## What's a good way to calculate when I have won the game??

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Topic Author
barberakb
Posts: 52
Joined: Fri Apr 21, 2017 11:14 pm

### What's a good way to calculate when I have won the game??

What's a good way to calculate when I have won the game??

Under my previous train of thought, I was shooting for a #. It was 2 million in assets. To include houses.

Now I'm not so sure. I am currently 40 and about to retire from the military.

I will have a pension, of about \$40K a year that adjusts with inflation. Plus I should have medical for life, which I think will only cost about \$1K
a year for me and my family.

I'm not counting on SSecurity so I'm not including that in any of my calculations. Although I think it will still be available at a reduced rate by the time I reach my 60's.

But both me and my wife would like to retire early so we will most likely need to live off our investments at some point.

I would like to retire by 52 and my wife by 45.

We currently live on about 75K a year but I actually think that will increase after retirement. My wife likes to travel and she spends more money when shes bored...

Just curious what your thoughts are for calculating how much money we need to retire early since we are very lucky and have medical covered and a pension.

Thanks for the help!

Peter Foley
Posts: 4947
Joined: Fri Nov 23, 2007 10:34 am
Location: Lake Wobegon

### Re: What's a good way to calculate when I have won the game??

There are a couple ways to do this that are often mentioned. For both methods one starts by determining their shortfall. Here is one method.

Discounting SS, you roughly project your shortfall to be \$35K.

How much would one need in investments to be able to withdraw \$35k/year at a 4% rate. \$35k/.04 = \$875,000. (4% is an often used safe withdrawal rate)

HOWEVER - this is a really rough approximation. You are planning to retire relatively young so you have to plan for a longer withdrawal from savings to support your retirement. A 3% withdrawal is sometimes suggested for early retirees. \$35K/.03 = \$1,166,666.

In your case you are not counting SS benefits in the calculation so the number is probably in the neighborhood of \$900,000 to \$1,100,000 in retirement savings (not your net worth).

The second method is to take 25 times your shortfall, or roughly 30 times if you are retiring early. You get the same number. The first method provides a little more background on how the calculation was determined.

Both are discussed in the first chapter of The Bogleheads' Guide to Retirement Planning. Topic: "How to Calculate Your Number"

delamer
Posts: 9293
Joined: Tue Feb 08, 2011 6:13 pm

### Re: What's a good way to calculate when I have won the game??

Peter Foley wrote:
Fri Aug 10, 2018 3:41 pm
There are a couple ways to do this that are often mentioned. For both methods one starts by determining their shortfall. Here is one method.

Discounting SS, you roughly project your shortfall to be \$35K.

How much would one need in investments to be able to withdraw \$35k/year at a 4% rate. \$35k/.04 = \$875,000. (4% is an often used safe withdrawal rate)

HOWEVER - this is a really rough approximation. You are planning to retire relatively young so you have to plan for a longer withdrawal from savings to support your retirement. A 3% withdrawal is sometimes suggested for early retirees. \$35K/.03 = \$1,166,666.

In your case you are not counting SS benefits in the calculation so the number is probably in the neighborhood of \$900,000 to \$1,100,000 in retirement savings (not your net worth).

The second method is to take 25 times your shortfall, or roughly 30 times if you are retiring early. You get the same number. The first method provides a little more background on how the calculation was determined.

Both are discussed in the first chapter of The Bogleheads' Guide to Retirement Planning. Topic: "How to Calculate Your Number"

Well said.

I’d add that expenses need to include income taxes and irregular costs, like the occasional new car or new roof for the house.

Net worth isn’t irrelevant, but ultimately you need liquid assets (savings/investments) to create spendable income. You can’t spend equity in a house unless you sell it (or take out a loan that has to be repaid).

One Ping
Posts: 773
Joined: Thu Sep 24, 2015 4:53 pm

### Re: What's a good way to calculate when I have won the game??

One approach might be using the Funded Ratio. BobK had a post (thread) on this a while back. viewtopic.php?f=10&t=219878

One Ping
"Re-verify our range to target ... one ping only."

friar1610
Posts: 1581
Joined: Sat Nov 29, 2008 9:52 pm
Location: MA South Shore

### Re: What's a good way to calculate when I have won the game??

delamer wrote:
Fri Aug 10, 2018 5:04 pm
Peter Foley wrote:
Fri Aug 10, 2018 3:41 pm
There are a couple ways to do this that are often mentioned. For both methods one starts by determining their shortfall. Here is one method.

