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Back in Nov of 2003, I posted "How much is enough?" to this board. It was a pretty cool thread:
http://boards.fool.com/Message.asp?mid=19859445&sort=who...
At the time, I had reached $100K, and I was trying to get a handle on how little people need to get by.

After thinking about it more, I decided I wanted a minimum of $500K, and that I'd work till the age of 45 if necessary to get there, and revisit the idea later. I'm now in the neighborhood of 45, and I'm revisiting.

There have been some rocky periods. In 2007 I was laid off, and was unemployed for almost half the year. I had just bought a new car for $20K (0% loan with 0 down, which was nice, but still, ouch, bad timing). While unemployed, I was paying about $500/mo for COBRA, an added expense. However, despite months of unemployment, my net worth actually grew, evidence of how much the market drives the number now. My net worth began to dive in Oct 2007, and continued to plummet until 2009. This, despite the fact that I found a new job in 2008 and have been saving handily ever since.

If you look at a graph of my net worth vs time, you see something approximating a pretty straight line from 2003 to 2007. If you extend that line out to 2010, it'd be at around $600K. Instead, there's a great big valley between 2007 and 2010, and in 2010 I'm back to where I was in 2007 - at $350K.

I always like to see concrete numbers when people post. So here are some numbers:

year | salary | saved | all expenses, excluding taxes
2003 | $75K | $30K | $30K <-- hit $100K mark
2004 | $75K | $30K | $25K
2005 | $100K | $45K | $30K
2006 | $75K | $25K | $30K
2007 | $60K | $0 | $45K <-- hit $350K net worth
2008 | $80K | $15K | $50K
2009 | $90K | $30K | $40K <-- finally back to $350K

I was sick of working back in 2003. Fortunately, in 2008, I finally found a better job, one that's more tolerable. But I'm still sick of spending my time on work which is meaningless to me, and I wonder how many more healthy years I have ahead of me to do the stuff that I want to do. I also notice that my enthusiasm for that stuff has waned. I may have delayed gratification for too long.

Recently I started reading the "Retire Early Extreme" blog^*, and a bunch of other blogs by people who hate their jobs and are looking to "retire" on very little. This got me wondering again about how much I really need to live on. In 2008, RER claimed his costs were $12K/year, but his numbers are dodgy, see footnote.

So I'm wondering what other people are doing? Is there anyone out there who just got fed up and decided to leave work temporarily and wing it? Are most people just hanging in there and hoping they'll still be able to retire early, but gave up for now? What's your experience?

Rocannon

^*Re the "Early Retirement Extreme" blog: FWIW I do not consider this guy to be financially independent; he works and gets his health insurance through work, has a wife who brings in income. Also, he's not open about his actual numbers. But his posts can be interesting, if you can ignore the arrogant tone -
http://earlyretirementextreme.com/
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If you believe the myth of Obama Care, in 2014 or so you'll be able to get free health care...with your 'low income'.

I know of a bunch of folks who live on very little. One has an RV...he is a campground host at a US core of engineers campground - year round....he works 20 hours a week, and in return, gets a free spot and free utilities including cable tv , water, sewer and electricity. Lives there year round.

His expenses are upkeep on his mobile home, a cellphone, his part of Medicare/Medicaid.....and food.

Your biggest expenses will be health care and your living expenses - rent, food, insurance, etc.

Plan on keeping that car 10-12 years, and figure out how to downsize your life to your budget constaints..or make enough to meet your needs. Your choice.
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telegraph,

he is a campground host at a US core of engineers campground - year round....he works 20 hours a week

What kind of work does he do there?

It sounds like he's not doing any paid work. So does he draw on his investments and savings to pay for other living expenses?

Rocannon
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The easiest way to retire early on very little is to find a wife with an income and health insurance.

Of course, then you'll have someone you have to "report to" every morning, so it probably won't feel like much of a retirement.

intercst
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I switched jobs from one that I hated to one that I like. I recognize though that the job itself might change, but it moved my desire for FIRE from being extremely important to just something to aim for.

In the original post you linked to, you mentioned some investors in the 80's who had done very well. Unfortunately, we don't live in the 80's, the market appears to be overvalued, and your real return on investments in the overall market may be quite low (like 2-3% a year). I think some solid dividend players may be the maximum you could really hope to garner, which might be around 5% a year (with KMP, MO, RAI, ED, DUK, MCD) So now you are looking at 350*.05 = $17.5k which is pretty tight, far below the $40k which you are living on now.

If I were you I would try experimenting with a super low lifestyle just to see how it feels (for those expenses which are discretionary obviously)

I suspect if you were reasonably lucky with both health and investments, which would be the most probable situation, you could retire right now provided you started traveling abroad a lot of the time and living in really cheap accommodations. however, if you were unlucky in either of these categories, it might land you in a world of hurt. This would take some more investigation to see if you could cover your health expenses with some foreign plan that was not as pricey as US plans. I priced out annuities for someone in their 40's and the most you can hope to get is around 3.3% a year, which is worse than dividend yields of those aforementioned companies.

Is there anyone out there who just got fed up and decided to leave work temporarily and wing it? Are most people just hanging in there and hoping they'll still be able to retire early, but gave up for now?

To be honest the crappy markets have really taken the wind out of my sails with regards to trusting that my investments could really pull their weight and be enough to live on. Combine that with the fact that the investments really aren't doing as well as they should be to retire on, and I'd place myself in the "given up for now" camp, but with the caveat: not as desperate to retire either. My job doesn't demand that much compared to the older job, and it is a bit like being partially retired actually compared to my old job which demanded nearly 50% more working hours.

I like the "Early Retirement Extreme" blog too, it is fun to read. However I share your concern that he really is now mooching off his wife/girlfriend combined with spending huge amounts of time managing his stocks (which he appears to be doing well at, but I don't share his confidence that one can beat the stock market consistently even with a high level of time invested in it). So he has basically switched careers to stock investing, putting in more than 20 hours a week on it, if you read him closely.

I also notice that my enthusiasm for that stuff has waned.

I agree with this sentiment as well. My enthusiasm for some of the things I dreamed of even as recently as 5 years ago has waned. I dreamed living in a foreign country would be exciting and fun. Now Mexico has a really strong drug lord presence and it seems threatening. I dreamed that having nothing to do would be idyllic. Now I have more free time on my hands with a less stressed job I find myself sometimes bored. I prefer it! But I realize that some of my dreams may have been naive. I am still aiming for financial independence, but more because I don't trust my overall job situation than anything else.
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This got me wondering again about how much I really need to live on.

Well, in 2007/2008, when you had to pay for your own health insurance, it looks like your expenses were $45k - $50k. On your proposed $500k portfolio, you would have to get 9% or 10% to just keep from digging into the principal, and more if you wanted to principal to grow so that you could increase your outtake in line with inflation in future years.

So, I'd say that lowering your expenses is the key to you trying to trying to retire on less. If you concentrate on lowering your expenses, you can also increase your savings rate.

AJ
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I'm in the wait and see mode too. Mostly because my job is fun, pays pretty well, and provides me lots of flexibility. But, I still want to be financially independent so I can quit when and if this job changes, as all things do.

I also was living in denial about how having kids and and a wife would delay early retirement. No longer.

Also, the things I loved to do and wanted to do all the time don't have the allure they once did. Why? I don't know. just older I guess. It does drive me to stay in good shape so that I can do other things when/if I retire.

At this point in time my investments are 1.2% above the 12/31/2007 level and 10 times my estimated annual spending, 16 times my 'just get by' level. When I am at 25 times 'just get by' - I'll still have to work, but not all that hard.

Since I'm not retired, the fact that the stock market sucks is actually a good thing, so I try not to sweat it all that much. Supposedly we are 10 years in to 16 years of a market like this.

Finally, and most importantly, a very good friend of mine died from cancer a while ago, completely out the blue and unexpected. So, I spend more money on fun now because there might not be a later.

"People plan and god laughs"

V
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intercst,

The easiest way to retire early on very little is to find a wife with an income and health insurance.

If you generalize that to "spouse" then, yes, I've noticed that does seem to be the "easy" road that many people take.

In my case, I'd have to find a husband. But that would probably be worse than going into work every day.

Rocannon
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yttire,

Thanks for responding. I was wondering how far along you are towards your goal. It's really good to hear from you!

I switched jobs from one that I hated to one that I like

I've very glad to hear that! Congrats!

So now you are looking at 350*.05 = $17.5k which is pretty tight, far below the $40k which you are living on now.

Actually I was really hoping to live on about $12K/year. I believe the biggest expense when unemployed will be health insurance. However, while employed, the largest expense by far is the cost of renting an apartment. From 2003-2007, that cost about $10K/year. In 2008, I had to move to a large, expensive city to find work; now the cost of my current apartment is $15K/year. That cost could be substantially reduced by moving to a much cheaper area, which I could do if not for my job.

If I were you I would try experimenting with a super low lifestyle just to see how it feels (for those expenses which are discretionary obviously)

Good advice. From your perspective, which expenses do you consider to be discretionary?

In some sense, though, I already know how it feels to live on an extremely low income. I lived on about $10K per year for 6 years of grad school without accumulating debt. I rented a room in a house for a large part of that. Health insurance was very cheap back then, though! But it has been a while, and the circumstances are different. It's relatively easy finding a room to rent in a house in a college town when you're 25 years old. What about when you're 45? How would it feel moving in with someone else again? Not really the kind of thing I want to do, but I'm putting all options on the table.

When I started reading "Early Retirement Extreme", it occurred to me that as my net worth had increased, I had partially given up on scrimping (aside from a natural tendency towards cheapness). There's a certain amount of misery I can tolerate in my life, and my job was giving me plenty of it. It just felt too hard to be restrictive in the rest of my life, and I didn't have to be, so I gave up on it. I came to a certain balance in my lifestyle. For example, I pay almost no attention to the cost of food. If I feel like getting a high-priced drink at Starbucks, I do it without thinking. Ditto for renting a video. Ten years ago, I was extremely conscious of each purchase, but now they just seem like drops in the bucket. It's hard to see them making a real difference in my retirement plans.

Reading "Early Retirement Extreme" made me think I might be wasting a lot of money needlessly. Maybe I should take some extreme steps to eliminate the biggest source of misery in my life (the job) which would make smaller sacrifices more bearable.

