Early retirement experiences?

SKJSS (formerly Klayfish) said:

In reply to OHSCrifle :

How do you determine that number?

Oversimplified answer:

Create a detailed budget, approximating your monthly spending in retirement

Multiply that x12 to get yearly spending (again, in retirement)

Multiply that x25.  1/25 = 4%  so multiplying by 25 gives you your nest egg needed to sustain 4% withdrawal rate

Now that you have a target "nest egg" number, you can use one of the many calculators online to determine if your current investments are likely to get you there. Essentially you're answering the following: With X years to retirement, assuming average market returns, will my current investment of Y get to my nest egg number if I contribute $0 going forward?

calteg said:

SKJSS (formerly Klayfish) said:

In reply to OHSCrifle :

How do you determine that number?

Oversimplified answer:

Create a detailed budget, approximating your monthly spending in retirement

Multiply that x12 to get yearly spending (again, in retirement)

Multiply that x25.  1/25 = 4%  so multiplying by 25 gives you your nest egg needed to sustain 4% withdrawal rate

Now that you have a target "nest egg" number, you can use one of the many calculators online to determine if your current investments are likely to get you there. Essentially you're answering the following: With X years to retirement, assuming average market returns, will my current investment of Y get to my nest egg number if I contribute $0 going forward?

The famous 4.0% Rule referenced above assumes that you begin retirement at age 65.  For an earlier retirement, you'll need to reduce the draw rate slightly.

Here's one 4.0% Rule chart for various timelines, draw rates, & allocation mixes:

If your objective is simply to avoid running out of money before you die, a start is to visit the Social Security Administration's Actuarial Table.

What isn't available is the standard deviation on life expectancy...for a 60 year old male, it's 9.1 years...I know that because I'm a 60 year old male statistician.  

If you take the life expectancy for your age and gender from the table and add 9.1 years, there's ~83.5% chance you won't live longer than that and if you add 18.2 years, there's ~97.5 chance you won't live longer than that.

Of course, the standard deviation varies as a function of age and gender and we're not considering the shape of the distribution.  But, if you start with this estimate and push the number up or down in consideration of family longevity, life style, and current health, you'll get the numbers almost as tight as they can get.   

I'm 52, turning 53 in the spring.  I no longer contribute to my retirement funds since I "retired" but I still earn enough money from my various fun jobs to pay the bills and not touch my nest egg.  I guess this is where I still get a bit confused.  My goal is to not run out of money before I die, skewed towards having more fun now and a financially comfortable and peaceful low spending life when/if I get to 70+. 

I've talked to several financial planners, including the one who actually runs my finances.  They all say I'm in a wonderful place.  Is there a good calculator I can play with to plug in all the variables...my current age, income, nest egg size, etc...and then play around with various withdrawal amounts year over year?  I guess another big challenge is calculating any penalties or fees for withdrawal before age 65.  Right now I'm not touching it, except for money I withdrew to purchase a primary residence, so it's not a factor.  However....

In reply to SKJSS (formerly Klayfish) :

Don't look now Steve - you're coasting. The new job covers present expenses and your nest egg keeps growing. 

SKJSS (formerly Klayfish) said:

I'm 52, turning 53 in the spring.  I no longer contribute to my retirement funds since I "retired" but I still earn enough money from my various fun jobs to pay the bills and not touch my nest egg.  I guess this is where I still get a bit confused.  My goal is to not run out of money before I die, skewed towards having more fun now and a financially comfortable and peaceful low spending life when/if I get to 70+. 

I've talked to several financial planners, including the one who actually runs my finances.  They all say I'm in a wonderful place.  Is there a good calculator I can play with to plug in all the variables...my current age, income, nest egg size, etc...and then play around with various withdrawal amounts year over year?  I guess another big challenge is calculating any penalties or fees for withdrawal before age 65.  Right now I'm not touching it, except for money I withdrew to purchase a primary residence, so it's not a factor.  However....

Wearymicrobe posted a calculator on the prior page that does exactly this:

FI Calc

In reply to calteg :

That sounds great!  If you can comfortably get out by 50, do it - you'll find plenty to do.

So FireCalc is a tool and like all tools their are limitations. The 4% rule is the same. It should keep you from burning through your capital until you die. Two things. Most people make significantly more on the market then that even with a very safe distribution. Two people spend a lot less then they retire as they age. Also you can spend down your capital if you need to as you get older if required in an emergency. 
 

FYI I have no intention of leaving anything to anyone beyond money for school for my nieces and nephews and some to charity if I don't burn though it. So the 4% rule does not exactly apply to me. I like the die with nothing calculators. But I also have a history of living past 100 for a large portion of my family and well I have seen 

There's also firecalc.com for projecting and looking at possible outcomes. I like that it allows you to have different retirement income "events" at different times (like pension and social security starting in different years or you & your SO starting social security at different times). Built in assumptions, but at least there is some explanation of them and you can easily look at different options for investment strategy, spending/withdrawl philosophy, etc.

Edit to add, make sure to look at each tab to see how much you can customize.

I just had a 1 hour review with a financial advisor. After the first 20 minutes or so he basically said that my plan looked really good and asked if I had questions. Every question I asked was like "I was planning to do this but wanted to see if you had any better ideas". Every time he said "No, that looks like a great idea." At the end of the hour he basically said that he could run more analysis and charge more for it, but it would just confirm what I already had in mind. 