Discounting SS, you roughly project your shortfall to be \$35K.

How much would one need in investments to be able to withdraw \$35k/year at a 4% rate. \$35k/.04 = \$875,000. (4% is an often used safe withdrawal rate)

HOWEVER - this is a really rough approximation. You are planning to retire relatively young so you have to plan for a longer withdrawal from savings to support your retirement. A 3% withdrawal is sometimes suggested for early retirees. \$35K/.03 = \$1,166,666.

In your case you are not counting SS benefits in the calculation so the number is probably in the neighborhood of \$900,000 to \$1,100,000 in retirement savings (not your net worth).

The second method is to take 25 times your shortfall, or roughly 30 times if you are retiring early. You get the same number. The first method provides a little more background on how the calculation was determined.

Both are discussed in the first chapter of The Bogleheads' Guide to Retirement Planning. Topic: "How to Calculate Your Number"

Well said.

I’d add that expenses need to include income taxes and irregular costs, like the occasional new car or new roof for the house.

Net worth isn’t irrelevant, but ultimately you need liquid assets (savings/investments) to create spendable income. You can’t spend equity in a house unless you sell it (or take out a loan that has to be repaid).
And don't forget to include (if they are applicable in your case):
- the fact that you receive untaxed allowances on active duty. As a civilian you would need to make more money (that is, afjusted upward for taxes) to end up with the same after tax amount of income.
- depending on whether you claim residence in a non-state income tax state or not and depending on where you settle, you may have a state tax liability you don't have now.
Friar1610

Dandy
Posts: 5998
Joined: Sun Apr 25, 2010 7:42 pm

### Re: What's a good way to calculate when I have won the game??

Here is what I would do.

1. estimate retirement expenses
2. estimate retirement income
3. calculation the amount of income needed to have retirement income equal retirement expenses. Let's call that gap
"residual expenses"
4. How many dollars worth of residual expenses do you need to fund retirement from your retirement age to -- say age 90.
e.g. est. expense \$80k, est. income \$50k, residual exp. \$30k. Retire age 60. 30k x 30 years = \$900k
5. Is the total in #4 equal to or less than your current nest egg? If so, you probably have won the game. I would add 20% extra for a margin of safety so in the example in #4 about 1.1 million. Your estimated withdrawal rate would be a bit less than 3%. \$30k/1.1 million = 2.7%

Obviously, being in or close to retirement will make a difference in the reliability of the conclusion. Also, there are a lot of variables e.g. inflation, health, market performance, expense creep, job loss, how aggressive is your allocation, etc.

Topic Author
barberakb
Posts: 52
Joined: Fri Apr 21, 2017 11:14 pm

### Re: What's a good way to calculate when I have won the game??

friar1610 wrote:
Fri Aug 10, 2018 10:41 pm
delamer wrote:
Fri Aug 10, 2018 5:04 pm
Peter Foley wrote:
Fri Aug 10, 2018 3:41 pm
There are a couple ways to do this that are often mentioned. For both methods one starts by determining their shortfall. Here is one method.

Discounting SS, you roughly project your shortfall to be \$35K.

How much would one need in investments to be able to withdraw \$35k/year at a 4% rate. \$35k/.04 = \$875,000. (4% is an often used safe withdrawal rate)

HOWEVER - this is a really rough approximation. You are planning to retire relatively young so you have to plan for a longer withdrawal from savings to support your retirement. A 3% withdrawal is sometimes suggested for early retirees. \$35K/.03 = \$1,166,666.

In your case you are not counting SS benefits in the calculation so the number is probably in the neighborhood of \$900,000 to \$1,100,000 in retirement savings (not your net worth).

The second method is to take 25 times your shortfall, or roughly 30 times if you are retiring early. You get the same number. The first method provides a little more background on how the calculation was determined.

