Sugar Magnolia Posted October 5, 2008 Share Posted October 5, 2008 We retired at age 46 and 48 years of age. To determine whether we'd have enough money to retire we researched a number of studies on withdrawal rates of savings. Most studies showed that even if you retired at the top of the market ,say in 1929, if you withdrew 4% a year you would be okay with a balanced portfolio. We are currently 50% in stocks, 30% in bonds and 20% in cash, and our stocks are very diversified in mutual funds (small caps, large caps, foreign, index etc). We have adhered to one of the more conservative studies that say if we retire at age 50 our withdrawl rate shoud be 3.64% and should last us until we are 100 even if we retire at the top of the market, and the market goes down from there over a 20 year period. We are also factoring in we are not going to see a dime of Social Security and if we do, it is a bonus. We are not calculating in our home as savings, since it is not a liquid asset. The first 4 years of retirement we have withdawn about 2.7%, but we haven't bought a car or had a major house repair like a roof as yet. I am very worried we may run out of money! We both have worked semi-reitred jobs and have brought in an average of 50K a year over the last 3 years, which has eased things a bit. I know there aren't many of you Huddlers who are retired or close to retirement, but was wondering what are the deciding factors you use to determine if you have enough money to retire. Some of you are financial planners or in a similar business so input would be much appreciated. Quote Link to comment Share on other sites More sharing options...
Chief Dick Posted October 5, 2008 Share Posted October 5, 2008 I'm 39 and will work until I die. Can't help you much there. Quote Link to comment Share on other sites More sharing options...
Sugar Magnolia Posted October 5, 2008 Author Share Posted October 5, 2008 (edited) Sorry about the typo in the heading. 10:00 pm is much too late for us 50 year olds to still be awake and thinking clearly, especially with a few glasses of wine. Last week I set my line-up at this hour and started a linebacker on a bye week. Edited October 5, 2008 by Sugar Magnolia Quote Link to comment Share on other sites More sharing options...
wiegie Posted October 5, 2008 Share Posted October 5, 2008 I'm 39 and will work until I die. Can't help you much there. -1 on the age, +1 on the rest of the post Quote Link to comment Share on other sites More sharing options...
muck Posted October 5, 2008 Share Posted October 5, 2008 I think "retirement" is a bad idea. Besides, you're not retired yet, SM ... each of you are still working and are productive members of society. If you're not comfortable with your current situation, work more (and/or change your investments around so you are truly diversified) until you are. Quote Link to comment Share on other sites More sharing options...
cliaz Posted October 5, 2008 Share Posted October 5, 2008 Well since my 401K has a -19.4% return since Jan 1st. and the fact I lost 10s of thousands of $ out of my 401K when my old Company WORLDCOM flopped and the .com boom busted, I seriously doubt i will be retiring. Anyways, most of my "retirement" money goes towards my kids retirement. Quote Link to comment Share on other sites More sharing options...
Kid Cid Posted October 5, 2008 Share Posted October 5, 2008 Ms Cid and I turn 45 this month and we are probably the very last of the Baby Boomers even though we never really fit in with either the Boomers or Gen X. All our research says that neither of us will be able to "retire" until after we turn 75, and then we will still be required to bring in some income. Realistically our options are to cash out of our home and move to Mexico or death by cop, neither of which is particularly appealing. People wonder why I'm such a cynical prick. It's mostly because the folks that have come before me have completely fraked things up and left me holding a bag of crap. Quote Link to comment Share on other sites More sharing options...
Jimmy Neutron Posted October 5, 2008 Share Posted October 5, 2008 I thought I was working toward an early retirement - socking away a lot of money into a 401k and other investments. That strategy may change if this economy gets a lot worse. Even millions available at retirement may be worthless if the dollar continues to decline in value like I think it will. Commodities will hold their value, better to have lots of usable goods on hand purchased with today's dollar vs. what might become a very ugly scenario for all of us. Quote Link to comment Share on other sites More sharing options...
The Holy Roller Posted October 5, 2008 Share Posted October 5, 2008 Consider the lillies of the field... Quote Link to comment Share on other sites More sharing options...
muck Posted October 6, 2008 Share Posted October 6, 2008 Consider the lillies of the field... +1 Quote Link to comment Share on other sites More sharing options...
Czarina Posted October 6, 2008 Share Posted October 6, 2008 Not to be rude or anything, but if you're ~50 and working part time jobs that bring in around 50k...is this a problem? I'm assuming it's just the two of you since most parent with younger kids wouldn't be retired at this age. Quote Link to comment Share on other sites More sharing options...
driveby Posted October 6, 2008 Share Posted October 6, 2008 Lottery tickets are my retirement plan. Quote Link to comment Share on other sites More sharing options...
fingfootball Posted October 6, 2008 Share Posted October 6, 2008 Consider the lillies of the field... lillies might not toil or spin, but they aint puttin two kids through college either. Quote Link to comment Share on other sites More sharing options...
muck Posted October 6, 2008 Share Posted October 6, 2008 lillies might not toil or spin, but they aint puttin two kids through college either. While my wife and I went to college, college is not a prerequisite for being a contributing member of society, a good parent, faithful friend, etc. Quote Link to comment Share on other sites More sharing options...