My biggest expense is the apartment, so cutting the rent would give me the biggest bang for my buck. When I moved into my current place, I did quite a lot of research, and this place was the cheapest I found that was also reasonably close to work. However, I've been here for about two years, and I haven't continued to look for anything cheaper. I don't want a roomie, and I don't like the idea of sharing a house, but maybe I'm being too restrictive. I could at least keep an eye out on craigslist, and see if any interesting possibilities turn up.

if you were reasonably lucky with both health and investments, which would be the most probable situation, you could retire right now provided you started traveling abroad a lot of the time and living in really cheap accommodations

That's one possibility I've considered (if you would like to expand on why you think that's doable, I'd be glad to hear more). Actually I would like to try some long backpacking trips. Effectively you're homeless, so you only have to worry about health insurance and food, and weird stuff like how to provide a permanent address for health insurance purposes. I've done short backpacking trips and enjoyed it, but never anything really long. And it would be impossible to test the waters there without quitting my job.

My enthusiasm for some of the things I dreamed of even as recently as 5 years ago has waned. I dreamed living in a foreign country would be exciting and fun.

I'm sorry to hear that you're experiencing a similar problem. In my case, my entire enthuasiasm for everything is gone. Did you see the Dilbert cartoon in which Dilbert asks: "Is there more to life than just working?" and Dogbert answers "Yes, there's also the complaining about work, the nightly periods of unconsciousness, and sweet, sweet death." Well, that's what my life feels like right now. I feel like I've got to do something about this before I wind up in a black hole of despair. Or worse, just comfortably numb.

Rocannon
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aj485,

Well, in 2007/2008, when you had to pay for your own health insurance, it looks like your expenses were $45k - $50k.

Just so it's clear, there's no way I'd need to spend $40-$50K once I left my job. I would probably find it fairly easy to live on $25K/year once unemployed. The car could go and the expensive apartment definitely would go - I only live where I do now because it's close to work. It's getting lower than $25K which is harder.

Re health insurance: In 2008, I was able to switch from COBRA to paying about $400/month on health insurance for a really good plan which covered a lot. I'd need to look into that some more to see what's available now.

The expenses in 2007/2008 are on the high side partly because of health insurance, but largely because I was making car payments of approximately $10K each year, on top of all the usual expenses. Then in 2008, I moved to a larger, more expensive city, and began paying an extra $5K in rent (although my health insurance costs decreased, I now pay about $2K/year and my employer pays the rest).

lowering your expenses is the key to you trying to trying to retire on less

Yes, we're in agreement.

Rocannon
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Volucris,

the things I loved to do and wanted to do all the time don't have the allure they once did.

Have they been replaced by anything? In my case, I just feel completely blah about everything. All the future days start to look like the past, with no end in sight.

my investments are 1.2% above the 12/31/2007 level and 10 times my estimated annual spending

This sounds very similar to my current situation. What do you mean by your "estimated annual spending"? Is that your estimated annual spending if you were to quit right now?

Since I'm not retired, the fact that the stock market sucks is actually a good thing

That's the one bit of solace in the current situation for me, too.

Supposedly we are 10 years in to 16 years of a market like this

Says who?

a very good friend of mine died from cancer a while ago, completely out the blue and unexpected. So, I spend more money on fun now because there might not be a later.

My condolences. I've had a few minor health issues which seemed like nature reminding me I won't always be in good shape. And I know someone who suddenly developed kidney disease for no known reasons.

Things like that make it pretty hard to decide to cut expenses to the bone in order to save more. I do want to enjoy life while I've got it. But I'm sure not enjoying much as it is now.

Rocannon
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Have they been replaced by anything? In my case, I just feel completely blah about everything. All the future days start to look like the past, with no end in sight.

I think you need to solve this problem, a lack of joy in life. unfortunately I think others advice in this domain is often useless, however I will provide some anyway.

our brains are composed of different parts, and the lower levels determine our happiness, so finding joy is a lot like training a puppy, but the puppy resides within.

I read a book which was excellent on this topic, I think it was titled The Elephant or something. anyway, I would try an approach of behavioral cognitive psychology along with finding some joy providers.

joy providers include the right friends or some young pets or kids to work with. I know there are others for other people, but unabashed joy is infectious. good luck. walking the valley of death is no fun, but there are those who will help you through.
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he is a campground host at a US core of engineers campground - year round....he works 20 hours a week

What kind of work does he do there?

Campground host is a job. The host sells ice and firewood to the campers. It may be the very definition of "cush gig."

- HCF
sometimes patron of the campground host
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HaltCatchFire explains,

he is a campground host at a US core of engineers campground - year round....he works 20 hours a week

What kind of work does he do there?

Campground host is a job. The host sells ice and firewood to the campers. It may be the very definition of "cush gig."

</snip>


20 hours a week selling ice & firewood? It sounds like a job at a convenience store.

intercst
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There's a certain amount of misery I can tolerate in my life, and my job was giving me plenty of it. It just felt too hard to be restrictive in the rest of my life, and I didn't have to be, so I gave up on it. I came to a certain balance in my lifestyle. For example, I pay almost no attention to the cost of food. If I feel like getting a high-priced drink at Starbucks, I do it without thinking. Ditto for renting a video. Ten years ago, I was extremely conscious of each purchase, but now they just seem like drops in the bucket. It's hard to see them making a real difference in my retirement plans.

Well, if you could cut your food and discretionary purchases by $15 a day, that's $5475 a year. Compounding at 8% a year, assuming you do that for 5 years, it's another $33k added to your net worth, or nearly 10% 0f your current net worth. So, it's not necessarily a lot, but it can add up.

I get that you feel like tracking all of this stuff is restrictive, and that you think it adds misery to your life. What I don't get is that if you reach your goal of retiring on as little as possible, you are going to need to track every penny and restrict your spending, thereby trading your current misery with your job for the misery of budgeting/closely tracking expenditures.

Sounds like you are setting yourself up for just another kind of unhappiness in your hurry to get to retirement.

AJ
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Have they been replaced by anything?
No, not really. In my younger years I was pretty obsessed by this:
http://www.youtube.com/watch?v=1bj1sNL13iQ
It took me to a lot of cool places and gave me some incredible memories. Doing it less has left a big void in my life, but I don't really have the desire to do it all the time anymore. Or give it up. 25 years of flying is hard to quit.

What do you mean by your "estimated annual spending"?
This is what I need to live comfortably, for me, with a nice cushion.

Says who?
This guy:
http://www.gluskinsheff.com/us-intl/ourteam/david-rosenberg....
One of the better, free, investing economic newsletters out there.

I do want to enjoy life while I've got it. But I'm sure not enjoying much as it is now
And this is because you have to work? A lot of people say, if only this were true, then, I will be happy. they are almost universally wrong. Results don't make you happy. The process to get results can make you happy, if you let it. You have no control over results, as the last economic boondoggle so aptly points out. You can control the process though.

Abraham Lincoln said it pretty well: "People are about as happy as they make up their minds to be. I found it to be pretty true in my case.

However, I don't want to poo poo those fighting clinical depression, or depression in general. Maybe you should go see a doc. Might help - won't hurt.
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aj485,

Compounding at 8% a year, assuming you do that for 5 years, it's another $33k

If I could get a guaranteed 8% return, I'd probably be more enthusiastic about saving the money.

I get that you feel like tracking all of this stuff is restrictive, and that you think it adds misery to your life. What I don't get is that if you reach your goal of retiring on as little as possible, you are going to need to track every penny and restrict your spending, thereby trading your current misery with your job for the misery of budgeting/closely tracking expenditures.

Just so we're clear - I do track every dollar that I spend. I just don't control my spending like I used to. Controlling my spending doesn't make me miserable, but it does take a certain amount of will power, which is hard to summon up when there's very little positive going on in my life.

Sounds like you are setting yourself up for just another kind of unhappiness in your hurry to get to retirement.

Yes, that's entirely possible. But I don't know for sure that it's true. It may be that I'll be much happier living a very restricted life (I was quite happy in grad school when I was living on $10K/year; the lack of money didn't bother me - in fact I even took a nice Caribbean vacation one year.) Whereas right now, it's completely clear to me that I'm in misery, so trying something else, even seemingly drastic, is appealing.

Rocannon
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Volucris,

In my younger years I was pretty obsessed by this

Cool! This is one of those things that I want to do "some day." It's not at the top of my list, but I'm pretty sure I'd enjoy it (I went paragliding once and had a lot of fun).

And this is because you have to work? A lot of people say, if only this were true, then, I will be happy. they are almost universally wrong.

Well, I tend to disagree with that idea. Of course, there are people who tend towards happiness or unhappiness, no matter what their circumstances. But I think it's natural to be happy or unhappy in response to your life situation. For example, when some people are unemployed, they get very unhappy because they are anxious about being unable to support their family. This seems like a valid reason to be unhappy, to me. The circumstances lead to their unhappiness.

When I started doing the kind of work that I do now, I enjoyed it, and I was happy with my life. I enjoyed learning some new things, and the future looked bright. I no longer see the future in it, and in addition I'm no longer learning things; I just don't see the point in going to work every day aside from the paycheck, and that starts to seem like not enough anymore. I know this about myself: I only feel happy when I'm learning new stuff. And if I don't get that, I'm not happy.

In the past I've managed to distract myself from work unhappiness by taking courses and studying other things on my own. However, I find there's less time for that now because of the amount of time I spend at work.

The options are: 1) start over again in another field (but I'm not sure what that would be), probably at a lower pay scale. I'm not hugely motivated to do this because I can't think of any paid work that I really want to do. (OTOH if I could get paid to go hang-gliding, I'd jump at the chance.) 2) Or I could scale back a bit. But I haven't been able to find "scaled-back" work in my area - there aren't very many part-time positions doing what I do. Still I could certainly look into this some more. I think I'd feel a lot brighter if I just had to go to work 2-3 days a week. 3) Just quit and see what happens.

I don't want to poo poo those fighting clinical depression, or depression in general. Maybe you should go see a doc. Might help - won't hurt.

I don't think that I am clinically depressed. I have nothing against therapy, but I doubt that a therapist could help with my problems. A job counselor, perhaps.

