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34 Months and counting down
Old 06-30-2010, 09:41 PM   #1
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34 Months and counting down

I'm very excited about finding this forum. I'm 52 and am planning on ER the day I turn 55 -- 34 months from now when I can start receiving payments from my TIAA-CREF annuity.

I am single and live fairly modestly -- incurring approximately $11,000 in 'necessary' expenses annually, which includes my utilities, property/school taxes, food, car/home insurance as well as Cable TV and Internet access. I also spend about $4,000 annually on vacation travel and other indulgences such as new laptop, bicycle, plants for the garden, hobbies, etc.

I had a $175,000 home built 8 years ago and paid the mortage off in 3 years because I hate being in debt for anything. Maybe that wasn't wise from a financial/investment standpoint but it makes me feel wonderful. I have 0 debt. Starting 4 years ago or so, I have taken a *very* conservative approach in my investing -- being satisfied to earn 3-4%.

I'll have $370,000 in a life-time annuity at 55 as well as $30,000 in savings; I'll also have $60,000 ($25,000 Roth; $35,000 trad.) in IRA's when I hit 59.5. I intend to use the savings to fund a new car 7 years from now; and the IRA money for emergency home repairs, replace major applicances, fund another new car in my 70's, etc. As far as health insurance, my current employer will pay half my premium until I reach 62.

I'm a little uncertain as to how much of the $370,000 I should annuitize. I'm leaning towards 80% which would provide me with approx. $15,000 (after tax income) annually. The other 20% ($74,000) would give me about $10,000 each of the 7 years prior to $12,000 in Social Security kicking in at 62. So I'm looking at an annual income of $25,000 which is more than the $15,000 I am spending now. So even with added expense of paying 1/2 of the health insurance premium I'm feeling comfortable that I'll have some additional money to travel and indulge a little more in retirement than what I'm currently doing.

Do you see any red flags? Or am I going about this wrong? Thanks for your time.
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Old 07-01-2010, 01:48 AM   #2
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I'm very excited about finding this forum. I'm 52 and am planning on ER the day I turn 55 -- 34 months from now when I can start receiving payments from my TIAA-CREF annuity. (snip)
I think you're the fifth or sixth person I've read on the forum recently who is aiming at retirement about three years from now. I'm one too. Maybe we should start a "Class of 2013" thread.

Greetings!
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Old 07-01-2010, 04:52 AM   #3
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I'm a little uncertain as to how much of the $370,000 I should annuitize. I'm leaning towards 80% which would provide me with approx. $15,000 (after tax income) annually.
You can get 5% after tax at age 55? Do you smoke 50 cigarettes a day or something? (I read that some annuity providers will consider adding a little extra for smokers... macabre, but that's business, I guess.)

Seriously: do you have some links for places offering that kind of rate? I'm having trouble finding 5% gross at age 60.
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Old 07-01-2010, 06:48 AM   #4
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Welcome to the board!
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Old 07-01-2010, 08:09 AM   #5
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LauAnn, welcome from a fellow TIAA participant! Are you in higher education?

The question of how much and when to annuitize is an interesting one. Although I've already retired, I'm still considering that one. Fortunately TIAA is one of the few good annuity providers and it's an option I love having.

I'll look forward to your future posts.

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Old 07-01-2010, 09:18 AM   #6
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I will count down with you but I won't ER until 2014. Welcome to the board. Please continue to post about your countdown experience. Love to read about your journey between now and your ER.
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Old 07-01-2010, 09:46 AM   #7
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Welcome! I have 22 months as of today. This forum helps me grin and bear it on a daily basis. Keep us posted periodically on how its going for you.
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Old 07-01-2010, 09:54 AM   #8
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Welcome. I retired in March 08. I remember counting down for a couple years. It was a good thing to plan for the transition. Got a close look at expenses , cash flow, desired activities.
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Old 07-01-2010, 10:06 AM   #9
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You can get 5% after tax at age 55? Do you smoke 50 cigarettes a day or something? (I read that some annuity providers will consider adding a little extra for smokers... macabre, but that's business, I guess.)

Seriously: do you have some links for places offering that kind of rate? I'm having trouble finding 5% gross at age 60.
I can't be sure but IIRC as an academic if you have fairly "old" TIAA you can get a very good annuity rate from them. DW still has a chunk in TIAA from the 1980s and they will allow her to annuitize that at a good rate.
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Old 07-01-2010, 10:07 AM   #10
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I'm very excited about finding this forum. I'm 52 and am planning on ER the day I turn 55 -- 34 months from now when I can start receiving payments from my TIAA-CREF annuity.
.
Are you doing an equal payments lifetime annuity? or is there some other tax protection?
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Old 07-01-2010, 12:12 PM   #11
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25 months for me as of today. From the point we set a "date" and started our countdown clock, more time has passed than we have remaining. Another little milestone.

I try to avoid looking at it in terms of "only XX number of these meetings to attend" or "only XX number of these reports to write.

