A Journey of Mindfulness--the Remaking of Life in Midstream.

Where are you and where are you going?
IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Fri Mar 15, 2019 8:15 am

Mister Imperceptible wrote:
Fri Mar 15, 2019 8:07 am
OMY
MI, sorry, I'm a right-tail Boomer who identifies more as an X-er, and have no idea what that means. :lol:

Mister Imperceptible
Posts: 856
Joined: Fri Nov 10, 2017 4:18 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by Mister Imperceptible » Fri Mar 15, 2019 8:18 am

One more year.

Interestingly, I’m a Millennial who seems to connect better with the Xers.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Fri Mar 15, 2019 9:08 am

Mister Imperceptible wrote:
Fri Mar 15, 2019 8:18 am
One more year.
Ah, okay. Yeah, something like that. Certainly close enough that it is starting to feel real. It's not going to be as easy as I once thought. I've never approached ER from a perspective of hating my job or working. But I'm starting to run out of excuses. :lol:

George the original one
Posts: 4726
Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by George the original one » Fri Mar 15, 2019 1:23 pm

IlliniDave, it may or may not apply to you, but in the mini-ERE thread, Fish wrote:
"I find it interesting how common it is for retirees (early and normal) to say that they could and should have pulled the trigger earlier. It turns out money was substituting for confidence in making the retirement decision."

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Fri Mar 15, 2019 6:30 pm

George the original one wrote:
Fri Mar 15, 2019 1:23 pm
IlliniDave, it may or may not apply to you, but in the mini-ERE thread, Fish wrote:
"I find it interesting how common it is for retirees (early and normal) to say that they could and should have pulled the trigger earlier. It turns out money was substituting for confidence in making the retirement decision."
Alas, if only foresight was as sharp as hindsight. I'll probably say it someday too, assuming enough of the potential risks do not manifest themselves over time. The hazards of being a conservative person by nature.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Sat Mar 30, 2019 7:32 am

Q1 2019 Summary

Dull Numbers:
March spending was somewhat high again. Don't have final numbers but it should come in at about $4,200. About $1,100 went into property upkeep, the vast majority into "curb appeal" projects including deferred external maintenance. Also under siege from entropy with some plumbing repairs I bought supplies for and some auto repair. I hired out for some tasks that normally I would do myself, but working overtime on an ongoing basis is cutting into my self-determined time, and I've worked myself into the position where I can trade off a little expense to preserve time for some of the things I find enriching on a personal level. So for example I paid for some things like external cleaning/powerwashing of my house to free me up to rejuvenate my landscaping/flower gardening.

Invested assets were up $26,600 for the month. Net worth rose by a little over $124,000 for the quarter and $198,000 for the 12-months ending 3/31/19.

I've exceeded 40X (age 55-70) and am around 67X (55-80). Those numbers are relative to anticipated withdrawals from investment accounts, not relative to total planned spending. I'll see a sizable jump in those numbers in a number of weeks once I cross the age 55 retirement event horizon.

In Real Life:

Years are passing by quickly. Today marks the anniversary of my mom's passing. The return of my interest in hummingbird/butterfly gardening is related to that. It was a hobby of mine up until the early 10s when pursuit of FI caused it to diminish--not my interest in it, but the amount of time/effort I dedicated to it, mostly because I decided to stop spending money on it. I maintained what I had as long as it survived, but in time much of it has faded. Around 2012 my mom became interested in what I had been doing after being surprised a hummingbird feeder she put up attracted birds in the middle of the city, so I spent the subsequent years through 2017 coaching her, sending her plants that were highly successful for me, and enjoying her reports of success, especially see the delight it provided her as the cancer battle wore on. It never really occurred to me last year restart the hobby, but I got the bug this past winter. It's not a productive past time aside from the amount of curb appeal that flowers add to a home (the first thing a realtor I consulted a couple years back told me was to add flowers to the landscape beds), which isn't much as investments go, but I think it is okay to expend effort and squander a little $ for enjoyment.

