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

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

Post by KlangFool » Tue Jun 13, 2017 7:12 pm

bayview wrote:
KlangFool wrote: delamer,

Thanks. That number = one more year for me. Or, if I am lucky, I may hit that number by the end of the yer.

KlangFool
KlangFool, I hope you get that year, or the market returns to make it happen sooner. It's an interesting world out there these days.

Best wishes to you and to your family. :beer
bayview,

Thanks. I hope so.

KlangFool

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

Post by Will do good » Tue Jun 13, 2017 7:48 pm

KF,

Any possibility of signing yourself up as a minority business owner and pitch your own IT business from Fortune 500 companies? Instant of looking for another job if you lose this one.

As I understand it, many large companies pledge to spend x dollar supporting small minority businesses. I have a friend who did exactly that and his business growing.

Best of luck.

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

Post by KlangFool » Tue Jun 13, 2017 8:42 pm

Will do good wrote:KF,

Any possibility of signing yourself up as a minority business owner and pitch your own IT business from Fortune 500 companies? Instant of looking for another job if you lose this one.

As I understand it, many large companies pledge to spend x dollar supporting small minority businesses. I have a friend who did exactly that and his business growing.

Best of luck.
Will do good,

I have some possibility of consulting works if I am unemployed. It is a hit or miss. But, the pay is good. Normally, it is between $60 to $100 per hours and a few thousand per project.

KlangFool

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

Post by KlangFool » Sun Aug 20, 2017 7:11 am

Folks,

I do have a bit of good news to report.

My wife found a permanent part-time (20 hours per week) job with the county. It comes with full benefits, pension, and 457 retirement plan. The job pays around 10K but the health insurance is about the same or better than my existing employer with lower cost. So, as long as she keeps this part-time job, I might be able to retire.

KlangFool

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

Post by delamer » Sun Aug 20, 2017 11:16 am

KlangFool wrote:
Sun Aug 20, 2017 7:11 am
Folks,

I do have a bit of good news to report.

My wife found a permanent part-time (20 hours per week) job with the county. It comes with full benefits, pension, and 457 retirement plan. The job pays around 10K but the health insurance is about the same or better than my existing employer with lower cost. So, as long as she keeps this part-time job, I might be able to retire.

KlangFool
Congratulations to both your wife and you. A lot people still refer to health insurance, pensions, paid vacation, etc. as "fringe benefits" but there is nothing fringe about them. They are core parts of total compensation.

renue74
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by renue74 » Sun Aug 20, 2017 11:22 am

Congrats. It seems health insurance is the major wild card for many contemplating retirement.

My wife is 47 and I'm 43. She's a school teacher and I get my insurance through her. I anticipate 55 or so for retirement and always kid with her that we can never get divorced! :D

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

Post by KlangFool » Sun Aug 20, 2017 1:16 pm

delamer wrote:
Sun Aug 20, 2017 11:16 am
KlangFool wrote:
Sun Aug 20, 2017 7:11 am
Folks,

I do have a bit of good news to report.

My wife found a permanent part-time (20 hours per week) job with the county. It comes with full benefits, pension, and 457 retirement plan. The job pays around 10K but the health insurance is about the same or better than my existing employer with lower cost. So, as long as she keeps this part-time job, I might be able to retire.

KlangFool
Congratulations to both your wife and you. A lot people still refer to health insurance, pensions, paid vacation, etc. as "fringe benefits" but there is nothing fringe about them. They are core parts of total compensation.
Thanks. Still crossing my fingers regularly.

KlangFool

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

Post by KlangFool » Sun Aug 20, 2017 1:18 pm

renue74 wrote:
Sun Aug 20, 2017 11:22 am
Congrats. It seems health insurance is the major wild card for many contemplating retirement.

My wife is 47 and I'm 43. She's a school teacher and I get my insurance through her. I anticipate 55 or so for retirement and always kid with her that we can never get divorced! :D
renue74,

I guess we are stuck with each other. :-) :-) I need her insurance. She needs my income. If I do not need insurance, I can take on some projects every now and then if I am unemployed.

KlangFool

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

Post by flyingaway » Sun Aug 20, 2017 1:40 pm

Dandy wrote:
Sat Jun 03, 2017 7:56 am
I given thought to how to determine if you have enough to retire i.e. have you reached your number. There should be some rule of thumb like I mention below - but so far as I know there isn't.

Assume a 50% drop in your equities and then subtract 2 years of estimated withdrawals to fund your retirement expenses? After that math how comfortable are you with the number?
If you are, your number appears solid if not you may need to look at your allocation and/or the size of your number.

