Can't see retiring without 15x-30x fixed income

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marcopolo
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Re: Can't see retiring without 15x-30x fixed income

Post by marcopolo » Wed Mar 13, 2019 8:25 am

visualguy wrote:
Tue Mar 12, 2019 7:34 pm
JBTX wrote:
Tue Mar 12, 2019 7:07 pm
Thats fair.

I'm just saying it isn't as binary for some people. For many people, retirement is occupying time to keep themselves busy, doing things they generally like to do. But more often than not they aren't monumental things. Puttering if you will. And I don't mean that in a negative way. But in the grand scheme of things if I work a little more doing a job I like and that means I end up puttering a little less on the back side, it isn't as if it is a great loss.
Same with me - I don't see anything all that wonderful that I can (and want to) do in retirement, but can't do now while working. Whenever I think about it, I just come up with things that are also basically variants of work. I actually retired at some point, but went back to work after realizing that I was mostly frittering my time away.

I think there is a lot of truth to this.

Each person has to decide the relative value they put on things. Some may value the freedom to just putter around. One frequent poster here has a goal of playing video games during retirement. You may not find that meaningful, but if that is what makes him happy, who am I to judge?

I also think most people have an inflated view of how meaningful their careers are, after all they have devoted a lifetime to it. But, the vast majority of jobs are not doing "momumental" things, certainly not on a daily basis.

Perspectives also change with time. What you find exhilarating about a career can become stale and routine after many years, and as other interests come to the fore.

There is no single right path, and I doubt any of the discussions here will change anyone's mind, but it is interesting to see other perspectives.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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TheTimeLord
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Wed Mar 13, 2019 9:03 am

marcopolo wrote:
Wed Mar 13, 2019 8:25 am
visualguy wrote:
Tue Mar 12, 2019 7:34 pm
JBTX wrote:
Tue Mar 12, 2019 7:07 pm
Thats fair.

I'm just saying it isn't as binary for some people. For many people, retirement is occupying time to keep themselves busy, doing things they generally like to do. But more often than not they aren't monumental things. Puttering if you will. And I don't mean that in a negative way. But in the grand scheme of things if I work a little more doing a job I like and that means I end up puttering a little less on the back side, it isn't as if it is a great loss.
Same with me - I don't see anything all that wonderful that I can (and want to) do in retirement, but can't do now while working. Whenever I think about it, I just come up with things that are also basically variants of work. I actually retired at some point, but went back to work after realizing that I was mostly frittering my time away.

I think there is a lot of truth to this.

Each person has to decide the relative value they put on things. Some may value the freedom to just putter around. One frequent poster here has a goal of playing video games during retirement. You may not find that meaningful, but if that is what makes him happy, who am I to judge?

I also think most people have an inflated view of how meaningful their careers are, after all they have devoted a lifetime to it. But, the vast majority of jobs are not doing "momumental" things, certainly not on a daily basis.

Perspectives also change with time. What you find exhilarating about a career can become stale and routine after many years, and as other interests come to the fore.

There is no single right path, and I doubt any of the discussions here will change anyone's mind, but it is interesting to see other perspectives.
You are of course correct. But still being in the workforce I have a problem seeing how it is worth trading a day's pay for a day of puttering. I think that will go away once I am retired but for now it presents a hurdle.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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HomerJ
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Re: Can't see retiring without 15x-30x fixed income

Post by HomerJ » Wed Mar 13, 2019 9:41 am

visualguy wrote:
Tue Mar 12, 2019 7:34 pm
JBTX wrote:
Tue Mar 12, 2019 7:07 pm
Thats fair.

I'm just saying it isn't as binary for some people. For many people, retirement is occupying time to keep themselves busy, doing things they generally like to do. But more often than not they aren't monumental things. Puttering if you will. And I don't mean that in a negative way. But in the grand scheme of things if I work a little more doing a job I like and that means I end up puttering a little less on the back side, it isn't as if it is a great loss.
Same with me - I don't see anything all that wonderful that I can (and want to) do in retirement, but can't do now while working. Whenever I think about it, I just come up with things that are also basically variants of work. I actually retired at some point, but went back to work after realizing that I was mostly frittering my time away.
Heh, puttering is a fair description.

Me, I can also see myself continuing to do variants of things that I currently do at work... The FUN things though, without any of the meetings or deadlines.
The J stands for Jay

supersharpie
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Re: Can't see retiring without 15x-30x fixed income

Post by supersharpie » Wed Mar 13, 2019 9:45 am

Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"

mak1277
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Re: Can't see retiring without 15x-30x fixed income

Post by mak1277 » Wed Mar 13, 2019 9:51 am

supersharpie wrote:
Wed Mar 13, 2019 9:45 am
Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"
Yes, once you have "enough", if you keep working you should just accept/admit that your job has become a paid hobby.

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TheTimeLord
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Wed Mar 13, 2019 10:29 am

supersharpie wrote:
Wed Mar 13, 2019 9:45 am
Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"
Why would you spend them sitting in front of a TV? People do funny things. Most of us have grand plans for what we would/will do with our free time, the reality of what we do is often quite different.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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TheTimeLord
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Wed Mar 13, 2019 10:30 am

mak1277 wrote:
Wed Mar 13, 2019 9:51 am
supersharpie wrote:
Wed Mar 13, 2019 9:45 am
Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"
Yes, once you have "enough", if you keep working you should just accept/admit that your job has become a paid hobby.
Makes sense to me.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

smitcat
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Re: Can't see retiring without 15x-30x fixed income

Post by smitcat » Wed Mar 13, 2019 10:36 am

supersharpie wrote:
Wed Mar 13, 2019 9:45 am
Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"
Optional viewpoint...
- there are folks that do not work 8-10 hrs per day
- there are folks that are very flexible to take vacations and spend time
- there are folks that often have fun at work
- there are folks that are doing things during their working years typically thought of as retirement items
- there are folks that have 'good options' about what to do with extra funds

Independent George
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Re: Can't see retiring without 15x-30x fixed income

Post by Independent George » Wed Mar 13, 2019 11:03 am

TheTimeLord wrote:
Tue Mar 12, 2019 9:46 pm
abuss368 wrote:
Tue Mar 12, 2019 8:33 pm
That is a wide range - 15x - 30x.
Just trying to cover a world that has portfolios from 25x-100x.
So... 30-60% fixed income, then? If anything, that would be on the aggressive side. I've debating the merits of 50/50 or 40/60 for my low-end retirement projections.