Rocannon
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Compounding at 8% a year, assuming you do that for 5 years, it's another $33k

If I could get a guaranteed 8% return, I'd probably be more enthusiastic about saving the money.

Well, I don't know about 'guaranteed' but you might want to check out this post by rayvt: http://boards.fool.com/Message.asp?mid=28548621

I own some of the securities that are listed, plus some similar ones. I get a 9% annual return based on my purchase price, plus I've had over an 8% capital gain since I purchased in November. www.quantumonline.com is a good starting research tool, and the 'Bonds and Fixed Income Investing' board has some good discussions.

However, in only 5 years $27.4k of that $33k was the principal saved. Not quite $6k was the compounding. So it would still add up to over 8% of your current net worth at a 0% return.

AJ
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aj485,

check out this post by rayvt

That's interesting... I'll look into it some more. Thanks!

Rocannon
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Is there anyone out there who just got fed up and decided to leave work temporarily and wing it?

Me! I quit my job last Dec 31st and have been in South America since then. A bit crazy to voluntarily leave a good job given the economy and job market, but I had been wanting to take an extended period for travel and decided that this was the time. I just turned 30 half way through my trip, and I've spent $10-15k in 6 months (I should probably be tracking this in some more effective way...).

Not exactly the best method of retiring early, but I think in the last 10 years I've been thinking about it I realized that you've got to live in the meantime and there are significant components of luck in retiring early. I've made some really nice money on Apple for example, if I could just replicate that great choice a few more times...

I will plan on getting back to work near the end of this year or early 2010. I'm thinking of trying to get a job at a large consulting firm which would potentially mean a big increase in pay, if I can remain motivated enough to work the amount those places demand.

I stopped trying to put in place a fancy plan for retirement, figuring I'm just too far away to project anything accurately now. I just try to save as much as possible and will plan more the closer I get. I think in another 10 years I'll get more serious. By then I'll have a good idea what my lifetime income will be, whether or not I end up having kids, etc. And we'll have a better idea if the Doom and Gloom (aka METAR) board's predictions are right or not. Will we be destitute serfs in a self destructing superpower with hyperinflation, ruled over by our gold-owning overlords? Or are they just a bit panicky over there?
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I will plan on getting back to work near the end of this year or early 2010.

You better check your calendar...

:-)
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You better check your calendar...

An advantage of not working is that you don't need to know what year it is!
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"An advantage of not working is that you don't need to know what year it is! "

^^^^^^^^^^^^^^^^^^^^^^^^^^^

Other than figuring when to take Social Security, Medicare, and
figuring what Minimum Required Distributions might need distributin.

Howie52
I make it a habit to know what day yesterday might have been and
to keep tract of where my towel resides.
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maracle,

have been in South America.. and I've spent $10-15k in 6 months

Whereabouts in South America? That sounds more expensive than I'd expect (esp $15K).

What are you doing for health insurance in the meantime?

Rocannon
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Whereabouts in South America? That sounds more expensive than I'd expect (esp $15K).

I've been in Buenos Aires for 3.5 months or so, and traveling throughout Argentina and Chile for about 2 months.

Buenos Aires is fairly expensive. Most things are only a bit less expensive than the US, and an apartment rental in a nice neighborhood is more than I was paying in Austin. However that's for a short term rental, which is really distorted. You could do better on a long term rental.

I've also been taking Spanish courses, I spent $750 per month in Jan and Feb and somewhat less recently...maybe more like $400 a month the last two months.

Chile is quite more expensive than Argentina. I hear Brazil is almost as expensive as the UK! But Peru, Bolivia, etc are quite cheap.

What are you doing for health insurance in the meantime?

I'm uninsured...No address in Texas so I can't get a policy there. I'm using my parents address in Michigan for mail, but it turns out I need a Michigan Driver's License to get insurance there! A bit of a catch 22. But had I known to get a DL in Michigan before leaving on the trip I could get a $3000 deductible policy for about $50-55 a month. Insurance with a private hospital here is pretty reasonable, I think most people pay about $100 USD a month for a very inclusive policy.
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maracle,

thanks for the info - I'd love to see a breakdown of your budget, if you're interested in posting that here or on another board. In general I'd be curious about a trip report, what your experiences are and why you're doing this.

Sorry to hear about the health insurance... I sure wish it was easier getting a health insurance policy when you're not employed or have no fixed address!

Rocannon
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I priced out annuities for someone in their 40's and the most you can hope to get is around 3.3% a year

maybe I misunderstand you as I'm not familiar with annuities but do you mean by 3.3% only $3,300 per year for life if you hand them $100,000?
Immediateannuities.com for 45yo male and no payments to benefitiaries just quoted me $478/month which is $5,736/year (I'm not 45 but wanted to compare apples and apples...which I'm probably not doing..could you clarify what you meant?)
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Rocanon your thinking in many ways mirrors mine. One of the many parallels was my "I'm not sure I'd want to rent a room at my age, but now all options are on the table" moment. Another option to think about if you're not a "city person" is that not only one saves on rent moving from big city to town, but one can save another amount of money moving from town to rural or semi-rural (maybe keep a cheap dependable scooter or something if you don't have a car) that is still within 15 minutes or what you need.

Staying happy? If it's not something you need a therapist for, then it might just 'cure' itself when you let go of your job..keep in mind initially you may get more depressed with "what to do with all the time" before you find something...so it's good to start exploring things now while employed. Of course, much less energy and time..but on a small scale? Explore things that don't take much time and energy...to throw out some random things...growing your own herbs (parsley etc) in a pot by the window, meditation, even slow breathing for 5 minutes with eyes closed, writing your own journal, are some examples.. The last one may help you better understand your own thoughts and feelings not just about life in general but about your job too..Expanding social network is another thought.

Two of the biggest I can think of for fulfillment though are helping others and creative self expression. The latter could be writing poems, art, music, crafts, even DIY stuff..the former, volunteering, civic engagement from local to national to global issues, even tutoring kids in reading, math, or being a big sister..

just some thoughts..thank you for your generosity in sharing all that financial background and your inner thoughts..
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Edlbym,

Thank you for posting. I think your comments are helpful, although they hit the nail on the head for me. I'll reply to some of your points to give you a better idea where I am. BTW I'd be very interested to hear more about your story, if you've written it down somewhere.

Another option to think about if you're not a "city person" is that not only one saves on rent moving from big city to town

I have moved several times in the past 10 years, always following the job market. The only reason I rent where I do is to live close to my job. I do enjoy certain features of city life, but not enough to live there if I don't have a job in the city. I'm more than happy to visit once in a while. Whenever I do become permanently unemployed, I would move somewhere more remote (i.e. cheaper).

Staying happy? If it's not something you need a therapist for, then it might just 'cure' itself when you let go of your job..

Yes, I do think that this is the case - if I hit the road right now, I'm pretty sure I'd get out of my immediate funk. What if I wait another 10 years, though? That's what's going through my mind right now.

keep in mind initially you may get more depressed with "what to do with all the time" before you find something

I find it hard to believe that would ever happen to me. I used to have a ton of things that I wanted to do outside of work, most of them involving a considerable time commitment. In the last couple of years, their siren call has gotten fainter. What worries me is that I "delayed gratification" too long, to the point where I'm getting into a funk that will be difficult to get out of.

growing your own herbs (parsley etc) in a pot by the window, meditation, even slow breathing for 5 minutes with eyes closed, writing your own journal, are some examples.. The last one may help you better understand your own thoughts and feelings not just about life in general but about your job too

These are fine suggestions, but overall I'm a more active personality (you should see the plants in my windowsill, they are mostly looking rather sickly). I like outdoor sports and so on. I do get a lot of hiking done on the weekends when the weather is decent, but that's about the only outdoor activity that I do on a regular basis, because it's mostly free, aside from cost of gas and wear-and-tear.

I am also very introspective. I do write stuff down (not exactly a journal format). But I don't necessarily see that helping me. I do like reading blogs of like-minded people, because I find it gives me helpful ideas.

Two of the biggest I can think of for fulfillment though are helping others and creative self expression. The latter could be writing poems, art, music, crafts, even DIY stuff

I'm largely anti-social (so "expanding social network" is not easy for me, and I'm not convinced there's value in it for someone like me). However, the latter part - being creative - I have a desire to do that. But I have no energy for it at the end of the day, and I'm so desperate to get out by the time the weekend comes that I can't bear to sacrifice my hiking time to do anything else.

I think part of my funk comes from the fact that I crossed my deadline and I don't see an end anywhere in sight. What if I delay another few years, and there's still no end in sight? Eventually I'll be too old to enjoy some of the things I want to find time to do, due to physical limitations. How long dare I postpone things? That's where I'm at now.

Rocannon
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OCD:
although they don't exactly hit the nail on the head for me

Rocannon
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Rocannon,
Not all but many parts of your posts are remarkably parallel to my own life past and present. Even with the anonymity of hiding behind my fool.com username, I'm not quite ready to share them all publicly as generously as you have (I could share them with you by email but you might not gain that much by knowing those few extra tidbits). I will say that I'm not very far from your numbers in age and in net worth..And in living expenses too for that matter. I've been able to keep those a little bit closer to 20k/year than to 25k/year, which helps. A few thoughts on my current thinking about that which might interest you (or garner a loud Boo) in a moment.

I'm not miserable in my job (so luckier than you that way, though on the other hand I get paid less) but certainly the thought of saying here until I'm 60 much less 65+ leaves a taste in my mouth of, having spent too much of my life (way more than 40 hours per week along the way) on what is not at the core of what is most meaningful to me. Have you checked out Choosing Simplicity by the way? Not so much for ideas but might lift your spirits reading the stories of folks who 'escaped' while you're still 'stuck there'..there are many such books, but the examples and interviews in this one, are well written (http://www.gallagherpress.com/pierce/book-cs.htm ) I'll get myself in trouble if I suggest that times when I'm feeling too active to just want to sit and close my eyes and follow my own breathing, are exactly the times when I need it most, but it's certainly true for me, and something I'm working to balance better..though outdoors are great and yes, being out in nature is wonderful..

Anyway, in connection to

I think part of my funk comes from the fact that I crossed my deadline and I don't see an end anywhere in sight. What if I delay another few years, and there's still no end in sight? Eventually I'll be too old to enjoy and especially, What if I wait another 10 years, though? That's what's going through my mind right now.

