|
|
03-18-2014, 10:03 PM
|
#21
|
Moderator Emeritus
Join Date: May 2007
Posts: 12,894
|
Similar age, similar net worth. FIRECalc and other calculators give me the green light up to $84K in annual spending including a greatly discounted SS income starting at 70. So it looks like you are good to go.
Like clifp, I think that going back to work should not be considered an infallible plan B, even at your age.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
03-19-2014, 12:29 AM
|
#22
|
gone traveling
Join Date: Oct 2007
Posts: 1,135
|
Well done!
Welcome!
Firecalc holds some of the answers. I think you'll be fine.
With respect to buying property, i suppose it's the old rent vs own ROI analysis.
If it were me, i would avoid the trappings of an expensive home and the incremental costs that go with it - maintenance, property taxes, insurance, etc. While appreciation can far exceed those costs...with the amount of travel you plan to do, I would take a bit of a "keep flexible" attitude. ..either get something less expensive (a single middle aged woman living in a 500K place generally is a decent amount of house, although location dependent could also be something modest)...or rent for a while til you get into retirement routine and see what happens.
Who knows...you could meet Mr. Right who already has a home and decide to marry. Or want to travel for months on end and not want to be tied to having to maintain a house remotely (or the perils of renting it for the short term).
You have a lot of flexibility with no kids .... 2.5M in cash now....a 0.5M 401K that will grow for another 20-25 years. A reliable 30K annual pension+SS "annuity" at age 65 if all else fails and is lost... pretty well prepared but you should also consider that your parents will eventually pass and if you have no heirs....your own older age care could require more than family help... best to plan for that with long term care insurance, etc etc.
Just some thoughts. Keep us posted.
|
|
|
03-19-2014, 05:44 AM
|
#23
|
Confused about dryer sheets
Join Date: Mar 2011
Location: Lisbon
Posts: 9
|
Hello JPearl,
congratulations for the amount you have saved and for being able to keep your expenses under control (with such income I think it would have been very easy to let your expenses increase out of control).
Since nobody did until now please let me point you to some valuable resources, in what concerns to investment philosophy and practice:
Bogleheads® Blog | Investing advice inspired by Jack Bogle
Bogleheads • Index page
Please don't assume that to be able to manage your own money you need to have special investment skills or dedicate to it a lot of time. Both are myths and such task can be very simple - it is, nevertheless, important to be knowleadgeble about some investment principles (that you can find in the resouces above as well as from specific authors like Bogle, Ferry, Swedroe, Bill Schultheis,...). There is a lot of evidence that the so called investment expertise is basically noise/luck or results from the comparison with the wrong benchmarks.
Since you are young it is very worthwile to invest some time reading such authors and then keep to yourself the 20k/year - it will be probably your best returning investment.
Best Regards,
sinbad
|
|
|
03-19-2014, 05:59 AM
|
#24
|
Recycles dryer sheets
Join Date: Oct 2011
Location: Upstate Ruralia
Posts: 356
|
Your money may go a LOT farther if you move out of New York State.....and yes I know NY has a lot of very nice areas to live, but they tax your pension ( part of it), property taxes and school taxes are outrageous ( if you were to purchase property)...Winters can be brutal...I just think your dollar can go a lot further in another state.
Being single myself, and childfree and taking care of an elderly parent ( who is, thank goodness, still very independent at 93 in her own home, reads the WSJ every day and is in relatively good shape for her age)....I see what's down the road for me....I do a LOT for my Mom, and I can see I need to plan for my advanced age as I have no kids to rely on....
But, there are plenty of kids that contribute NOTHING to their parents care...
Anyway...congratulations on accumulating so much wealth at such a young age!!!!
You will be set no matter what you choose to do....!!!!!
|
|
|
03-19-2014, 07:01 AM
|
#25
|
Recycles dryer sheets
Join Date: Mar 2010
Location: Rural
Posts: 120
|
I am close to your age with a hubby and three kids. We could easily retire with what you have, but our spending is pretty low. Congrats on saving so much!
|
|
|
03-19-2014, 07:11 AM
|
#26
|
Gone but not forgotten
Join Date: Jul 2012
Location: Peru
Posts: 6,335
|
I have a very good looking son who is single and likes to travel.
|
|
|
03-19-2014, 07:48 AM
|
#27
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
|
Quote:
Originally Posted by Ready
Correct. 2% for you, 1% for him.
|
Unfortunately, this is the bottom line. Advisers will always tell you that their expertise more than makes up for their fee, but while the evidence to support this is scant and generally anecdotal, the fee is constant in up markets and down.
|
|
|
03-19-2014, 07:57 AM
|
#28
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Location: Seattle
Posts: 6,008
|
Probably a better suggestion than mine, which was to ask about her views on polygamy...
|
|
|
03-19-2014, 08:17 AM
|
#29
|
Dryer sheet wannabe
Join Date: Mar 2014
Posts: 24
|
Quote:
Originally Posted by Fermion
Probably a better suggestion than mine, which was to ask about her views on polygamy...