So, is this a Minor Win or a Minor Rant? I'm not sure. I guess I was hoping he'd have more magical insights for me, but at least I'm not completely off track.

In reply to CAinCA :

There is usually some value in paying somebody who is supposed to be intelligent to confirm that you are not being dumb.

It may be a rant that you spent money to be told to keep keeping on, but it is more a win in my book.

OHSCrifle said:

In reply to SKJSS (formerly Klayfish) :

Don't look now Steve - you're coasting. The new job covers present expenses and your nest egg keeps growing. 

There is a term for that: coastFIRE!

Per Google AI: Coast FIRE is a financial strategy that involves saving and investing enough money to retire early, while still earning enough to cover living expenses. The term "coast" refers to the idea of letting your investments grow and compound over time, instead of continuing to contribute money.

I get the "coast" part, but what's FIRE?

In reply to Duke :

Financial Independence Retire Early = FIRE

Welp, the universe is telling me it's time.

Wife found a WFH gig, the stock market has had an exceptional run, and this morning I got word that my job will be significantly restructured as of March 1st.

I'll ride it out for a few months, with the intention of no longer working by December. 

It's nerve wracking, but sometimes life pushing you off the diving board.

dyintorace said:

OHSCrifle said:

In reply to SKJSS (formerly Klayfish) :

Don't look now Steve - you're coasting. The new job covers present expenses and your nest egg keeps growing. 

There is a term for that: coastFIRE!

Per Google AI: Coast FIRE is a financial strategy that involves saving and investing enough money to retire early, while still earning enough to cover living expenses. The term "coast" refers to the idea of letting your investments grow and compound over time, instead of continuing to contribute money.

..and that is exactly why I used the word "coast"! 
 

Edit: with twelve hours of hindsight - I realized others may not have known. So thanks for adding that info. 

calteg said:

Welp, the universe is telling me it's time.

Wife found a WFH gig, the stock market has had an exceptional run, and this morning I got word that my job will be significantly restructured as of March 1st.

I'll ride it out for a few months, with the intention of no longer working by December. 

It's nerve wracking, but sometimes life pushing you off the diving board.

If you happen to see a nice severance option in the process- all the better!

Can't assume though. My industry's idea of a severance package is your accrued PTO and "good luck". 

They're too savvy for that. From what I understand the "restructuring" means double the account load, less pay, and a pivot into aspects of the job that are pretty undesirable. 

They won't lay us off, but they will make the job so E36 M3ty that people will quit.

Sometimes life gives you a little push. Go to Portugal, enjoy the reduced stress, and live a good life there.

I know if I get laid off, I'm out of the US. This is the last career focused job I'm going to have. I made a comfortable amount of money selling my house in CO and my next move is coastFIRE till I can get meds from medicare. 

calteg said:

It's nerve wracking, but sometimes life pushing you off the diving board.

It's the norm rather than the exception.

In reply to RX Reven' :

Sad but true. I've just had 2 friends in their mid 50s get the push out the door. They are having a tough time getting a new job. Unfortunately, neither were ready to leave the workforce this young.

I'm getting all of my ducks in a row as I turn 50 in July and have zero faith in the job market going forward. 

In reply to bmw88rider :

I'm really sorry about your two friends and yes, get your ducks in a row...quack-quack.

I'm 60 and I just celebrated my 20 year work anniversary...math is my thing and there always seems to be a need for it.

bmw88rider said:

Sometimes life gives you a little push. Go to Portugal, enjoy the reduced stress, and live a good life there.

I know if I get laid off, I'm out of the US. This is the last career focused job I'm going to have. I made a comfortable amount of money selling my house in CO and my next move is coastFIRE till I can get meds from medicare. 

Not Portugal, but close. Maybe I'll document the move on here.

In reply to Duke :

Happy Birthday! 

How's retirement going?

Met with my financial planner yesterday.  They took a bunch of info and will be presenting a synopsis to my wife and I once I give them a date that works well for us.  

Sounds like we're in good shape though and I think I'll be able to stop working when I want, even if my wife continues and doesn't sell her business/building at the same time.

OHSCrifle said:

In reply to Duke :

Happy Birthday! 

How's retirement going?

Why, thank you!  I turned 60 yesterday.  As my wife said, "Welcome to the sixth floor."

So far, 1 month in, retirement is going great.  I'm still solidly in decompression mode - been sleeping in late and staying up late.  We're not naturally morning people.  We've done a couple big jigsaw puzzles and have a bunch more on the slate.

We've been going to art and craft classes at several of our local libraries, and plan to keep doing that regularly.  Just had our 4th in a series of 8 classes in collage art today - it's been fun.  I plan to do more watercolor painting as well.

I need to get planning some trips with DW.  Traveling is my main goal for retirement.  We've gone on one trip every 5+ years or so, and most of those were not so big.  I really want to get out and see the world.

I've kind of neglected BMC car club business in the 3-4 month full court press leading up to retirement.  I need to get serious about that again, since April's season will be here before I know it.  I also need to decide what I want to do with the Manic Miata; put out feelers for selling it and start shopping for a suitable replacement.  With more time for simple pleasure trips, I'm thinking I want to get something more comfortable for both of us to cruise in.  An early '00s Boxster S would be ideal.

Anybody interested in an XB autocross Miata?  Supercharged '96 (235-240 rwhp / 185 lb-ft), many extras.  No rust.  Licensed and perfectly streetable - you could even reinstall the A/C if you wanted.