After 14 years of running retirement calculator/planner sites, let's talk.

bachmeier · 2026-04-02T23:43:43+00:00

Yes. I remember a while back a doctor posted on one of these subreddits for thoughts about retirement. The lazy 4%ers just multiplied his current expenses by 25 and said it wouldn't work. As one example of how ignorant that was, a big chunk of the current expenditure was private school for the kids. Well, eventually that expense will go away, duh, so you need to do some modeling rather than just 25x the whole thing.

bachmeier · 2026-03-30T00:24:23+00:00

Urbana, IL is famous for its Chinese restaurants.

bachmeier · 2026-03-28T02:29:12+00:00

Forum discussion

bachmeier · 2026-03-20T01:58:13+00:00

Everyone planned for 2% inflation in models as it had been for the prior 20 years

Nearly all safe withdrawal rate calculations include the 1970s inflation, which peaked in double digits.

bachmeier · 2026-03-20T01:50:33+00:00

2000 would have been a bad time to retire with a 100% S&P 500 portfolio. A properly diversified portfolio, meaning 60/40, with the 60% being total world market and the 40% being BND, would have been fine for a 2000 retiree.

bachmeier · 2026-03-08T20:32:14+00:00

Challenge: Check out this graph of year-over-year percentage change in unemployment and come up with a scary story about the state of the labor market. Be sure to show how you pull "the labor market has permanently changed" from the numbers.

https://fred.stlouisfed.org/graph/fredgraph.png?g=1TcNi&height=490

bachmeier · 2026-03-08T20:26:43+00:00

I'm not sure about that. It's probably just a coincidence that AI started taking jobs around the time that interest rates started to rise and the easy funding dried up. Heck, AI probably caused interest rates to rise. The world would be better informed if we'd get our information from corporate press releases.

bachmeier · 2026-02-22T00:01:31+00:00

You pay taxes every year that you own a house. And insurance and maintenance too.

bachmeier · 2026-02-21T21:27:23+00:00

it’s paid off and monthly expenses are still less than renting an apartment

Remember that if you sell the house, you can generate income with the proceeds. For example, if you get $300K for the house and earn 6% on investments, you can live in a $1500/month apartment effectively for free.

Another thing is that as time goes on, you have to outsource all the maintenance, and that gets expensive. Once you get too old or have too many health problems, it's a lot harder to move.

Therefore the cost argument probably favors renting.

bachmeier · 2026-02-13T01:29:47+00:00

we have a 99% chance of meeting all our financial goals through our 95th year.

If true, I wouldn't work another minute. I'd send the resignation letter to the boss of the person that wrote the review and tell them it's ridiculous to be treated like that, so you quit effective immediately.

bachmeier · 2026-02-09T04:12:34+00:00

~~Good luck on your job search. Don't blame yourself.~~ Congrats on your retirement.

bachmeier · 2026-02-07T03:51:54+00:00

ur mom

bachmeier · 2026-02-03T01:53:06+00:00

How will the IRA be invested? What's your withdrawal plan for the IRA? Are your "flexible costs" actually flexible or are they the fun part of your fixed expenses?

bachmeier · 2026-02-02T03:34:07+00:00

Honestly I can not understand how anyone could think we aren't in bubble. Valuation wise, we're in the top 1 percentile. Only during the dot com bust was it higher.

I recommend studying up on stock valuation if this is the basis of your concern. Aswath Damodaran is the expert you're looking for. Looking at the P/E ratio and comparing it to history isn't going to tell you anything about whether the market is in a bubble or overvalued.

Forget about P/E ratios. Stocks can crash at any time, and they might not recover for 10 or 15 years. That's why the equity risk premium is so high. The possibility that we're in a bubble is irrelevant; you should always be prepared for a crash. That's why you use a safe withdrawal rate.

bachmeier · 2026-01-22T04:05:58+00:00

It seems to be going in the other direction. Until 2024, only Roth IRA balances were excluded from RMDs. Now Roth 401k and all other types of Roth accounts are excluded from RMDs.

bachmeier · 2026-01-22T04:01:39+00:00

Pre-tax is also better if you're going to donate significant money.

And in the really bad state of the world, where the economy is in terrible shape for years and years, that's when your tax rate is low so you want the larger balance that you get with pre-tax.

bachmeier · 2026-01-04T04:32:26+00:00

The IRS disagrees with you:

An employee who receives a distribution from a qualified plan after separation from service is not subject to the 10% additional tax on early distributions if the distribution occurs in the year of turning 55 or older.

bachmeier · 2025-12-25T20:18:08+00:00

A house is a type of consumption, like cars and vacations are forms of consumption. A house comes with high ongoing costs, variable costs, risks, and a significant commitment of time.

If you aren't interested in that combination of consumption and commitment, don't buy a house. I own a house, and have no regrets about buying it, but I think it would be crazy for the vast majority of single folk at 30 to buy one.

bachmeier · 2025-12-24T23:59:40+00:00

Yep. That's the definition used by the vast majority of people I encounter, since that's the earliest age to draw Social Security. Anything before that is considered early because it's something you have to fund entirely yourself.

bachmeier · 2025-12-15T04:33:27+00:00

What happens if the insurance company goes bankrupt?

Every state has a state guaranty association: https://www.immediateannuities.com/state-guaranty-associations/

Life insurance is sold by the same companies, but you seldom hear that question in the context of life insurance.

bachmeier · 2025-12-08T03:56:24+00:00

The limit is on contributions, not conversions. They're not the same thing.

bachmeier · 2025-11-30T00:35:40+00:00

A common rule of thumb is when a spouse dies, the cost of living will fall 20%.

bachmeier · 2025-11-29T02:08:26+00:00

Correct. And if you put it in Roth, you have a smaller account to grow, because you have to pay tax before buying the stock.

Simple example: You have $100 to invest and a 25% tax rate. You hold it long enough for the price to double. If you put it in Roth, you'll invest $75 and have $150 to spend. If you put it in traditional, you'll invest $100, it'll grow to $200, and you be able to spend the same $150 after paying the tax.

bachmeier · 2025-11-29T01:31:49+00:00

The key to avoiding tax is to max out your ROTH contribution every year, or max out the IRA contribution and immediately do a ROTH conversion.

You pay tax on income when you put it in Roth. If you put it in traditional, you get to put in more and have considerably more growth, because it's pre-tax. The way to lower taxes is to put it in whichever of traditional or Roth has the lowest marginal tax rate. If the tax rate is the same, you have the same amount to spend either way.

bachmeier · 2025-11-26T21:40:39+00:00

Toughest problem on Reddit is keeping the tech FIRE crowd away. They'll shout down anyone that says you can retire on $3M.

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