Originally Posted by
TED74
I don’t care enough about your math to show you all the ways it’s wrong. I honestly don’t care if you’re surprised now or later that what you think you’re going to earn or what you think you can/will spend in retirement is way off. If you’ve got a money guy or gal, throw them your assumptions if you care to - it honestly matters that you know what you’re likely to have and to spend, but of course it’s your prerogative to do as you wish.
First, I don’t know if your 500k includes or doesn’t include the 17% DC.
If your 500k/year doesn’t include the 17% DC, I’d love to see how you still take home 400k after state/federal/social security/Medicare/ALPA. If your 500k is inclusive of the 17% DC, you’re absolutely not taking home 400k.
If you have a “typical” airline pilot life and actually SPEND (meaning into things that aren’t appreciating or contributing to your net worth and aren’t producing any current or future income potential) $33k/month every month starting the first month you retire…yeah, the numbers are going to look terrible. Because that’s not sustainable, particularly if you plan on doing so in perpetuity, and in addition to spending your social security income and any other spousal income or social security or military pension. But I’d also like to be your buddy and ride along on this spending spree!
For a job that pays 500k/yr and yields 750k of actual money deposited into your checking account by the end of two years (and I think I’m being overly gracious on after-tax residual)…you simply aren’t going to be down $2M in the same time period.
Is the 15% you reference above additional savings beyond the 17% DC? If so, that’s demonstrating that the pilot’s monthly expenditures don’t even require all of his take-home, since he’s able to save.
There once was a draw-down “common wisdom” that 4% was a pretty safe back-of-the-napkin math number to ensure you don’t run out of money. It’s debatable how good or universal that number is, but it’s not off by a lot for most people. Your scenario of drawing down 10% of your best egg annually is truly nonsensical. It’s also not uncommon and thought to be relatively conservative to estimate needing 80% of your final annual income in retirement (not 100%)…so there’s that.
Just for fun, what do you suggest this hypothetical pilot is spending $33k/month on, since to make your math work it can’t in any way feed back into his net worth?
First thank you for having a mostly logical debate on this vice the SSMonkey. Although the “I don’t care about your math” makes me think you can’t counter it because it is just math. Also let me say that this was simply an exercise to show how at least it was plausible that the extra two years didn’t just mean $1M more but could plausibly be closer to $2M. Do I make assumptions? Hell yes. Show me your assumptions. For instance if you don’t think 500K a year for two years that you wouldn’t otherwise be getting isn’t considered an extra $1M then OK but I thought that was the agreed on starting point. Do the math and show me how you come up with another number.