I’m not talking about the fund running out, I’m talking about lifestyle.
If you have a million saved you are going to draw 1.5% or 15,000 a year. If you have 10M then it’s 150,000 a year. That’s a big difference in lifestyle.
The general rule of thumb is 4% and that covers a roughly 30 years retirement with low risk of ruin. 1.5% has to be just about forever. But not the point I was making. You gotta have a big balance if that 1.5% is going to provide enough annually (unless you live super cheap).
Everything I see posted about Boggleheads here makes me think the people on that site are nuts. I can’t imagine being that nitty about every financial thing in my life especially since most of them seem to be very well off
But that is my point, in order to retire that early with that withdrawal rate you need a big balance. Maybe that means you already live super frugally. I can’t imagine it.
I know some small town folk that hate work so much they retire way early and just somehow make it work. A little passive income (usually from leasing farm land), some shitty savings, a lot of food grown/hunted.
I know nada about the bogelheads. Sound like the money version of the ultra mileage folks getting every last mile per gallon.
I think that leasing land is the thing here. My grandma made a decent amount leasing a few sections and a quick google of prices in my area shows about $80k of income cash renting 1 section of land to farmers. I’m not sure how much less land people own and cash rent.
Even a 1/4 section is an additional $20k per year though at those prices and is totally encompassing the $15k retirement.
If I go by the national average for cash rent cost (I thought i was in the most fertile are in the world) it is $139/acre or $88960/year to cash rent a section of farm land. A 1/4 section at national average would be $22,400 income.
Sounds about right. They’d inherit some little piece and stirch together a shitty income where their saving ran out when they turned 62 and start to draw.
Might work a construction job or fix cars or whatever their trade was if money gets too tight. The luckiest ones had their wives work a few more years to support the drinking, fishing, and hunting lifestyle.
Or unless your backup plan if you run out of money is to live in Honduras on Social Security.
Saving my principle for the 1% chance I live to 90 seems suboptimal.
Doesn’t apply to people who have kids (and care about them) obviously.
Also who wants to retire retire at 50 and never try to make money in any fashion again? Seems super boring to me. I only have so much patience for hobbies if no one gives a shit about my output.
5% whatever. I’m a big dude and I can’t seem to get under 250 lbs to save my life. You don’t see a lot of fat 90 year olds.
I’m also not opposed to assisted suicide if my quality of life goes to shit. I’d needed to be one of those spry 90-year-olds with all my faculties. If I’m that spry maybe I’ll keep making working in some capacity into my 70s like my dad. I don’t mind work.
If dementia or alzheimers is coming on I’m definitely pulling a Kevorkian. Fuck that shit - I hate seeing my relatives go through it.
All the men on my Mom’s side are essentially done (dead or disabled/incapacitated) by 65 or 70. Fucking hell of a lot their savings did for them. Might as well have enjoyed it a little first.
There’s actually a lot of good advice on Bogleheads. The main points can be summarized briefly as:
Live below your means and invest what you save
Make an investment plan and stick to it; don’t chase fads
Allocate your assets across asset classes (U.S. stocks, foreign stocks and bonds) and periodically rebalance your portfolio to maintain the allocation
Use diversified investments with low fees (i.e., index funds at placed like Vanguard or Fidelity)
Invest in a way that minimizes taxes
The principles are simple enough, but the details of implementing them can be confusing, and the forum offers a lot of valuable free advice. Anyone can post a question about investing there and get a solid financial plan for free. I’ve also picked up a lot of tips and tricks there that are hard to find other places.
As with anything, there are some people that take it too far. And they tend to make for the most entertaining discussions.
All true, but note that none of those bullet points helps you retire. So its good advice, but incomplete.
In the industry we talk about this in terms of accumulation and decumulation. Decumulation is the idea of optimizing outcomes in retirement after are drawing down savings. The problem the Bogleheads can have is they sometimes turn accumulation into a religion. This will lead to very bad decumulation outcomes. Well, not for their kids. Their kids will get a multimillion dollar windfall.