

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Re: When did you realize it wasn't enough?

Post by KlangFool » Mon May 13, 2019 3:47 pm

tampaite wrote:
Mon May 13, 2019 1:43 pm
Morning all. Lots of interesting replies from everyone here. Thanks for sharing your thoughts and am hoping this will help others as well.

I don't know what "enough" is - so everyone decides what's "enough", it could be 500k, 1M or 2M, upto you.
tampaite,

<<I don't know what "enough" is>>

I do not understand this statement.

A) If you do not know, won't it makes sense for you to find this out as soon as possible?

B) It is easy to know what "enough" is. It is 25 times your current annual expense. Unless and until you can calculate a better estimate, this is a good enough number to go by.

KlangFool

JBTX
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Re: When did you realize it wasn't enough?

Post by JBTX » Mon May 13, 2019 3:54 pm

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?
Never really. From day one I've always saved considerably. Now in 50s

I will say the last 2 years on this site have motivated to save even more.

obgraham
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Re: When did you realize it wasn't enough?

Post by obgraham » Mon May 13, 2019 4:04 pm

There are a few benefits that come with getting old.

One is the realization that we can, and once did, live a very active lifestyle on a whole lot less income than we have today. Even taking inflation into account. And as is often pointed out, millions of retirees survive on little more than their SS.

When I look at my Quicken check register, which goes back many years, I soon realize that massive amounts of expenditure could be eliminated if we really had to. We will survive on $5 wine rather than $20 wine. We can read library books instead of dumping cash into video and cable outfits that we hardly watch anyway. We can eat at home 95% of the time, instead of, say, 60%. I've got all the tools I'll ever need, so Lowe's can be a rare visit.

I'm not so sure the younger generations are in a position to make those cutbacks.

The real unknown, of course, is always health expenditures. It can and does mess up many people's planning.

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Phineas J. Whoopee
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Re: When did you realize it wasn't enough?

Post by Phineas J. Whoopee » Mon May 13, 2019 4:21 pm

KlangFool wrote:
Mon May 13, 2019 3:47 pm
tampaite wrote:
Mon May 13, 2019 1:43 pm
Morning all. Lots of interesting replies from everyone here. Thanks for sharing your thoughts and am hoping this will help others as well.

I don't know what "enough" is - so everyone decides what's "enough", it could be 500k, 1M or 2M, upto you.
tampaite,

<<I don't know what "enough" is>>

I do not understand this statement.

A) If you do not know, won't it makes sense for you to find this out as soon as possible?

B) It is easy to know what "enough" is. It is 25 times your current annual expense. Unless and until you can calculate a better estimate, this is a good enough number to go by.

KlangFool
I believe KlangFool is overly formulaic with his twenty five times advice he always gives to everybody under all circumstances. It might not be enough for some people. It might be more than enough for others. So far as I can tell it's based on the William Bengen study, which was strictly an empirical evaluation of past results. It's far better than having no guidance at all, but there's no reasoning behind it beyond an initial four percent subsequently adjusted annually for inflation would not have made the portfolio value negative in all the thirty-year periods examined by the study.

I'm not saying twenty five times expenses isn't a laudable goal. I am saying it isn't one size fits all. Individual circumstances, many of which can't be accurately predicted decades in advance, neither by you for yourself nor by KlangFool predicting them for you, matter.

PJW

KlangFool
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Re: When did you realize it wasn't enough?

Post by KlangFool » Mon May 13, 2019 4:34 pm

Phineas J. Whoopee wrote:
Mon May 13, 2019 4:21 pm
KlangFool wrote:
Mon May 13, 2019 3:47 pm
tampaite wrote:
Mon May 13, 2019 1:43 pm
Morning all. Lots of interesting replies from everyone here. Thanks for sharing your thoughts and am hoping this will help others as well.

I don't know what "enough" is - so everyone decides what's "enough", it could be 500k, 1M or 2M, upto you.
tampaite,

<<I don't know what "enough" is>>

I do not understand this statement.

A) If you do not know, won't it makes sense for you to find this out as soon as possible?

B) It is easy to know what "enough" is. It is 25 times your current annual expense. Unless and until you can calculate a better estimate, this is a good enough number to go by.

KlangFool
I believe KlangFool is overly formulaic with his twenty five times advice he always gives to everybody under all circumstances. It might not be enough for some people. It might be more than enough for others. So far as I can tell it's based on the William Bengen study, which was strictly an empirical evaluation of past results. It's far better than having no guidance at all, but there's no reasoning behind it beyond an initial four percent subsequently adjusted annually for inflation would not have made the portfolio value negative in all the thirty-year periods examined by the study.

I'm not saying twenty five times expenses isn't a laudable goal. I am saying it isn't one size fits all. Individual circumstances, many of which can't be accurately predicted decades in advance, neither by you yourself nor by KlangFool predicting them for you, matter.

PJW
PJW,

<<It might not be enough for some people. It might be more than enough for others. >>

For the uninitiated, It is a good number to start.