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TheTimeLord
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Wed Mar 13, 2019 11:17 am

Independent George wrote:
Wed Mar 13, 2019 11:03 am
TheTimeLord wrote:
Tue Mar 12, 2019 9:46 pm
abuss368 wrote:
Tue Mar 12, 2019 8:33 pm
That is a wide range - 15x - 30x.
Just trying to cover a world that has portfolios from 25x-100x.
So... 30-40% fixed income, then? If anything, that would be on the aggressive side. I've debating the merits of 50/50 or 40/60 for my low-end retirement projections.
So I am saying 30%-60% fixed income with a minimum of a 25x portfolio. If you have a 25x portfolio with 15x fixed income then you are 40/60. But if you have a 100x portfolio with 30x in Fixed Income at age 60 you are 70/30. That said, it is hard to argue that for your personal finances you are overly aggressive given that your fixed income likely can cover the rest of your life. Personally, I like 20x for me, starting 5 years before retirement and through FRA, which for me will be 67, basically enough to cover my expected lifespan, beyond that where I would put the remaining money should have little impact on me personally but I think I would likely put the rest in stocks. I think because so many people here are focused on retiring early we don't discuss age and lifespan as much as we could. Personally, for a long time I did my planning using an age of 96 but finally I stopped and said 90 with below average returns makes more sense. I did that with the belief if I did live longer I wouldn't also catch the bullet of below average returns. Obviously I don't know the future but it is not my personal nature to plan for every possible thing that could go wrong to go wrong over a 30+ year period.
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smitcat
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Re: Can't see retiring without 15x-30x fixed income

Post by smitcat » Wed Mar 13, 2019 11:33 am

TheTimeLord wrote:
Wed Mar 13, 2019 11:17 am
Independent George wrote:
Wed Mar 13, 2019 11:03 am
TheTimeLord wrote:
Tue Mar 12, 2019 9:46 pm
abuss368 wrote:
Tue Mar 12, 2019 8:33 pm
That is a wide range - 15x - 30x.
Just trying to cover a world that has portfolios from 25x-100x.
So... 30-40% fixed income, then? If anything, that would be on the aggressive side. I've debating the merits of 50/50 or 40/60 for my low-end retirement projections.
So I am saying 30%-60% fixed income with a minimum of a 25x portfolio. If you have a 25x portfolio with 15x fixed income then you are 40/60. But if you have a 100x portfolio with 30x in Fixed Income at age 60 it is hard to argue that for you your personal finances are overly aggressive given your fixed income likely can cover the rest of your life. Personally, I like 20x for me, starting 5 years before retirement and through FRA, which for me will be 67, basically enough to cover my expected lifespan beyond that where I would put the money should have little impact on me personally but I think I would likely put the rest in stocks. I think because so many people here are focused on retiring early we don't discuss age and lifespan as much as we could. Personally, for a long time I did my planning using an age of 96 but finally I stopped and said 90 with below average returns makes more sense. I did that with the belief if I did live longer I wouldn't also catch the bullet of below average returns. Obviously I don't know the future but it is not my personal nature to plan for every possible thing that could go wrong to go wrong over a 30+ year period.
"If you have a 25x portfolio with 15x fixed income then you are 40/60."
And if you have a 25X portfolio with a 40/60 and stocks should drop a whopping 50% you still have 20X.

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TheTimeLord
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Wed Mar 13, 2019 11:36 am

smitcat wrote:
Wed Mar 13, 2019 11:33 am
TheTimeLord wrote:
Wed Mar 13, 2019 11:17 am
Independent George wrote:
Wed Mar 13, 2019 11:03 am
TheTimeLord wrote:
Tue Mar 12, 2019 9:46 pm
abuss368 wrote:
Tue Mar 12, 2019 8:33 pm
That is a wide range - 15x - 30x.
Just trying to cover a world that has portfolios from 25x-100x.
So... 30-40% fixed income, then? If anything, that would be on the aggressive side. I've debating the merits of 50/50 or 40/60 for my low-end retirement projections.
So I am saying 30%-60% fixed income with a minimum of a 25x portfolio. If you have a 25x portfolio with 15x fixed income then you are 40/60. But if you have a 100x portfolio with 30x in Fixed Income at age 60 it is hard to argue that for you your personal finances are overly aggressive given your fixed income likely can cover the rest of your life. Personally, I like 20x for me, starting 5 years before retirement and through FRA, which for me will be 67, basically enough to cover my expected lifespan beyond that where I would put the money should have little impact on me personally but I think I would likely put the rest in stocks. I think because so many people here are focused on retiring early we don't discuss age and lifespan as much as we could. Personally, for a long time I did my planning using an age of 96 but finally I stopped and said 90 with below average returns makes more sense. I did that with the belief if I did live longer I wouldn't also catch the bullet of below average returns. Obviously I don't know the future but it is not my personal nature to plan for every possible thing that could go wrong to go wrong over a 30+ year period.
"If you have a 25x portfolio with 15x fixed income then you are 40/60."
And if you have a 25X portfolio with a 40/60 and stocks should drop a whopping 50% you still have 20X.
Yep, and depending on my age I would definitely take that into consideration. If I was 67 that would be enormously comforting, if I had retired early at 50 not quite as much unless I was planning on substantial SS or pension benefits. But that is me and I feel I lean conservative on these issues.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

mariezzz
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Re: Can't see retiring without 15x-30x fixed income

Post by mariezzz » Wed Mar 13, 2019 11:56 am

matthewbarnhart wrote:
Mon Mar 11, 2019 6:14 pm

I found that this chart gave me a lot of perspective: Rich, Broke or Dead?
This is really interesting. I put in the values I've had in the back of my mind for my situation and it looks very positive - I could retire today.
I wonder if people think this calculator is a little too optimistic ... However, it's also true that in most possible scenarios, most people can take out more than 4% annually from their portfolio for 30+ years and still see it grow. It's only a very small percent of scenarios where it's not likely to last 30 years (and even 40 years) - and this ignores the fact that people can adjust their spending if the market has a string of bad years.

The 'dead' part of the visual is sobering.

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JoeRetire
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Re: Can't see retiring without 15x-30x fixed income

Post by JoeRetire » Wed Mar 13, 2019 12:04 pm

HomerJ wrote:
Tue Mar 12, 2019 12:33 pm
It's too bad part-time work is not a normal option for most U.S. jobs.
Most people don't bother to explore that possibility.

And there are plenty of jobs for part-time work. Perhaps not the specific job you hold now, perhaps something similar somewhere else, perhaps something very different.
I like my job... I'd love to do it 6 months a year. If I could be guaranteed such a job, I'd semi-retire today, and work part-time for the next 10-15 years. I would enjoy that very much.
Have you asked?
Instead, I'm going to have to work full-time for another 5-6 years, and save enough so I can support myself 100% if I never work again after that.
That might be the best option. But clearly you don't have to do it.
Don't be a lemming.