Otherwise there is a lot of marking time. I'm still working on guitar daily, an activity I enjoy, and that I believe will help preserve mental and nervous system acuity as I forge new neurological connections and improve coordination and dexterity. I'm growing a little disheartened with the increasing political polarization I see around me (and still see political polarization as among the top clear/present dangers to my economic future). I hope the disingenuous facets of the polarization collapse before they spawn a wider disaster.

My dad still seems to be doing pretty well on his own, though far from great. One of the things that could prompt me to pull stakes suddenly would be indications that he's failing to keep up with things. Otherwise I'm still eyeing EOY 2020 for my transition date. That gets me to the point where if things go reasonably well I may have little or no need to draw on the stash for planned spending levels (multiple -> infinity). I can't come up with a reason to go beyond that point.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Fri Apr 12, 2019 8:23 am

Political risk beginning to materialize on the horizon?

I stated not too long ago I believed political risk is among the top risks I see for myself going forward.

Although this is a relatively minor one in the grand scheme, and one I think I'm in the minority here for even considering, it does leave me a new problem to work out.

It seems that in the US there's soon to be some changes to the laws concerning retirement accounts. One thing that seems doomed is the so-called "stretch IRA". I'd never heard that term before this morning but what it refers to is that under current law if one inherits a"traditional" IRA from someone other than a spouse they have to withdraw the money by effectively making RMDs based on their age. This allows even a much younger heir (if they want) to essentially stretch the withdrawals out over their life expectancy. I think 401ks are treated the same. Roth IRAs are even sweeter because the inheritor does not need to start withdrawals until they reach RMD age.

The proposed legislation floating around now requires all the money to be pulled from IRAs inherited from a non-spouse to be withdrawn in either 5 years (senate version) or 10 years (house version), meaning a) the money will likely be taxed at a higher rate and b) can't be preserved by the heir as a retirement account. It's possible that relatively small IRAs might wind up exempted from the proposed laws. It's also unclear (to me) whether Roth IRAs are included. It's being marketed as essentially an anti-wealthy people measure.

It's definitely a first-world problem, but it is really frustrating to me to have spent decades executing the discipline to accumulate money and optimize the accumulation under a system of rules only to have the rules change adversely during the last two years. I can say with a high degree of certainty I would have spent the last 10 years accumulating differently if these rules had been in place then (I'd have steered away from maxing out my 401k with pretax money) to avoid leaving my heirs so much of a tax headache. I say headache because if there is a substantial remainder and especially if it all has to be withdrawn in 5 years it may require filing quarterly estimated taxes on top of the gov't getting a heftier cash grab out of the deal.

I get that it's manageable and there are things I can do in the meantime to simplify the situation (at a cost to me).

To me it seems like just another example of reducing everything to the lowest common denominator. Since most people don't bother to optimize what they do with their money, we have to curtail the advantages people who have already made the effort on a given playing field are allowed to realize. A form of "bait and switch", if you will. This one by itself isn't horrific. It's conventional to look at heirs as increasingly "undeserving", but in my view that attitude tends to undermine the property rights/freedoms of the bequestor (in this case, me). But if you pay attention to the political conversation in certain parts of the spectrum, there is substantial likelihood for additional "scope creep" in this realm going forward.

I also get that I probably sound like a whiny privileged rich dude (and all the other derogatory attributes automatically attached to my demographic cohort). But I think changing the rules on a guy late in the game is justification for a self-absorbed rant. In fairness these proposed changes aren't law yet, so I'm being a bit preemptive. About all I can say is that at least I'm not complaining about dating and relationship woes. :lol:
Last edited by IlliniDave on Fri Apr 12, 2019 10:34 am, edited 1 time in total.

