Has anyone here created a financial plan stretching all the way to the end of life? Whether you did it yourself or worked with a pro. How did the process go. Did you run a Monte Carlo analysis, and if so, what were the results?
Did your plan give you peace of mind, or did it leave you rethinking some goals? What surprised you the most in the process?
Pre covid, I just worked and saved for retirement like the average Joe, except I had no idea when I could consider retiring. Like many, I always assumed it would be at 65. Covid had us quickly trying to get our affairs in order in case we and we were surprised that if we wanted to we could retire a little earlier especially if we lived in Taiwan. What really made a big difference was the cost of healthcare in Taiwan vs the US.
How has the experience been for you all? For those who live in a country with higher health care costs how are you handling that?
I wouldn’t say I’ve mapped it out, but I have a good idea of what assets / income I’ll have based on a few different resources:
back of the envelope numbers based on current assets, assuming 10ish% increase per year, and 4% rule of thumb
firecalc is an excellent resource to run numbers through
my 401k plan gives me an estimate of what income it thinks I’ll have based on 401k and ss at full retirement age - which there’s no way in hell I’m working to. I’m thinking 55 is the max age I’ll work to, preferably stopping sometimes before then. I’m not sure what will trigger that decision.
They all suggest there will be more than enough.
Still working, so that for now. Later, it’ll be through the market. What else you going to do? There’s games to be played with manipulating income from year to year to qualify for subsidies in “low income” years, but I’m somewhat uneasy about that morally.
Also DIY. It’s not that hard to figure stuff out. At this point I’m just playing tic tac toe and all I have to do is not lose.
Read lots of books. Subscribe to a stock news letter or two. Read more books. Watch the news once in a while.
Year two of retirement is upon me. I’m in far better shape; stress level is way down and when I find myself puttering around, I run.
I’d like to spend about 2/3 of the year in Taiwan and 1/3 in the Adirondack Mountains in a condo I can rent out in the winter. So, VA hospital when I’m there, and NIH here.
Don’t get too fancy. My two largest holdings are still MO and PM. And they are sky high these days and I’ve been dripping the dividends for 20 years. Yawn
Health wise: don’t smoke tobacco. Exercise. Sweat. Be thin.
I DIY. I hope to keep working as 100% retirement is boring.
As it is I take around 10 - 14 weeks vacations a year. As it is I only do actual work for maybe 4 hours on a Saturday Sunday and maybe 20 mins on other days of the week. A lot I can do remotely.
I think I should retire when I can bank US$100k net a year. Gives me enough coin for my diving vacations and flying to visit family in Australia and for my wife to have her fun overseas as well.
I do whats legally allowed not what some people claim to be ethical or moral. Australian Government says I will get old age pension of A$25k plus at year at todays figures but adjusted for inflation every year.
So around a net NT$550k a year. Not too shabby if I had no other income I could squeeze by on that. Not a great lifestyle though.
I’m sure there’s some legally allowed things you would be like, um, maybe not. Like you probably wouldn’t roll up to a soup kitchen or food pantry for free food meant for the poor even if there’s no income cutoff,. right? This feels kind of like that.
Why “should” you if you seem to not to want to?
Working to 65, I’d qualify for a bit over ~$75k USD between pension and SS (in today’s dollars - SS will increase for inflation, pension won’t), but don’t nobody want to work until then.
It’s like minimum U$100,000 or maybe NT$ equivalent in stocks, cash, bonds, etc. in account, and IBKR gives you money-market rate on the cash holdings in account. No need to do anything. Think it’s over 4.5% now.
I don’t know if I would say I’ve mapped it out but I do have a goal of semi-retirement at 45 and a plan to get there (I’m in my early 30s). I only started taking things seriously about 2 years ago.
I roughly follow barefoot investor with some twists to suit my preferences. And recently listened to a book called Strong Money Australia which has changed my mind about a few things but basically
(All AUD$)
I earn approx $7116 a month after taxes, medicare, HECS repayment.
Monthly
I spend $2200 on living expenses
$500 towards an emergency fund
$1420 towards house deposit savings
$80 towards xmas gift savings
$650 towards rubbish (i admit I often go over this so probably more like $850 - $950)
$400 towards travel and holidays
About $100 on gym/subscriptions
And about $1500 towards investments which is split between my superannuation, employee share plan, and ASX shares (mostly an ASX200 ETF) - this is on top if mandatory employer super contributions of 11.5%
There is a buffer in there as I work on base+bonus so my wage fluctuates a bit month to month but I do have relative control over how much I earn. The more I do the more I’m paid. The extra I add to either investments or emergency fund
I’m about to stop putting extra into my super and move that towards putting more into the employee share plan (which is basically buy 2 get 1 free but don’t quit)
There will be some changes when our house is built, my HECS is paid off, and my emergency fund is where I want it to be which would mean I can pretty dramatically increase the amount I invest.
I’ve worked out that I should have about $800,000 worth of investments (minus whatever is left on the mortgage) when I’m 45. I haven’t decided what I will do at that time cos it’s too far away. But probably moving back to Taiwan
And I should have at least $1,000,000 of super I can withdraw from when I’m 60.
Don’t know about CD rates. If you buy 1 -year CD, there’s a penalty if you cash out before that 1 year is up.
Risk is if you find a good stock (or one that’s fallen to your price target to buy) or other investment during that 1-year timeframe, but your cash tied up in the 1-year CD.
If you haven’t already then check out some financial education books including Rich Dad Poor Dad, Cash-flow Quadrant and the Richest man in Babylon. I also recommend Dave Ramsey for another take on how to generate wealth.
The Cash-flow Quadrant Strategy is a solid one
Employee to Self Employed to Business Owner to Investor.
What you said made me pause a bit. I can see where you’re coming from and appreciate your way of thinking. I guess I see it as similar to tax efficient planning such as using deductions and credits to legally reduce tax liability. Another example is timing Roth conversions as to minimize the overall taxes paid to Uncle Sam. I don’t mind paying my fair share of taxes but I don’t want to pay the government more than I need to.
Was retiring what you expected? Did you miss anything about our pre retirement life?
Your situation is a bit similar to mine in that once I fully retire our plan is to spend several months in the US and the rest in Taiwan or traveling. The idea of being able to do some slow traveling seems interesting.
You seem to have a great situation going on. If the work isn’t overly stressful and if I could work remotely like that I may not want to retire anytime soon.
How are you planning on banking US$100k a year? Stock market, real estate, pensions??
and we were surprised that if we wanted to we could retire a little earlier especially if we lived in Taiwan. What really made a big difference was the cost of healthcare in Taiwan vs the US.
There’s games to be played with manipulating income from year to year to qualify for subsidies in “low income” years, but I’m somewhat uneasy about that morally.