|
Huh, you guys are too funny!
|
|
|
03-19-2014, 08:22 AM
|
#30
|
Dryer sheet wannabe
Join Date: Mar 2014
Posts: 24
|
Quote:
Originally Posted by dontworry
I am close to your age with a hubby and three kids. We could easily retire with what you have, but our spending is pretty low. Congrats on saving so much!
|
I have friends at my age with my kind of saving, but have kids and they say they can't retire yet. I guess saving for schools and especially college sets them back a lot - more importantly, adds uncertainty to the future.
|
|
|
03-19-2014, 08:36 AM
|
#31
|
Dryer sheet wannabe
Join Date: Mar 2014
Posts: 24
|
Quote:
Originally Posted by Lcountz
Your money may go a LOT farther if you move out of New York State.....and yes I know NY has a lot of very nice areas to live, but they tax your pension ( part of it), property taxes and school taxes are outrageous ( if you were to purchase property)...Winters can be brutal...I just think your dollar can go a lot further in another state.
Being single myself, and childfree and taking care of an elderly parent ( who is, thank goodness, still very independent at 93 in her own home, reads the WSJ every day and is in relatively good shape for her age)....I see what's down the road for me....I do a LOT for my Mom, and I can see I need to plan for my advanced age as I have no kids to rely on....
But, there are plenty of kids that contribute NOTHING to their parents care...
Anyway...congratulations on accumulating so much wealth at such a young age!!!!
You will be set no matter what you choose to do....!!!!!
|
Good for you that your mom is 93 and still so smart and independent! That means you will live a long and healthy life too! I totally agree with you that taking care of our elderly parents makes us realize that we need to prepare early too.
Yes you read my mind! I will be moving out of NY as soon as I retire - been here for more than 20 years and I am DONE with the east coast! I am going to travel a lot, and start doing some research in Southeast Asia for retirement communities and even nursing homes - I (at least for now) plan to eventually stay in Asia (where I was originally from and still have lots of friends and relatives) when I am really old. SE Asia has some of the best retirement and healthcare systems. My parents now spend winters in one of those retirement communities (not nursing home, just condo complex for retirees mostly in their 60s and 70s) and are very, very happy.
|
|
|
03-19-2014, 08:39 AM
|
#32
|
Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,586
|
Kids don't make it any easier, but it's not the lack of savings, it's the excess spending that holds people back.
Keeping a lid on spending and not doing something boneheaded with the portfolio is the key to retire early. Moving to a lower cost area and reducing your portfolio management fees are two important potential sources of expense control. Buying a condo and occasionally renting it sound like a plan that could backfire. Going back to work is a viable Plan B only if you are realistic about how little you will earn. More likely you will find early retirement to be rewarding enough to see that as a real " last option".
|
|
|
03-19-2014, 08:42 AM
|
#33
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
|
JP, if you can live on $70k a year - you have plenty.
On the FA, while I'm not keen on them if they are able to earn their keep then I'm not opposed to them. Most do not earn their keep. Look at the AA of the money they are managing and then look to the return they generate after the 1% fee for 1, 3, 5 and 10 years, as applicable, and compare it to the relevant Vanguard balanced funds that correlate to the AA of the money they are managing. If their returns exceed the relevant Vanguard fund then they may be a keeper, otherwise DIY. If they are a keeper, continually monitor them and if they start slipping, consider going DIY.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
03-19-2014, 08:48 AM
|
#34
|
Dryer sheet wannabe
Join Date: Mar 2014
Posts: 24
|
Quote:
Originally Posted by papadad111
Well done!
Welcome!
Firecalc holds some of the answers. I think you'll be fine.
With respect to buying property, i suppose it's the old rent vs own ROI analysis.
If it were me, i would avoid the trappings of an expensive home and the incremental costs that go with it - maintenance, property taxes, insurance, etc. While appreciation can far exceed those costs...with the amount of travel you plan to do, I would take a bit of a "keep flexible" attitude. ..either get something less expensive (a single middle aged woman living in a 500K place generally is a decent amount of house, although location dependent could also be something modest)...or rent for a while til you get into retirement routine and see what happens.
Who knows...you could meet Mr. Right who already has a home and decide to marry. Or want to travel for months on end and not want to be tied to having to maintain a house remotely (or the perils of renting it for the short term).
You have a lot of flexibility with no kids .... 2.5M in cash now....a 0.5M 401K that will grow for another 20-25 years. A reliable 30K annual pension+SS "annuity" at age 65 if all else fails and is lost... pretty well prepared but you should also consider that your parents will eventually pass and if you have no heirs....your own older age care could require more than family help... best to plan for that with long term care insurance, etc etc.
