The Intersection of FIRE and Disney

[Mome Rath]

Yeah, especially with retirement amounts, comparisons don't work well. We all have completely different lives, costs of living, health situations, family situations, plans for what we want in retirement, etc... so dollar amounts devoid of context don't tell us much in reality. Keep making your own goals and kind of put blinders on to the rest.

 

[Frwinkley]

My DH wanted out. That's when I knew we had enough money. I'll work for 3 more years (teacher) and will have a good pension. Very thankful for that.

 

[QueenIsabella]

They say comparison is the thief of joy and I have to tell you that is true reading this and the Boglehead forums at times. I think we are doing pretty well until I read about how everyone is maxing out contributions, not only to 401ks, but also Roth IRAs and HSAs and then people even have extra to put into other investment vehicles. Ackkk. lol We have never even been able to max our 401k, not once in over 25 years. But I still feel like we are doing OK. Maybe it is because we are not really looking to RE in the under 50 sense. Well, I guess technically, I retired early at the age of 30 after baby #3. I thought I would go back to work but here I am still not working and all my babes are in college or older. DH can fully retire at 57. That is our plan right now, but I am not sure I will be able to get him to leave. We will see, 7 more years to go. I thought these retirement savings/net worth calculators were interesting. The numbers make me feel pretty good about where we are, especially as DH will get a pension that is not added into our numbers. Reading the responses on the Boglehead forums have me pretty baffled. A lot of responders were in the 99% and still not feeling good about their numbers. I am happy to be somewhere in the 90th percentiles. Thought there is a weird jump between ages 49 and 50. We are doing much better as 50 years olds than 49. lol (we will both be 50 this year) At what point are you happy with your numbers? Are you striving to be 1%ers? Though I guess you could be 1% at 30 and then if you did FIRE would that be enough? So many variables. I guess I need to stick to not comparing with others because every situation is different.

Retirement Savings by Age

Average Net Worth By Age

Yeah, Bogleheads can be enough to make Jeff Bezos feel poor--or at least, like he's not putting enough aside for the future. And, hey--maybe he isn't, I have no idea! But, you really have to look at it from your own perspective. Maybe you won't retire with enough money to take a private jet to your villa in Tuscany. Neither will I. I'll have to learn to live with that.

I would also take a lot of those finance articles with a HUGE grain of salt. A couple of my personal bugaboos: They'll say that the "average retirement account has $47,00 in it", or some such thing. Generally, they're talking IRAs. But, many people have multiple IRAs, and maybe a 401k (or two, if both spouses work). When you leave a company, you have to roll your 401k over into a new IRA, not add it to a new one. When my MIL died, my DH inherited 7 (!!!) IRAs--some were originally from his dad, who died in 1990. Similarly, his current 401k balance is fairly small--maybe $35k?, because he's only been at his current job for a little over a year.

The other complaint I have about finance articles is, they typically say, "You can no longer count on a pension." That's true in a lot of industries--there's been a shift from defined benefit (pension) plans to defined contribution (401k type plans). BUT--some companies do still offer pensions. State and federal employees still get pensions. Teachers are another group that typically gets pensions. So, maybe 25-30% of people still have access to pensions. Obviously, everyone needs to look at their own circumstances and plan their retirement accordingly. But to act like nobody is ever getting a pension, ever again, is just as false as saying that Social Security is going away.

 

[Samantha*belle]

Happy almost end of summer everyone! Our family unit just hit coast-FI (we're late 30s with 2 young kids). There are many definitions of this, but for us it means that we don't have to save a dollar more into retirement and we could live very well at 65+ (start of withdrawal at that time). No inheritance, no company stock option sale configuration...just saving! I don't want to boardcast it to friends or family but wanted to share it with someone. Love this Board!

 

[Starport Seven-Five]

Happy almost end of summer everyone! Our family unit just hit coast-FI (we're late 30s with 2 young kids). There are many definitions of this, but for us it means that we don't have to save a dollar more into retirement and we could live very well at 65+ (start of withdrawal at that time). No inheritance, no company stock option sale configuration...just saving! I don't want to boardcast it to friends or family but wanted to share it with someone. Love this Board!

Very cool. Can you share a bit on how you calculated your coast-FI number? I've heard of the concept and can think of ways to do it, but curious the method you used.

Understand completely about not being able to share milestones like this. It's one of the more frustrating things about FI because so few can relate.

 

[Samantha*belle]

Very cool. Can you share a bit on how you calculated your coast-FI number? I've heard of the concept and can think of ways to do it, but curious the method you used.