Retirement at age 54 adds additional concerns i.e. funding several extra years of retirement. I am not sure how to assess what the extra level of risk is but is it likely significant. e.g. longer funding to collect SS, Medicare, pension? greater chance of market/inflation risk, longer period with little or no human capital etc.
The assumption of market dropping 50% has been used again and again to warn potential early retirees that they need a portfolio of double size. It seems that if you had $1M, after the market dropped 50%, you would become much worse than the guy who had $0 before the market dropped. (That guy's portfolio did not change).

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

Post by KlangFool » Sun Aug 20, 2017 3:49 pm

flyingaway wrote:
Sun Aug 20, 2017 1:40 pm
Dandy wrote:
Sat Jun 03, 2017 7:56 am
I given thought to how to determine if you have enough to retire i.e. have you reached your number. There should be some rule of thumb like I mention below - but so far as I know there isn't.

Assume a 50% drop in your equities and then subtract 2 years of estimated withdrawals to fund your retirement expenses? After that math how comfortable are you with the number?
If you are, your number appears solid if not you may need to look at your allocation and/or the size of your number.

Retirement at age 54 adds additional concerns i.e. funding several extra years of retirement. I am not sure how to assess what the extra level of risk is but is it likely significant. e.g. longer funding to collect SS, Medicare, pension? greater chance of market/inflation risk, longer period with little or no human capital etc.
The assumption of market dropping 50% has been used again and again to warn potential early retirees that they need a portfolio of double size. It seems that if you had $1M, after the market dropped 50%, you would become much worse than the guy who had $0 before the market dropped. (That guy's portfolio did not change).
flyingaway,

We are human. We feel pain if we had it and lost it. Versus never having it. This is a fact of life. This is a good thing. It protects us from the fatal mistake and taking on too much risk.

KlangFool

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

Post by wrongfunds » Mon Aug 21, 2017 9:56 am

Retire at 54
...
SS:-
20K at 62 years old
29K at 67 years old
36K at 70 years old
KF,

Are the above numbers assumed with you being retired at 54? Or are they taken from SS website which assumes that you will continue to earn at least the same annual salary until you reach the real retirement age? The SS website makes it extremely difficult to get the numbers based upon the retirement age (aka 0 contribution from that point onward) and the age at which you start taking the payments. It always assumes that you keep on working until taking the payments out from the system.

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

Post by KlangFool » Mon Aug 21, 2017 10:00 am

wrongfunds wrote:
Mon Aug 21, 2017 9:56 am
Retire at 54

SS:-
20K at 62 years old
29K at 67 years old
36K at 70 years old[/quite]

KF,

Are the above numbers assumed with you being retired at 54? Or are they taken from SS website which assumes that you will continue to earn at least the same annual salary until you reach the real retirement age? The SS wesbsite makes it extremely difficult to get the numbers based upon the retirement age (aka 0 contribution from that point onward) and the age at which you start taking the payments. It always assumes that you keep on working until taking the payments out from the system.
wrongfunds,

In my case, it does not really matter whether I keep on working since I had crossed the second bend points. Any additional earning will be credited at 15%. I believe that estimate is based on I stop working now.

KlangFool

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

Post by wrongfunds » Mon Aug 21, 2017 10:05 am

Looks like I need to study the bend points to evaluate our specific situation.

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

Post by KlangFool » Mon Aug 21, 2017 10:14 am

wrongfunds wrote:
Mon Aug 21, 2017 10:05 am
Looks like I need to study the bend points to evaluate our specific situation.
https://www.ssa.gov/oact/cola/bendpoints.html

wrongfunds,

A quick and dirty estimate could be calculated.

The first bend point = $885
The second bend point = $5,336

So, your top 35 years of social security taxed earning exceed 35 X 12 X $885 = $371,700. You had crossed the first bend point. To cross second bend point, you need 35 X 12 X $5,336 = $2,241,120.

Please note that the actual number you need is lower than this estimate because of the upward adjustment to the earlier year earning. With this method, you had definitely crossed the bend point with a big safety margin.

KlangFool

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

Post by marcopolo » Mon Aug 21, 2017 10:16 am

wrongfunds wrote:
Mon Aug 21, 2017 10:05 am
Looks like I need to study the bend points to evaluate our specific situation.
There is a calculator on the SS website that allows you to put in the year you plan to stop working, and your average salary between now and then (it uses your record for past earnings). If the age you enter is below 62, it will give you your anticipated benefits at age 62. I guess they assume if you retire early, you start SS early as well. But, with that number in hand, it is pretty easy to calculate the FRA and age 70 benefits assuming you never work again.

