How Much?

[Debt Vigilante]

How much do you want to have saved by the time you retire?

How old do you want to be?

[jIM_Ohio]

25X my expenses at time I retire will be average
20X expenses is living on the edge
33X expenses means the money lasts forever

25X represents a 4% starting withdraw (so 40k of expenses is $1 M saved and 4% is taken as initial withdraw)
20X represents a 5% initial withdraw rate (so 40k of expenses is $800k saved and 5% is taken as initial withdraw)
33X represents a 3.3% starting withdraw rate (SWR) so 40k of expenses is $1.32 M saved and 3.3% is taken as initial withdraw

The day I hit 25X expenses in my portfolio I send in my two weeks notice.

[disneysteve]

I want to retire as soon as possible. I'm shooting for 62 but I certainly wouldn't complain about 60 or 59 or 47. As Jim said, when the money is there, I will retire and not a day later.

[EconoMutt]

62 no matter what.

[disneysteve]

Originally Posted by EconoMutt

62 no matter what.

Actually, I will probably do the same. If I don't have my retirement fully funded at that point, I will likely still hang up the full time job and just do part-time stuff on my schedule to make up the difference. I may even make that change before 62 depending on how large the gap would be between what we have and what we need.

[EconoMutt]

Originally Posted by disneysteve

Actually, I will probably do the same. If I don't have my retirement fully funded at that point, I will likely still hang up the full time job and just do part-time stuff on my schedule to make up the difference. I may even make that change before 62 depending on how large the gap would be between what we have and what we need.

I'm not ruling out a part time job or picking up odd jobs.
Unless I can get a guarantee that I'm going to live to 100, I'm definitely hanging up the full time job at 62.

[bjl584]

Depends what I'm doing at the time that I have the ability to retire. If I'm working at a job that I'm passionate about, and if there is an option to do it part time, then I may consider working longer or partially retiring.

[Debt Vigilante]

I guess I just look at my parents who are GREAT people, but made some bad business decisions early in life and will work the rest of their lives because of their lack of retirement. They will literally work until they die. I want to be able to see some things and enjoy the end of my life before I get too old.

[Ima saver]

I retired at 45 but dh is still working. I can not imagine him not working, he is a workaholic!

[snshijuptr]

My husband and I want to work until our children graduate college then move to part time work within a couple years. From there we will work until we are tired of it. Of course we still don't have kids...so probably around age 55 we move to part time. My goal is to save as much as possible now and figure out a better budget after we buy a house and I get a real job.

[Snodog]

As soon as I can get FireCalc to give me 100% success rate is when I give my 2 weeks notice. And I won't let the door hit me on the way out!

[jIM_Ohio]

Originally Posted by Snodog

As soon as I can get FireCalc to give me 100% success rate is when I give my 2 weeks notice. And I won't let the door hit me on the way out!

LOL anything above an 80% success rate is wasted

[srblanco7]

Shooting (planning) for 59. I'll be 59 when my son graduates from college, and I'd like to retire or go part-time at that point.

[Snodog]

Originally Posted by jIM_Ohio

LOL anything above an 80% success rate is wasted

That I cannot agree with.

[jIM_Ohio]

Originally Posted by Snodog

That I cannot agree with.

Its on the firecalc boards that anything above 80% is probably wasted. Something like 20 years of every century have a major economic event which cannot be planned for (civil war, great depression) so anything above 80% is wasted planning.

[Snodog]

Originally Posted by jIM_Ohio

Its on the firecalc boards that anything above 80% is probably wasted. Something like 20 years of every century have a major economic event which cannot be planned for (civil war, great depression) so anything above 80% is wasted planning.

jIM_Ohio-

I think this article by William Bernstein is the inspiration for that reasoning.

Bernstein says-

"A wildly optimistic historian might give us another few centuries of economic, political, and military continuity. Back-of-the-envelope, that’s about an 80% survival rate over the next 40 years. Thus, any estimate of long-term financial success greater than about 80% is meaningless."

