52 YO from South Carolina - Wishing (long)

[Pilot2013]

Hi- I am 52, wife is the same (6 months ahead of me). We both work, but would like to enjoy more of life sometime relatively soon. I'll give some details, and hope that we are not judged to harshly....

I have worked in various engineering and manufacturing management jobs since 1987. Wife has worked as Admin Asst at various levels since about 1984. Both of us are still working. We both were previously married. I have 2 daughters from my previous marriage, both are grown and out of the house/college and on their own (for the most part). My wife had no children from her previous marriage, but has 2 elderly parents with very limited means that we provide some occasional, although not significant, assistance to.

Divorce, and a company bankruptcy due to asbestos litigation all but depleted my retirement savings in 1999 as unfortunately, that company matched and provided profit sharing as company stock only.
Wife had not even thought about retirement savings up to the point that we met, and she was one of the rare (maybe not too smart?) ex wives that just wanted out of her marriage and did not bring anything from former husbands retirement plan(s). I wasn't quite so lucky....

In any event, we reset our finances and retirement accounts in 2000 after all of these events (divorces, child support, college tuition, company bankruptcy). We have good income between the two of us ($~200k), which on the one hand allows for some recapturing of funds, but on the other hand gives us a lifestyle that will be hard to maintain with lower than originally planned retirement funds.

Our current situation is $564k:
My 401K - $360k;
Wife's 401K - $110k;
Company ESOP and Stock Grants - $38k;
Previous employer defined contribution pension - $56K (accessible at 65, expected value then of ~$90K)

We have no CC debt, $200k mortgage with home value est. at $320k

I would retire tomorrow if I could. Very tired of running manufacturing plants and all that involves, but not possible for sure. Would love for wife to retire in a few more years (55), and then for me to retire at latest, 60.

That's all I have for now. Just came across the site yesterday. Hoping to learn a lot and MAYBE pull in my retirement date!

 

[JoeWras]

For starters, you've done pretty well to reset after your early combined mess. So nothing harsh from me, good start. Glad you have no CC debt. Make sure your mortgage is at a rock low rate.

But be realistic. The common denominator is to ask if you ran firecalc? And what is really key is to understand your expenses, both today and in the future.

You'll find people on this site who live easily (they say) on $30k per year for a family. Others say it takes $120k plus. So see, your expense level is absolutely key when you run a program like firecalc.

You can also try to run it with an assumption that maybe you don't retire right now, but perhaps change to less demanding and life-sucking job. Etc. Play with it.

 

[Pilot2013]

Thanks Joe- Mortgage was refinanced about 2-3 years ago at 3.375. Have about 17 years left. I have started to work on my past spending information, and make some estimates on future spending, so that I can work out some numbers with firecalc.

Just looking through the forum, I see a lot of people who have planned REALLY WELL and seem to have pretty damn good portfolios! I am hoping to keep looking and see some of the strategies those a little less "insightful" have taken to move forward with ER.

 

[JoeWras]

Hang around and read here, pilot2013. I've learned a lot. The nice thing is it goes beyond early retirement. There's a lot here and excellent collective wisdom from like minded people.

When you run firecalc, make sure to get the social security stuff in there. You can also play with it by changing the years, etc.

And I was talking about maybe a "semi" retirement for you if you decide to downshift. You can also do that in firecalc by running the additional income portion numbers.

There's a lot in there for portfolio types that you can adjust. Start with the default and then do "what ifs."

One reason I asked about your spending is seeing your home value in SC. That seems a bit above average to me for SC (I live in NC and have some idea), so my vague concern is that you might have a higher spending pattern. That can kill retirement.

But it is conjecture on my part. It is up to you to be realistic with yourself on firecalc, and also share what you want here.

Other considerations on the expense side of things:
- How will you pay for health care (HC)?
- Don't forget taxes if you are drawing from retirement accounts
- Do you like to travel?
- Do you have an expensive hobby like being a pilot (hint from your name)
- Don't forget occasional one time big costs (new cars, new roofs, new appliances)

Good luck. My gut feel is you are still a bit "light" on savings, but I don't have enough information. Also, since it is all tax deferred, it limits your options on gaining access to liquidity at an earlier age. (There are solutions, read other places around here.)

