52 and looking at ER in 2015- super dreamer?

[pb4uski]

Oh boy, had not considered paying off the home with 401K at 55. We can forgoe the 10% penalty yes but I believe it's within the 72t IRS rule guidelines of equal withdraws over a given 5 year time period. Let me check that out.

Also I need to spend more time on other retirement calcs like you suggest. Appreciate all the insight here. Lots of great input!

Just to be clear I was not necessarily suggesting that you tap the 401k to pay off the mortgage. What I was suggesting is that in calculating your withdrawals that you use 3.5% of your 401k net of your mortgage since the 50k of living expenses is before mortgage payments.

 

[MBAustin]

Have you looked at another refi? You should be able to get 15-year under 3% which would make your extra payments go that much further.

 

[supernova72]

A few more datapoints to consider: Taxes


50K gross, $5,950 deductions, $3,800 exemptions, $40,250 Taxable Income
Federal tax bill: $6,099
WA state tax bill: $0


see -> TurboTax® TaxCaster - Free Tax Calculator - Free Tax Estimator


What if you sold the house and rented.
Is it better to buy or rent? See-> Is It Better to Buy or Rent? - Interactive Graphic - NYTimes.com


The sale might result in:


$400k in taxable investments (assuming no capital gains owed on sale of house)
$18,000 annual rent


68k Annual expenses (includes rent)
<36k> Annual pension payout
32k Needed from other sources


scenario 1:
Assuming 16k drawn from the 400k taxable portfolio (4%), 16k drawn from the 401k (2%)
52K gross (36k+16k), $5,950 deductions, $3,800 exemptions, $42,250 Taxable Income
Federal tax bill: $6,599
WA state tax bill: $0


scenario 2:
Assuming 32k drawn from the 400k taxable portfolio (8%)
36K gross, $5,950 deductions, $3,800 exemptions, $26,250 Taxable Income
Federal tax bill: $3,506
WA state tax bill: $0


Numbers is hard


zedd

Thanks much Zedd. All good scenario's to consider and had not thought about selling and renting for whatever reason. The thought of a $3500 tax bill is appealing however.

 

[supernova72]

And she might be willing to make lunch and cook at home. YMMV

Just think of the savings.

omni

Based on Zedd and Omni 550 I may need to dust off those Thailand vacation pics and see what the options are. More to follow this evening... Having red chicken curry for lunch sounds more appealing than the Taco Bell #3 Value Meal.

 

[zedd]

One step at a time.

In the meantime might I suggest
Thai Ginger :: Factoria - Lunch

Love their phad thai

 

[supernova72]

... and of course you could reduce the $6,099 Federal tax bill down to $3,709 by getting married to that Thai lady. Just sayin

Ok, I went back and looked at my last budget trip to Thailand. This was a friend I met who could reduce my tax obligation.

 

[omni550]

Ok, I went back and looked at my last budget trip to Thailand. This was a friend I met who could reduce my tax obligation.

Is the Thai culture one of those where you marry the girl and end up supporting her whole family?

omni

 

[supernova72]

Have you looked at another refi? You should be able to get 15-year under 3% which would make your extra payments go that much further.

Good point on looking again at another refi. My credit union now offers a "no fee" 12 year refi option from my current loan. I'll check the 15 year out too and see how much the rates have dropped from the 4% I currently have. I got 4% with negative discount points so it zero'd out that part of the loan cost.

 

[supernova72]

Is the Thai culture one of those where you marry the girl and end up supporting her whole family?

omni

Yes, good point. Almost all of the ladies you meet are young and have family up north in Thailand. They move to Bangkok or Pattaya and find men they call "customers" and send money home to support their own kids and extended family. It could get expensive if you are not careful. Better to just go have dinner...

 

[supernova72]

One step at a time.

In the meantime might I suggest
Thai Ginger :: Factoria - Lunch

Love their phad thai

Thanks Zedd...sounds like you know the area well.