Gilberto de Piento
Posts: 1252
Joined: Tue Nov 12, 2013 10:23 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by Gilberto de Piento » Fri Apr 12, 2019 8:38 am

The story about your mom and the butterfly garden is really sweet.
One thing that seems doomed is the so-called "stretch IRA".
I think you can blame all the people who abuse the system for these types of changes. Remember Mitt Romney somehow having something like $100 million in his IRA? The rule changes are something I am wary of as well and the reason why I am not using an IRA as a place to put early retirement money. I just don't trust that I will be able to get the money out later. Maybe this is dumb as I am paying a lot more in taxes.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Fri Apr 12, 2019 9:41 am

Gilberto de Piento wrote:
Fri Apr 12, 2019 8:38 am
I think you can blame all the people who abuse the system for these types of changes. Remember Mitt Romney somehow having something like $100 million in his IRA? The rule changes are something I am wary of as well and the reason why I am not using an IRA as a place to put early retirement money. I just don't trust that I will be able to get the money out later. Maybe this is dumb as I am paying a lot more in taxes.
Presuming that Romney does have that much in an IRA, and that he didn't do anything illegal, I don't blame him at all. It's the lawmakers' "fault" for legislating in such a way that favors uber-wealthy political benefactors (most likely) or very sloppily (less likely). The origins of 401(k) legislation was not to give middle- and low-income people a retirement savings vehicle, it was to allow very high income employees to defer taxes by deferring compensation. It was just a happy accident that someone in industry had the insight to recognize the law's potential as a retirement vehicle for the rank and file.

Like I implied above, I'd have put more emphasis on taxable savings/investing had the rules been like what's currently proposed and moving forward. There have been past legislative proposals, especially popular during market declines, that the gov't take over all IRAs/401(k)s/etc., because obviously the gov't can manage the money better than you or I can--just see, well, nothing the gov't has ever done with money, as the evidence to back that claim up. So your concerns are not without merit. What I think is more likely is that via future surtaxes and "wealth taxes" we'll wind up being financially worse off for having saved the money in a retirement account. Despite the uneven distribution of wealth, the 1% just don't have enough money to pay for everything on the 2020 Christmas lists.

SavingWithBabies
Posts: 507
Joined: Mon Aug 31, 2015 2:50 pm
Location: Midwest, USA

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by SavingWithBabies » Fri Apr 12, 2019 10:09 am

Somehow, I missed Romney's $100M IRA but this article guesses how he did it (but is stumped on why he did it). I also missed that the news about the potential changes with stretch IRAs. I guess I'm lucky as I've thought all along I had the opposite problem -- too much money saved post-tax (~50% of our savings is post-tax). As to self-indulgence, if you can't self-indulge in a journal... :)

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Fri Apr 12, 2019 10:43 am

SWB, so yeah, it really has nothing to do with IRAs and more to do with quirks of private equity arrangements. Nice find, and even if the new tax laws persist, he's actually worse off for having done it regarding that portion of his money.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Sat Apr 27, 2019 7:59 am

Health Statistic Update
Had some lab work done a week ago and went to see the doc yesterday. This was a ~8 mos followup (was supposed to be 6 mos) from a lab/visit where my cholesterol and triglycerides had spiked a disconcerting amount.

-My triglycerides were back down to 121 from 430-something (iirc). Good there.
-Total cholesterol down to 208 from 270ish (iirc). Still a tad above the guidelines but better.
-HDL was 44, which is okay.
-LDL was 140 which according to the report is borderline high, so something to work on there.
-Blood pressure is "well-controlled based on my age" (I'm hearing that 'based on your age" caveat ever more frequently, ha!)

She also tested for CRP and creatine kinase. My CRP cardiac risk assessment is in the low category, and my CPK was in the middle of the reference range, which I guess means my heart is not presently under any unusual duress.

So today it seems more likely that I'll actually survive long enough to retire than it did 8 mos ago. Although part of me was convinced the prior test results were anomalous is some way, and I didn't fret over them overly much, I didn't completely disregard them either. Puts me in a good mood for the weekend.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Sun May 05, 2019 3:36 pm

2019 April Update

Well, spending is still pretty bad, checked in at $4,480 for April. Floated some cash to my youngest daughter and SIL to help them get ready to move (a neighbor's house took two stray bullets after an altercation a block down the street) and I had some deferred auto repair/maintenance I needed to get taken care of before hot season. Those accounted for $1,600 and without them I spent about $2,900 which isn't awful (though I still probably spent too much on my spruce-up-the-landscape-for-curb-appeal project). Problem with discounting those unexpected outlays is that there always seems to be something when one allows too much complication into one's life.