This is very similar to my own thinking on and off these last 2 years...I'm a bit less worried in my own case (which I hope is not a mistake on my part..to worry a little less..!) but definitely a question. What if we have another 'lost decade'? Before I say anything else, if you or any other reason things all annuities are always evil at all times, stop reading right now, the economy has already pelted me with rotten tomatoes as far as net worth, and my thoughts below don't need another pelting of their own ;-)

Anyone who continues to read below has lots their right to slam them ;-) (But it's ok to gently critique of course) Ok so let's crunch some numbers shall we?

Your networth and age and annual spending as I said are not that far from mine. Lets say a net worth equal to between 14 and 15 years worth expenses. A happy scenario is that growing over the next 2 or 3 years from market appreciation and dividends, plus added savings, we are each saving an amount every year, not very far from the amount we spend per year. If the market averages 15% over the next 2 or 3 years (significant rebound from recession...which would put it basically equal to the 2007 highs, and an average annual growth for the Dow from 1992 to 2012 or a modest 7.5% or so) would put one at or near 20 to 24 years' worth of expenses by 2012 or 2013...but that's a happy scenario, the worry is, what if we get 2 or 3 (or more)years or "blah" (or even decline) in the markets?

Then you're right, then we're all older* and worse, are no closer to to goals (I guess the "we're all older" part happens in any scenario ;)

Now what if one takes 5 to 8 years of expenses and puts that into an immediate annuity, would that buy some security? If the quote above is correct and one can expect close to 6% then at least for the initial years (when getting smarter about frugal living could out pace inflation) that 6% per year from having given up say 6.5 years worth of expenses would pay for 39% of your living expenses, guaranteed. If you have 2 years worth of living expenses in cash, suddenly that can stretch to last for more than 3 years..that plus "if I get REALLY i-cant-take-it-one-minute-longer miserable at work, I'm willing to rent a room in someone's house" might lower expenses enough (say, significantly below even 25k in your case, to 20k or so or lower) so that with the annuity coming in, the cash can last you for 4 years or even more before having to significantly or at all, dip into one's equities in a "I don't want to sell when the market is down" situation.

That seems to me to be a possible way to offer some protection..nothing is perfect protection...what if the market stays low for the next 25 years?? One can't plan for everything..but if one things the chance of things staying in the dumps beyond 2016 or 2017 are very low, then having an annuity plus 2 years of cash (or even 1.5 years) might be enough to be able to say, "I can quit in 2012 or 2013 and, unless the market stinks without end in sight into and even past 2017, I won't have to take a significant amount of equities to sell, if any"

Of course one will have given up the growth potential in the amount one used to buy the immediate annuity..and of course maybe the market will be not quite in the dumps but only barely-slightly-better in 2017 (in which case ALL middle class investors are in some trouble, not just you or I or those who quit or down-shifted their jobs!) So I guess the personal question is, "given my personal risk tolerance" (cliche but true) and given my own 'subject probability' estimate of how unlikely it is for the market to be flat or worse, by 2016-2017, is that a scenario I think is sufficiently unlike that I'm going to be willing to act financially on the assumption that it won't happen (provided the worst case scenario isn't too horrible)?

As you can tell from this hopefully not too boring exposition, I'm still sitting on the fence but am part of the way towards convincing myself that in my case, the answer may be yes I'm willing to act on the assumption that even though recovery by 2012 is a maybe, that recovery by 2015 or 2016 or 2017 is an "I'm going to assume that will happen" (recover by how much? so the market in N years is N years of growth at 10 to 15 percent per year, higher than today's crud level, maybe..) In the worst case scenario one has no job, and no easy way to get a career or even easy way to get a job back, but one has 40% or so of one's expenses, maybe 50% or a bit more living very frugally, and one will have had 4 or so years (2012/2013 to 2016/2017) of learning skills and looking into possible part time or alternative jobs so that by 2016/2017, one has a prospect of some earned income opportunities if one needs it (and still before the very last resort of selling some stocks, is still something we'd have that many Americans and most in the world, don't have, as the last backup)...doesn't sound too crazy. Especially if you can get your expenses closer to 20k/year living alone (which could put that 'renting a room' option down below 18k even after paying for a high-deductible catastrophic health insurance plan)

Most of us on this board are comfortable with proportions without needing numbers but for the heck of it, let's try an example of an imaginary person who can live off 10,000 per year (not realistic for most, just an easy, "round" number one can scale up from) and, having 15 years of expenses saved, their networth would be, for them, 150,000. They get close to 6% when they spend 65,000 on an immediate annuity, that pays them 3,900 per month for life. They quit their job in 1 or 2 or 3 years from today..if the market is up, they're in even better shape, if down, not as good, if flat, same as today's market, then they'd have that 85,000 in wealth plus $3,900 per month coming in. They learn to live even more frugally and are down to 9,000 a year after quitting their exhausting job, let's say (these number are not meant to be realistic, just proportional to whatever numbers each of us has). Now they are getting not 39% but 43% of their living expenses from the annuity. Another 7% of their living expenses? Simple part time job they found. They need the market to go up so they can cover the other half from "taking out 4% per year" instead of drawing down on their cash savings. how long will their cash savings last? If they initially had 20,000, or 2 years worth, now that's 2.2 years' worth, but half their expenses come from the annuity plus that 7% part time stuff they are exploring, so their cash savings will last 4.4 years or so, beyond even the date (2012 or 2013 or 2011) when they quit..taking them until almost 2017 before they have to sell stock...their hope of course is that the market goes up long before then...maybe by 2013, maybe even by 2012, in which case they can take out 4% or what have you, increase their cash savings to last them well past, and ride out the bumps ahead..

Perfectly safe? Heck no. But it's more conservative than just quitting the job and crossing one's fingers and having nothing but the market plus some cash, and on the other hand, less frustrating than "I guess I'm stuck here forever, or until the Dow shoots up, even if it takes until 2020 or beyond" Other disclaimers: if I buy an immediate annuity at all, it would be after careful research for the more stable, more honest, less-hidden-fees type..disclaimer..lower interest rates today mean getting a little less in an immediate annuity than otherwise..Ok I think I'm depressed enough now that I can't get THAT much more depressed when every aspect of the above gets shot down by your and everyone else ;-)
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Interesting concept.

One small nit: I think you meant that spending $65,000 for an immediate annuity would get you $390 per month not $3900.

Cheers,
Nuclear Redneck
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They get close to 6% when they spend 65,000 on an immediate annuity, that pays them 3,900 per month for life.

Even assuming you mean $3900/year (for 39% of 10k), instead of $3900/month, I'm curious where you're getting these numbers. $3900 a year equates to $325 a month. On www.immediateannuities.com I am showing that to get $325 a month from $65k, you would have to be a male between 50 and 51 or a female between 54 and 55, for a single lifetime annuity with no beneficiaries. Someone who is 45 would get only $302 (female) or $311 (male). (I used Texas as the state - there might be slightly different results with another state.) For a female (which Rocannon is) the missing $23 a month adds up to $276 a year, which would drop the 39% to 36%.

Now, if a 45 year old person wanted to count on SS benefits, they could buy a 20 year annuity for $65k and collect $410 a month, or a 25 year annuity and collect $351 a month, assuming that at age 65 or 70, SS would step in to replace the annuity. But I don't know that many 45 year olds who would be willing enough to count on SS that they would commit to giving up the annuity income in 20 or 25 years, if you asked them.

The other question I have about your annuity scenario is that to get those levels of income, there is no inflation protection, so you are assuming that 43% of the person's living expenses aren't going to increase with inflation? Because inflation protection on annuities costs a lot more.

AJ
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Note.. You want to be sure to have inflation adjusted dollars. I also priced an annuity for two people where it continues until both are goners... I imagine this accounts for the difference you observe.
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Thanks..That should say "3,900 per year for life"...that second to last paragraph is basically all in terms of years, not months.

The idea is to be relatively safe for the first 5 or so years after quitting..and somewhere in that long post I said about, initially, the idea is that one's improvements in frugality, for example for the first 5 year, outpace inflation.

I haven't gotten a reply to my post number 4836 which is where I got the figure of 6% (just slightly below that right now, but almost 6%)...that's on 100k, they might pay less for 65k..but on 100k for single male 45yo no survivor benefit, it was almost 500/month so almost 6k/year so almost 6% per year.

The 65k was just for that "easy round numbers" example for a person living on 10k/yaer for 6.5 years of expenses. It would be more than 100k for me, for Rocannon, for most folks (we're only looking at the 10k/year example to see how many years like that "4.4 years", they would hang on before having to sell equities..And if there's no trickery, which there might be, then on 100k (and I assume on higher amounts) you get almost 6%/year for a single person's policy if you're 45..even if it's a bit less, the hypothetical in that paragraph does seem to suggest you're in the 'ballpark' if you are personally comfortable with "my expenses not covered by the annuity and my "7% of expenses" PT job, will be small enough that my cash will last almost four and a half years" Does that paragraph above make more sense now?
edlbym
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I'm spending about the same now as 10 years ago and still have places that I could cut (lower rent in more rural area for example) but other areas (catasgrphic health insurance and healthcare expensese0 would go up. It seems plausible for frugality to still stay ahead of inflation until say 2015, with luck a little beyond, but definitely not forever.

I also priced an annuity for two people where it continues until both are goners... I imagine this accounts for the difference you observe.

Definitely...for Rocannon and for myself it would be a single person annuity.

aj,
I thought about annuities lasting a fixed number of years, too. That has some advantages and some risks. A possibility I've thought about is a mixture of a lifetime annuity and a fixed term one (and still leaving a reasonable proportion of networth left over, and some cash). For example for a single person 45yo putting 60k into lifetime and another 60k into a 10 year annuity, your first 10 years you'll get 287+591 or $878/month. The idea is you don't sit on your hands doing nothing for the first 9 years. If the market increases enough, you take 4% or more out...if it's year 5 or year 6 and nothing, we're all in trouble, but if you're the person with that mixture of annuities, you don't just sit on your hands and wait for your guaranteed income to crash to $287, but instead bite the bullet and get a job even if you don't like it; if the Dow is still at 10,000 even in 6+ years from now, as I said, most of are in trouble anyway, and biting lots of bullets, not just that person. In a happier situation they'd take market gains out and add to lifetime annuity moving that $287/month up to $400 or more while buying another 10-year annuity, and keeping some left over untouched in equities, and so forth.