<<many of which can't be accurately predicted decades in advance, >>

To start with, many people do not know whether they have a few decades to go.

KlangFool

Topic Author
tampaite
Posts: 569
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Re: When did you realize it wasn't enough?

Post by tampaite » Wed May 15, 2019 8:58 am

KlangFool wrote:
Mon May 13, 2019 3:47 pm

B) It is easy to know what "enough" is. It is 25 times your current annual expense. Unless and until you can calculate a better estimate, this is a good enough number to go by.

KlangFool
I just want to leave what's "enough" for each of us to define since it will divert the topic. I mean if you are 30 and saved 25x annual expense you still are NOT ready to retire. However, if you are 85 and you have saved 25x annual expense then it's poor planning.

Calico
Posts: 320
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Re: When did you realize it wasn't enough?

Post by Calico » Wed May 15, 2019 9:21 am

I'm not going to have "enough." It's frustrating for me because I thought I did everything right. I started saving for retirement with my first job out of college. I maxed out my IRA (that's the only option I had at the time for retirement savings) and put saving first. I was frugal and careful with money.

I made a poor choice in in a husband though and let my emotions get the better of me and it nearly ruined everything for me. After 13 years of marriage he came out of the closet (he was using me basically to cover up during a time of don't ask, don't tell) and left me. I also learned he wracked up secret debt during this time too. Just like assets accumulated during marriage, you split debt too. I tend to say the divorce is what set me back, but really, it was the marriage that lead up to the divorce. The divorce just brought everything to light for me. I walked away a free woman, but with a lot of debt I didn't know existed, plus legal bills.

Then I made another poor choice: a financial advisor. I needed to get out of the hole and rebuild and I thought a professional would help me. He sold me annuities instead. Ugh.

I did make some good choices too. Reading Jack Bogle's book was one of them. I'm back on track now, just running later than before.

I figure I lost about 5-7 years total (meaning I need to work that much longer to make up for the losses). I thought I was on track to retire in my early 60s and now to have the same amount of money to retire on, I can't retire until I am 67. I am not counting SS at all though. This is the point where I can live off my investments alone.

I am pretty healthy. I just had a physical and I am in much better shape that others my age. I was told I have the health of someone 20 years younger and my doctor praised me for taking such good care of myself. So hopefully working until 67 will be easy for me. Maybe working will keep me busy, active, and mentally engaged. Besides, what am I going to do when I retire? My dream was originally to travel the world with my husband. I don't have a husband now. I have a boyfriend, but we don't plan to marry and he is 10 years older than me and has retirement plans of his own that sound like he won't be with me anymore once he retires. I don't mind doing some traveling on my own, but I think being alone takes some of the fun out of it so I doubt I will do as much when I retire, I plan to do more now instead, in my working years when I can bring my boyfriend or my daughter along with me.

So to answer your questions OP:

1. Did you panic? No
2. Decided to work until however longer you can? Yes
3. Cutback on your lifestyle drastically? No (interestingly enough, while I lived lean while digging myself out of divorce debt, I live better now than when I was married and save more too. I am better off financially single than married).
4. Or turbo charged savings?(basically turn more frugal) I was already pretty frugal although the divorce kicked a spendthrift to the curb, so that helped a lot.
5. Changed jobs that paid significantly higher? No. As a single mom, I needed work/life balance. Once my daughter if off to college, I hope to find a new and better paying job though.
6. Started a new business? This idea is interesting to me, but I don't know what I would do. And so many start-up business fail. I don't think I can take the risk at this point in my life.

mtmingus
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Re: When did you realize it wasn't enough?

Post by mtmingus » Wed May 15, 2019 11:30 am

wolf359 wrote:
Mon May 13, 2019 10:48 am
tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic?
2. Decided to work until however longer you can?
3. Cutback on your lifestyle drastically?
4. Or turbo charged savings?(basically turn more frugal)
5. Changed jobs that paid significantly higher?
6. Started a new business?
You and I seem to have very different worldviews. I am presuming that you are defining "enough" as the minimum amount of money that you need to meet a goal.

I define "enough" as meaning I've met all my material goals and don't need any more.

Your variables are how much you earn, how much you save, how long you save, and what risks you take.

Stephen Covey has an excellent book called, "The Seven Habits of Highly Effective People." In it, he discusses the concept of "Circle of Concern," which is everything that matters to you, and "Circle of Control," which are the things that you have influence over.

1. Did you panic? (This is under your control.)
2. Decided to work until however longer you can? (The decision is under your control. Whether or not you can get a job, how much it pays, and whether or not it is even in your current field is under someone else's control. You may very well be unemployable depending on age and career choice.)
3. Cutback on your lifestyle drastically? (This is under your control.) (I view this as lowering your lifestyle expectations permanently.)
4. Or turbo charged savings?(basically turn more frugal) (This is under your control.) (I view this as lowering your lifestyle expectations during the accumulation stage, but not permanently. For example, I may be willing to cut back to meet a goal, but not for the rest of my life.)
5. Changed jobs that paid significantly higher? (Trying to change careers is a choice. Being able to actually do so may be under someone else's control.)
6. Started a new business? (The decision, skills, and effort are under your control. The results depend upon many external factors.)