I have outlook give me a pop up on the 1st day of each month -like a need a reminder
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Old 07-01-2010, 04:48 PM   #12
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I think you're the fifth or sixth person I've read on the forum recently who is aiming at retirement about three years from now. I'm one too. Maybe we should start a "Class of 2013" thread.

Greetings!
Count me in that group! I plan to pull the plug on my federal career on my 55th birthday, which is January 18th, 2013. So...I'm down to 30 months & 18 days....but who's counting? (ME!!!) Also...on April 1st of this year, I retired from the AF Reserves, after a total of 33 years, including 4 1/2 yrs active duty USAF, the rest reserves. That'll sweeten my retirement pot when I turn 60.
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Old 07-02-2010, 05:40 PM   #13
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Are you in higher education?


Coach
Thanks for the welcome.

Yes, I've been in higher education at the same institution for 32 years. I enrolled in an associate degree program when I was 18; then graduated and was offered employment at the same institution when I parlayed a work-study position into full-time employment.

My position required a little more knowledge of technology than the average individual in our office, so I never got bored due to having to constantly learn new software systems, etc.

It was a great environment to spend 32 years but I'm more than ready for ER!
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Old 07-02-2010, 07:19 PM   #14
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Thanks for the welcome.

Yes, I've been in higher education at the same institution for 32 years. I enrolled in an associate degree program when I was 18; then graduated and was offered employment at the same institution when I parlayed a work-study position into full-time employment.

My position required a little more knowledge of technology than the average individual in our office, so I never got bored due to having to constantly learn new software systems, etc.

It was a great environment to spend 32 years but I'm more than ready for ER!

Just a question. Did they offer a defined benefit option when you signed up ? Our university always had both the state retirement (which I took) and TIAA-CREF with a 7.2 percent Employer contribution
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Old 07-02-2010, 10:16 PM   #15
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Just a question. Did they offer a defined benefit option when you signed up ? Our university always had both the state retirement (which I took) and TIAA-CREF with a 7.2 percent Employer contribution
We aren't a state school so the only option presented was TIAA-CREF. Several years later VALIC was added as an option. When I started, they provided a 7% contribution. Once I was there long enought that increased to 10%.
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Old 07-02-2010, 10:25 PM   #16
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Are you doing an equal payments lifetime annuity? or is there some other tax protection?
Planning for most (80-90%) to be equal payments lifetime annuity.
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Old 07-02-2010, 10:26 PM   #17
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We aren't a state school so the only option presented was TIAA-CREF. Several years later VALIC was added as an option. When I started, they provided a 7% contribution. Once I was there long enought that increased to 10%.
Thanks I do have colleagues at private Universities who had DB options at that time.
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Old 07-04-2010, 12:31 AM   #18
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Originally Posted by kyounge1956 View Post
I think you're the fifth or sixth person I've read on the forum recently who is aiming at retirement about three years from now. I'm one too. Maybe we should start a "Class of 2013" thread.

Greetings!
Hey, another 2013 here. It is finally starting to feel like it is getting close.

OP, I hope to see you around here.
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Old 07-04-2010, 01:19 AM   #19
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Originally Posted by LauAnn View Post
I'm very excited about finding this forum. I'm 52 and am planning on ER the day I turn 55 -- 34 months from now when I can start receiving payments from my TIAA-CREF annuity.

I am single and live fairly modestly -- incurring approximately $11,000 in 'necessary' expenses annually, which includes my utilities, property/school taxes, food, car/home insurance as well as Cable TV and Internet access. I also spend about $4,000 annually on vacation travel and other indulgences such as new laptop, bicycle, plants for the garden, hobbies, etc.

I had a $175,000 home built 8 years ago and paid the mortage off in 3 years because I hate being in debt for anything. Maybe that wasn't wise from a financial/investment standpoint but it makes me feel wonderful. I have 0 debt. Starting 4 years ago or so, I have taken a *very* conservative approach in my investing -- being satisfied to earn 3-4%.

I'll have $370,000 in a life-time annuity at 55 as well as $30,000 in savings; I'll also have $60,000 ($25,000 Roth; $35,000 trad.) in IRA's when I hit 59.5. I intend to use the savings to fund a new car 7 years from now; and the IRA money for emergency home repairs, replace major applicances, fund another new car in my 70's, etc. As far as health insurance, my current employer will pay half my premium until I reach 62.

I'm a little uncertain as to how much of the $370,000 I should annuitize. I'm leaning towards 80% which would provide me with approx. $15,000 (after tax income) annually. The other 20% ($74,000) would give me about $10,000 each of the 7 years prior to $12,000 in Social Security kicking in at 62. So I'm looking at an annual income of $25,000 which is more than the $15,000 I am spending now. So even with added expense of paying 1/2 of the health insurance premium I'm feeling comfortable that I'll have some additional money to travel and indulge a little more in retirement than what I'm currently doing.

Do you see any red flags? Or am I going about this wrong? Thanks for your time.
Welcome to the Early Retirement Forum. You are making great steps towards your goal. As for red flags, be sure your annuity is fully inflation protected or that you have some other way of dealing with inflation.

Like you, I bought and paid off a house before retiring and have no debt, and this has made ER a lot simpler and less stressful for me.
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