Klangfool,
Congratulations on overcoming yet another hurdle. Best of luck in the future.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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

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

Post by KlangFool » Mon Aug 21, 2017 10:27 am

marcopolo wrote:
Mon Aug 21, 2017 10:16 am
wrongfunds wrote:
Mon Aug 21, 2017 10:05 am
Looks like I need to study the bend points to evaluate our specific situation.
There is a calculator on the SS website that allows you to put in the year you plan to stop working, and your average salary between now and then (it uses your record for past earnings). If the age you enter is below 62, it will give you your anticipated benefits at age 62. I guess they assume if you retire early, you start SS early as well. But, with that number in hand, it is pretty easy to calculate the FRA and age 70 benefits assuming you never work again.

Klangfool,
Congratulations on overcoming yet another hurdle. Best of luck in the future.
Thanks.

KlangFool

FOGU
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Re: KF's Worst Case Retirement Plan

Post by FOGU » Fri Jun 08, 2018 12:49 am

smitcat wrote:
Fri Jun 02, 2017 6:00 pm
indexonlyplease wrote:Klangfool, see it this helps,

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

http://www.mrmoneymustache.com

Certainly some of the ideas on that site are very good - but he definitely does not live on $30,00/year.
That site was and is a business play that worked out pretty well.
No doubt. It's an eminence front.
~ Don't just do something. Sit there. ~

michaeljc70
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Re: KF's Worst Case Retirement Plan [KlangFool's]

Post by michaeljc70 » Sat Jun 09, 2018 9:10 am

KlangFool wrote:
Sun Aug 20, 2017 7:11 am
Folks,

I do have a bit of good news to report.

My wife found a permanent part-time (20 hours per week) job with the county. It comes with full benefits, pension, and 457 retirement plan. The job pays around 10K but the health insurance is about the same or better than my existing employer with lower cost. So, as long as she keeps this part-time job, I might be able to retire.

KlangFool
That's fantastic as the healthcare part of your plan would have had me worried the most.

I can empathize with your situation. I have worked in IT for 25+ years. Almost all contracting. I took a "permanent" more "stable" job with benefits (health insurance) 2 months ago. A few weeks ago a merger was announced and there will be no jobs in 9-12 months. On top of that, I hate the job and the prospects of getting a new job I like that pays decent are moderate at best. I may retire sooner than expected. I know that I will be cutting it close, but like you, I also have several contingencies.

michaeljc70
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Re: KF's Worst Case Retirement Plan

Post by michaeljc70 » Sat Jun 09, 2018 9:12 am

FOGU wrote:
Fri Jun 08, 2018 12:49 am
smitcat wrote:
Fri Jun 02, 2017 6:00 pm
indexonlyplease wrote:Klangfool, see it this helps,

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

http://www.mrmoneymustache.com

Certainly some of the ideas on that site are very good - but he definitely does not live on $30,00/year.
That site was and is a business play that worked out pretty well.
No doubt. It's an eminence front.
It's always easier to retire on $30k when you have a blog bringing in 6 figures. I don't consider running a business that earns you money being retired.

KlangFool
Posts: 10147
Joined: Sat Oct 11, 2008 12:35 pm

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

Post by KlangFool » Sat Jun 09, 2018 9:17 am

michaeljc70 wrote:
Sat Jun 09, 2018 9:10 am
KlangFool wrote:
Sun Aug 20, 2017 7:11 am
Folks,

I do have a bit of good news to report.

My wife found a permanent part-time (20 hours per week) job with the county. It comes with full benefits, pension, and 457 retirement plan. The job pays around 10K but the health insurance is about the same or better than my existing employer with lower cost. So, as long as she keeps this part-time job, I might be able to retire.

KlangFool
That's fantastic as the healthcare part of your plan would have had me worried the most.

I can empathize with your situation. I have worked in IT for 25+ years. Almost all contracting. I took a "permanent" more "stable" job with benefits (health insurance) 2 months ago. A few weeks ago a merger was announced and there will be no jobs in 9-12 months. On top of that, I hate the job and the prospects of getting a new job I like that pays decent are moderate at best. I may retire sooner than expected. I know that I will be cutting it close, but like you, I also have several contingencies.
michaeljc70,

Thanks.

I have 2 kids going to college now. With my annual expense and college funding, I am spending 110K to 120K per year now. So, it makes a significant difference whether I survive the next 2 years. I hope for the best but plan for the worst.

KlangFool

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