As a postcript a 5-year instead of 10-year would give 287+1055 or 1,342/month, or 16k/year...that means having to take only a very small percent of even a (350k-120k=230k) nest egg (using Rocannon's numbers) so living on 20k to 25k would mean taking out 4k to 9k per year, which is 1.7% to 3.9% out per year...but then you really have to hope for improvement in the first 3 or 3 and a half years at most before you have to activate emergency-find-a-job mode...I assume most companies have 7-year and any other fixed year, not just the 5, 10, 20 year ones they list, so you can find an in-between spot..

I don't see a huge flaw in this variant or the original hypothetical paragraph, but my biggest worries are either terrible economy for a long long time (again, it would hit everyone, not just me, but still a worry) and worried about fine print in annuity. To avoid fine print 'gotcha' I hear a handful are more trustworthy, I've seen the name of TIAA mentioned as one of those...do people agree? And others that don't have the same 'gotcha' clauses, and have lower-fees as TIAA is reputed (on money.cnn.com for example) to be?
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I haven't gotten a reply to my post number 4836 which is where I got the figure of 6% (just slightly below that right now, but almost 6%)...that's on 100k, they might pay less for 65k..but on 100k for single male 45yo no survivor benefit, it was almost 500/month so almost 6k/year so almost 6% per year.

The 65k was just for that "easy round numbers" example for a person living on 10k/yaer for 6.5 years of expenses. It would be more than 100k for me, for Rocannon, for most folks (we're only looking at the 10k/year example to see how many years like that "4.4 years", they would hang on before having to sell equities..


With annuities, doing 'easy round numbers' can be misleading, because there are costs that are incurred no matter how much is invested, so a smaller investment generally means a lower return. In this case, $65k gets you closer to 5.5% than 6%.

AJ
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I thought about annuities lasting a fixed number of years, too. That has some advantages and some risks. A possibility I've thought about is a mixture of a lifetime annuity and a fixed term one (and still leaving a reasonable proportion of networth left over, and some cash). For example for a single person 45yo putting 60k into lifetime and another 60k into a 10 year annuity, your first 10 years you'll get 287+591 or $878/month. The idea is you don't sit on your hands doing nothing for the first 9 years. If the market increases enough, you take 4% or more out...if it's year 5 or year 6 and nothing, we're all in trouble, but if you're the person with that mixture of annuities, you don't just sit on your hands and wait for your guaranteed income to crash to $287, but instead bite the bullet and get a job even if you don't like it; if the Dow is still at 10,000 even in 6+ years from now, as I said, most of are in trouble anyway, and biting lots of bullets, not just that person. In a happier situation they'd take market gains out and add to lifetime annuity moving that $287/month up to $400 or more while buying another 10-year annuity, and keeping some left over untouched in equities, and so forth.

Sounds like taking up a retirement career in annuity management :-)

Actually, that is kind of an interesting idea, but I'm not sure I like the idea of eventually converting a significant amount of my net worth to annuities, because to get the highest payment, you can't have any beneficiaries, and personally, I would like to leave some money behind. On the other hand, I guess that's why I'm not trying to retire on an absolute minimum.

I don't see a huge flaw in this variant or the original hypothetical paragraph, but my biggest worries are either terrible economy for a long long time (again, it would hit everyone, not just me, but still a worry) and worried about fine print in annuity.

Another issue you probably need to consider is that you are betting your income, possibly for 50 years, on the continuation of 1 company - your annuity issuer. There are state insurance funds that provide insurance, similar to FDIC insurance, but given the shape that some states are in right now, I'm not sure I'd want to count on that.

To avoid fine print 'gotcha' I hear a handful are more trustworthy, I've seen the name of TIAA mentioned as one of those...do people agree? And others that don't have the same 'gotcha' clauses, and have lower-fees as TIAA is reputed (on money.cnn.com for example) to be?

I have heard good things about TIAA and Vanguard. Never having had an annuity, all I can go on is hearsay, though.

AJ
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Edlbym,

For example for a single person 45yo putting 60k into lifetime and another 60k into a 10 year annuity, your first 10 years you'll get 287+591 or $878/month.

I have generally not been paid attention to annuities, because I heard too many bad things about them. Quoting aj485:
Another issue you probably need to consider is that you are betting your income, possibly for 50 years, on the continuation of 1 company - your annuity issuer

That part has always concerned me too. Of course, I have my money in various other institutions, and why do I trust they won't go belly up either?

Currently my assets are divided pretty evenly between retirement funds and pre-retirement funds. Here's the split:
$160 in retirement funds (not pain-free access)
$30K in a Roth (no gains, so accessible)
$160 savings and investments

I'd much rather not have to pay penalties by withdrawing early, so I'm trying to plan on not touching the retirement funds till I'm 65, should I live that long. So putting $120K into annuities feels really uncomfortable to me. But you've raised some interesting ideas, which I will mull over.

FWIW my mom did some kind of conversion of her retirement plan into annuities, half that's variable and half that's fixed. It was done through TIAA-CREF. So far it's worked out pretty well for her. Even the variable part doesn't vary all that much; her payments may drop by $50/month or so, but it doesn't have any kind of impact on her lifestyle. She's got my dad's retirement plan, her own retirement plan, and SS survivor benefits. If I were making that kind of money, I could easily retire today. She's really bad with money, so it's a probably a good thing she went with the annuities.

Rocannon
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aj485,

because to get the highest payment, you can't have any beneficiaries, and personally, I would like to leave some money behind. On the other hand, I guess that's why I'm not trying to retire on an absolute minimum.

I also would like to leave some money behind. My 401K is currently set up to go to several charitable organizations, and I'd like to see at least part of it go to them.

Ideally, I'd like to live off an income stream from my investments. I also wouldn't mind doing some work on the side while retired - contract work of some kind. I think that wouldn't bother me as much as my current situation, because I feel like 90% of my life is consumed with going to work at a job that I don't care about, and the other 10% I'm too tired and discouraged to devote to my own productive goals. I do realize I am lucky to be in such a position, and there are a lot of people who would love to be in my situation.

So all those things play into my thoughts also, when I think about just quitting and taking my chances. Not the way I wanted things to work out.

Rocannon
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Edlbym,

Have you checked out Choosing Simplicity by the way? Not so much for ideas but might lift your spirits reading the stories of folks who 'escaped' while you're still 'stuck there'..there are many such books, but the examples and interviews in this one, are well written

Haven't read that one, but I see it's in my library system, so I'll see about getting it.

What if we have another 'lost decade'?

I got pretty scared when people started talking about a Depression, and that idea still scares me. Scares me so much I'm having a hard time pulling money from some money market funds back into the market. Another flat decade certainly looks possible. With my net worth stalling out over the last few years, despite significant savings, I wonder what toilet I'm throwing my money into.

Before I say anything else, if you or any other reason things all annuities are always evil at all times

Not exactly evil, but I'm very definitely skeptical of them. I do think they are worthwhile in some cases, but I never considered them useful for my purposes. I've read what you said, and I will look into it further, but currently I'm quite skeptical still.

Simple part time job they found.

This may be easier said than done. It would be hard to find relevant work after significant time off in my field (I'm a computer programmer). Suppose I decide to just do anything, e.g. I see the jobs at Starbucks where they offer health insurance (how good is that health insurance?). That means I'd have to live in an area that's wealthy enough to support a Starbucks, or be willing to commute an hour or more just to take this crappy Starbucks job (no offense intended to Starbucks workers, they generally seem nice and pleasant). Won't I be kicking myself a couple years from now if I wind up in that situation?

I have a vague idea now, to work for another year, perhaps, and then go off and do one of those long backpacking trips I've always wanted to do. This would be something I think I'd enjoy, and also a cheap way to live.

For example, hiking the AT is supposed to cost $3K-5K according to this site:
http://www.appalachiantrail.org/site/c.mqLTIYOwGlF/b.4805475...
Aside from costs of food and any extra equipment I'd need, my main expense would be health insurance, which would presumably cost something like $5K/year.

When I think about this, I always bang my head up against the residency problem. How to maintain health insurance without a permanent residence? Our society is not amenable to homeless people. malaoshi posted over the last year that he couldn't get health insurance because he didn't have proof of residency (I think he needed a driver's license) and was leaving the country for a few months to a year.

Anyway, that's my number one wild-eyed idea, so in comparison I guess some people might think buying an annuity is pretty tame.

Rocannon
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Edlbym,

Most of us on this board are comfortable with proportions without needing numbers

Generally I find proportions fairly worthless, because I cannot apply them to my own living situation. I like to see absolute numbers. These are what really matter, because there is a certain absolute minimum amount of money which is required to live "decently" in the US, or any other country. By "decently" I mean:
- have health insurance, and have reasonably good health care - have access to modest things like dental care all the way to cancer treatments
- live in a safe neighborhood
- eat a reasonably healthy diet
- probably some other stuff which doesn't come into my mind yet.

At least if you are living in the US, there's a certain minimum cost to the above. So saying "I plan to live off 4% of my net worth in retirement" is very easy, in my view, if your net worth is $1M or more. If your net worth is $100K, I think it is very difficult, no matter what Jacob Lund Fisker claims. So just giving the percent in this case has no value to me.

That's why I post my real numbers. I think it's helpful for other people. I'm not completely comfortable about the possibility that someone might connect my posted real numbers with who I am in real life. OTOH I don't think it really matters. I'm usually pretty open with family and friends about what I make, although I've become more cautious after getting the impression that some people are uncomfortable about discussing these things. Either they get envious, or decide that you should pay their way all the time, after all you're so "incredibly rich"...

Rocannon
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<<I got pretty scared when people started talking about a Depression, and that idea still scares me. Scares me so much I'm having a hard time pulling money from some money market funds back into the market. Another flat decade certainly looks possible. With my net worth stalling out over the last few years, despite significant savings, I wonder what toilet I'm throwing my money into.>>


Look on the bright side ---- carbon dioxide production is not increasing as rapidly!!