Both are discussed in the first chapter of The Bogleheads' Guide to Retirement Planning. Topic: "How to Calculate Your Number"

Well said.

I’d add that expenses need to include income taxes and irregular costs, like the occasional new car or new roof for the house.

Net worth isn’t irrelevant, but ultimately you need liquid assets (savings/investments) to create spendable income. You can’t spend equity in a house unless you sell it (or take out a loan that has to be repaid).
And don't forget to include (if they are applicable in your case):
- the fact that you receive untaxed allowances on active duty. As a civilian you would need to make more money (that is, afjusted upward for taxes) to end up with the same after tax amount of income.
- depending on whether you claim residence in a non-state income tax state or not and depending on where you settle, you may have a state tax liability you don't have now.
Thanks all.

Yes, I claimed Texas my whole career so will start having to pay NM taxes.

We also have 4 houses, 3 rentals from where we have moved around. But the plan is to have them all paid off before I retire. Im about 70/30 stocks/bonds right now.

3feetpete
Posts: 390
Joined: Sun Dec 14, 2014 7:30 pm

### Re: What's a good way to calculate when I have won the game??

Go to firecalc.com There you can do a montecarlo simulation based on past investment returns for over a century. It's free however they do request a donation to help maintain the site. You input your yearly expenses and income stream along with your portfolio dollars and percentages of stocks and bonds. You input the number of years you want it to last and it gives you a percentage success rate. It also gives you a graph of the 100+ curves showingn what your portfolio value would be during the retirement. There are many things that you can customize.

Of course the first thing you need to know is how much your costs will be. If you are unsure, you can do multiple simulations to represent the low and high end of the range that you think your expenses might be.

randomguy
Posts: 8397
Joined: Wed Sep 17, 2014 9:00 am

### Re: What's a good way to calculate when I have won the game??

barberakb wrote:
Fri Aug 10, 2018 2:42 pm
What's a good way to calculate when I have won the game??

When you (and the people you hope your money will support) are dead. Up until then you are still playing the game and have a chance to lose all your money. The person with 100x of expenses all in government bonds still lost if they happened to be living in Weimar germany in the early 20s. The person with 1000x split between stocks and bonds living in tsarist russia in 1916 lost. Or on a more likely note the person with 30x in expenses who got hit with a 20x expense still loses. At best you can reduce the odds of losing and change your game (i.e. be more conservative) but you are still playing the game til the end.

inbox788
Posts: 6646
Joined: Thu Mar 15, 2012 5:24 pm

### Re: What's a good way to calculate when I have won the game??

barberakb wrote:
Fri Aug 10, 2018 2:42 pm
We currently live on about 75K a year but I actually think that will increase after retirement. My wife likes to travel and she spends more money when shes bored...
Other than medical, this was the other variable that was/is the toughest to estimate. So far, both have been (upwardly) moving targets. Also, you want to consider disability/insurance and LTC/insurance. And you're far off from an end date, but are you looking at 90? 100? 110? These unknowns have pushed up the retirement number and pushed back the retirement date.

skime
Posts: 132
Joined: Fri Nov 10, 2017 6:24 pm

### Re: What's a good way to calculate when I have won the game??

You've won the game when you have 50x+ annual expenses.

chipperd
Posts: 481
Joined: Sat Sep 24, 2011 5:58 am

### Re: What's a good way to calculate when I have won the game??

randomguy wrote:
Mon Aug 13, 2018 9:38 am
barberakb wrote:
Fri Aug 10, 2018 2:42 pm
What's a good way to calculate when I have won the game??

When you (and the people you hope your money will support) are dead. Up until then you are still playing the game and have a chance to lose all your money. The person with 100x of expenses all in government bonds still lost if they happened to be living in Weimar germany in the early 20s. The person with 1000x split between stocks and bonds living in tsarist russia in 1916 lost. Or on a more likely note the person with 30x in expenses who got hit with a 20x expense still loses. At best you can reduce the odds of losing and change your game (i.e. be more conservative) but you are still playing the game til the end.
+1

texasdiver
Posts: 3197
Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

### Re: What's a good way to calculate when I have won the game??

I find it curious that you are counting on your inflation-adusted pension and cheap medical coverage as guaranteed but not social security when they all come from the same source. I know we are to avoid politics here but seems to me that any crisis severe enough to collapse social security would also threaten your other two benefits as well. I have a hard time imagining a financial crisis that is severe enough to destroy social security but that leaves all other federal entitlements alone.