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Re: Can't see retiring without 15x-30x fixed income

Post by Starfish » Wed Mar 13, 2019 12:10 pm

dknightd wrote:
Mon Mar 11, 2019 7:02 pm
KlangFool wrote:
Mon Mar 11, 2019 6:23 pm

TheTimeLord,

Your problem has nothing to do with money. You do not have something to retire to.

To each its own.

KlangFool
That is not fair. He could spend more time on this web site. More time on other things. Even more time watching TV if he wanted. And still have more time to do other things he wants to do.

If he is like me I want 3 months of vacations every year. Not the 6 weeks my employer provides.

I don't understand this "you must have something to retire to" mentality. I'm not retiring to anything. Except not having to work 5 days a week.

YMMV
You can retire because you are tired.
And you can retire because you want to do something else.
In the first case, once the work hours are removed and you rest for a month or two, you might discover that life is very different from what you thought.

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willthrill81
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Re: Can't see retiring without 15x-30x fixed income

Post by willthrill81 » Wed Mar 13, 2019 12:11 pm

JoeRetire wrote:
Wed Mar 13, 2019 12:04 pm
HomerJ wrote:
Tue Mar 12, 2019 12:33 pm
It's too bad part-time work is not a normal option for most U.S. jobs.
Most people don't bother to explore that possibility.

And there are plenty of jobs for part-time work. Perhaps not the specific job you hold now, perhaps something similar somewhere else, perhaps something very different.
As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

mak1277
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Re: Can't see retiring without 15x-30x fixed income

Post by mak1277 » Wed Mar 13, 2019 12:24 pm

willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm
JoeRetire wrote:
Wed Mar 13, 2019 12:04 pm
HomerJ wrote:
Tue Mar 12, 2019 12:33 pm
It's too bad part-time work is not a normal option for most U.S. jobs.
Most people don't bother to explore that possibility.

And there are plenty of jobs for part-time work. Perhaps not the specific job you hold now, perhaps something similar somewhere else, perhaps something very different.
As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
Agreed. I get static from my company if I ask for two consecutive weeks off for vacation...no way would I ever be able to work part time or take recurring sabbaticals.

mariezzz
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Re: Can't see retiring without 15x-30x fixed income

Post by mariezzz » Wed Mar 13, 2019 12:32 pm

willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm

As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
I'm not sure that I agree with the above statement. Yes, it is easier for the average person to find a low-paying part-time job ($25K) than a part-time job that pays $100k. But, I think that people who make salaries in the $200k or higher range have many more options than the average person.

They are more likely to be able to talk to their current employer and be able to cut back on hours, working part-time and cutting their salary down to $100k ... they are more likely to have options to do consulting work ... they are more likely to be able to go to another employer, negotiate working part time, and cutting their take-home pay from $200k to $100k. In the latter scenario, maybe they'd end up working 30 hours/week instead of 60 . It's still part-time, a 50% reduction in work time and a 50% reduction in pay.

The more difficult option is being able to work 6 months on, 6 months off - that just doesn't meet the needs of many employers. But if you consult, it might work.

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Re: Can't see retiring without 15x-30x fixed income

Post by SuzBanyan » Wed Mar 13, 2019 1:16 pm

I have been part time for more than 2 years now and my salary more or less went from $200k to $100k. My company was in its own transition after a significant property sale. That combined with my feeling that I was more or less at FI, gave me the comfort in asking for the reduced hours/pay. My employer still pays 100% of my health insurance plus HSA contribution, which has me hoping to hold on until I reach 65.

With an extra 2 days at home each week, I do find myself doing more “puttering”. Often, though, my puttering means spending more time with my already retired husband and so I’m okay with that.

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Re: Can't see retiring without 15x-30x fixed income

Post by willthrill81 » Wed Mar 13, 2019 2:55 pm

mariezzz wrote:
Wed Mar 13, 2019 12:32 pm
willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm

As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
I'm not sure that I agree with the above statement. Yes, it is easier for the average person to find a low-paying part-time job ($25K) than a part-time job that pays $100k. But, I think that people who make salaries in the $200k or higher range have many more options than the average person.

They are more likely to be able to talk to their current employer and be able to cut back on hours, working part-time and cutting their salary down to $100k ... they are more likely to have options to do consulting work ... they are more likely to be able to go to another employer, negotiate working part time, and cutting their take-home pay from $200k to $100k. In the latter scenario, maybe they'd end up working 30 hours/week instead of 60 . It's still part-time, a 50% reduction in work time and a 50% reduction in pay.

The more difficult option is being able to work 6 months on, 6 months off - that just doesn't meet the needs of many employers. But if you consult, it might work.
I didn't say it was impossible to get a part-time $100k job. I said it's less realistic.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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JoeRetire
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Re: Can't see retiring without 15x-30x fixed income

Post by JoeRetire » Wed Mar 13, 2019 3:33 pm

willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm
As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
Why the magic "to $100k" number?

There's nothing wrong with going from $200k to $25k.

(And when I consulted 2 days per week, it was very close to $100k per year, so it's not "unrealistic".)
Don't be a lemming.

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JoeRetire
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Re: Can't see retiring without 15x-30x fixed income

Post by JoeRetire » Wed Mar 13, 2019 3:36 pm

mak1277 wrote:
Wed Mar 13, 2019 12:24 pm
Agreed. I get static from my company if I ask for two consecutive weeks off for vacation...no way would I ever be able to work part time or take recurring sabbaticals.
... at your company.

Fortunately there is more than one company in the US.
Don't be a lemming.

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Re: Can't see retiring without 15x-30x fixed income

Post by JBTX » Wed Mar 13, 2019 3:43 pm

TheTimeLord wrote:
Wed Mar 13, 2019 10:29 am
supersharpie wrote:
Wed Mar 13, 2019 9:45 am
Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"
Why would you spend them sitting in front of a TV? People do funny things. Most of us have grand plans for what we would/will do with our free time, the reality of what we do is often quite different.
What people choose to do with their time and what brings lasting contentment or fulfillment are often different things. I'm as guilty of that as anybody.

