Wall Street reacts to Biden’s VP pick.

Tsla pumping after split announcement as expected, sadly I missed capitalizing with call options this morning cause wanted to avoid Musk induced volatility. Grats to whoever made the play / holds tsla.

This post was edited by obisent on Aug 12 2020 11:31am

I just completed my initial retire by 37 projections. Looks possible at an estimated 2.2% inflation per year and a 4.5% dividend yield during retirement. I used dividend all stars to determine if the 4.5% was possible. It appears so but ill project at lower rates and higher rates to ensure I have a good mix to consider. I only projected a measly 1.5% annual growth rate given I would be moving everything into blue chip dividend stocks. $2,529,642.77 banked by age 37 should be possible at our current savings rate. Projected to die with approx 4.5M depending on draw downs. In Canada you're forced to draw down your RRSP at age 71 at a rate of 5.28%. With no kids in the scenario I don't know what ill do with it, I guess re-evaluate every 5 years and drawdown potentially. No point in kicking the can with a ton of money.

In my 8 years I have remaining to save I have estimated 5% growth per year. While that is conservative given historic average I truly believe we're in for some dark days. Re-balancing my portfolio at the end of year 2028 will result in taxable capital gains being triggered. This will be covered by my severance payout.

I still have to work out a rent vs own scenario. Ideally we travel 6 months of the year (this is not luxury travel, backpacking and bicycling). The low maintenance of a rental is enticing , but we could purchase a home base condo. This would result in a draw down earlier than anticipated and alter the dividend projections. I am also considering zero inheritance since I don't need it and it get go to siblings who are far worse off.

The scenario has no kids and also includes a fairly high entertainment budget along with the travel and financing of a Crosstrek, skidoo and 2x ATV's. Although id likely not finance since at the end of the first 23 years of retirement I have a positive float that is more than enough to outright buy them, it just made it easy to project. We also don't come close to what I budgeted for fitness passes, food and other items now but I rather be conservative since ill have more time to do things.

We will not be entitled to social security as dividends will exceed the maximum allowable annual income and the full amount of social security will be clawed back.

Anyone else work out their magic number? It has been a very enjoyable exercise regardless if we actually go for it.

This post was edited by SBD on Aug 12 2020 02:09pm

That’s impressive, unfortunately I can’t speak to retiring in my 30s. Assuming it’s a combination of lower assets, income, and higher cost of living compared to what you’re working with. Working on raising the first 2, unable to lower the 3rd due to family reasons.

I do follow general FIRE ideas (don’t spend in excess, invest savings) but recognize I won’t be RE anytime soon. Im realistically looking at 50-55 depending on childcare related finances, assuming no big medical expenses (I’m sure something will come up) and 7% rate of return on investments. Planning to use savings from 55-60+, 401 and Ira from 60-70+, collect max ss afterwards and move to a lower cost of living area, also as important Medicare kicks in.

This post was edited by obisent on Aug 12 2020 02:41pm

Why age 37?

In my 8 years leading up to retirement that I have remaining $21,100 for discretionary expenditures per year, this includes travel, gifts, shopping, entertainment, and eating out. We are fortunate enough to be able to save on average $14,600 per month after that discretionary spending and all other necessary expenses. We both have zero debts, I worked constantly through university and extended university to 5 years to do additional work to pay for it. I worked while doing all post secondary education as well after university and did anything education related in the evening and weekends for two years. She generated significant grant money during her research period while completing her masters and was able to actually save while being a student. I have been working for years now, granted the majority of the years were not at the income I am currently at, but still sufficient to save a good amount.



Sufficient investment to generate adequate dividends to cover estimated comfortable living costs and our goals (extended travel and a lot of recreational activities, we're both fit and enjoy skiing, water sports, etc.)



That's why I landed on 5% for the remaining 8 years before retirement and a dismal 1.5% after since moving away from growth stocks.

There could be a strong argument to keep in growth and draw down triggering capital gains vs ineligible dividends. This will have to be monitored.

At the end of the day , I doubt either of us will stop working and we will likely both consult or just do something with no monetary consideration that takes up 6 months of the year.

This post was edited by SBD on Aug 12 2020 03:34pm

Rate of return is going to be lower in the long run as interest rates stay low. 7% return is historical and future projections are looking at between 4-5%. Factor that likelihood into your decision making.

Going to work until I’m 75. Out of necessity for most of it but also work is good for you. Even if I have a massive cushion going into my 50s I’d want to have some sort of passive work like investment management or whatever

This post was edited by ofthevoid on Aug 12 2020 03:35pm

I 100% agree. I'm going to work until I drop dead. Not out of necessity (hell, we could live on my wife's salary alone) but because it's good to DO stuff that has meaning.

Retirement is not synonymous with doing nothing with no meaning. It simply means I no longer have to give monetary consideration to what I'm spending my time doing as long as I live within the budgeted amounts. Right now if you said here is a salary for 220K, you wont enjoy the job or here is a salary for 100K and you will enjoy the job I would pick the 220K job. That could be my own folly but its what has guided me thus far.

Meaning is also subjective and will be different for each individual. Fitness holds meaning to me, experiencing other cultures has meaning. Even at my current income, I don't go to resorts it holds no meaning, I take my tent to other countries and go among people. Those experiences hold meaning. You don't have to be saving the world to have meaning. Our versions of fulfillment will all be different.

As someone who slams in 325 hour work months frequently, I don't see myself doing nothing.

This post was edited by SBD on Aug 12 2020 03:56pm