Understand completely about not being able to share milestones like this. It's one of the more frustrating things about FI because so few can relate.

I was never able to find an online calculator that worked for the scenario I was interested in. They all had continued contributions included, retiring today, etc. none of which that got at the "its invested, but you're not touching for 27 yrs." so I created the calculation using an old school Excel sheet. My assumptions are 7% return with a 3% withdrawal. Conservative I know, but I can't depend on a gangbusters market and social security.

 

[twincruisers]

How do you guys calculate how long you will live for? Do you just put the FI as something beyond your lifetime (like will last till 150) or choose something more moderate like 75/80/85?

It's hard to imagine what your lifespan will be. Let alone budget for it.

 

[bernina]

Very cool. Can you share a bit on how you calculated your coast-FI number? I've heard of the concept and can think of ways to do it, but curious the method you used.

Understand completely about not being able to share milestones like this. It's one of the more frustrating things about FI because so few can relate.

Not original poster but I've played around with this scenario using cfiresim.

You can plug in a future retirement date, and pick your plan end (I normally set to the year the younger spouse will be 100).

To keep things simple you enter current portfolio and then projected annual spend which can be absolute dollars (today's dollars and select adjust for inflation) or percent of portfolio.

You can enter in social security and any pension assumptions or you can leave those out to see how only your existing portfolio will grow over time. You can also add in 1x expenses like college, basically you can get as detailed or high level as you want. For portfolio assumptions you can use historical market data, fixed percentage, or several other options.

Here's 1 random example:
Retirement year: 2041
Plan end: 2080

Starting Portfolio: $1m (no further contributions)
Historical market data
75/25 equities/bonds
Annual Spend in retirement (starting 2041): $80k. Adjusted for inflation.

100% success.
Avg portfolio at retirement: $3.1m
Highest portfolio: $33m
Lowest $0.6m (using data from 1929, not a great year to retire but portfolio would have survived)

Link to simulation above:
https://www.cfiresim.com/a27c3bc0-b277-4084-9041-2be55ab685ce

 

[Samantha*belle]

How do you guys calculate how long you will live for? Do you just put the FI as something beyond your lifetime (like will last till 150) or choose something more moderate like 75/80/85?

It's hard to imagine what your lifespan will be. Let alone budget for it.

Our savings would last 40 years plus or minus a few years. The horizon is so far out that it of course is hard to gauge. Perhaps social security will be around by the time I'm in my 60s, in which case we'll be fine. Neither myself or DH work at jobs with a pensions so it is all on us to save for retirement. We haven't stopped saving for retirement, the coast-FI is a nice milestone on the journey.

 

[Samantha*belle]

Not original poster but I've played around with this scenario using cfiresim.

You can plug in a future retirement date, and pick your plan end (I normally set to the year the younger spouse will be 100).

To keep things simple you enter current portfolio and then projected annual spend which can be absolute dollars (today's dollars and select adjust for inflation) or percent of portfolio.

You can enter in social security and any pension assumptions or you can leave those out to see how only your existing portfolio will grow over time. You can also add in 1x expenses like college, basically you can get as detailed or high level as you want. For portfolio assumptions you can use historical market data, fixed percentage, or several other options.

Here's 1 random example:
Retirement year: 2041
Plan end: 2080

Starting Portfolio: $1m (no further contributions)
Historical market data
75/25 equities/bonds
Annual Spend in retirement (starting 2041): $80k. Adjusted for inflation.

100% success.
Avg portfolio at retirement: $3.1m
Highest portfolio: $33m
Lowest $0.6m (using data from 1929, not a great year to retire but portfolio would have survived)

Link to simulation above:
https://www.cfiresim.com/a27c3bc0-b277-4084-9041-2be55ab685ce

Thanks for the tip! I'll get to doublecheck my spreadsheet #s

 

[bernina]

Thanks for the tip! I'll get to doublecheck my spreadsheet #s

I like to play around with different scenarios and tools and I'm always conservative and leave social security off the table and way over inflate our spending. I figure if multiple tools are indicating a high probability of success, then I'm most likely ok. It doesn't mean the world can't flip on its side and throw everyone for a loop, but those are scenarios you can't really protect against, so no use wasting my energy on them.

 

[lsutigers03]

Not original poster but I've played around with this scenario using cfiresim.

You can plug in a future retirement date, and pick your plan end (I normally set to the year the younger spouse will be 100).

To keep things simple you enter current portfolio and then projected annual spend which can be absolute dollars (today's dollars and select adjust for inflation) or percent of portfolio.