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Earl Lemongrab
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Re: Can't see retiring without 15x-30x fixed income

Post by Earl Lemongrab » Wed Mar 13, 2019 4:25 pm

I don't calculate things that way. I'm not particularly worried about day-to-day spending. I'm a simple guy, with simple wants and needs. Right now, first couple years in retirement, my pension covers all spending. It's non-COLA, but of course Social Security is in the future as needed. The bulk of my savings is a hedge against the things that are NOT part of my current spending.

randomguy
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Re: Can't see retiring without 15x-30x fixed income

Post by randomguy » Wed Mar 13, 2019 4:34 pm

mariezzz wrote:
Wed Mar 13, 2019 12:32 pm
willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm

As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
I'm not sure that I agree with the above statement. Yes, it is easier for the average person to find a low-paying part-time job ($25K) than a part-time job that pays $100k. But, I think that people who make salaries in the $200k or higher range have many more options than the average person.

They are more likely to be able to talk to their current employer and be able to cut back on hours, working part-time and cutting their salary down to $100k ... they are more likely to have options to do consulting work ... they are more likely to be able to go to another employer, negotiate working part time, and cutting their take-home pay from $200k to $100k. In the latter scenario, maybe they'd end up working 30 hours/week instead of 60 . It's still part-time, a 50% reduction in work time and a 50% reduction in pay.

The more difficult option is being able to work 6 months on, 6 months off - that just doesn't meet the needs of many employers. But if you consult, it might work.

I don't think you can make assumptions. Fields differ drastically and the ability to split work among multiple people and the overhead of an employee. I know a couple of consultants that work 8 months, take 4 off. Companies bring them in for a project. They do it and take 2 months off. And repeat.

As for how realistic, who knows. There are a lot of 60 year olds who want and can't get jobs. I don't think consulting 3/days week is a viable option for them. Granted the reason they are unemployed might be because they are low performers. At a high level, if you could work 2-3 days/week I am betting a ton of professionals would keep working for several more years. I have met few people that ever did that. Again maybe your field is different.

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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Wed Mar 13, 2019 5:57 pm

JBTX wrote:
Wed Mar 13, 2019 3:43 pm
TheTimeLord wrote:
Wed Mar 13, 2019 10:29 am
supersharpie wrote:
Wed Mar 13, 2019 9:45 am
Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"
Why would you spend them sitting in front of a TV? People do funny things. Most of us have grand plans for what we would/will do with our free time, the reality of what we do is often quite different.
What people choose to do with their time and what brings lasting contentment or fulfillment are often different things. I'm as guilty of that as anybody.
Just saying as humans our plans are often grander than our actions.
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Re: Can't see retiring without 15x-30x fixed income

Post by HomerJ » Wed Mar 13, 2019 11:11 pm

JoeRetire wrote:
Wed Mar 13, 2019 12:04 pm
I like my job... I'd love to do it 6 months a year. If I could be guaranteed such a job, I'd semi-retire today, and work part-time for the next 10-15 years. I would enjoy that very much.
Have you asked?
Have I asked my employer if they will guarantee me a part-time job for the next 10-15 years?

No, I don't want to be considered a crazy fool.
Instead, I'm going to have to work full-time for another 5-6 years, and save enough so I can support myself 100% if I never work again after that.
That might be the best option. But clearly you don't have to do it.
It's the correct option to choose, because, even though I probably COULD find a part-time job today (with my current employer, or someone else), I will have to work far longer, and having my plan REQUIRE keeping a decent-salary part-time job for 10-15 more years is not a good plan.

Once I achieve my number, I probably will talk to people about going part-time, because it will no longer be a job that I need to keep for many years. Just for fun/extra money.
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Re: Can't see retiring without 15x-30x fixed income

Post by SevenBridgesRoad » Wed Mar 13, 2019 11:33 pm

TheTimeLord wrote:
Wed Mar 13, 2019 5:57 pm
JBTX wrote:
Wed Mar 13, 2019 3:43 pm
TheTimeLord wrote:
Wed Mar 13, 2019 10:29 am
supersharpie wrote:
Wed Mar 13, 2019 9:45 am
Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"
Why would you spend them sitting in front of a TV? People do funny things. Most of us have grand plans for what we would/will do with our free time, the reality of what we do is often quite different.
What people choose to do with their time and what brings lasting contentment or fulfillment are often different things. I'm as guilty of that as anybody.
Just saying as humans our plans are often grander than our actions.
TTL, I completely admire and respect you for being comfortable in your own skin. You tried full-time retirement and found that you prefer work instead. Cool. Your actions and the various responses on this thread show once again how many different kinds of people there are. The harder part might be: how do we learn to understand the different approaches and accept the differences respectfully (while each explaining...even advocating... how we have approached the situation)?
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Re: Can't see retiring without 15x-30x fixed income

Post by MikeG62 » Thu Mar 14, 2019 8:30 am

TheTimeLord wrote:
Tue Mar 12, 2019 9:09 am
MikeG62 wrote:
Tue Mar 12, 2019 8:17 am
SevenBridgesRoad wrote:
Mon Mar 11, 2019 10:57 pm

...The last third (I know...hopefully a third!) is about doing what I want to do everyday without the time commitment and responsibility of a paid job. I've been in this last phase (retirement) for less than a year, but I have to say it's pretty cool. The feeling of freedom is unbelievable. And what if I get bored a year or two from now? The idea that the only cure for boredom is a job doesn't make sense to me. There are a thousand and one things to do in this last phase.
Well said and my sentiments exactly (I am in my fourth year of early retirement).
Unfortunately, neither myself or friends I have talked to have been able to figure this out for 365 days a year. We usually can get to about 5-7 months but that's about all. I have one friend who is very happily retired but the rhythm of his retirement is about 1 trip per quarter (very interesting trip usually) followed by 3 months of light fitness, errands and planning for the next trip. A good life for him but not anything he couldn't have waited 5 years to do.
My experience is quite the opposite. In my daily routine I constantly come into contact with many others who are retired. I can't think of a single one (other than my FIL, who has finally retired at 80) who have ever said to me that they struggle to figure out how to spend their time in retirement. So I think your sample size may be skewed (or too small).

I remember talking to people who were retired while I was still working. I would routinely here them say, "I don't know how I ever had the time to work". As I retired person, I get it. So many other more enjoyable things to do than spend any more time working.

I think the preponderance of retired folks who have commented in this thread report the same thing I am saying. Not bored and never been happier. It seems to me, you have perpetual one-more-year syndrome.

WRT your friend, how about instead of 3 month of light fitness, what if they committed to a routine of fitness which involves going to the gym 4, 5 or 6 days per week, every week of the year. Beyond the time it takes, think of the health benefits. DW and I go to the gym every morning six days per week. It's a very high end gym and a very nice place to spend an hour or two.
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Thu Mar 14, 2019 9:24 am

SevenBridgesRoad wrote:
Wed Mar 13, 2019 11:33 pm
TheTimeLord wrote:
Wed Mar 13, 2019 5:57 pm
JBTX wrote:
Wed Mar 13, 2019 3:43 pm
TheTimeLord wrote:
Wed Mar 13, 2019 10:29 am
supersharpie wrote:
Wed Mar 13, 2019 9:45 am
Why would you give up 8-10 hours of precious, limited free time in exchange for money you don't need?