What you can do is use social security as a backstop or safety net that is there in the event that your own resources fall short. Cheap insurance if you will.

I don't see any mention of kids. In my experience they are the biggest wild card. If you are child-free then this whole exercise gets much easier.

Topic Author
barberakb
Posts: 52
Joined: Fri Apr 21, 2017 11:14 pm

### Re: What's a good way to calculate when I have won the game??

inbox788 wrote:
Mon Aug 13, 2018 4:59 pm
barberakb wrote:
Fri Aug 10, 2018 2:42 pm
We currently live on about 75K a year but I actually think that will increase after retirement. My wife likes to travel and she spends more money when shes bored...
Other than medical, this was the other variable that was/is the toughest to estimate. So far, both have been (upwardly) moving targets. Also, you want to consider disability/insurance and LTC/insurance. And you're far off from an end date, but are you looking at 90? 100? 110? These unknowns have pushed up the retirement number and pushed back the retirement date.
i think we can easily live on 90k a year but could scale back to the 75k if needed

Topic Author
barberakb
Posts: 52
Joined: Fri Apr 21, 2017 11:14 pm

### Re: What's a good way to calculate when I have won the game??

texasdiver wrote:
Mon Aug 13, 2018 7:42 pm
I find it curious that you are counting on your inflation-adusted pension and cheap medical coverage as guaranteed but not social security when they all come from the same source. I know we are to avoid politics here but seems to me that any crisis severe enough to collapse social security would also threaten your other two benefits as well. I have a hard time imagining a financial crisis that is severe enough to destroy social security but that leaves all other federal entitlements alone.

What you can do is use social security as a backstop or safety net that is there in the event that your own resources fall short. Cheap insurance if you will.

I don't see any mention of kids. In my experience they are the biggest wild card. If you are child-free then this whole exercise gets much easier.
I do believe SSec will be there for us, just maybe at a reduced rate. I am planning on this as you stated / using social security as a backstop or safety net that is there in the event that my own resources fall short.

I do have 2 kids. But they should be gone by the time I retire. And I am lucky again as their college should be paid for by the GI bill.

Thanks

Jefferson
Posts: 108
Joined: Wed Feb 21, 2018 1:37 pm

### Re: What's a good way to calculate when I have won the game??

texasdiver wrote:
Mon Aug 13, 2018 7:42 pm
I find it curious that you are counting on your inflation-adusted pension and cheap medical coverage as guaranteed but not social security when they all come from the same source. I know we are to avoid politics here but seems to me that any crisis severe enough to collapse social security would also threaten your other two benefits as well. I have a hard time imagining a financial crisis that is severe enough to destroy social security but that leaves all other federal entitlements alone.
I think 1) not getting SS, but still getting military benefits is more likely than 2) not getting SS AND not getting military benefits.

A very plausible scenario is SS turning into a means tested program in absence of a full-blown financial crisis. To me, this is actionable; the action being to not count on SS.

texasdiver
Posts: 3197
Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

### Re: What's a good way to calculate when I have won the game??

barberakb wrote:
Tue Aug 14, 2018 11:40 am
texasdiver wrote:
Mon Aug 13, 2018 7:42 pm
I find it curious that you are counting on your inflation-adusted pension and cheap medical coverage as guaranteed but not social security when they all come from the same source. I know we are to avoid politics here but seems to me that any crisis severe enough to collapse social security would also threaten your other two benefits as well. I have a hard time imagining a financial crisis that is severe enough to destroy social security but that leaves all other federal entitlements alone.

What you can do is use social security as a backstop or safety net that is there in the event that your own resources fall short. Cheap insurance if you will.

I don't see any mention of kids. In my experience they are the biggest wild card. If you are child-free then this whole exercise gets much easier.
I do believe SSec will be there for us, just maybe at a reduced rate. I am planning on this as you stated / using social security as a backstop or safety net that is there in the event that my own resources fall short.

