What is your current FIRE / Live off assets for life number?

Marine_life

michaels wrote: »

I plugged all our assets and likely future income streams (assuming no more earned income) into cfiresim.org and asked it how much we would be able to live on in real terms to age 95

Don't these calculators use US market returns as the basis?

That and a number of other factors will tend to mean that cfiresim will be overly optimistic for a UK based investor.

cfw1994

Marine_life wrote: »

Don't these calculators use US market returns as the basis?

That and a number of other factors will tend to mean that cfiresim will be overly optimistic for a UK based investor.

I assume you mean “ overly optimistic for a person investing mostly in the UK”?
I’m a UK based investor, but the bulk of my investments cover US companies.
The UK is, I believe, only around 6% of the world in market terms....the US far bigger.....and a UK investor can invest in global investments.....which I would always advocate anyway!

savingholmes

Our desired FIRE number minimum is about £290K - increased to £390K if we want to use it to repay the mortgage as well. This is if our goal was to retire at 60. Our current expenses minus mortgage and children are approx £31K - so would need that plus a portion for tax. I can get £6K from DB pension at 60 plus £35K lump sum which helps. I am then just trying to bridge between 60 and 67. From age 67 - I would get a further £7K+ DB pension, DH would get £4K+ and as long as we contribute until we are 55 we will get full state pension. We therefore already have enough for post age 67 - especially as we plan to work until at least age 55.

kinger101

MaxiRobriguez wrote: »

FIRE took off about ten years ago when the markets were cheaper, but the withdrawal rate advice hasn't changed since.

If you're planning to retire shortly and it's an early retirement based on fire principles, then just make sure you stress test your plans. Factor in things like:

- Inflation rising to 5% and staying there.
- Equity returns annualised at 2% for the next decade.
- Impact of lowering your withdrawal rate.
- Market crash of 50% in the next five years.

Personally I feel I'm still a long way from FI despite having a net worth of about £350k. I'm planning on having a 35x expenditure rate in worth and a 2% withdrawal rate before I declare myself FI.

If you can achieve the 35X great, but I think you've been overly-pessimistic. Most would not be able to achieve that, and the danger becomes a short retirement.

While there's no crystal ball, one would presume the state pension ought to provide a reasonably predictable element of ones retirement income. And as for market crashes, events like this can be buffered by holding 5-7 years in cash (or equivalents), and a somewhat flexible approach to spending. We all adapt to circumstances in working life. No reason so assume we wouldn't do the same in retirement.

Triumph13

kinger101 wrote: »

If you can achieve the 35X great, but I think you've been overly-pessimistic. Most would not be able to achieve that, and the danger becomes a short retirement.

While there's no crystal ball, one would presume the state pension ought to provide a reasonably predictable element of ones retirement income. And as for market crashes, events like this can be buffered by holding 5-7 years in cash (or equivalents), and a somewhat flexible approach to spending. We all adapt to circumstances in working life. No reason so assume we wouldn't do the same in retirement.

5-7 years seems like a bit much to hold in cash - unless it's specifically for covering a bridging period until say SP comes on line. It would be a big drag on returns.
The more flexible your approach to spending, the less the need to carry large amounts of cash. It's a trade-off though for which people will have different personal preferences between having a better chance of a more stable income vs a better chance of higher income across the whole of retirement. You [STRIKE]pays[/STRIKE] invests your money and you takes your choice.

lisyloo

748,271

Not under any pressure to retire early at the moment I.e. health good, enjoy job.
I would plan to get a bigger pot than necessary for safety however I’m aware that sometimes life has other plans.

kinger101

Triumph13 wrote: »

5-7 years seems like a bit much to hold in cash - unless it's specifically for covering a bridging period until say SP comes on line. It would be a big drag on returns.
The more flexible your approach to spending, the less the need to carry large amounts of cash. It's a trade-off though for which people will have different personal preferences between having a better chance of a more stable income vs a better chance of higher income across the whole of retirement. You [STRIKE]pays[/STRIKE] invests your money and you takes your choice.

I agree is seems a lot, but in the context of the 35X pot that was mentioned, it seemed a sensible alternative. If one uses a (flexible) 4% withdrawal rate, the 5 years is still only the equivalent of a 80/20 equities/cash equiv. split.

I'm fortunate in that SP + DB should provide half my requirements, but it should be fairly easy for most people to stretch out a 5Y cash pot over 7Y if market recovery was slow.

If you play around with the simulators, if drawdown fails, it's usually due to an event in that first decade.

Triumph13

kinger101 wrote: »

I agree is seems a lot, but in the context of the 35X pot that was mentioned, it seemed a sensible alternative. If one uses a (flexible) 4% withdrawal rate, the 5 years is still only the equivalent of a 80/20 equities/cash equiv. split.

I'm fortunate in that SP + DB should provide half my requirements, but it should be fairly easy for most people to stretch out a 5Y cash pot over 7Y if market recovery was slow.

If you play around with the simulators, if drawdown fails, it's usually due to an event in that first decade.

It's definitely a way to do it. Looked at another way though, if you have 20% flexibility in your spending, 1 year of cash will last you through 5 years of a 40% crash.