If environmentalists get their way, we'll have a permanent depression and achieve those global warming goals --- otherwise, forgetaboutit.

Around here, we have an ambitious program of not cutting trees and tearing out hydroelectric dams to contribute to this process.


Of course, China and India will just burn that oil and coal instead, but we can feel better in our misery.



Seattle Pioneer
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Another flat decade certainly looks possible.

Flat decades are a myth, as far as stock markets are concerned.

Decades that end up where they start may occur, but they are not flat. Panama ends up where it starts out (sea level on both coasts) but is not flat - the Canal has several sets of locks in it, and it's cut into the surrounding mountains.

Here's the Nikkei (Japanese stock index) since 1985. http://finance.yahoo.com/q/bc?s=^N225&t=my&l=on&... There is no flat decade.

Here's the Dow in the 1960s and 1970s. http://finance.yahoo.com/echarts?s=^DJI+Interactive#chart3:s... Again, there is no flat decade.

The trick is to find a way to make volatility your friend.
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What if you invested in high yield dividend stocks, like ATT, MO, DUK, KMP, etc.

Then you would have a hope of pacing inflation, whereas a non indexed annuity would not.

Since you are willing to post numbers, would you mind sharing your expected social security payout in twenty five years. I think this would be a good number to know, I would expect that you might be able to draw a higher yield if you agree to have depleted some percentage of the assets to be replaced by social security.

I think annuities are not all bad, if you go for a more recommended provider.

They provide a real way to distribute risk, especially the risk of living extraordinarily long.

I wonder if your job could be made more palatable without quitting altogether, such as half time work, or perhaps taking a month of unpaid every year.

I took two months off from an employer, and it seemed to have no adverse affect on my career while I backpacker Europe.
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Sorry for my hiatus from TMF and this thread..was waiting on an email with new infor (for a different TMF thread on tax strategies) that never came..

iWth annuities, doing 'easy round numbers' can be misleading, because there are costs that are incurred no matter how much is invested, so a smaller investment generally means a lower return. In this case, $65k gets you closer to 5.5% than 6%.

As a general point this is well taken...as a practical point (sorry if I wasn't clear) neither she nor I would be using 65k (that is, our networth being higher, we'd therefore use much more than 65k if we were following the percents/proportions of the example) The example was just to use round numbers; the actual story is a happier one (and should be at or much closer to 6%) for the actual numbers we'd be using.
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I have heard good things about TIAA and Vanguard. Never having had an annuity, all I can go on is hearsay, though.


fair enough, but still offer me at least the reassurance it wasn't just 'voices in my head' I was hearing when I heard those things about TIAA and yes also as you said, also Vanguard.

Another issue you probably need to consider is that you are betting your income, possibly for 50 years, on the continuation of 1 company - your annuity issuer. There are state insurance funds that provide insurance, similar to FDIC insurance, but given the shape that some states are in right now, I'm not sure I'd want to count on that.

Maybe CNNmoney is not being cautious enough when it mentions this very insurance...I'd also be figuring that TIAA with 400Billion in assets (Vanguard even bigger, about 3 times larger) and one of the largest, is safer...and that with 3.6 million members that the larger the pool of people the less likely the government is to say, "we're throwing you to the dogs" if the worst happens. A smaller company you'd hope the government would not let retirees starve but they'd be less pressure for them to do the right thing.

As far as how large a percent of one's total net worth to put it, I give that the pillow test: can you sleep at night? Just like that sleep test for how aggresively or conservatively to invest..what balance..then same here and I'm still bouncing around various percents in my mind...they are all less than 50%, some as little as 25%, mostly in between...
-edlbym
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Warri,

Flat decades are a myth, as far as stock markets are concerned."
I almost thought you were quoting me before realizing Rocannon was the
one who had said "another flat decade certainly looks possible"...I
can't speak for Rocannon but I might have said the same thing, and in
my case, I would have merely meant not a "flat line" but the common
(ab?)use of language meaning, "average annual return for the period is
zero" which in turn is a fancy way of saying, the market is about the
same 120 months later was it was at the beginning of the 120 month
period.. that it's not entirely impossible for Dow to be at
10,000 on January 2020...in that sense it's not a myth that such
things can happen as the Dow is lower in 2010 than it was 120 months
ago. (an argument in your favor is that this doesn't count
dividends...so I'd modify that to say it's not entirely impossible
that the stock price appreciation part may be in Jan 2020 at same
level as it is today..and even if it were 'only' steady at 10,000
until 2017 and then up, that too could be pretty hard on someone on a
bare retirement who started in 2013 let's say...) (looks up again..I
guess I did use a similar phrase, 'lost' decade in quotes,
Rocannon used 'flat decade'...but either way can one rule out Dow
10,000 or 12,000 in 2020..? entirely ruled out? alas, not entirely..)

I totally agree that, it's far from a 'given' that our hypothetical
brave early retiree would find and keep a workable PT job that's
they'd find tolerable or even mildly enjoyable...I did in part, for
this reason, only suggest that for 7% of their expenses; that's not 7%
of today's much higher salary but 7% of their "very frugal" retirement
expenses. If you're living on 20,000 then that would be only needing
$1,400 which before taxes might be on the order of $2,000. Is even
that low an amount an automatic given? Agree it isn't. But it's low
enough that it seem like not a huge stretch, and small enough a number
of hours per week (or number of fulltime weeks per year) that even
some unpleasantness would be small part of the year. 4hrs/week times
50 weeks, times $10/hour for example, or 40hours per week times 5
weeks of $10/hour or 10 weeks even at $5/hour, that if you can
tolerate no so fun things on such a small scale, it seems not
unreasonable. Not claiming even this more modest sum would work out
for everyone, but it's on the more modest end of the 'working
assumptions' scale, imo..For such a small number of hours per week or
weeks per year, I'm almost willing to get paid to bang a hammer on my
fingers as my official job duty! ;-) Just kidding...but would
certainly be willing to tolerate a lot more if it's a small hr/wk or
wks/year commitment..

In my case I'm tentatively planning on NOT having to have health
insurance through PT work precisely because other than a small number
of employers, that's very hard ...and I also don't want to live in a
large city..I'm planning to fit $150/month for catastrophic (plus out of pocket
for medical care) into my annual budget. Whether that can stay at 20k
or not, time will tell. I'll be saving more than $250/month, perhaps
significantly more, on rent alone if/when I make such a leap and move
to more rural or semi-rural areas.

You are definitely more adventurous than I am with that AT
hike-for-a-year idea though :-) And agree very much we don't have a
very friendly situation as far as homeless people or for Americans in
general for that matter, and only the worst of the abuses (canceling
your insurance when you got sick by finding a subtle mistake on your
form like you forgot to mention acne) are finally being put to an
end...

Generally I find proportions fairly worthless, because I cannot
apply them to my own living situation. I like to see absolute
numbers.


Oh, but then DIY! :o)

That is, Do It Yourself, they stop being worthless just as
soon as you multiply them by the right factor...That's why I gave that
imaginary $10,000/year expenses..I don't presume to know what yours
are, and even if I knew, why have an example that works just for me,
or just for your expenses? (as noted, the 6% is probably not valid if
one's expenses were that low, but for the scaled up version,
e.g. 100k, the quotes I got online and posted earlier, are indeed at
the 6%). The rest of the numbers can (and should :-) be scaled up to
the budget one is planning on. In my case, multiplying the $10,000/yr
expenses by 2 to get 20,000..

..with your background in programming, you could not only do that and
multiply the example numbers by 2.5 of what have you, but you could
even do what most of us can't, (or at least not without it being
painful and very slow and much more buggy, for us than for you :-)
that is writing a program where you can plug in many what-if's,
including what the expenses "E" parameter equals, starting at 15*E in
networth, but changing that up or down to experiment, and putting
(6.5)E into an annuity, on which they'd get about (0.06)(6.5)E per
year or (0.39)E dollars coming in per year for the rest of their life,
and expecting "smarter at being frugal" to more than compensate for
inflation for the first Q years (I'm hoping my Q is 5 or a bit
more). But I don't like this variables-style notation that much, I
don't see any high paid financial news writers using it (this is a
JOKE...most of them are not high paid :-) hence the imaginary
Jane/John Public who will have exactly $10,000/yr of expenses in their
frugal retirement they are planning...Anyway, by all means,
my ex. was just a launching point and you can roll-your-own either
with a simple scaling factor of a fancier playing around with several
of the variables..

Very few of us could live off 4k/yr...(170k * 0.06) + (230k * 0.04) =
19.4k/yr? Maybe possible, if supplemented with PT work...There, I've broken down
and given a specific example..ugh, now you're gonna tell me these
number suck from your point of view ;-( or ;-) so definitely, our
"pretend" early retiree with 10k/yr expenses was just a launching
point to scale up from and for many, to also modify in other more
nuanced ways..Personally hoping to have more than 400k in 12 or 24 or
36 months and hoping to "hang on " until then (maybe sharing mutually
cathartic vents about 'working for the Man' with Rocannon and others
here until then ;-) but alas nothing is certain, that might not
happen. Then again, health or even being alive, isn't certain either..


I'd much rather not have to pay penalties by withdrawing early, so
I'm trying to plan on not touching the retirement funds till I'm
65


I'm guessing from your expertise in many other areas (I read the thread
from a year ago) that you know about 72t already as a way to avoid
penalty (another way, I believe, is 457(b) instead of 401k/403b,
although I will definitely recheck and recheck that before I assume I
can do that) Ideally I'd like to not take out from retirement account
but if that means no semi-retirement until 20 years later than one
might feel a strong need for...then some no-penalty way of accessing
the accounts may be what is needed...at least, in my case, it's
something that's on the table

yttire: I think annuities are not all bad, if you go for a more
recommended provider. They provide a real way to distribute risk,
especially the risk of living extraordinarily long.
that's my impression as well and (so far)
after some research, continues to be my feeling..I'll keep
researching. Your ideas like working PT at same employer are
reasonable ones, I'm not sure how it is for others, in my case working
"halftime" would mean far less than 50% of the pay unfortunately, and
that's before the lost benefits are taken into account. For other
folks in other situations it might be a perfect sweet spot, no doubt.

