173 Days Till FI!

Where are you and where are you going?
2Birds1Stone
Posts: 441
Joined: Thu Nov 19, 2015 11:20 am

Re: 178 Days Till FI!

Post by 2Birds1Stone » Thu Jan 10, 2019 10:21 pm

Almost forgot, I purchased $6,000 of Vanguard Total World Stock Fund in my Roth IRA. I also exchanged $74k of Vanguard SP500 fund for Vanguard Total World Stock Fund.

This brought my AA to 50/50.

2Birds1Stone
Posts: 441
Joined: Thu Nov 19, 2015 11:20 am

Re: 178 Days Till FI!

Post by 2Birds1Stone » Sat Jan 12, 2019 9:36 am

@c_L

Your own journal/projections as well as THF's thread on babyboomers and the ensuing discussion around SS has prompted me to download the SS benefit calculator and plug in my own data, with $0 projected earnings past 2019.

The results were not very exciting. My current PIA (assuming I worth till July 30th, 2019) is $1159 at FRA, and I suppose that would mean $811/month at age 62 (under current law, which will very likely change).

I see in your planning you use 50% of SS amount, and I'm assuming it's the age 62 one? So I will use $405/month in my financial models, this replaces the need to save ~$120k in today's dollars.

Fidelity received my HSA transfer and I dumped that $19k into Vanguard Total World Stock Index.

Asset Allocation is now,

US Stock 36.14%
Int Stock 18.91%
Bond 10.24%
Pre tax Cash 1.79%
Post tax Cash 27.80%
PM 5.12%

Cheepnis
Posts: 15
Joined: Mon Dec 31, 2018 11:52 am

Re: 178 Days Till FI!

Post by Cheepnis » Sat Jan 12, 2019 10:38 am

The light is getting brighter! You're so close. Keep it up!

classical_Liberal
Posts: 542
Joined: Sun Mar 20, 2016 6:05 am

Re: 178 Days Till FI!

Post by classical_Liberal » Sat Jan 12, 2019 7:37 pm

2Birds1Stone wrote:
Sat Jan 12, 2019 9:36 am
I see in your planning you use 50% of SS amount, and I'm assuming it's the age 62 one? So I will use $405/month in my financial models, this replaces the need to save ~$120k in today's dollars.
I use 50% of my age 67 (full benefit) and never include it until that age. This is why I use my own spreadsheet vs SS calculators, I can't get them do to what I want, retire early and wait until full benefit age. For me that's the equivalent of 220K future value in 2043 @4%WR, or about 100K today assuming 3% real returns, without any additional income.

The other thing wrt SS is the huge (8% annual) gain in benefit amount after 67. Assuming the fundamentals of investing don't change in the next 25 years, my plan is to look at asset valuations from age 62 on and determine when to start taking benefits. Decreasing WR may be worth it if a prolonged bear is in effect, so I'd consider taking it early. If the situation is similar today with overvalued financial assets, I'd wait until the oldest possible age and take the 8%, as I can't imagine beating that performance over the next several years. In any macoeconcomic situation, if I end up with way more money than I'll need, I'll wait as well, nice to have the pension-like security.

User avatar
Jin+Guice
Posts: 246
Joined: Sat Jun 30, 2018 8:15 am

Re: 175 Days Till FI!

Post by Jin+Guice » Sun Jan 13, 2019 11:12 pm

Guys you are ruining the blog post I planned for SS for ERE. JK I am still going write it.

The SS age differential thing, as it stands now, is very helpful if you view it from the "enough" standpoint rather than the "max it out" standpoint. The government is cashing in on the well known fallacy that most people over-estimate how long they will live. I look at SS as a buffer for ERE. If something unexpected happens and you are running out of $$, or there is an unexpected spending increase due to old age, SS is there to save you. SS offers 3 levels of $$ so you can either a) take the early benefit if you are still in runaway mode/ everything is going as planned b) take the full amount or c) take the elevated amount if unexpected expenses creep up. This is a much better position than needing the benefit to survive because you've saved nothing or just trying to max it out. Even in old age/ traditional retirement the concept of "enough" pays off.

You know I can't resist mentioning part-time ERE. 1) I think when the law changes the government will smile more fondly upon those who've kept working, even at a low level than those who've stopped. The U.S. government REALLY wants you to keep working, and almost all laws are set up to favor those who do. 2) It'll be much easier to understand how SS affects your future if you work until you receive it. If you're going the part-time ERE route, then having enough for regular retirement (when you are aged out of high salaries and/ or can no longer physically work) is still a concern... Imagine only having to bank 3/4 as much money because SS is covering the rest. I'll feel a lot more confident making this call when I'm 62 than 31.

2Birds1Stone
Posts: 441
Joined: Thu Nov 19, 2015 11:20 am

Re: 173 Days Till FI!

Post by 2Birds1Stone » Wed Jan 16, 2019 6:24 am

@cheepnis, it definitely has. Heck, stock markets could propel me to <4% WR as soon as this spring.

@c_L, thank you for clarifying. In that regard I can add in ~$7,000 for age 67 in my model. That's worth ~$175k saved at present value! Even more if you assume you would need a <4% WR in the future. That should totally count toward NW, like a pension ;) I mean we do pay in 7.2% + employer another 7.2% on our behalf.

I did you cFIREsim calculation, "Investigate max WR" with my current AA, portfolio values, the $7k/yr in SS, and it spit out $13,500/yr as having 0% chance of historical failure. $1,125 in perpetuity with today's spending power. Definitely Barista FIRE

2Birds1Stone
Posts: 441
Joined: Thu Nov 19, 2015 11:20 am

Re: 173 Days Till FI!

Post by 2Birds1Stone » Wed Jan 16, 2019 6:27 am

@J+G, I'm with ya! c_L or yourself made a comment in another thread about a PT job being one of the best protections against inflation, period. I agree. In times of need or want, someone working a BS PT job can actually play the career game for even 6-12 months and likely attain a FT position earning way more than someone in ERE spending mode could ever use.

I'm personally hoping to earn here and there throughout my lifetime, but first and foremost I need to decompress and decouple my life from corporate America.

Post Reply