Net worth was up $26,475 for the month. Invested assets were up $31,566 for the month. Dunno how long equity prices will rise. Last time I checked I was about 55/45 in allocation split which is below my 60/40 goal, but I'm going to let it ride and keep my new contributions going to non-equities.

I'm starting to think that maybe I employed frugality and simplified living as a means to an end rather than as an end in and of itself. The last 16 months has been like driving down the road tossing handfuls of $20-dollar bills out the window as I go. I'm still operating, on average, well below my retirement planning bogey, but I need to engage in some serious introspection to determine if I'm happy with the path I'm on.

7Wannabe5
Posts: 4773
Joined: Fri Oct 18, 2013 9:03 am

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by 7Wannabe5 » Sun May 05, 2019 6:06 pm

To what end was it a means?

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Mon May 06, 2019 3:11 am

7Wannabe5 wrote:
Sun May 05, 2019 6:06 pm
To what end was it a means?
Accumulating financial resources for early retirement.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Mon May 06, 2019 5:44 am

A Couple Add-on Stats for April

Savings rate January-April 2019, as percentage of gross income (pretax): 55%. Even though I've been critical of myself for spending levels, I'm not a complete spendthrifty miscreant.

I don't have my savings rate relative to after-tax income at hand, but I think it is about 67%.

Using today as my retirement day invested asset multiples would be 44.7X average anticipated withdrawals from retirement day to age 70, and 67.6X average anticipated withdrawals from retirement day to age 85. Invested assets are 227% of total anticipated withdrawals.

I'm on the cusp of a nontrivial change in my situation which won't improve the savings rates, but will improve the multiples.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Thu May 09, 2019 5:48 am

Reached a Significant Milestone Today

By virtue of reaching age 55 during active employment status I just got a birthday present of $926/mo for life from my employer in the form of a retirement annuity bump. That changes some of my numbers significantly. Just looking at multiples and % of total withdrawals funded (comparable to one of my recent posts) I'm now at 65.9X average withdrawals through age 70, and 111.3X average withdrawals through age 80. Invested assets as a percent of total anticipated withdrawals is 412%.

To calculate those numbers I use some pretty sloppy spending forecasts and assume I receive less than 80% of the estimated annuity payment (and similar for SS). So the $926/mo above turns into something around $720 in my calculations. That conservatism is somewhat offset by using current inflation levels in my projections.

While achieving this "status" degrades the marginal utility of working any longer, it also marks my entry into another favorable zone in my employer's calculation landscape. For the next 5 years my estimated annuity payout increases by about $6,900/year for each year worked (the estimated payment has gone up something on the order of $1,200/year per year worked during these latter years). Part of the ramp up is the actuarial adjustment for taking a later early retirement, but much of it is what I consider another quirk in their plan where one aspect of the formula peaks ahead of what they designate as full retirement age (65).

So if I project forward using the same metrics I've discussed recently:

When mult70/mult80/total funding rate
May19 65.9X/111.3X/412%
EOY19 75.7X/122.0X/469%
EOY20 128.3X/213.7X/855%

If I assume annuity payout at 100% of the estimate, the EOY10 and EOY20 numbers change to

EOY19 178.6X/297.7X/1190%
EOY20 1,008X/1,680X/6720%

And if I further assume my spending levels are consistent with the last 8 years but adjusted (upward) for known/anticipated retirement-driven changes I'm looking at total lifetime withdrawals being less than 10% of this morning's stash balance. I'll probably challenge myself to have zero withdrawals outside of a couple carefully-considered, one-off bucket list splurges. Of course through all of this it's reasonable for me to anticipate the stash growing by 25% or more by the time I reach 70, making it likely I'll be guilty of rent-seeking. I can run around chasing walleyes, and aside from the token amount of food the activity could produce, I'll be goofing around while leaching off the system. I feel a little guilty about that but far less than I should. A bigger part of me just wants to say, "Winner, winner. Chicken dinner."

I can tease a few tentative observations from all of this.

1. Either I'm a coward; or I'm totally FOS when it comes to all I've said about what I value and where I want to go in life. Maybe a little of both. My instincts tell me not to check out just yet.