If you love your job and prefer focusing on that than other pursuits, all the more power to you.

However, if there are other things you would prefer doing 8-10 hours a day than your job, and you are financially independent, it is perfectly rational to retire. I doubt many people on their deathbed think to themselves "I really wish I had worked longer!"
Why would you spend them sitting in front of a TV? People do funny things. Most of us have grand plans for what we would/will do with our free time, the reality of what we do is often quite different.
What people choose to do with their time and what brings lasting contentment or fulfillment are often different things. I'm as guilty of that as anybody.
Just saying as humans our plans are often grander than our actions.
TTL, I completely admire and respect you for being comfortable in your own skin. You tried full-time retirement and found that you prefer work instead. Cool. Your actions and the various responses on this thread show once again how many different kinds of people there are. The harder part might be: how do we learn to understand the different approaches and accept the differences respectfully (while each explaining...even advocating... how we have approached the situation)?
People definitely have a wide range of desires and needs. I believe it is very important to know yourself and do what works best for you while realizing it is not the solution for everyone or perhaps anyone else.
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Re: Can't see retiring without 15x-30x fixed income

Post by HomerJ » Thu Mar 14, 2019 9:32 am

Something to note Time Lord...

You reference your one stint of 7 months off as a "trial retirement", which leads you to believe you won't enjoy retirement.

But was that really a "trial retirement"? Or just being unemployed? I mean, your friends and your wife were all still working, and you weren't ready to commit to any new projects, because you were still thinking about looking for work.
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Re: Can't see retiring without 15x-30x fixed income

Post by JoeRetire » Thu Mar 14, 2019 9:37 am

HomerJ wrote:
Wed Mar 13, 2019 11:11 pm
JoeRetire wrote:
Wed Mar 13, 2019 12:04 pm
I like my job... I'd love to do it 6 months a year. If I could be guaranteed such a job, I'd semi-retire today, and work part-time for the next 10-15 years. I would enjoy that very much.
Have you asked?
Have I asked my employer if they will guarantee me a part-time job for the next 10-15 years?

No, I don't want to be considered a crazy fool.
No. Have you asked if you could work part-time?
It wouldn't make sense to ask for guarantees. Your full-time work isn't guaranteed either, even if that is your plan.
Instead, I'm going to have to work full-time for another 5-6 years, and save enough so I can support myself 100% if I never work again after that.
That might be the best option. But clearly you don't have to do it.
It's the correct option to choose, because, even though I probably COULD find a part-time job today (with my current employer, or someone else), I will have to work far longer, and having my plan REQUIRE keeping a decent-salary part-time job for 10-15 more years is not a good plan.

Once I achieve my number, I probably will talk to people about going part-time, because it will no longer be a job that I need to keep for many years. Just for fun/extra money.
That's clearly your choice. It's one option among many. You may consider it "correct", others may not.
Don't be a lemming.

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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Thu Mar 14, 2019 9:39 am

MikeG62 wrote:
Thu Mar 14, 2019 8:30 am
TheTimeLord wrote:
Tue Mar 12, 2019 9:09 am
MikeG62 wrote:
Tue Mar 12, 2019 8:17 am
SevenBridgesRoad wrote:
Mon Mar 11, 2019 10:57 pm

...The last third (I know...hopefully a third!) is about doing what I want to do everyday without the time commitment and responsibility of a paid job. I've been in this last phase (retirement) for less than a year, but I have to say it's pretty cool. The feeling of freedom is unbelievable. And what if I get bored a year or two from now? The idea that the only cure for boredom is a job doesn't make sense to me. There are a thousand and one things to do in this last phase.
Well said and my sentiments exactly (I am in my fourth year of early retirement).
Unfortunately, neither myself or friends I have talked to have been able to figure this out for 365 days a year. We usually can get to about 5-7 months but that's about all. I have one friend who is very happily retired but the rhythm of his retirement is about 1 trip per quarter (very interesting trip usually) followed by 3 months of light fitness, errands and planning for the next trip. A good life for him but not anything he couldn't have waited 5 years to do.
My experience is quite the opposite. In my daily routine I constantly come into contact with many others who are retired. I can't think of a single one (other than my FIL, who has finally retired at 80) who have ever said to me that they struggle to figure out how to spend their time in retirement. So I think your sample size may be skewed (or too small).

I remember talking to people who were retired while I was still working. I would routinely here them say, "I don't know how I ever had the time to work". As I retired person, I get it. So many other more enjoyable things to do than spend any more time working.

I think the preponderance of retired folks who have commented in this thread report the same thing I am saying. Not bored and never been happier. It seems to me, you have perpetual one-more-year syndrome.

WRT your friend, how about instead of 3 month of light fitness, what if they committed to a routine of fitness which involves going to the gym 4, 5 or 6 days per week, every week of the year. Beyond the time it takes, think of the health benefits. DW and I go to the gym every morning six days per week. It's a very high end gym and a very nice place to spend an hour or two.
I have no doubt they have figured out a way to fill their days. If they are like me when I took time off a lot of it evolves from doing things at a different pace or at non-peak times. But when I discuss trading in work for retirement with my friends those aren't the types of activities they yearn to do in retirement although they may find them enjoyable once they are retired. Most of my circle realizes the reason they don't do things like the gym has far more to do with motivation than not having the time. I am sure I am jaded from the year I took off work because it was not a positive experience for me. That said while people I know who are retired do so pretty cool stuff from time to time, their descriptions of their daily lives just does not entice me which is my problem not theirs. Luckily we all are free to make the choices we feel are best for us and our families.
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Re: Can't see retiring without 15x-30x fixed income

Post by willthrill81 » Thu Mar 14, 2019 9:43 am

JoeRetire wrote:
Wed Mar 13, 2019 3:33 pm
willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm
As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
Why the magic "to $100k" number?

There's nothing wrong with going from $200k to $25k.
The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Thu Mar 14, 2019 9:45 am

HomerJ wrote:
Thu Mar 14, 2019 9:32 am
Something to note Time Lord...

You reference your one stint of 7 months off as a "trial retirement", which leads you to believe you won't enjoy retirement.