I do have 2 kids. But they should be gone by the time I retire. And I am lucky again as their college should be paid for by the GI bill.

Thanks
Three kids here. In 10 years the youngest will be scheduled to graduate from college. That is our tentative retirement date. Probably won't be full retirement but some kind of partial retirement. My wife is a physician and will likely want to keep working in some capacity doing occasional locum work or part time tele-medicine at least.

Like you, I assume we are on track but the kids are the biggest wild card. When I look around to our far extended circle of friends and family I see all kinds of kid-related hicups. Kids in rehab, kids who boomerang, unmarried kids who get pregnant and move back in, kids who become disabled. We have been lucky to have 3 bright stable healthy girls. But I have seen more than one retirement scenario get completely derailed by kids. Both co-workers and extended family. Like you, we are planning to turn off the spigot when the last child gets through 4 years of college. But one never really knows.

texasdiver
Posts: 3197
Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

### Re: What's a good way to calculate when I have won the game??

Jefferson wrote:
Tue Aug 14, 2018 12:11 pm
texasdiver wrote:
Mon Aug 13, 2018 7:42 pm
I find it curious that you are counting on your inflation-adusted pension and cheap medical coverage as guaranteed but not social security when they all come from the same source. I know we are to avoid politics here but seems to me that any crisis severe enough to collapse social security would also threaten your other two benefits as well. I have a hard time imagining a financial crisis that is severe enough to destroy social security but that leaves all other federal entitlements alone.
I think 1) not getting SS, but still getting military benefits is more likely than 2) not getting SS AND not getting military benefits.

A very plausible scenario is SS turning into a means tested program in absence of a full-blown financial crisis. To me, this is actionable; the action being to not count on SS.
It would take a Zimbabwe or Venezuela level financial melt-down to actually threaten the existence of SS or other Federal pensions. Most of the proposals I've seen are things like messing around with the inflation adjustments (chained CPI) and so forth that could easily ripple through all inflation-adjusted Federal entitlements, not just SS. And there have certainly been proposals to trim TRICARE in various ways. I agree this is actionable in that one must make a choice to rely or not rely on SS when it comes to retirement planning and I see people going both ways on this forum. I just find it curious that people can have rock solid faith in one type of Federal entitlement and no faith in another type of Federal entitlement when ultimately they all come from the same source.
Last edited by texasdiver on Tue Aug 14, 2018 12:31 pm, edited 1 time in total.

Topic Author
barberakb
Posts: 52
Joined: Fri Apr 21, 2017 11:14 pm

### Re: What's a good way to calculate when I have won the game??

how do u delete a post?
Last edited by barberakb on Tue Aug 14, 2018 12:33 pm, edited 2 times in total.

Topic Author
barberakb
Posts: 52
Joined: Fri Apr 21, 2017 11:14 pm

### Re: What's a good way to calculate when I have won the game??

texasdiver wrote:
Tue Aug 14, 2018 12:16 pm
barberakb wrote:
Tue Aug 14, 2018 11:40 am
texasdiver wrote:
Mon Aug 13, 2018 7:42 pm
I find it curious that you are counting on your inflation-adusted pension and cheap medical coverage as guaranteed but not social security when they all come from the same source. I know we are to avoid politics here but seems to me that any crisis severe enough to collapse social security would also threaten your other two benefits as well. I have a hard time imagining a financial crisis that is severe enough to destroy social security but that leaves all other federal entitlements alone.

What you can do is use social security as a backstop or safety net that is there in the event that your own resources fall short. Cheap insurance if you will.

I don't see any mention of kids. In my experience they are the biggest wild card. If you are child-free then this whole exercise gets much easier.
I do believe SSec will be there for us, just maybe at a reduced rate. I am planning on this as you stated / using social security as a backstop or safety net that is there in the event that my own resources fall short.

I do have 2 kids. But they should be gone by the time I retire. And I am lucky again as their college should be paid for by the GI bill.

