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Old 12-06-2020, 08:15 AM
walleyetis walleyetis is offline
 
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Default Required retirement nest egg

My post yesterday regarding a franchise opportunity got me to thinking hard about risking a portion of my retirement portfolio. Which lead me to wondering what a good retirement nest egg should look like. Tough question I suppose considering that thereís so many factors that vary between individuals. No doubt itís something many of us have pondered. So many factors such as age of retirement, part time work during retirement, mortgage free or not, desire to travel, etc, etc. The 4% rule has been floating around for a number of years. Tough economic times and uncertainty are making it even more difficult to make these decisions. Whatís everyoneís thoughts? 1 million, 2, 5?? Would sure be nice to retire early to enjoy life a bit more with a part time gig for extra play money.
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Old 12-06-2020, 08:20 AM
-JR- -JR- is online now
 
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Whats the 4 % rule
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Old 12-06-2020, 08:31 AM
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The first 2 things you should do in my opinion is figure out your cash burn rate and look at your family history and get a realistic life expectancy. Once you get these you can calculate what your savings should be. Then add a slush fund for extras such as holidays, toys, new vehicles, and home repairs. Some people factor in gains on these savings but since I am not a fan of risk I keep that number at 0 or the current rate of inflation.
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Old 12-06-2020, 08:32 AM
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Originally Posted by -JR- View Post
Whats the 4 % rule
Take out 4% of your savings yearly and you should be good for 25 years of retirement.
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Old 12-06-2020, 08:38 AM
oldgutpile oldgutpile is offline
 
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Default retirement funds

I've been thinking the same thoughts for some time now too. Bordering 60, and thinking I'm OK to retire, but what will a dollar be worth in a few years? I have coffee with guys who set up in different ways. ONe was self employed, and thinking he sold out with a good nest egg, only to realize that money value at the time, is not worth nearly as much twenty years into retirement. When he retired the average wage was ten or twelve bucks and gas was still under a buck a gallon.
A few of the others worked for companies with good pension plans. They live comfortable, but not extravagent. They had moderate investments and savings that give them heart flutters every time the market takes a dive.
The feds will serve up enough pension to keep you alive, but that's about it, and assuming you have your own house mortgage free.
I think it all comes down to your personal style of living and how much you need to feel comfortable. People that have been happy to live paycheck to paycheck without saving, always seem to get by, even though they are waiting for the postman to deliver their next government pension check.
Myself, I have considerable savings (split between cash and investments) and a bit of land purchased, with everything paid for. I refuse to be one of those waiting for the mailman.
I know this doesn't answer the OP's question, but this isnt a specific number to look for. What will you need to support your style of living?
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Old 12-06-2020, 08:49 AM
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HalfBreed HalfBreed is offline
 
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I'm too busy trying to hide what I have now from the great reset. May sell off the excess properties so I don't lose those as well.
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Old 12-06-2020, 09:30 AM
cody j cody j is offline
 
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May want to ask Freeland how much of your savings sheíll need to fix the economy. Sheís looking for ideas on how to unlock peopleís savings.
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Old 12-06-2020, 10:05 AM
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Quote:
Originally Posted by cody j View Post
May want to ask Freeland how much of your savings sheíll need to fix the economy. Sheís looking for ideas on how to unlock peopleís savings.

Might just be time to take your money and stash it in your mattress., preferably in gold.

Grizz
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Old 12-06-2020, 10:06 AM
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Quote:
Originally Posted by Bergerboy View Post
Take out 4% of your savings yearly and you should be good for 25 years of retirement.
Yup or more then work towards a pension for life or two and start early then in your mid 50's or earlier your mortgage free etc then just sit back and do what you want when you want.
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Old 12-06-2020, 11:15 AM
walleyetis walleyetis is offline
 
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Not so sure about this but thought it was an interesting read.

https://playingwithfire.co/whatisfire/
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  #11  
Old 12-06-2020, 02:32 PM
-JR- -JR- is online now
 
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For me fire was an interesting read but at the same time its just talk talk talk.

Would be nice to read how much a guy needs if he retires at 55,60 and 65 if all his depts are paid for is it $500,000. $1,000,000. $1,500,000.

I think the average guy dies around 80 -85 if Cancer or a hart attack does not get him.

What age do we stop be active, or loss interest in some of our expensive hobbies.
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Old 12-06-2020, 02:41 PM
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Iím near 60 now and good with my #ís, even ahead, but just canít stop the career path just yet.
Got a good offer on a big project, and I figure itís best to jump on it, for 3-4 years anyways.
Maybe do a recheck at that time, still 5 weeks vacation (11 days ea) for hunting and fishing.