But was that really a "trial retirement"? Or just being unemployed? I mean, your friends and your wife were all still working, and you weren't ready to commit to any new projects, because you were still thinking about looking for work.
The 7 month reference was to the most time my friends and I could ever figure out how to fill in a year and I was being a little generous 5 months is likely closer. After taking an early retirement offer from my previous employer I didn't work for almost a year, tried 3 or 4 hobbies and never once looked for a job (I received an unsolicited offer). That said my happy retiree friend is younger than me and will never return to the workforce and has become engrossed in a new hobby.
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Thu Mar 14, 2019 9:48 am

willthrill81 wrote:
Thu Mar 14, 2019 9:43 am
JoeRetire wrote:
Wed Mar 13, 2019 3:33 pm
willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm
As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
Why the magic "to $100k" number?

There's nothing wrong with going from $200k to $25k.
The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
A lot of that likely depends on if you see value in doing the same things but in a more luxurious fashion. First class flights over coach, higher end hotels, better restaurants and so on. For some that would make the things they are planning better, for others it would be meaningless or even less enjoyable because they mat see it s being wasteful.
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Re: Can't see retiring without 15x-30x fixed income

Post by JoeRetire » Thu Mar 14, 2019 9:50 am

willthrill81 wrote:
Thu Mar 14, 2019 9:43 am
JoeRetire wrote:
Wed Mar 13, 2019 3:33 pm
willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm
As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
Why the magic "to $100k" number?

There's nothing wrong with going from $200k to $25k.
The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
Don't be a lemming.

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Re: Can't see retiring without 15x-30x fixed income

Post by willthrill81 » Thu Mar 14, 2019 9:58 am

JoeRetire wrote:
Thu Mar 14, 2019 9:50 am
willthrill81 wrote:
Thu Mar 14, 2019 9:43 am
JoeRetire wrote:
Wed Mar 13, 2019 3:33 pm
willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm
As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
Why the magic "to $100k" number?

There's nothing wrong with going from $200k to $25k.
The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
I'll try to spell it out what I mean more clearly. If someone with a $1.25 million portfolio who is planning on spending $50k (i.e. 4% withdrawals) encounters a poor sequence of returns, they may want to return to the workforce in order to reduce their withdrawals. In this instance, a $25k part-time job could be very beneficial as it is fully 50% of their planned withdrawal.

Compare this to someone with a $5 million portfolio planning on spending $200k. A $25k part-time job would be less beneficial financially because it only represents 12.5% of their planned withdrawal, meaning that the marginal benefit of the same job is significantly lower than for the above retiree.

In order for the second retiree to get the same marginal benefit in terms of reducing their withdrawals, they would need a $100k part-time job, and those are definitely harder to come by than the $25k part-time jobs.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Can't see retiring without 15x-30x fixed income

Post by 2pedals » Thu Mar 14, 2019 10:19 am

Being healthy and retired is not fun 24/7. There is still sleep, yard and housekeeping duties making it about 14/7 rather than 2/7. :twisted:

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Re: Can't see retiring without 15x-30x fixed income

Post by smitcat » Thu Mar 14, 2019 10:37 am

willthrill81 wrote:
Thu Mar 14, 2019 9:58 am
JoeRetire wrote:
Thu Mar 14, 2019 9:50 am
willthrill81 wrote:
Thu Mar 14, 2019 9:43 am
JoeRetire wrote:
Wed Mar 13, 2019 3:33 pm
willthrill81 wrote:
Wed Mar 13, 2019 12:11 pm
As I noted above, this is a far more realistic option at the lower end of the pay scale. It's far more realistic to go from making $50k to $25k with part-time work than to go from $200k to $100k.
Why the magic "to $100k" number?

There's nothing wrong with going from $200k to $25k.
The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
I'll try to spell it out what I mean more clearly. If someone with a $1.25 million portfolio who is planning on spending $50k (i.e. 4% withdrawals) encounters a poor sequence of returns, they may want to return to the workforce in order to reduce their withdrawals. In this instance, a $25k part-time job could be very beneficial as it is fully 50% of their planned withdrawal.

Compare this to someone with a $5 million portfolio planning on spending $200k. A $25k part-time job would be less beneficial financially because it only represents 12.5% of their planned withdrawal, meaning that the marginal benefit of the same job is significantly lower than for the above retiree.

In order for the second retiree to get the same marginal benefit in terms of reducing their withdrawals, they would need a $100k part-time job, and those are definitely harder to come by than the $25k part-time jobs.
Of course I agree with everything you say but there is another important aspect to consider as well.
- the person planning to spend $200K per year can reduce spending by many methods if required
- the person planning to spend $50K per year has much less flexibility to reduce spending.

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Re: Can't see retiring without 15x-30x fixed income

Post by willthrill81 » Thu Mar 14, 2019 10:45 am

smitcat wrote:
Thu Mar 14, 2019 10:37 am
willthrill81 wrote:
Thu Mar 14, 2019 9:58 am
JoeRetire wrote:
Thu Mar 14, 2019 9:50 am
willthrill81 wrote:
Thu Mar 14, 2019 9:43 am
JoeRetire wrote:
Wed Mar 13, 2019 3:33 pm

Why the magic "to $100k" number?

There's nothing wrong with going from $200k to $25k.
The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
I'll try to spell it out what I mean more clearly. If someone with a $1.25 million portfolio who is planning on spending $50k (i.e. 4% withdrawals) encounters a poor sequence of returns, they may want to return to the workforce in order to reduce their withdrawals. In this instance, a $25k part-time job could be very beneficial as it is fully 50% of their planned withdrawal.

Compare this to someone with a $5 million portfolio planning on spending $200k. A $25k part-time job would be less beneficial financially because it only represents 12.5% of their planned withdrawal, meaning that the marginal benefit of the same job is significantly lower than for the above retiree.

In order for the second retiree to get the same marginal benefit in terms of reducing their withdrawals, they would need a $100k part-time job, and those are definitely harder to come by than the $25k part-time jobs.
Of course I agree with everything you say but there is another important aspect to consider as well.
- the person planning to spend $200K per year can reduce spending by many methods if required
- the person planning to spend $50K per year has much less flexibility to reduce spending.
Absolutely. Unfortunately, we have quite a few people around here who believe that spending less than $200k annually would basically mean a life of deprivation, and spending $50k would be a fate worse than death.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Thu Mar 14, 2019 10:54 am

willthrill81 wrote:
Thu Mar 14, 2019 10:45 am
smitcat wrote:
Thu Mar 14, 2019 10:37 am
willthrill81 wrote:
Thu Mar 14, 2019 9:58 am
JoeRetire wrote:
Thu Mar 14, 2019 9:50 am
willthrill81 wrote:
Thu Mar 14, 2019 9:43 am


The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
I'll try to spell it out what I mean more clearly. If someone with a $1.25 million portfolio who is planning on spending $50k (i.e. 4% withdrawals) encounters a poor sequence of returns, they may want to return to the workforce in order to reduce their withdrawals. In this instance, a $25k part-time job could be very beneficial as it is fully 50% of their planned withdrawal.