You can enter in social security and any pension assumptions or you can leave those out to see how only your existing portfolio will grow over time. You can also add in 1x expenses like college, basically you can get as detailed or high level as you want. For portfolio assumptions you can use historical market data, fixed percentage, or several other options.

Here's 1 random example:
Retirement year: 2041
Plan end: 2080

Starting Portfolio: $1m (no further contributions)
Historical market data
75/25 equities/bonds
Annual Spend in retirement (starting 2041): $80k. Adjusted for inflation.

100% success.
Avg portfolio at retirement: $3.1m
Highest portfolio: $33m
Lowest $0.6m (using data from 1929, not a great year to retire but portfolio would have survived)

Link to simulation above:
https://www.cfiresim.com/a27c3bc0-b277-4084-9041-2be55ab685ce

With this simulation for portfolio value do you add what you currently have plus what you plan to add until retirement.?

 

[bernina]

With this simulation for portfolio value do you add what you currently have plus what you plan to add until retirement.?

You can. I set up the example I shared above to mimic a portfolio where you don't need to add additional savings once you hit some magic number (in this case it was $1m to safely support $80k annual spending for 40 or so years of retirement).

Most folks will continue to add to savings until retirement so you can do that down in the Adjustment section.

Using the same numbers as above, you can enter in an Adjustment of say $20k/year and list it as income/savings. Set the start year to 2021 and end year to 2040 (last year before planned retirement in 2041). This will tell the simulator to add $20k/year to your portfolio at your desired asset allocation.

 

[RamblingMad]

I was never able to find an online calculator that worked for the scenario I was interested in. They all had continued contributions included, retiring today, etc. none of which that got at the "its invested, but you're not touching for 27 yrs." so I created the calculation using an old school Excel sheet. My assumptions are 7% return with a 3% withdrawal. Conservative I know, but I can't depend on a gangbusters market and social security.

A 7% return seems really high. You'd need to be 100% invested in equities for that to work.

https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/
Check out slide: 76.

 

[BridgetBordeaux]

Random tidbit- on CNBC this morning they were talking about stats..............the S&P 500 is up 20 percent so far this year..........the Dow about 15 percent.

If we don't go up a single point for the rest of the year those are very respectable numbers.

 

[AlohaNow]

Happy almost end of summer everyone! Our family unit just hit coast-FI (we're late 30s with 2 young kids). There are many definitions of this, but for us it means that we don't have to save a dollar more into retirement and we could live very well at 65+ (start of withdrawal at that time). No inheritance, no company stock option sale configuration...just saving! I don't want to broadcast it to friends or family but wanted to share it with someone. Love this Board!

Congrats and thanks for sharing! I have a question, if you feel comfortable answering. You mention 2 young kids so I'm curious if your projections take into account any planned spend on college tuition for them. I love to hear people's success stories - that is awesome that you've hit your number!

 

[Budzooka]

Congrats and thanks for sharing! I have a question, if you feel comfortable answering. You mention 2 young kids so I'm curious if your projections take into account any planned spend on college tuition for them. I love to hear people's success stories - that is awesome that you've hit your number!

It’s funny that you mention college tuition and have been rethinking my strategy. My oldest started college this year and she has enough in her 529 to pay for about 2 years of school, but not all 4. I just paid the first semester’s tuition bill and I don’t think I am going to take a distribution. My initial thought was to let it sit in there a little while longer and pull out the last two years, but am now thinking about just paying out of pocket for the entire bill and leaving this for her kid one day. I know there are caps as to how much you can contribute, but if it can sit there and grow tax free for another 30 years, that will create some value. What traps am I not thinking about?

 

[Starport Seven-Five]

It’s funny that you mention college tuition and have been rethinking my strategy. My oldest started college this year and she has enough in her 529 to pay for about 2 years of school, but not all 4. I just paid the first semester’s tuition bill and I don’t think I am going to take a distribution. My initial thought was to let it sit in there a little while longer and pull out the last two years, but am now thinking about just paying out of pocket for the entire bill and leaving this for her kid one day. I know there are caps as to how much you can contribute, but if it can sit there and grow tax free for another 30 years, that will create some value. What traps am I not thinking about?

I would hope that the educational funding model changes within the next 30 years. Current trajectory is not sustainable.

 

[cjlong88]

Update! We hit another milestone. Husband is officially 6 years away from retirement! I am 10 years away. We are continuing to invest aggressively with our raises we received this past year. As the time progresses, we are finding it easier and easier to balance our quality of life with our investment strategies.

Plan on purchasing AP’s on Wednesday using an unexpected bonus I received from my school district.

 

[SouthFayetteFan]

2 Comma Club...

That's it... That's the message friends!