TBark
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Old 12-06-2020, 02:49 PM
fishtank fishtank is offline
 
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Originally Posted by HalfBreed View Post
I'm too busy trying to hide what I have now from the great reset. May sell off the excess properties so I don't lose those as well.
home equity tax coming soon
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  #14  
Old 12-06-2020, 02:53 PM
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Quote:
Originally Posted by Bergerboy View Post
Take out 4% of your savings yearly and you should be good for 25 years of retirement.

Question being interest rates, they've been near zero for a couple of decades, kind of throws a wrench into the theory.

Grizz
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Old 12-06-2020, 03:29 PM
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I still have a long ways to go before can even think of retiring but here are some of my thoughts.

I hadn't heard of the 4% rule so just looked it up. Seems that it is more a rule about how you should spend your savings (should only spend 4% of savings each year). The inverse of that rule I see is called multiply by 25 rule which just says to take what you think you need for income each year and multiple by 25 (assuming you will live 25 years after retirement).

Now the tricky part is what you are alluding to, inflation. You must not only have 25 years of income saved up but you must also invest it wisely to ensure your investment increases on par or better than inflation or you need to save up more to account for anticipated inflation. Inflation has been around 2% per year for a while now and this can add up to a quite a bit of money over 25 years.

For example you may figure you can retire on 40k per year, anticipate to live for 25 more years and thus need 1 million in savings. In 25 years 40k of todays dollars will only be worth around 25k (assuming 2% inflation per year). If you actually want to live on the equivalent of 40k at that 25th year then your savings will have had to increase to account for inflation or you would have to start with 1.28 million in savings.

Conversely being good at investing can stretch your savings significantly. The stock market (say S&P 500) thus far has averaged close to 9-10% interest each year. Lets say you invest through a good manager that gets those levels of return on your investment and takes 3% and leaving you with 6% per year. 1 million savings in such an investment would offset 2% inflation and pay you 40k per year indefinitely.

Even at my young age if I somehow got 2 million dollars I would probably "retire" and find a line of work more as a hobby and try to maintain/increase savings with smart investments.
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Old 12-06-2020, 03:32 PM
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Quote:
Originally Posted by Grizzly Adams View Post
Question being interest rates, they've been near zero for a couple of decades, kind of throws a wrench into the theory.

Grizz
If you were just relying interest on for returns, 4% drawdown hasnít been applicable for a while. But if you have a good chunk invested on the conservative side, I have read that it is a conservative number.

Who knows ?
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Old 12-06-2020, 05:35 PM
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fordtruckin fordtruckin is offline
 
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I’m a ways off and am already saving but I can tell you ain’t no way I will come close to that number. I’m lucky as my job has a pension and am putting pretty close to the same away in a separate account as work takes away for the pension. Thank goodness my back up plan is to win the powerball.....
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Old 12-06-2020, 05:52 PM
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Retired for almost a year now, Union pension, and the Government thing as well as our investments and savings keep us living the way we like to .
Cat
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Old 12-06-2020, 05:52 PM
-JR- -JR- is online now
 
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T Bark I know where you are coming from . I am 60 now and my numbers say I can retire this month easily ,but its so hard to let go after working 45 years .
Money gets better every year.
The sad truth is ,we will not live long enough to enjoy it all .
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Old 12-06-2020, 05:53 PM
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After being retired for approx 11 yrs I can tell you that it takes a lot more than most people think. Those that think part time work could help are correct except what happens if you get sick or get laid off late in life & can't get back working. The longer you work, the smarter you invest & the longer you invest & you & your significant spending habits all factor in. I highly doubt there is a one fits all answer.

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Old 12-06-2020, 05:59 PM
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Originally Posted by skidderman View Post
After being retired for approx 11 yrs I can tell you that it takes a lot more than most people think. Those that think part time work could help are correct except what happens if you get sick or get laid off late in life & can't get back working. The longer you work, the smarter you invest & the longer you invest & you & your significant spending habits all factor in. I highly doubt there is a one fits all answer.