BTW, O'Char is closed in Eastgate now so one less Thai food option. Cheers.

 

[jphripjah]

I think you should sell the house and take that nice 36k pension and 401(k) and move to Thailand. It will go a long way there, even with a 25 year old wife. Just don't end up like this guy. Brit killed and barbecued after split from Thai bride | Mail Online

 

[tdv2]

Is the Thai culture one of those where you marry the girl and end up supporting her whole family?

omni

Yes it is. I know someone who is in that mode right now.

 

[supernova72]

I think you should sell the house and take that nice 36k pension and 401(k) and move to Thailand. It will go a long way there, even with a 25 year old wife. Just don't end up like this guy. Brit killed and barbecued after split from Thai bride | Mail Online

Whoa, that is harsh. I have seen 70 yr old ex-pat guys crying in their beer about their Thai wives leaving them once they cut back on the spending or suggest a more moderate lifestyle. The guys "fall in love" and then realiity hits once the Thai wife sees a better opportunity. I realize this is not a relationhip forum but ultimately it becomes financial. Next thing they know they are no money (bank accounts drained, etc). and no hot 25 yr old Thai wife either.

BUT, being killed and barabcued sounds even worse to me. I wonder who funded the 25 lbs of charcoal?? Just kidding.

I'm no Thai expert but when they say "me love you long time" take that with the smallest grain of salt known to mankind...

 

[heeyy_joe]

Good job and kudos to you! Sell the house, downsize a bit, retire.

You'll do fine!

 

[jphripjah]

Maybe you should try some trips to Latin America if you don't want to move to Southeast Asia. Inexpensive living, beautiful women, closer to the U.S. I actually like Thailand and Cambodia myself and would plan to spend a lot of time there once I retire, but I'll likely still keep a place in the U.S.

 

[supernova72]

Good job and kudos to you! Sell the house, downsize a bit, retire.

You'll do fine!

Thanks! Downsizing the home seems to be a popular option...I can't go much smaller but could go "cheaper". Cheers.

 

[supernova72]

Maybe you should try some trips to Latin America if you don't want to move to Southeast Asia. Inexpensive living, beautiful women, closer to the U.S. I actually like Thailand and Cambodia myself and would plan to spend a lot of time there once I retire, but I'll likely still keep a place in the U.S.

Good points on central america. I hear good things about Panama and hope to get there in the next year. Like you say much closer and not the $1,000 airfare like to SE Asia.

Cambodia is also on this list...not sure how it compares to Thailand but it's close. I heard the ladies are also very nice and pretty there. Cheers.

 

[supernova72]

re-visited FIRECalc

Welcome. Have you played with FIRECalc? I think you're cutting it really close, too close for comfort if it were me. We have similar balance sheets, except I don't have a pension, and I wouldn't dream of RE with your projected numbers even if I did have one. Is your pension COLA? That might make a little difference in your favor. I'd look into cutting expenses and stockpiling more into savings, and figure out a way to get rid of that mortgage payment before calling it quits.

Hi, I went in the went through FIRECalc again with what I believe is a realistic scenario of what my situation is. One major adjustment I made from the default is doing a 50/50 mix between equities and bonds (vs. 75% equities).


I also adjusted my require income to $60K a year which is a bit of a compromise. FIRECalc said 93% chance of success with that. I adjusted my retirement year to 2016 since I will be 55 in October of 2015 it makes sense to work the remainder of the year (given we get the Holidays paid for).

I need to play around a bit more with the different inputs. 93% almost seems too good to be true given my fairly low savings projection ($750K).

Once I added in the pension at $36K a year the world got better in a hurry. Once I "unchecked" COLA or adjusted for inflation it brought it back to reality.

Thanks again for all the help on this forum. It's been very valuable. I need to try some of the other calculators listed in this site. I've only done one other
one which was the Monte Carlo method. Cheers.