Just some thoughts. Keep us posted.
|
I was thinking to get a small condo in or near NYC, not a house - minimum amount of work in terms of maintaining it, and can be easily rented out when I travel. Even if it is left empty for months, the carrying costs are not too terrible. My only concern is that I don't intend to come back to the east coast to live or work, perhaps ever. So keeping a place here, although can be a good investment, may be pointless...
|
|
|
03-19-2014, 08:56 AM
|
#35
|
Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Southern California
Posts: 3,995
|
Quote:
Originally Posted by pb4uski
JP, if you can live on $70k a year - you have plenty.
On the FA, while I'm not keen on them if they are able to earn their keep then I'm not opposed to them. Most do not earn their keep. Look at the AA of the money they are managing and then look to the return they generate after the 1% fee for 1, 3, 5 and 10 years, as applicable, and compare it to the relevant Vanguard balanced funds that correlate to the AA of the money they are managing. If their returns exceed the relevant Vanguard fund then they may be a keeper, otherwise DIY. If they are a keeper, continually monitor them and if they start slipping, consider going DIY.
|
I think I'm going to have to respectfully disagree with you on this one. Many actively managed funds have outperformed their index counterparts for as many as ten years, only to seriously underperform the index during the next ten years. Magellan fund is a good example. Unless reversion to the mean has become obsolete, a fund that has outperformed over the past decade is statistically likely to underperform in the future. So if the funds have beat their index over the past five to ten years, it's probably statistically likely that they will underperform at some point in the future, which only further strengthens the recommendation to get out of them and move to index funds.
It's very difficult to guess which funds, or which fund managers, might have tremendous skills at beating the odds. But locking in low costs is as simple a move as you can make to increase the odds of not underperforming.
|
|
|
03-19-2014, 09:00 AM
|
#36
|
Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,586
|
Quote:
Originally Posted by JPearl
I was thinking to get a small condo in or near NYC, not a house - minimum amount of work in terms of maintaining it, and can be easily rented out when I travel. Even if it is left empty for months, the carrying costs are not too terrible. My only concern is that I don't intend to come back to the east coast to live or work, perhaps ever. So keeping a place here, although can be a good investment, may be pointless...
|
Owning a condo in NY State also exposes you to being deemed a resident for tax purposes even if you live overseas.
|
|
|
03-19-2014, 09:13 AM
|
#37
|
Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
|
Quote:
Originally Posted by travelover
Here is one way to look at it. Pulling 3% a year gives you $90,000 a year, which is twice the average American family income. Can you live on $90,000 a year?
|
Or at 4%.....120000. Plus a pension to follow. Well, how much does ONE need.
|
|
|
03-19-2014, 09:19 AM
|
#38
|
Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,183
|
Quote:
Originally Posted by sinbad
Hello JPearl,
congratulations for the amount you have saved and for being able to keep your expenses under control (with such income I think it would have been very easy to let your expenses increase out of control).
Since nobody did until now please let me point you to some valuable resources, in what concerns to investment philosophy and practice:
Bogleheads® Blog | Investing advice inspired by Jack Bogle
Bogleheads • Index page
Please don't assume that to be able to manage your own money you need to have special investment skills or dedicate to it a lot of time. Both are myths and such task can be very simple - it is, nevertheless, important to be knowleadgeble about some investment principles (that you can find in the resouces above as well as from specific authors like Bogle, Ferry, Swedroe, Bill Schultheis,...). There is a lot of evidence that the so called investment expertise is basically noise/luck or results from the comparison with the wrong benchmarks.
Since you are young it is very worthwile to invest some time reading such authors and then keep to yourself the 20k/year - it will be probably your best returning investment.
Best Regards,
sinbad
|
Great post: well said and 100% true. Not following this advice is the main threat to so many people's financially sound retirement.
|
|
|
03-19-2014, 09:19 AM
|
#39
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
|
Quote:
Originally Posted by Ready
I think I'm going to have to respectfully disagree with you on this one. Many actively managed funds have outperformed their index counterparts for as many as ten years, only to seriously underperform the index during the next ten years. Magellan fund is a good example. Unless reversion to the mean has become obsolete, a fund that has outperformed over the past decade is statistically likely to underperform in the future. So if the funds have beat their index over the past five to ten years, it's probably statistically likely that they will underperform at some point in the future, which only further strengthens the recommendation to get out of them and move to index funds.
It's very difficult to guess which funds, or which fund managers, might have tremendous skills at beating the odds. But locking in low costs is as simple a move as you can make to increase the odds of not underperforming.
|
We can agree to disagree but the reasoning you suggest is exactly why I think continual monitoring is important. If the managed fund or manager starts to lose their touch, you can identify it and consider changes.
BTW, I think the analysis and monitoring is more effort than it is worth, which is why I am mostly in low-cost index funds. At the same time however, I'm not a zealot that FAs are a no-no.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
03-19-2014, 09:53 AM
|
#40
|
Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,736
|
Quote:
Originally Posted by Fermion
Probably a better suggestion than mine, which was to ask about her views on polygamy...
|
Wow, I'm surprised it took 26 posts for a 'proposal.'
__________________
You may be whatever you resolve to be.
100% x 10% > 10% x 100%
Small pensions & SS cover essentials
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|