H8tank Posted October 6, 2008 Share Posted October 6, 2008 My retirement will consist of wearing a blue apron and saying "hi" 10,000 times a day by the front door of a walmart. I am very worried we may run out of money! We both have worked semi-reitred jobs and have brought in an average of 50K a year over the last 3 years, which has eased things a bit. I hang 9" flaccid. Quote Link to comment Share on other sites More sharing options...
twiley Posted October 6, 2008 Share Posted October 6, 2008 (edited) What's a semi-retired job? You're either retired or not retired. My definition of retired is sitting on my duff at my beach house and watching women 30 years younger than we walk around in tight bikinis, meanwhile, praying that something moves down below. Honestly, if you're asking these questions then you may have retired too young. You're talking like a 10K roof job or down payment on a car is going to strap you. I'm no financial advisor but my guy ran the numbers for me and projected an age where I wouldn't have to work one bit and still be able to leave behind a nice sum for my family once I die from staring at hardbodies. Edited October 6, 2008 by twiley Quote Link to comment Share on other sites More sharing options...
isleseeya Posted October 6, 2008 Share Posted October 6, 2008 I am punting for now Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted October 6, 2008 Share Posted October 6, 2008 I assume this means that you continue live at a standard that remains level. Can you scale back your lifestyle over the next five years or so? Or is that not an option that you guys are willing to consider? Quote Link to comment Share on other sites More sharing options...
Atlanta Cracker Posted October 7, 2008 Share Posted October 7, 2008 (edited) You should be more than fine. A 4% withdrawal rate generally assumes 100% preservation of principal. With only 50% in stocks you have more than 10 years before you'd HAVE to have that portion of your portfolio and probably much longer with your more conservative withdrawal. The key to safe withdrawal rates a lot of people miss is that if the total portfolio declines your withdrawal should decline as well. So you'd want to keep the withdrawal under 4%/yr. If you can do that you should be set. I would suggest adding some non-correlated investments as well like managed futures or something along those lines for 10% or so to further spread your risk but that's not totally necessary. I suppose I'm biased but I would suggest consulting an adviser to help guide you through the next 50+ years . Edited October 7, 2008 by Atlanta Cracker Quote Link to comment Share on other sites More sharing options...
muck Posted October 7, 2008 Share Posted October 7, 2008 (edited) I would suggest adding some non-correlated investments as well like managed futures or something along those lines for 10% or so to further spread your risk but that's not totally necessary. Wrong. She (and everyone else) needs some allocation to "uncorrelated stuff". As we're seeing now, prices do things besides go up...and financial advisors that tell their clients anything other than this are (imo) committing an enormous injustice to their clients. I personally oversee / manage the "uncorrelated stuff" parts of investment portfolios for a wide variety of high-net-worth and corporate clients where my money is directly invested alongside my clients. If they lose money, so do I. Collectively, we have investments in: * the direct ownership of oil and gas wells (got to be careful about who you partner with, though) -- currently all of our investments are in properties in the Gulf of Mexico and our partners are firms like Chevron, BP, etc. where we are investing pari-pasu with them (i.e., our money goes in the well just the same as theirs, and we participate in the economics in substantially identical ways). * very low loan-to-value loans backed by real estate with double digit yields * high velocity futures trading ... not all of this stuff is for everyone (mainly because the SEC has decided that "only rich people" should have access to this stuff -- if you don't like that, tell them ... I think it's a crock) ... but, for investors with more than $1.5 million of net worth and/or incomes above $200,000 / yr, these sorts of investments should absolutely make up a portion of your investment portfolio. How much? At least 5%, but probably less than 70% ... the exact amount will depend on a variety of factors including on your net worth, need for liquidity and the nature of your other investments. Edited October 7, 2008 by muck Quote Link to comment Share on other sites More sharing options...
Atlanta Cracker Posted October 7, 2008 Share Posted October 7, 2008 Wrong. She (and everyone else) needs some allocation to "uncorrelated stuff". As we're seeing now, prices do things besides go up...and financial advisors that tell their clients anything other than this are (imo) committing an enormous injustice to their clients. Well I do, but it isn't TOTALLY necessary given her withdrawal rates unless the fluctuations make them bail on the whole plan. That's where alternative options really help out. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted October 7, 2008 Share Posted October 7, 2008 In the last couple of weeks, I've heard a lot of radio advertisements with ambulance chaiser saying if you've lost money you can go after your broker, you guys have got to love that. Quote Link to comment Share on other sites More sharing options...
muck Posted October 7, 2008 Share Posted October 7, 2008 (edited) In the last couple of weeks, I've heard a lot of radio advertisements with ambulance chaiser saying if you've lost money you can go after your broker, you guys have got to love that. As I've said before, legal action is one of the great inhibitors to the creation of one's net worth in this country. Possibly bigger than oppressive taxation. Anyhow, in aggregate, I think I'm right at, or a little above, breakeven across all investments for all investors over the last month. Also, if someone ever came after me, I'd just hand 'em the keys to the office and wish them luck on figuring out how to run the company. Edited October 7, 2008 by muck Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted October 7, 2008 Share Posted October 7, 2008 As I've said before, legal action is one of the great inhibitors to the creation of one's net worth in this country. Possibly bigger than oppressive taxation. Anyhow, in aggregate, I think I'm right at, or a little above, breakeven across all investments for all investors over the last month. I agree with you 100%. When I first heard the commercial I litterally said It's raining men! Hallelulah! It's raining men!. I feel pretty lucky my guy has me up about 3% ytd, not nearly as good as the last few years, but I'll take it this year with a smile on my face. Quote Link to comment Share on other sites More sharing options...
Atlanta Cracker Posted October 7, 2008 Share Posted October 7, 2008 In the last couple of weeks, I've heard a lot of radio advertisements with ambulance chaiser saying if you've lost money you can go after your broker, you guys have got to love that. That doesn't bother me at all. If everything is setup, explained, and executed properly then that's not something you ever have to worry about. If you're out selling performance and talking people into rolling over their small 401k at 40 and retiring based on 15% average returns then you probably should get sued. Quote Link to comment Share on other sites More sharing options...
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