Thanks
Three kids here. In 10 years the youngest will be scheduled to graduate from college. That is our tentative retirement date. Probably won't be full retirement but some kind of partial retirement. My wife is a physician and will likely want to keep working in some capacity doing occasional locum work or part time tele-medicine at least.

Like you, I assume we are on track but the kids are the biggest wild card. When I look around to our far extended circle of friends and family I see all kinds of kid-related hicups. Kids in rehab, kids who boomerang, unmarried kids who get pregnant and move back in, kids who become disabled. We have been lucky to have 3 bright stable healthy girls. But I have seen more than one retirement scenario get completely derailed by kids. Both co-workers and extended family. Like you, we are planning to turn off the spigot when the last child gets through 4 years of college. But one never really knows.
I guess my situation is different, my kids expenses are different or I just don't understand how your kids could derail your retirement.

With maybe the exception of an accident or disability and not counting costs for college, how could their expenses derail you?

My kids could live with me until they are 40 (ugg the horror) but they wouldn't really up my expenses much. The housing cost is the same, bills a little higher but not much. I'm not buying them clothes etc... at that point. Unless they are disabled if they are 20+ and not going to school they will be working and paying for their own stuff...

What am I missing.

Jefferson
Posts: 108
Joined: Wed Feb 21, 2018 1:37 pm

### Re: What's a good way to calculate when I have won the game??

texasdiver wrote:
Tue Aug 14, 2018 12:29 pm
Jefferson wrote:
Tue Aug 14, 2018 12:11 pm
texasdiver wrote:
Mon Aug 13, 2018 7:42 pm
I find it curious that you are counting on your inflation-adusted pension and cheap medical coverage as guaranteed but not social security when they all come from the same source. I know we are to avoid politics here but seems to me that any crisis severe enough to collapse social security would also threaten your other two benefits as well. I have a hard time imagining a financial crisis that is severe enough to destroy social security but that leaves all other federal entitlements alone.
I think 1) not getting SS, but still getting military benefits is more likely than 2) not getting SS AND not getting military benefits.

A very plausible scenario is SS turning into a means tested program in absence of a full-blown financial crisis. To me, this is actionable; the action being to not count on SS.
It would take a Zimbabwe or Venezuela level financial melt-down to actually threaten the existence of SS or other Federal pensions. Most of the proposals I've seen are things like messing around with the inflation adjustments (chained CPI) and so forth that could easily ripple through all inflation-adjusted Federal entitlements, not just SS. And there have certainly been proposals to trim TRICARE in various ways. I agree this is actionable in that one must make a choice to rely or not rely on SS when it comes to retirement planning and I see people going both ways on this forum. I just find it curious that people can have rock solid faith in one type of Federal entitlement and no faith in another type of Federal entitlement when ultimately they all come from the same source.
I don’t think this is true at all. We’re getting close to politics, so I’ll say one more thing and leave it at that. I think it is likely that SS will become means tested (to some degree) within the lifetimes of many on this forum. The lowest hanging fruit to improve the solvency of SS could easily be to lower (or deny) benefits to people who have significant liquid assets.

texasdiver
Posts: 3197
Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

### Re: What's a good way to calculate when I have won the game??

barberakb wrote:
Tue Aug 14, 2018 12:31 pm
texasdiver wrote:
Tue Aug 14, 2018 12:16 pm
barberakb wrote:
Tue Aug 14, 2018 11:40 am
texasdiver wrote:
Mon Aug 13, 2018 7:42 pm
I find it curious that you are counting on your inflation-adusted pension and cheap medical coverage as guaranteed but not social security when they all come from the same source. I know we are to avoid politics here but seems to me that any crisis severe enough to collapse social security would also threaten your other two benefits as well. I have a hard time imagining a financial crisis that is severe enough to destroy social security but that leaves all other federal entitlements alone.

What you can do is use social security as a backstop or safety net that is there in the event that your own resources fall short. Cheap insurance if you will.

I don't see any mention of kids. In my experience they are the biggest wild card. If you are child-free then this whole exercise gets much easier.
I do believe SSec will be there for us, just maybe at a reduced rate. I am planning on this as you stated / using social security as a backstop or safety net that is there in the event that my own resources fall short.