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I have had several job offers and suggestions.
My answer is always the same " if I wanted to keep working I would have!"
Many did not believe that I would ever retire, but I had set a date 5 years ago, and held to it!
Cat
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Old 12-06-2020, 05:59 PM
oldgutpile oldgutpile is offline
 
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I guess the other factor is WHEN you want to retire. For some reason, I cant think of myself preserving my sanity without having somewhere to go everyday. As long as I dont require doing anything unreasonably physical as I get closer to 60-65, the more I dont think of it as being "old"!
Some of these "old" people you see working are not necessarily doing it because they have to, but rather because they enjoy going to work everyday.
The way I currently live (assuming I can quit buying more guns) I could retire very comfortable with a million. Never been a big traveller, and only enjoy going if I have good company. My land for camping and recreation is 3 hours away, and once I get there, I am pitted in for quite some time before going anywhere substantial, so hopefully fuel will not be a huge issue.
I met a young fellow from Norway one spring at a bear hunting camp. He announced to all that he could live off his savings for the rest of his life. Assuming he died tomorrow
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Old 12-06-2020, 06:01 PM
MooseRiverTrapper MooseRiverTrapper is online now
 
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Seen a lot of guys work until they are damn near dead. Wonít be me. Remember inflation is roughly 2% a year and you going to spend drastically less money when your 70 plus.
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Old 12-06-2020, 06:07 PM
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Mistake i made was i retired a bit to late. Didnt need to work but kept going. Downsized my business by quite a bit but still worked.
Finally retired and about a year later a massive heart attack put a kibosh on enjoying retirement.
If you can retire dont hold off till you get sick and cant enjoy it much, or worse. Retired friends used to tell me that but i kept working. Just saying.
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Old 12-06-2020, 06:29 PM
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True dat JR,
At highest earning potential right now and tough to walk away.
As my #ís are good, my Co pension for life isnít very good, as Iím only a 10 yr man with my current O & G Co.
But add it all up and I wouldnít starve.
Just with good jobs at a premium right now, and then thereís the challenge of a new project too.
3-4 more years to tuck a bit more away wonít kill me, I hope.

TBark
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Old 12-06-2020, 07:32 PM
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Very difficult decision for sure. Remember fast go, slow go, no go. Need enough to enjoy retirement, yet not wait too long. Saved like crazy my whole life, hope to work another decade. Did buy a boat though, trying to enjoy the journey some along the way.

A decent portfolio should yield 6% net, just need enough cash set aside to use when the markets tank. It's a great plan, but I haven't tried to execute it yet
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Old 12-06-2020, 08:02 PM
sirmike68 sirmike68 is offline
 
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According to this research paper every year worked after 55 take 2 years off your life expectancy. I have always put 57 in my mind as the time to retire. My dad pulled the pin at 57 and has a decent pension, was able to travel and enjoy his grandkids while somewhat "young". He is now 76 and I can see over the past couple years his energy levels, mental capacity, deminish drastictly. He is still happy and content but would rather hang at home than travel or do anything else. I'd rather have 20 years of nice retirement than work my balls off only to croak a few years later. Definately don't want to be the richest guy in the graveyard.

https://faculty.kfupm.edu.sa/COE/gut...sc/Retire1.htm
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Old 12-06-2020, 08:18 PM
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Well donít you worry about your savings now guys, our glorious finance minister is looking for ideas how to relive you off your savings....
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  #29  
Old 12-06-2020, 08:50 PM
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Quote:
Originally Posted by cranky View Post
Mistake i made was i retired a bit to late. Didnt need to work but kept going. Downsized my business by quite a bit but still worked.
Finally retired and about a year later a massive heart attack put a kibosh on enjoying retirement.
If you can retire dont hold off till you get sick and cant enjoy it much, or worse. Retired friends used to tell me that but i kept working. Just saying.
Nailed it

Retire and enjoy yourself. Be satisfied. Decide on an age and do it. Dont trade years for bucks. Its a poor trade.

There is no magic age. Everyone is different.
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Old 12-06-2020, 09:35 PM
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Zip-in-Z Zip-in-Z is offline
 
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Retired with 38 years of service, got out at age 55 with 70% indexed pension, the Mrs had 35 years of service with the same pension plan, we both max'd out our RRSP's and now TFSA's and she still has a few rental properties, we have 0 debit and 2 b-new vehicles, we live in a small 3 b-room townhouse condo and our cost of living in Sylvan is very reasonable.

Some of the best advice we got was to see a financial advisor 12-15 years before we planned to retire, we both had/have a plan and invested wisely.

On December 31, it will be 10 years of enjoying Freedom 55. The Fed's keep sending me a monthly cream cheque that goes into the mattress, if you haven't got a solid financial plan that should be your priority.

D.



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