Without a doubt those who want to leave something for a beneficiary
after they are no longer alive, have a more nuanced and complex set
of trade-offs to try to balance ..

And one more thought...oh and I hope Rocannon won't throw tomatoes at me since this is also a scaled down example... ;) But, it was a sobering
experience for me to imagine $100 funds for retirement (our VERY
unrealistic and definitely for scaling up proportionately, example :-)
and considering 6%/year for life (Case I) versus the so often quoted
"4% the first year and then increase for inflation" (Case II) If
inflation is huge the latter option is in big trouble of its own, so I
assumed 3% or 3.5% inflation...10 to 14 years for the annual amount in
II to catch up with I. I think 10 years if it was 5.65% not 6% and if
inflation was 3.5% (so you take out $4 out of the $100 the first year,
(1.035)*($4) the second year and so on) and 14 years if 6% from Case I
and inflation is 3% per year. Of course this looks not at what you'd
have in net work in II but only at what your annual "I must live on
this" plan in that case..One could be dead before those 10 or 14
years are over..So long as it's a small-ish part of my total savings
and a trusted and robust company, and given the insurance too, I'm
definitely leaning towards annuities being part of my mix..

I wonder what toilet I'm throwing my money into. I feel your
pain...I started investing "real" amounts of money into the market
maybe only 2 years before the dot com bubble peak..from 2000 to today
or even 1998 to today isn't a great 'run'.. :(

Thanks for sharing about your mother's experience. Yeah, if only that
was the cash flow many of us FIRE wannabes had, me too...When you
said earlier that you don't think you'd want to or ever be really
happy working for anyone else, earlier this thread, my head was
nodding..I'm wondering if I may feel as (or almost as) strongly as you
do that that applies to me as well... edlbym

Postscript

Rocannon: "I've become more cautious after getting the impression
that some people are uncomfortable about discussing these things
"

Oh hell yes, I read this story on the internet (so it MUST be true)
that they did this sexuality survey some years back and the
participants had no problem sharing intimate details, then they tried
to get financial demographics info and some participants were
very uncomfortable and even balked. "Masturbation history? No
problem! My personal net worth and income? No way, that's too
personal!!" ;-) but that's exactly how it was for those researchers

-edlbym signing off again, waiting for the inevitable pun about the
"intellectual m*st*rbation" to be careful to avoid being guilty of in
these posts on TMF boards ...
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Flat decades are a myth, as far as stock markets are concerned."
I almost thought you were quoting me before realizing Rocannon was the
one who had said "another flat decade certainly looks possible"...I
can't speak for Rocannon but I might have said the same thing, and in
my case, I would have merely meant not a "flat line" but the common
(ab?)use of language meaning, "average annual return for the period is
zero" which in turn is a fancy way of saying, the market is about the
same 120 months later was it was at the beginning of the 120 month
period.


If you cross the United States you'll start at sea level and end at sea level. No net change in elevation. So your average change in elevation per mile traveled is zero.

As you're going through the Appalachians, Rockies, or Coast Ranges you might be excused for not realizing that the United States is flat.

I am not saying that the stock market won't be at the same level in 10 years that it is today, any more than I'm saying that the US east and west coasts won't both be at sea level... I am saying that even if it IS at the same level, it'll take a very bumpy route from here to there, that is extremely likely to include at least one 25% upturn (and probably at least three). Which necessarily implies a similar number of downturns of comparable magnitude.

Volatility is a fact of life in the stock market. You need to find a way to make it your friend.

It isn't hard.

If you had bought 1,000 units of the Dow Jones Industrial average at the 1928 close, and just sat on them, you still would have been feeling good at the end of 1929 and even okay at the end of 1930. Then you wouldn't have been back to even until sometime in 1950 or 1951.

If instead you had bought 500 units and simply resolved to hold the dollar value of your stock holdings steady, trading only at the end of each year, you would show a cumulative profit at the end of 1936 through 1940 and then every year beginning in 1943 - ending 1951 with a 41% cumulative gain. And whereas the Dow at its worst year-end was down 71% compared to 1928, your worst would be only down 41%.

(The above two paragraphs do not include interest, dividends, or transaction costs.)

There are quite a number of strategies that are almost certain to be better than buy-and-hold, and extremely likely to be profitable, based around starting with a cash reserve and then buying more stock when it's marked down and selling it when it's dear to rebuild the reserve. In general I recommend them for indexes, not individual stocks, because an index is far less likely to go to near-zero and stay there; however if you are extremely confident of a company's long-term viability, and reexamine it periodically to check that said confidence is still justified, it can work.
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Warri,

you might be excused for not realizing that the United States is flat.

Oh goodness, so are so very cute...especially since my post had just pointed out that "flat" (a term I had not used) isn't to be taken literally when other people do choose to use that expression... hence the phrase "level at beginning equal level at end of 120 month period" as the clarifying definition so there is no doubt about what is being discussed.

Now, I think I'm on pretty firm ground when I say that, if the Dow does end up at 10,000 on January 2020 there will be a LOT of very disappointed investors. No that's not strong enough..Let's try that again - that if that happens, there will be a lot of investors, retirees and would-be retirees who would be not only disappointed, but in serious trouble.

That said, my point was that while I certainly hope it doesn't happen, that one should not exclude the possibility. Which translates into: one's plans should include that (Dow 10,000 in 2020) as a possibility. Unless you are trying to argue that one's plans should exclude that as being possible, then there is nothing to argue about here. You seem to be saying that, even if it happens, one could have used investment strategies to still do better. Maybe. Maybe not. But the thrust of my earlier comments were, to not assume that "Dow 10,000 in 2020" is completely impossible. Unless you're suggesting we should assume that such an event is completely impossible, then we are not in disagreement on that...

And, I'm not all that eager to get into a big discussion, disagreement or otherwise, about the best investment strategies..The issue of which investing strategies are best to use ("trading only at the end of each year,") are whole discussion in their own right.

Suffice it to say that despite some success I've personally had in selling when the market is high and buying when low, I'm far from convinced there's anything that's a "almost certain to be better than buy and hold" strategy but you know what? If you have a mutual fund that you yourself run based on this strategy or who someone else does, and if your, oh, say, 25 year record shows you've consistently beat the buy and hold index funds (after fees) then I'm all ears..or we can start a new thread about ideal investment strategies for FIRE...maybe there's a sure-fire way to beat all the index funds after all..though I'm not holding my breathe :-)

edlbym
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Unless you are trying to argue that one's plans should exclude that as being possible, then there is nothing to argue about here. You seem to be saying that, even if it happens, one could have used investment strategies to still do better.

No, I'm arguing that calling it "flat" is a falsehood with serious negative consequences even if it does end up where it started.
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yttire,

would you mind sharing your expected social security payout in twenty five years.

I could only find my SS statement from a couple of years ago; my files are rather disorganized.

The statement says my estimated benefits, if I stop working at (numbers slightly rounded):
- 62 -> $1K/month
- 67 -> $1500/month
- 70 -> $1900/month

However, they do not provide an estimate if I stopped working now altogether.

It appears in making the estimates that they are assuming I will continue to make about $30K/year up until I am retired, so I do not take the estimates seriously.

I wonder if your job could be made more palatable without quitting altogether, such as half time work, or perhaps taking a month of unpaid every year.

Yes, I would love to find a job which permits this. I have approached my boss about taking a salary reduction for extra time off; the idea was flat out rejected. And I definitely have the impression that you are not looked upon favorably for asking for more time off - after all, if you're a good employee you love your job sooo much, and can think of nothing more than spending all your time at work.

Keep in mind, too, that I do get approximately 15 days of vacation per year. However, this tends to get eaten up in fragments - a few days here and there to visit friends and family, and then usually one or two 1-week trips over the year. Sometimes I can roll over days to the following year, which gives me a little more cushion. But taking vacations that last more than 1 week is frowned on at my company. I know of one person who took several weeks off, but then worked off-site for half the time! - that is very unappealing to me.

To do something like this, I would need to find a new job. My experience job hunting is that you will not get a job if you have any special requests, like taking time off for a couple months per year. I have been unemployed and job hunting twice in the last 10 years; both times it was an incredible scramble to find something, and it took about 1/2 year each time. I am curious to know if your experience has been different.

I took two months off from an employer, and it seemed to have no adverse affect on my career while I backpacker Europe.

Wow! I can't even begin to imagine having a job where this would be allowed. What kind of company was that? PM me if your prefer to discuss this in private. I'd really love to know more, since this sounds very much like what I'd like to do.

Rocannon
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Rocannon mentions something that I have been wondering about for a long time. Let's say you are 52 and have been working since age 22 -- 30 years now. That's well more than enough time to get full social security benefits when you retire.

But...

Let's say you retire at age 52. Stop working completely. When you decide to begin receiving social security benefits, be it at age 62, or 65, or 70, or whenever... do you get the exact same amount as if you had continued working? If not, how is the amount calculated?

Thanks in advance, for whoever can shed light on this. I've not been able to find any discussion of it elsewhere.

Cheers!
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Let's say you retire at age 52. Stop working completely. When you decide to begin receiving social security benefits, be it at age 62, or 65, or 70, or whenever... do you get the exact same amount as if you had continued working? If not, how is the amount calculated?

As I understand it, your Social Security benefit is calculated based on your highest-earnings (up to the Social Security cap) 40 years.

If you begin working at age 18 and retire at 52, you'll have only 34 years in, so six of those years will have zero earnings. This will obviously drag your benefit down somewhat.

There are some other complications that I am forgetting.
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CheersSRX asks,

Let's say you retire at age 52. Stop working completely. When you decide to begin receiving social security benefits, be it at age 62, or 65, or 70, or whenever... do you get the exact same amount as if you had continued working? If not, how is the amount calculated?

Here's an analysis I did a while back on the affect of early retirement on your Social Security benefit.

http://www.retireearlyhomepage.com/soc_security.html

intercst
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Warrl, "No, I'm arguing that calling it "flat" is a falsehood with serious negative consequences even if it does end up where it started."