I do have 2 kids. But they should be gone by the time I retire. And I am lucky again as their college should be paid for by the GI bill.

Thanks
Three kids here. In 10 years the youngest will be scheduled to graduate from college. That is our tentative retirement date. Probably won't be full retirement but some kind of partial retirement. My wife is a physician and will likely want to keep working in some capacity doing occasional locum work or part time tele-medicine at least.

Like you, I assume we are on track but the kids are the biggest wild card. When I look around to our far extended circle of friends and family I see all kinds of kid-related hicups. Kids in rehab, kids who boomerang, unmarried kids who get pregnant and move back in, kids who become disabled. We have been lucky to have 3 bright stable healthy girls. But I have seen more than one retirement scenario get completely derailed by kids. Both co-workers and extended family. Like you, we are planning to turn off the spigot when the last child gets through 4 years of college. But one never really knows.
I guess my situation is different, my kids expenses are different or I just don't understand how your kids could derail your retirement.

With maybe the exception of an accident or disability and not counting costs for college, how could their expenses derail you?

My kids could live with me until they are 40 (ugg the horror) but they wouldn't really up my expenses much. The housing cost is the same, bills a little higher but not much. I'm not buying them clothes etc... at that point. Unless they are disabled if they are 20+ and not going to school they will be working and paying for their own stuff...

What am I missing.
I have a co-worker who's college age son was severely injured in a car accident. After months of hospitalization he is now living at home but may never fully recover and regain independence.

My wife has a co-worker who's college age daughter has gone through maybe \$100,000 of rehab for opioid abuse with no end in sight.

I have a former co-worker who postponed retirement because she is now raising her granddaughter after her single daughter left her behind and ran off to I'm not sure where.

Not saying that any of these sorts of scenarios are likely. Just that kids seem to be the most unpredictable wild card when it comes to planning for your future.

gotester2000
Posts: 620
Joined: Sun Nov 12, 2017 1:59 am

### Re: What's a good way to calculate when I have won the game??

chipperd wrote:
Mon Aug 13, 2018 5:43 pm
randomguy wrote:
Mon Aug 13, 2018 9:38 am
barberakb wrote:
Fri Aug 10, 2018 2:42 pm
What's a good way to calculate when I have won the game??

When you (and the people you hope your money will support) are dead. Up until then you are still playing the game and have a chance to lose all your money. The person with 100x of expenses all in government bonds still lost if they happened to be living in Weimar germany in the early 20s. The person with 1000x split between stocks and bonds living in tsarist russia in 1916 lost. Or on a more likely note the person with 30x in expenses who got hit with a 20x expense still loses. At best you can reduce the odds of losing and change your game (i.e. be more conservative) but you are still playing the game til the end.
+1
+2. There is no escape from playing the game called LIFE till you have life. If you peak early, life can throw googlies to return to START.

inbox788
Posts: 6646
Joined: Thu Mar 15, 2012 5:24 pm

### Re: What's a good way to calculate when I have won the game??

barberakb wrote:
Tue Aug 14, 2018 11:37 am
inbox788 wrote:
Mon Aug 13, 2018 4:59 pm
barberakb wrote:
Fri Aug 10, 2018 2:42 pm
We currently live on about 75K a year but I actually think that will increase after retirement. My wife likes to travel and she spends more money when shes bored...
Other than medical, this was the other variable that was/is the toughest to estimate. So far, both have been (upwardly) moving targets. Also, you want to consider disability/insurance and LTC/insurance. And you're far off from an end date, but are you looking at 90? 100? 110? These unknowns have pushed up the retirement number and pushed back the retirement date.
i think we can easily live on 90k a year but could scale back to the 75k if needed
I was referring to years not dollars. You can use 2% inflation, but what does using 2.2% inflation do to your number? And 90 years old vs 110 years old is 20 more years to try to assure you're not outliving your money. In the end, it's a probability measurement, and you can estimate a 5% chance of failure, a 2% chance of failure, or even 1%, but luck is involved. Also, note that spending today is far more impacted by inflation and decreased growth than spending decades later, which makes the travel question more difficult as you're more likely able to travel more in younger years.