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52 & Burned out, wanting to retire NOW. Help!!
Old 02-07-2008, 11:18 AM   #1
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52 & Burned out, wanting to retire NOW. Help!!

I am 52 worked hard all my life. Not unlike most of you. Just have a difficult time making the leap to "early retirement". In reading many of the post it looks like there are a lot of experts on the forum. Your opinion would be greatly appreciated! I have read many of the other early retirement web pages and the claims that people make seem to be unrealistic, such as retire in Thailand, or South America. My situation is as follows:

Age: 53
Married, no children
Total Investments: 2.8 million
Investment spit: 70% stocks/mutual funds, 10 bonds, 20 cash
House - Paid off value $500,000.00
Expenses without State or Federal tax- $85,000

The Retirement calulators mostly say I should be fine. But I feel that SS is an important factor, and if SS says I will collect 1,500.00 per month how can I calulate the amount if I quit at age 53, as I would assume the amount would change.

Question: Is the amount of 2.8 mil plenty with SS adding in at 66 or is there not enough cushion.

Worry and tire of running retirment calulators!
Jack "loosing confidence"
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Old 02-07-2008, 11:25 AM   #2
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Looks to me like you are more than fine. Do your expenses include health insurance? That would be the major killer I can think of.
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Old 02-07-2008, 11:54 AM   #3
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Quote:
Originally Posted by brewer12345 View Post
Looks to me like you are more than fine. Do your expenses include health insurance? That would be the major killer I can think of.
Thank you for your reply. I am new to the forum. Health insurance has been included at $6,000.00 per your which I now pay for with NASA for self employed.

Jack Carr
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Old 02-07-2008, 11:59 AM   #4
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Quote:
Originally Posted by brewer12345 View Post
Looks to me like you are more than fine. Do your expenses include health insurance? That would be the major killer I can think of.
The Social Security Website has a calculator to help you figure out what your benefit would be - ssa.gov

When I ran the calculation for my husband and I, I got our most recent statements and plugged in the past data plus the current year to get the benefit amount.

I think you will find many people here are enjoying a great retirement with a smaller cushion than you have without having to move overseas. I agree with Brewer that health insurance is the biggest question. There is some excellent info on this board on this topic.

BTW, I know what you mean about those calculators. I drove myself nuts before taking the plunge just last month at age 52.
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Old 02-07-2008, 12:05 PM   #5
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Hi Jack,
Welcome to the boards. I see you have already done some homework on the various threads here.

Please be sure you look over the Community Rules at the very bottom of the page.

A couple of questions:

$80k in expenses seems a bit high with a paid off house. Also, don't forget about taxes in your expense needs. You have to pay them in retirement too.

$2.8 Million in investments will give you $80+k in income over your expected life span. So you can retire now your nest egg but I would be careful about taxes and the content of your expenses.

Do you have a pension of any kind? What other sources of income do you expect? Your taxes should go down with a lower income or one derived from investement sales or other liquidation.

Do you have an emergency fund that is in addition to your expected living expenses. Things break and cars need to be replaced.

What about other debt?

Again, welcome to the board.
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Old 02-07-2008, 01:00 PM   #6
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Quote:
Originally Posted by Jack Carr View Post
I am 52 worked hard all my life. Not unlike most of you. Just have a difficult time making the leap to "early retirement". In reading many of the post it looks like there are a lot of experts on the forum. Your opinion would be greatly appreciated! I have read many of the other early retirement web pages and the claims that people make seem to be unrealistic, such as retire in Thailand, or South America. My situation is as follows:

Age: 53
Married, no children
Total Investments: 2.8 million
Investment spit: 70% stocks/mutual funds, 10 bonds, 20 cash
House - Paid off value $500,000.00
Expenses without State or Federal tax- $85,000

The Retirement calulators mostly say I should be fine. But I feel that SS is an important factor, and if SS says I will collect 1,500.00 per month how can I calulate the amount if I quit at age 53, as I would assume the amount would change.

Question: Is the amount of 2.8 mil plenty with SS adding in at 66 or is there not enough cushion.

Worry and tire of running retirment calulators!
Jack "loosing confidence"
Jack,

Welcome to the board.

A couple of thoughts:

1. On SS, the statements you get (which is where I'm betting you get the $1500 number) assume you work until full retirement age. However, the way the formulas work, you will probably find out that if you quit now your SS benefit will probably be not much less than $1500. Check out the advanced calculator on the SS website.

2. It looks like you would be at about a 3% withdrawal rate plus taxes, which at age 52 is probably safe. At this point I think the best thing you can do is learn as much as you can about the retirement calculators and their assumptions, look at your expenses and see if they would change much if you retired (commuting expenses and taxes might drop, recreation and health care expenses might go up). It's a personal decision where each of us has to decide which is the bigger set of risks: retiring and risk running out of money, or staying at work and risk spending too many days at the office. The former is often discussed on this board, but it needs to be balanced against the latter. If I were in your shoes there would be skid marks in the parking lot, but everyone is different in how they balance out the two.

3. Since you have a paid off home and no children, a reverse mortgage and/or downsizing might be an additional safety cushion as an option for you to consider.

Good luck,

2Cor521
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Old 02-07-2008, 01:21 PM   #7
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Quote:
Originally Posted by Jack Carr View Post
I am 52 worked hard all my life. Not unlike most of you. Just have a difficult time making the leap to "early retirement". In reading many of the post it looks like there are a lot of experts on the forum. Your opinion would be greatly appreciated! I have read many of the other early retirement web pages and the claims that people make seem to be unrealistic, such as retire in Thailand, or South America. My situation is as follows:

Age: 53
Married, no children
Total Investments: 2.8 million
Investment spit: 70% stocks/mutual funds, 10 bonds, 20 cash
House - Paid off value $500,000.00
Expenses without State or Federal tax- $85,000

The Retirement calulators mostly say I should be fine. But I feel that SS is an important factor, and if SS says I will collect 1,500.00 per month how can I calulate the amount if I quit at age 53, as I would assume the amount would change.

Question: Is the amount of 2.8 mil plenty with SS adding in at 66 or is there not enough cushion.

Worry and tire of running retirment calulators!
Jack "loosing confidence"
Are you retired already, and spending $60k on toys/fun?
$85k seems like an awful lot (even in a high cost of living area) of expenses to have with a paid-for house. Unless of course, there's a secondary mortgage, or really expensive vehicles to pay for.
Personally, if I had $2.8M in the bank right now I'd at least quit working 9-5, and do whatever I wanted. And we have 4 kids.
Heck, even if you withdraw at 3%, you'd have $84k take-home (well, aside from any tax implications you might have).

And congratulations on saving so well!
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Old 02-07-2008, 01:24 PM   #8
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Looks like you can easily get out if you want to. You shouldn't even need S.S. It's just icing on the cake. Congratulations and good luck.
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Old 02-07-2008, 01:34 PM   #9
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You're fine without social security, and downright affluent with it, at least at first glance.

I suggest you live with FireCalc.com after coughing up a few bucks to be a "supporter" so you have access to the flexible spending module. That will let you test out almost any set of circumstances so you get a comfort level.

The good old rule of 25 is rarely too far off barring unusual circumstances (savings should be >= 25 x expenses). 2.5 million is more than 25 x $85k. So withdrawing 4% per year to live on, corrected annually for inflation, should leave you smiling.

Congratulations! So whaddya gonna do with your spare time?
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As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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