Compare this to someone with a $5 million portfolio planning on spending $200k. A $25k part-time job would be less beneficial financially because it only represents 12.5% of their planned withdrawal, meaning that the marginal benefit of the same job is significantly lower than for the above retiree.

In order for the second retiree to get the same marginal benefit in terms of reducing their withdrawals, they would need a $100k part-time job, and those are definitely harder to come by than the $25k part-time jobs.
Of course I agree with everything you say but there is another important aspect to consider as well.
- the person planning to spend $200K per year can reduce spending by many methods if required
- the person planning to spend $50K per year has much less flexibility to reduce spending.
Absolutely. Unfortunately, we have quite a few people around here who believe that spending less than $200k annually would basically mean a life of deprivation, and spending $50k would be a fate worse than death.
Well in death you wouldn't be suffering from deprivation so they may have a point.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

smitcat
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Re: Can't see retiring without 15x-30x fixed income

Post by smitcat » Thu Mar 14, 2019 11:15 am

willthrill81 wrote:
Thu Mar 14, 2019 10:45 am
smitcat wrote:
Thu Mar 14, 2019 10:37 am
willthrill81 wrote:
Thu Mar 14, 2019 9:58 am
JoeRetire wrote:
Thu Mar 14, 2019 9:50 am
willthrill81 wrote:
Thu Mar 14, 2019 9:43 am


The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
I'll try to spell it out what I mean more clearly. If someone with a $1.25 million portfolio who is planning on spending $50k (i.e. 4% withdrawals) encounters a poor sequence of returns, they may want to return to the workforce in order to reduce their withdrawals. In this instance, a $25k part-time job could be very beneficial as it is fully 50% of their planned withdrawal.

Compare this to someone with a $5 million portfolio planning on spending $200k. A $25k part-time job would be less beneficial financially because it only represents 12.5% of their planned withdrawal, meaning that the marginal benefit of the same job is significantly lower than for the above retiree.

In order for the second retiree to get the same marginal benefit in terms of reducing their withdrawals, they would need a $100k part-time job, and those are definitely harder to come by than the $25k part-time jobs.
Of course I agree with everything you say but there is another important aspect to consider as well.
- the person planning to spend $200K per year can reduce spending by many methods if required
- the person planning to spend $50K per year has much less flexibility to reduce spending.
Absolutely. Unfortunately, we have quite a few people around here who believe that spending less than $200k annually would basically mean a life of deprivation, and spending $50k would be a fate worse than death.
I guess your right - but if your plans already include a VLCOL area with stripped down expenses you have no real maneuvering room if you have problems.
OTOH - if your in a HCOL area with some larger discretionary items you have a host of choices to make to alleviate potential future problems.
I just see the higher budget plans as having much more built in safety in the big picture.

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TheTimeLord
Posts: 6294
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Thu Mar 14, 2019 11:20 am

smitcat wrote:
Thu Mar 14, 2019 11:15 am
willthrill81 wrote:
Thu Mar 14, 2019 10:45 am
smitcat wrote:
Thu Mar 14, 2019 10:37 am
willthrill81 wrote:
Thu Mar 14, 2019 9:58 am
JoeRetire wrote:
Thu Mar 14, 2019 9:50 am

So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
I'll try to spell it out what I mean more clearly. If someone with a $1.25 million portfolio who is planning on spending $50k (i.e. 4% withdrawals) encounters a poor sequence of returns, they may want to return to the workforce in order to reduce their withdrawals. In this instance, a $25k part-time job could be very beneficial as it is fully 50% of their planned withdrawal.

Compare this to someone with a $5 million portfolio planning on spending $200k. A $25k part-time job would be less beneficial financially because it only represents 12.5% of their planned withdrawal, meaning that the marginal benefit of the same job is significantly lower than for the above retiree.

In order for the second retiree to get the same marginal benefit in terms of reducing their withdrawals, they would need a $100k part-time job, and those are definitely harder to come by than the $25k part-time jobs.
Of course I agree with everything you say but there is another important aspect to consider as well.
- the person planning to spend $200K per year can reduce spending by many methods if required
- the person planning to spend $50K per year has much less flexibility to reduce spending.
Absolutely. Unfortunately, we have quite a few people around here who believe that spending less than $200k annually would basically mean a life of deprivation, and spending $50k would be a fate worse than death.
I guess your right - but if your plans already include a VLCOL area with stripped down expenses you have no real maneuvering room if you have problems.
OTOH - if your in a HCOL area with some larger discretionary items you have a host of choices to make to alleviate potential future problems.
I just see the higher budget plans as having much more built in safety in the big picture.
People should try to retire in the fashion they wish. While I have no desire for a $3,500 Italian Expresso machine I do enjoy my morning Starbucks while someone else prefers to make their coffee at home. Who am I to say that any of us is right or wrong except for our own situation. That said my retirement plan needs to include money for my morning indulgence.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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willthrill81
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Re: Can't see retiring without 15x-30x fixed income

Post by willthrill81 » Thu Mar 14, 2019 11:21 am

smitcat wrote:
Thu Mar 14, 2019 11:15 am
willthrill81 wrote:
Thu Mar 14, 2019 10:45 am
smitcat wrote:
Thu Mar 14, 2019 10:37 am
willthrill81 wrote:
Thu Mar 14, 2019 9:58 am
JoeRetire wrote:
Thu Mar 14, 2019 9:50 am

So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
I'll try to spell it out what I mean more clearly. If someone with a $1.25 million portfolio who is planning on spending $50k (i.e. 4% withdrawals) encounters a poor sequence of returns, they may want to return to the workforce in order to reduce their withdrawals. In this instance, a $25k part-time job could be very beneficial as it is fully 50% of their planned withdrawal.

Compare this to someone with a $5 million portfolio planning on spending $200k. A $25k part-time job would be less beneficial financially because it only represents 12.5% of their planned withdrawal, meaning that the marginal benefit of the same job is significantly lower than for the above retiree.

