HomerJ wrote: ↑
Tue Jan 09, 2018 10:07 am
Sandtrap wrote: ↑
Tue Jan 09, 2018 1:12 am
This reinforces 4 things to me in my particular financial situation (others may be different), that I need to keep in mind going forward.
1. Keep SPIA's on the option table.
2. 25X is not enough, maybe not even close going forward (I don't have a pension or very many alternate income streams).
3. Ability to adjust withdrawals is vital.
4. Explore alternate income streams.
thanks again, great post.
** Edited for clarity as it applies to my own situation.
How in the world is 25x not enough? This graph shows the exact opposite. Even using brain-dead following 4% rule to the letter, it still worked.
I agree with points 1 and 3.... maybe 4 (I know you're a real estate guy with rental income). But this thread shows that 25x is indeed a useful "rule of thumb".
Most of us have a lot of discretionary expenses built into our 4%. Most of us would take 2 vacations instead of 4 vacations during a 50% stock market crash or wait an extra year or two to buy a new car.
SPIA is always an option.
Look, you and many others here have 40x or 50x expenses because you weren't even paying attention. You loved your work, or you made a lot of money young that it was no great sacrifice to work an extra 5 years at age 50 to shoot past 25x expenses.
But plenty of people are approaching 25x expenses at a normal retirement age, and there's no reason for them to work an extra 5 years at age 60 or 65 because they've been scared that "4% is not even close".
Time is also a limited resource. No one wants to risk running out of money, but it sure seems a lot of people on these boards are willing to risk running out of time.
You're correct and thanks for pointing it out.
I edited my post to show it applies to my own personal financial situation.
Yes, I have been blessed with a little success in R/E by reinvesting every dime made into my business for 4 decades.(yes, I did not pay attention to anything. . 100+ tenants were overwhelming and pure burnout). Never had a vacation. Rarely took a day off.
I'm planning to take my first ever "vacation" soon.
Had been aware of Investment Finance via Bogleheads perhaps I might have retired sooner, done better, avoided "total burnout"
, or had alternative income streams such as a pension, 401k, IRA, or a semblance of a portfolio.
But, lacking those alternate income streams, I'm now have a SPOF, (single point of failure) for the most part, which is my Bogle portfolio. Rentals are now a lesser part of my holdings. For me, this vulnerability is a concern. A financial black swan for me would be a severe Market Downturn and a R/E crash as in the 70/80's. As for 50x, I really did not fully grasp what I had earned and "built up" until I started to sell my holdings because I was always in acquisition mode with rarely very much free cash around.
I'm used to inserting hefty margins of operating safety and mentally did the same with "willthrill81's" excellent post. Thus my post. It may apply only to myself but hopefully it may help others in my position that have the same degree (though possibly extreme) of caution going forward into retirement.
Thanks again, "Homer",
always value your excellent input.
Mahalo Nui Loa
A Hui Hou A Ka Kou