What's the number?

[frorider]

There are HBI (Hookers n Blow Index) market fluctuations that are difficult to integrate into a robust planning strategy.

[JimmyCarter]

There are HBI (Hookers n Blow Index) market fluctuations that are difficult to integrate into a robust planning strategy.

I've hedged that risk with investments in colombian agricultural RE and eastern european brothels. Subscribe to my newsletter!

[liv2ski]

I've hedged that risk with investments in colombian agricultural RE and eastern european brothels. Subscribe to my newsletter!

Link please

[liv2ski]

When I started budgeting / planning a few years ago, I wrote down all my actual annual spending so I could figure out "what's the number" to support that. It came to something like $28K/ year, and there was fat to trim if needed.

$28k a year sounds like just barely covering living expenses like taxes, insurance, utilities, etc. I don't think that covers food, entertainment, trips, a new car, etc. Using my numbers we need about $7k per month gross income to cover everything (including insurance before Medicare coverage kicks in)

[4matic]

You are the one insisting on investment. My original post says its a sweet, revenue neutral way to increase the awesomeness of retirement, not take it to the bank.

That was my original statement. That is was a poor retirement INVESTMENT.

[wooley12]

Curious. When your "number" is over $1Mil, how much of that money do you plan on leaving behind when you die?

[liv2ski]

Curious. When your "number" is over $1Mil, how much of that money do you plan on leaving behind when you die?

Likely about $3M in RE, so I can fuck the Gubermunt out of Capital Gain taxes.

[iceman]

That should give you a good laugh! Oh wait.

[AdironRider]

That was my original statement. That is was a poor retirement INVESTMENT.

Dude, you taking a bath on your investments recently or something? You seem quite upset

[alembical]

I think I would need on the higher end than most to retire. A lot of time people running these numbers look at their current spending habits and needs. I know the amount of money I spend this week is substantially less than the amount I will spend next week in the midst of a vacation. Retirement would be the same way. I will spend substantially more than I do during a typical work week.

[VTeton]

^ in your 4m/2m numbers/math; are you thinking per person, or a married couple?

Married, high cost of living state, retire by 55. Small second home, travel, ski, help kids a little. Big concern is 10+ yrs health insurance before govt health. At 4%, 160k year less 25% tax = 120k.

25k property tax, utilities, maintenance. ( 2038?)
24k health insurance for two old farts 2038?

Leaves 71k which is about 6k a month. Seems like a good number to walk away at.

What's 6k a month gonna get you in 20 years?

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[wooley12]

Likely about $3M in RE, so I can fuck the Gubermunt out of Capital Gain taxes.

I've thought about racking up $1-200k in cc debt just before I go. Fuck the Bankers!!!!

[dunfree]

I think I would need on the higher end than most to retire. A lot of time people running these numbers look at their current spending habits and needs. I know the amount of money I spend this week is substantially less than the amount I will spend next week in the midst of a vacation. Retirement would be the same way. I will spend substantially more than I do during a typical work week.

most people travel at the beginning of their retirement and the travel, etc. drop off to often pretty minimal expenditures - excluding healthcare.

[frorider]

Fucking healthcare is the wildcard for most.

Meanwhile my friends and family in CH/NZ/Australia don’t think about it much at all in these retirement conversations.

[The AD]

Married, high cost of living state, retire by 55. Small second home, travel, ski, help kids a little. Big concern is 10+ yrs health insurance before govt health. At 4%, 160k year less 25% tax = 120k.

So your plan is to simply live off the interest and not dip into that $4 million savings at all? I mean that's great if you're able to do it, but personally I'd be willing to actually spend some of the money I've saved over my working career.

[zion zig zag]

^^^

https://www.google.com/amp/amp.timei...ate-retirement


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[The AD]

^^^

https://www.google.com/amp/amp.timei...ate-retirement

On the contrary, 90% of the time investors following the 4% rule would have ended up with more than the amount they started with, and two-thirds of the time they would have more than double their original principal remaining even after 30 years of inflation-adjusted withdrawals. Based on that record, Kitces believes that a withdrawal rate of 4% “is still reasonable in today’s environment.”

I feel like I'm pretty fiscally conservative and this even seems absurd to me. 90% of the time investors would have ended up with more than they started? I'd say that makes it a little more than 'reasonable.' Personally it seems excessively constraining.

[VTeton]

So your plan is to simply live off the interest and not dip into that $4 million savings at all? I mean that's great if you're able to do it, but personally I'd be willing to actually spend some of the money I've saved over my working career.

4M in 2038 is equal to 2.2M today at a 3% discount rate. That may bring the number closer to today's reality.

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[VTeton]

The 4% theory doesnt account for the age you call it quits. Big difference between bagging out at 50 vs 70 and following the 4% theory. At 70, fuck it, draw 10%.... do that at 50 and you'll be greeting at Wally world.

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[Sirshredalot]

The 4% theory doesnt account for the age you call it quits. Big difference between bagging out at 50 vs 70 and following the 4% theory. At 70, fuck it, draw 10%.... do that at 50 and you'll be greeting at Wally world.

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Health care is wrapped up in it, but if you end up in the old folks home at age 80 or 85, you'd better be able to cash flow 5k+++ per month until you die.

My grandmother (the one who lived into her 90s) found herself in these shoes. SS, the proceeds of selling her house, and the survivors' benefit of her husband's pension covered a chunk of that, but the kids were kicking in to cover the remainder.

That shit ain't getting cheaper, either.

[The AD]

The 4% theory doesnt account for the age you call it quits. Big difference between bagging out at 50 vs 70 and following the 4% theory. At 70, fuck it, draw 10%.... do that at 50 and you'll be greeting at Wally world.

But the numbers I quoted above don't really bear that out. 90% had more money after 30 years than they started with in the sim. Yeah, I agree 10% would be rolling the dice, but 4% seems way too conservative.

[Art Shirk]

Add 60K to whatever my number is thanks to my side sewer under the road. That's a tough check to write before christmas.

[dunfree]

But the numbers I quoted above don't really bear that out. 90% had more money after 30 years than they started with in the sim. Yeah, I agree 10% would be rolling the dice, but 4% seems way too conservative.

over what time frame? shit's been really good in the past few decades.

[The AD]

over what time frame? shit's been really good in the past few decades.

The study used data back to the 1870s and evaluated every 30 year period from that time to today, so it certainly seems like it covered the gamut of possibilities.

[4matic]

The 4% rule looking back 30 years still had 20 years with at least a 4% risk free rate and equity dividend rates were also much higher. That's the problem I see with backward looking metrics today.