You're worried someone might think the person was referring to what they call a 'constant function' in math, as describing the market index level over time. I think if someone said "the market stayed flat" I would agree that is a possible interpretation; when I hear about "flat returns" or positive returns of negative returns, and average annual is implied, I think they are talking about (E-B)^(1/N) where E=End value, B=beginning value, N is number of years, and for the sticklers, yes, that number converted into a percent, is what's generally understood...but I'm not worked up enough about this issue, to try to convince you that's you're worked up too much over it :-)

If you are bothered by "lost decade" to refer to E=B (same level in 120 months) then cover you ears next time I post ;-)

As I understand it, your Social Security benefit is calculated based on your highest-earnings (up to the Social Security cap) 40 years.

I just looked on their website a week ago and thought it said 35..let me check again..

"Social Security benefits are typically computed using "average indexed monthly earnings." This average summarizes up to 35 years of a worker's earnings. "

http://www.ssa.gov/OACT/COLA/Benefits.html

By "up to" they mean that if it's less than that many years they just add zeros to your other years to average in..

Of course if someone was looking to retire at mid-40s say age 45 and planned to take SocSec at age 62 then instead of the ".(170k * 0.06) + (230k * 0.04) = 19.4k/yr" type calculation" (http://boards.fool.com/Message.asp?number=4861&bid=11637... ) one could look into what a 17 year annuity would get you, which would be more than a lifetime..but I'd still want to not put all or even most of the eggs into the annuity basket, and would want to have a significant sum left over.

Just out of curiosity I wondered what would happen if at age 47 our hypothetical person had 400k and put half into a 15 year annuity and kept the other 200k in market, cash and so on.

$200 would get them $1,460/month (17.5k/year) from 47 birthday until 62nd birthday and they'd have 200k on the side, 3.5% of which say, would bring another 7k the first year for 24.5k/year (minus taxes, plus any PT job earnings).

Personally 50% is too high for me in an annuity..even if I had ironclad trust in the company..but I guess other than trying to look for positive news in the numbers, I guess Rocannon this does suggest that with a mix of equities and annuities, then the mid-to-late 40s and about 400k total savings, which yours could certainly grow to in 2 years, means one is, at least roughly, "in the ballpark" if one can live on 25k or so...so not all hope is lost, there's light at the end of the tunnel! :-) edbym
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Sorry about the all italics. Serves me right for not doing "preview" message. Meant to put just the quoted first line in italics.

Aside: thanks for the link intercst...I had meant to relocate that page and re-read it..
edlbym
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I thought Social Security was based on the highest 35 inflation adjusted earnings years, not the highest 40.

So which is it?


Seattle Pioneer
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Here it is again

"Social Security benefits are typically computed using "average indexed monthly earnings." This average summarizes up to 35 years of a worker's earnings. "

http://www.ssa.gov/OACT/COLA/Benefits.html
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Wow! I can't even begin to imagine having a job where this would be allowed.

Well I basically said- I am leaving for a few months. If I have a job when I get back, great. If I don't, too bad.

That was back when I had just finished my graduate degree and felt highly employable, and before many layoffs, etc.

Now I wouldn't be so brazen.
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Rocannon,
At the time, I had reached $100K, and I was trying to get a handle on how little people need to get by.

After thinking about it more, I decided I wanted a minimum of $500K, and that I'd work till the age of 45 if necessary to get there, and revisit the idea later. I'm now in the neighborhood of 45, and I'm revisiting.


Every few years, I seem to adjust my numbers upward. I 1st caught the FIRE bug in 1999 and put together a plan to live on around 35k (4% SWR on a 875k). That would leave DW and I with about 20k in core expenses with 15k for goofing off and big ticket items. That also included a paid off energy efficient home in a rural setting. My original FIRE age was 48.

We'll, I'm 48 now so you can see how that worked out. I'm still working and far from 875k in FIRE assets. But what has also changed is watching my children grow up with one giving 2 grandsons by now. I don't really want to live a frugal subsistence lifestyle. DW and I want to be engaged with the family and that cost $. I want to be the "pa pa" that takes his grandkids to Disney World for a week, as well as many other things. How cool would it be go parachute jumping with your grandkids as an example.

So DW have revised our FIRE $ target and date target. In actuality, it really is no longer a 'FIRE' date. More of a 'FI' date because it will be around 60. Not exactly retiring early. So I'm expecting more like a 1.5 mil nest egg with SS kicking in about the same time.

decath
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We'll, I'm 48 now so you can see how that worked out. I'm still working and far from 875k in FIRE assets. But what has also changed is watching my children grow up with one giving 2 grandsons by now. I don't really want to live a frugal subsistence lifestyle. DW and I want to be engaged with the family and that cost $. I want to be the "pa pa" that takes his grandkids to Disney World for a week, as well as many other things. How cool would it be go parachute jumping with your grandkids as an example.

You and I started about the same time on the FIRE board, with the same goals. I have since revised my goals to FI as well. If RE happens, then so much the better.

When I started on the FIRE board, a lot of people were saying how having kids would ruin the RE plans. I was confident I was different. Well, I wasn't.

Congratulations on being a grandpa. I'm one year younger than you and my oldest is 9. I can't imagine being a grandpa.

Volucris
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"Congratulations on being a grandpa. I'm one year younger than you and my oldest is 9. I can't imagine being a grandpa.

Volucris "

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

May you not find out for another 9 years minimum - but when and
if you do find out whether beyond or within the 9 year suggestion,
may you find all the joys and be able to survive and overcome
the heartaches that come with children and grandchildren.

Howie52
A father of two - and glad to have the opportunity.
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Volucris
When I started on the FIRE board, a lot of people were saying how having kids would ruin the RE plans. I was confident I was different. Well, I wasn't.

Congratulations on being a grandpa. I'm one year younger than you and my oldest is 9. I can't imagine being a grandpa.


Thanks. Life has a way of throwing monkey wrenches at you! ;)

I guess only a select few end up like intercst. I would imagine his budget has been pretty stable and predictable all these years.

But I'm not complaining. His pioneering work has been invaluable to my planning. I'll never be poor, that is for sure.

Good luck with raising your kids Vol. It was good to hear from you.

decath
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decath,

I'm still working and far from 875k in FIRE assets. But what has also changed is watching my children grow up with one giving 2 grandsons by now. I don't really want to live a frugal subsistence lifestyle. DW and I want to be engaged with the family and that cost $. I want to be the "pa pa" that takes his grandkids to Disney World for a week, as well as many other things. How cool would it be go parachute jumping with your grandkids as an example.

That would be really cool! :)

I think things are fundamentally different when you have a family life. I think if I had a family, my main motivation would be to have a stable job with the lowest possible hours so that I could spend as much time as possible with my SO and kids. I get where you're coming from.

However, I never wanted kids, and the truth is I never actually wanted a SO. I've been in some happy relationships but after the last one ended, I didn't go hunting for someone new, and nothing just happened by chance, so I'm now alone, which is fine by me. I am pretty happy being alone when I can spend my time doing what I want. I think a lot of my unhappiness comes from being alone and having too little free time to do what I want. I have a friend who teaches and takes off every summer to go traveling. That lifestyle is very attractive. Unfortunately, I really don't enjoy teaching. I haven't been able to think of any other way to do something similar.

My teacher friend is the one that I mentioned in the original thread. She's the one who advised me that I'd be able to retire with $100K; she really has no financial chops (plus she practically has no savings). Anyway, she has suggested to me that I could do contract work (I'm in IT) part time, and travel part time. I guess she knows some young people who do this in NYC.

This may be fine if you're younger, but I wonder how realistic it is for us "elderly" folks. IT is highly competitive, and the older you get the harder it seems to be to find a job. I've been unemployed a few times and it has taken me 3-6 months of steady job seeking to find a new job. I wonder how these people she knows are able to do it (I always ask her but she never has the details).

OK, just rambling now :)

Rocannon
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<<Unfortunately, I really don't enjoy teaching. I haven't been able to think of any other way to do something similar.>>



I was a furnace repairman. I could make plenty of income from Labor Day through April, and then my time was my own unless I wanted to do the work that people wanted done.

I could be out boating with my feet on the fantail and schedule a job for when I planned to be back in town ---- people usually aren't too picky about having their furnace work in August.


Just don't get sucked in to doing AC work!



Seattle Pioneer
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This may be fine if you're younger, but I wonder how realistic it is for us "elderly" folks. IT is highly competitive, and the older you get the harder it seems to be to find a job. I've been unemployed a few times and it has taken me 3-6 months of steady job seeking to find a new job. I wonder how these people she knows are able to do it (I always ask her but she never has the details).

OK, just rambling now :)

Rocannon


I'm in IT as well and this is a major concern to me as I approach 50. I try to stay employed with a stable company that does not work me to much.

In addition, as I get older, I find it more and more irritating to have to learn new softare skills on my own time. That is part of the profession that was fine in my youth. Now that I'm older, I'm more protective of my free time and resent having to constantly work/learn outside the office. But you have to or younger, lesser paid IT people will replace you. It's the nature of the beast I guess.

decath
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<<In addition, as I get older, I find it more and more irritating to have to learn new softare skills on my own time. That is part of the profession that was fine in my youth. Now that I'm older, I'm more protective of my free time and resent having to constantly work/learn outside the office. But you have to or younger, lesser paid IT people will replace you. It's the nature of the beast I guess.

decath >>



If there were any Justice in the world, the IT greybeards would find their selves in demand during their declining years taking care of older systems that were dominant before the young generation came along.

That happened when COBOL systems need to be revised due to Y2000 issues, as I understand it.



Seattle Pioneer
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If there were any Justice in the world, the IT greybeards would find their selves in demand during their declining years taking care of older systems that were dominant before the young generation came along.

That happened when COBOL systems need to be revised due to Y2000 issues, as I understand it.



Seattle Pioneer


Yes. Many of those systems are still around. I occasionally run into an older programmer still working in COBOL.

I work mainly on a legacy database platform that I've know since 1984 called "Multivalue". I spend another 10-20% of my time with the .net web technologies. I became proficient on classic ASP (old web development tool) back in the early 2000's. Then they went to .net and I was left behind. I'm playing catch-up again.

decath
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I also was living in denial about how having kids and and a wife would delay early retirement.

Family of six (two in college), one income since the oldest was 6 months old. I can't imagine how having all the money we spent on shoes, food and additional car insurance. Of course, as a family, we really made out at Christmas and over the year on birthdays--my kids get four between them, and we only have to buy one, two, or three for the families of cousins.
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