Retirement Calculator From Hell, Part 3.

Since you changed to "probably wasted" I have less to disagree with. Anything over 80% IS probably wasted. But I'de prefer to err on the side of caution for the following reasons:

1. When I'm out, I'm out- Finding out you have to go back to work after a few bad years in the market would suck to say the least.

2. Limited ability to cut expenses should we need to- we don't have a lot of fat to trim in our budget as some might.

3. The 100% is a buffer in case future expenses turn out to be greater than past expenses.

Someone retiring during the late 1920's or early 1970's with an 80% success rate probably didn't fare so well. It is possible to have a very severe downturn while still keeping the fabric of society together. And if I recall correctly the 1970's stagflation was actually harder on a 50/50 stock/bond portfolio than the Great Depression so these events are not so rare. The late 90's may turn out to be another such time.

And I apologize to the OP for taking this slightly off-topic.

[feh]

When our net worth is between 1.5 and 2 million, we can probably seriously consider it. That may be as soon as 5-7 years from now (I'm currently 44), or 15, depending on investment returns.

[jIM_Ohio]

Originally Posted by Snodog

jIM_Ohio-

I think this article by William Bernstein is the inspiration for that reasoning.

Bernstein says-

"A wildly optimistic historian might give us another few centuries of economic, political, and military continuity. Back-of-the-envelope, that’s about an 80% survival rate over the next 40 years. Thus, any estimate of long-term financial success greater than about 80% is meaningless."

Retirement Calculator From Hell, Part 3.

Since you changed to "probably wasted" I have less to disagree with. Anything over 80% IS probably wasted. But I'de prefer to err on the side of caution for the following reasons:

1. When I'm out, I'm out- Finding out you have to go back to work after a few bad years in the market would suck to say the least.

2. Limited ability to cut expenses should we need to- we don't have a lot of fat to trim in our budget as some might.

3. The 100% is a buffer in case future expenses turn out to be greater than past expenses.

Someone retiring during the late 1920's or early 1970's with an 80% success rate probably didn't fare so well. It is possible to have a very severe downturn while still keeping the fabric of society together. And if I recall correctly the 1970's stagflation was actually harder on a 50/50 stock/bond portfolio than the Great Depression so these events are not so rare. The late 90's may turn out to be another such time.

And I apologize to the OP for taking this slightly off-topic.

I am too far away from firecalc giving me good info (I am maybe 11 years from FI, probably 15, but could be as little as 8...) so I do not have a success rate to play with yet...

but there is more than one way to take that success rate..

shoot for 80% and if the 1920's or 1970's happen, have a catastrophic plan... my plan includes

1) a portion of my portfolio and withdraw rate will be free cash flow. Meaning if my expenses are 40k, I plan to have 45k as the actual withdraw used, and then this excess is put into something like PRPFX.

2) The true need of that excess is for one time expenses- like a new roof, replacement car, new HVAC, new hotwater heater etc... as you pointed out, most budgets of extreme savers have little fat on them to cut, however a good retirement plan also accounts for the unexpected.

3) There are 2 SWR assumptions with above technique- its probable that a 4% withdraw is my base, but with unexpected expenses buffer that withdraw rate is 3.5% or similar. The other assumption is that when portfolio loses more than 10%, the withdraw rate is reduces as well... so if a $1 M portfolio drops to $900k, don't take out 4% of $1 M which is the 40k of needed expenses, take out 4% (or less) of the 900k balance and change expenses short term.


My plan is to get withdraw rate of 4% to about 70-80% success, then use a rate less than 4% as the withdraw rate. So while 4% is a good target, I know from reading many studies show a way to use a 5-5.5% SWR and then every 10 years lower that (so later in life the SWR looks like 2-3%, but when younger the SWR was much higher.

[TheStreetCeo]

62 and about 4 million give or take.

Good topic DV