You may just need to adjust:
1) The amount of money you have to live on. You will ALWAYS have the ability to retire. People live on less than you do all the time. Just like you can always find someone with MORE to be envious of, you can also always find someone with LESS, who is envious of YOU. What you want to avoid is a "Cliff retirement," in which your high income paycheck-to-paycheck lifestyle is severely reduced.
2) Whether or not you need to work or have an income stream in retirement.
3) When you retire. 60 is early. Is it really the end of the world if you have to wait until 61? Or 62?

Create a plan for what you would have to do if you were forced to retire right now, based on your current level of assets. (This is my job loss plan).
Create a plan for what you would have to do if you were forced to retire right now, based on half your current level of assets. (This is my 2008/Great Depression plan, where assets are cut in half AND you lose your job.)
Create a plan for your ideal retirement. (This is your planned retirement. It's the most flexible, because you can always adjust the amount and the age.)
Create a plan for a minimum acceptable retirement. (This is a fall-back plan.)
Create a plan for abundance. (This is "enough." Anything more and I'm working for the sake of working. There's nothing wrong with this; I know people who are working for the pure pleasure. I also know people who would never reach this level. The idea is to limit One More Year (OMY) syndrome, where you can no longer use the excuse that you're just increasing the safety margins.

If you then rank these plans in order of desirability, you now have Plans A, B, C, D, etc.
Well summarized!
Thank you very much!

Dottie57
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Re: When did you realize it wasn't enough?

Post by Dottie57 » Wed May 15, 2019 12:25 pm

I always had my head in the sand. Kind of a permanent state of semi panic. Always believed I HAD to work until FRA if not up. However I found this group which encouraged me to really know my expenses. Also had to figure out PIA for SS. Eureka, I could retire.

Lessons are to know your retirement expenses including taxes and insurance. Know your fixed expenses vs I want expenses which can be cut . Know your income streams and sources.

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HomerJ
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Re: When did you realize it wasn't enough?

Post by HomerJ » Wed May 15, 2019 12:28 pm

Calico wrote:
Wed May 15, 2019 9:21 am
I thought I was on track to retire in my early 60s and now to have the same amount of money to retire on, I can't retire until I am 67. I am not counting SS at all though. This is the point where I can live off my investments alone.
Good news is you will still be able to retire in your early 60s, because SS will not be zero.
The J stands for Jay

xenochrony
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Location: California

Re: When did you realize it wasn't enough?

Post by xenochrony » Wed May 15, 2019 12:28 pm

tampaite wrote:
Sun May 12, 2019 9:23 pm
Posting is intended for those in their late 40s to late 50s.

When did you realize that current amount of money being saved won't be enough when you intend to retire (say at 60)
Also:
1. Did you panic? Yes.
2. Decided to work until however longer you can? Yes.
3. Cutback on your lifestyle drastically? Yes.
4. Or turbo charged savings?(basically turn more frugal) Yes
5. Changed jobs that paid significantly higher? Currently trying to, not successful yet.
6. Started a new business?

Calico
Posts: 320
Joined: Thu Jan 01, 2015 5:45 pm

Re: When did you realize it wasn't enough?

Post by Calico » Wed May 15, 2019 12:39 pm

HomerJ wrote:
Wed May 15, 2019 12:28 pm
Calico wrote:
Wed May 15, 2019 9:21 am
I thought I was on track to retire in my early 60s and now to have the same amount of money to retire on, I can't retire until I am 67. I am not counting SS at all though. This is the point where I can live off my investments alone.
Good news is you will still be able to retire in your early 60s, because SS will not be zero.
Quite true. I had it drilled into my head that "Social Security will be gone when you retire," that I never consider it. But I suspect that belief is as outdated as feathered hair and parachute pants.

Topic Author
tampaite
Posts: 569
Joined: Wed Feb 18, 2015 9:29 pm

Re: When did you realize it wasn't enough?

Post by tampaite » Wed May 15, 2019 7:24 pm

Calico wrote:
Wed May 15, 2019 12:39 pm

Quite true. I had it drilled into my head that "Social Security will be gone when you retire," that I never consider it. But I suspect that belief is as outdated as feathered hair and parachute pants.
Agree. Social Security is something you've contributed and you have to fight for it and not just give up.

JGoneRiding
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Re: When did you realize it wasn't enough?

Post by JGoneRiding » Wed May 15, 2019 7:28 pm

I am 37. Over the weekend I was doing some back of the envelope crunching. We are fairly frugal and just flat have less money then a lot on here which in some ways makes things easier as we have no need for 25k a year private tuition as we can't afford it no matter what.

Back to numbers. I realized that with our rentals and future ss funds we really are just saving for just in case, long term care, travel. So I will continue to save and hope I think the numbers mean early retirement but I see no reason to panic ever!

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