2. It's hard to argue other than I've hit the point where the numbers don't mean much any more. The difference between 25X and 33X is meaningful in my view. The difference between 66X and 76X: not so much. Above 100X I'd argue it's not even worth tracking any more.

3. It's time to really sharpen my pencil when it comes to a forward-looking spending plan (less of a trigger word than 'budget', but that's all it is). Especially if I stick with my plan to work through EOY 2020, I believe I can spend a little more than I've been planning on. That may be blasphemous to say here, :lol: , but as long as it's well-considered, no reason it can't be a good thing.

4. It's also time to get back to active planning for the initial/transition years. I'd pushed those activities to the back burner for a number of reasons. I don't mean making a laundry list/itinerary, in my vision it is more of the thematic and in some ways dimensional road map. Having a little more financial margin means I can start with a larger sheet of blank paper.

One thing I've noticed over the last month leading to today is that I'm having a lot more difficulty when it comes to avoiding the pitfall of sitting around wishing I was doing something else, especially but not exclusively at work. It's not enough to prompt me to act yet. But I am entering a new mode now. For lack of a better term I'm calling it day-by-day mode. When I get to the point I'd gladly reach into the stash to pay myself the same to stay home as I'd make at work, that will probably mark the end.

7Wannabe5
Posts: 4773
Joined: Fri Oct 18, 2013 9:03 am

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by 7Wannabe5 » Thu May 09, 2019 7:09 am

I think what happened is you started out in a place of extreme mid-life stress in terms of responsibilities vs. authority, and while you have been making progress towards your goal, the landscape changed. As an introvert, you need a good deal of alone time, but all the hours available to you while not at work at this point in your life probably seems sufficient compared to your situation maybe 15-20 years ago.

In the meanwhile, you have developed an interest in the realm of finance. My uber-wealthy 78 year old friend still goes into the office of the small business he owns every day, but he spends most of his time there managing his personal finances. He keeps threatening to retire or sell the business, but even if he did, he would just change the location of his activities, not the activities themselves.

Two risks you are taking by not retiring now would be that if you keep thinking in terms of multiples, significant market correction might swamp future earnings contributions. Obviously, this is mostly a psychological problem, easy to overcome if, as I would assume to be true, your view on your holdings is more sophisticated than the simple reporting you share here.

The second risk, which is apparent to me as your age peer, is that in the not too distant future, you will be at an age where it is more cool to still be working if all health maximizing activities and options are first accounted for. IOW, at that point, the desire to still be competent will be second only to the desire to still be vigorous.

Anyways, my point being that it's more than okay to notice that while you were out shopping for diapers your two year old potty-trained herself.

IlliniDave
Posts: 2467
Joined: Wed Apr 02, 2014 7:46 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave » Thu May 09, 2019 8:38 am

One thing I've learned about myself is that I often do not communicate well. Part of my morning micro-manifesto was intended to be a statement that I've pretty much drifted into a realm at the bottom of an upward curve where the numbers don't have much utility any more. I suspect I have less interest in finance than it appears--it's one of those things that we (many of us, anyway) have to pick up a practical aptitude for in order to avoid self sabotage when the margins are thin.

Otherwise, fair (or at least interesting) points. It's hard for me to separate competence and vigor. If I truly have any privilege it is that I've never had the proclivity to forge strong ties between my professional occupation and how I judge myself and therefore how I would tally competence. It's quite likely that my broad competence will begin to wane in the relatively near future, and extending my work life won't save me. I just have to be clever in which dimension I measure competence. Some day I might be fist-pumping over still tying my own shoes.

I'm not even sure I have a good accounting for the risks associated with leaving now versus 19 months from now. All variations on the theme of juggling finite time versus increasing resources, and in general happening at the tail of the various distributions.

bigato
Posts: 1821
Joined: Sat Mar 05, 2011 12:43 pm

Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by bigato » Thu May 09, 2019 1:32 pm

Yeah, t's way past the point where you should focus on other areas other than hoarding money. Fwiw, i think you are a coward. Please retire and prove me wrong. "Here bigato! Retired before you!"

Post Reply