In order for the second retiree to get the same marginal benefit in terms of reducing their withdrawals, they would need a $100k part-time job, and those are definitely harder to come by than the $25k part-time jobs.
Of course I agree with everything you say but there is another important aspect to consider as well.
- the person planning to spend $200K per year can reduce spending by many methods if required
- the person planning to spend $50K per year has much less flexibility to reduce spending.
Absolutely. Unfortunately, we have quite a few people around here who believe that spending less than $200k annually would basically mean a life of deprivation, and spending $50k would be a fate worse than death.
I guess your right - but if your plans already include a VLCOL area with stripped down expenses you have no real maneuvering room if you have problems.
OTOH - if your in a HCOL area with some larger discretionary items you have a host of choices to make to alleviate potential future problems.
I just see the higher budget plans as having much more built in safety in the big picture.
I agree that bigger budgets, even in HCOL areas, leave you with more options. But my point from earlier is that supplementing your spending with part-time income is apt to be more difficult with a bigger budget.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

JBTX
Posts: 5539
Joined: Wed Jul 26, 2017 12:46 pm

Re: Can't see retiring without 15x-30x fixed income

Post by JBTX » Thu Mar 14, 2019 11:22 am

willthrill81 wrote:
Thu Mar 14, 2019 10:45 am
smitcat wrote:
Thu Mar 14, 2019 10:37 am
willthrill81 wrote:
Thu Mar 14, 2019 9:58 am
JoeRetire wrote:
Thu Mar 14, 2019 9:50 am
willthrill81 wrote:
Thu Mar 14, 2019 9:43 am


The marginal benefit of $25k is a lot more for someone only planning on spending $50k in retirement than someone planning on spending $200k.

If your desired spending is $200k and you encounter a very poor sequence of returns, getting a $25k part-time job may not be of much help, whereas the inverse would be true of someone whose desired spending is $50k.
So if you need the money, you keep working - no matter what your income level is. Marginal benefit doesn't matter.

It's perfectly realistic to go from $200k full time to $25k part time if you should choose to do so.
I'll try to spell it out what I mean more clearly. If someone with a $1.25 million portfolio who is planning on spending $50k (i.e. 4% withdrawals) encounters a poor sequence of returns, they may want to return to the workforce in order to reduce their withdrawals. In this instance, a $25k part-time job could be very beneficial as it is fully 50% of their planned withdrawal.

Compare this to someone with a $5 million portfolio planning on spending $200k. A $25k part-time job would be less beneficial financially because it only represents 12.5% of their planned withdrawal, meaning that the marginal benefit of the same job is significantly lower than for the above retiree.

In order for the second retiree to get the same marginal benefit in terms of reducing their withdrawals, they would need a $100k part-time job, and those are definitely harder to come by than the $25k part-time jobs.
Of course I agree with everything you say but there is another important aspect to consider as well.
- the person planning to spend $200K per year can reduce spending by many methods if required
- the person planning to spend $50K per year has much less flexibility to reduce spending.
Absolutely. Unfortunately, we have quite a few people around here who believe that spending less than $200k annually would basically mean a life of deprivation, and spending $50k would be a fate worse than death.
I don't recall ever seeing anybody saying they would be unhappy with less than $200k per year. I will say for us living on less than $100k-$120k per year would require some significant lifestyle changes. They are certainly doable, but not necessarily ideal.

One of the things I find when not working is I obsess on certain expenses more than when I have income coming in.

pascalwager
Posts: 1564
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Re: Can't see retiring without 15x-30x fixed income

Post by pascalwager » Thu Mar 14, 2019 10:41 pm

TheTimeLord wrote:
Mon Mar 11, 2019 2:51 pm
Maybe it is because I want to retire in my 50s and not my 30s or 40s or that I feel the value of my human capital falls off a cliff the day I retire but I have trouble understanding why anyone would want to retire without having somewhere between 15x-30x in safe fixed income. From my perspective if I couldn't do that it would mean I would have too high a need to take risk. I guess I just don't want to feel like every year I need my equity holdings to have a good year. So I would like to understand the other perspective on this.
As a partial answer, maybe because they've reviewed the Estrada retirement studies that show historical low failure rates for certain allocations of stocks and bonds. In fact, all-equity allocations (100% stocks) had the lowest failure rates, but 60/40 also worked out well. Higher bond allocations had higher failure rates.

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TheTimeLord
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Re: Can't see retiring without 15x-30x fixed income

Post by TheTimeLord » Fri Mar 15, 2019 7:52 am

pascalwager wrote:
Thu Mar 14, 2019 10:41 pm
TheTimeLord wrote:
Mon Mar 11, 2019 2:51 pm
Maybe it is because I want to retire in my 50s and not my 30s or 40s or that I feel the value of my human capital falls off a cliff the day I retire but I have trouble understanding why anyone would want to retire without having somewhere between 15x-30x in safe fixed income. From my perspective if I couldn't do that it would mean I would have too high a need to take risk. I guess I just don't want to feel like every year I need my equity holdings to have a good year. So I would like to understand the other perspective on this.
As a partial answer, maybe because they've reviewed the Estrada retirement studies that show historical low failure rates for certain allocations of stocks and bonds. In fact, all-equity allocations (100% stocks) had the lowest failure rates, but 60/40 also worked out well. Higher bond allocations had higher failure rates.
Likely long term success versus short term security is definitely something that needs to be balanced in one's retirement savings decisions.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

indexonlyplease
Posts: 1571
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Location: Florida

Re: Can't see retiring without 15x-30x fixed income

Post by indexonlyplease » Fri Mar 15, 2019 8:22 am

Jack FFR1846 wrote:
Mon Mar 11, 2019 5:27 pm
So to give you a poster child for "conservative", here I am. I'm already at 50/50 and should easily hit 50X spending at the point I retire (next few years). So I'll have the "traditional" 25X spending in bonds. Add social security and a very small pension to that and there's my future. I'm already 62, so could take early SS right now, if I wanted to. With money over 50X, I plan to buy a stupid car (as in a 6 figure car) and stay in the house we're in now (no downsizing).
I like the stupid car idea. Please tell the car. I also, have been looking at stupid cars I don't need. But want.

smitcat
Posts: 4330
Joined: Mon Nov 07, 2016 10:51 am

Re: Can't see retiring without 15x-30x fixed income

Post by smitcat » Fri Mar 15, 2019 10:33 am

indexonlyplease wrote:
Fri Mar 15, 2019 8:22 am
Jack FFR1846 wrote:
Mon Mar 11, 2019 5:27 pm
So to give you a poster child for "conservative", here I am. I'm already at 50/50 and should easily hit 50X spending at the point I retire (next few years). So I'll have the "traditional" 25X spending in bonds. Add social security and a very small pension to that and there's my future. I'm already 62, so could take early SS right now, if I wanted to. With money over 50X, I plan to buy a stupid car (as in a 6 figure car) and stay in the house we're in now (no downsizing).
I like the stupid car idea. Please tell the car. I also, have been looking at stupid cars I don't need. But want.
I would buy the stupid car now - do not wait.

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