 

[Pilot2013]

Joe- Thanks for all of the firecalc suggestions!

As for home value, ours is way above the median home price in our area ($140k), but I think there are a lot of "homes with wheels" that goes into that median calculation! Seriously, we purchased this home when we got custoey of my 2 daughters, adn it is overkill now. We will downsize int eh future, but to be happy (or at least keep the wife happy), will likely be in the $250k range. As I mentioned, or at least insinuated, in the initial post I made, we do have a decent income and live pretty well. Not to the point of getting our of control on debt, but not "eating beans and rice now to live better later" either.

I do have a somewhat expensive hobby (flying), although not nearly as expensive as some think. There are 3 owners to our plane, and we are in the process of adding a 4th. I know people that spend as much or more on golf!

As I also mentioned, I am in agreement that we are light on savings for thinking of retirement now, that's why I thought maybe 3 years for my wife, and 7-8 for me. Of course, I would love to learn here how I could do it sooner!

 

[rodi]

Hi Pilot2013 - welcome to the forum.

I found that getting a handle on spending (including taxes and healthcare) - then making sure I diverted EVERYTHING else to savings, was the key. Hanging out on this forum encouraged me to get more detailed in my tracking of spending. And as I tracked the spending I started getting annoyed by things that I perceived as recurring overpriced budget killers. I like cable - but can live with low-def, no premium channels - that saved me $100/month. I like smart phones, but don't need the pricy packages and am fine with a used cellphone purchased from ebay... so that saved me another $70/month... etc... Pretty soon these little cuts added up to significant spending cuts.

The more I put in savings, the less I was spending... which had a good impact on my firecalc runs.

This is a very supportive forum for folks looking to figure out how to get to retirement - especially for those looking for ways to trim their budget and not just hit the lottery.

 

[Rothman]

Hi Pilot2013 - welcome to the forum.

I found that getting a handle on spending (including taxes and healthcare) - then making sure I diverted EVERYTHING else to savings, was the key. Hanging out on this forum encouraged me to get more detailed in my tracking of spending. And as I tracked the spending I started getting annoyed by things that I perceived as recurring overpriced budget killers. I like cable - but can live with low-def, no premium channels - that saved me $100/month. I like smart phones, but don't need the pricy packages and am fine with a used cellphone purchased from ebay... so that saved me another $70/month... etc... Pretty soon these little cuts added up to significant spending cuts.

The more I put in savings, the less I was spending... which had a good impact on my firecalc runs.

This is a very supportive forum for folks looking to figure out how to get to retirement - especially for those looking for ways to trim their budget and not just hit the lottery.

+1 rodi plan, focus on maximum saving, minimum spending. This will help you answer your question on when you can make it work. I wish you the best




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[Katiek]

Welcome! As you noted, life sometimes throw curves at us that require us to adjust and reset our plans. Given the challenges, I think you're doing a good job and are focusing on the right things. Luckily, your income is good so that you're able to have significant savings by focusing on minimizing mindless spending and maximizing your savings.

 

[Gumby]

Welcome, Pilot2013. If you haven't already found it, check out our FAQ subforum, which has some of the perennially most popular discussions here. Early Retirement FAQs - Early Retirement & Financial Independence Community

 

[Pilot2013]

Played with the FireCalc today.... Using current portfolio information, I input data of wife working 3 more years, me working 5 more years, having a withdrawal of $60k/year. I used SS numbers for me drawing at 62, wife drawing at 67. Based on this, it stated 100% success with no failures. Not sure what I think of this. Need to do more research on what $60k would mean in real income (taxes, etc). I am starting to think this might me doable?

 

[NgineER]

Welcome Pilot2013. Firecalc says you are good with current portfolio, DB plan, SS and a spend of $60k. It makes sense, you should be fine as your pension alone covers your $69k expenses. Then add on two SS on top of that.
You'll only need to span the bridge to when you start collecting pension and SS.
Are your expenses really that low though? Do you include taxes and health care?

If your expenses are that low, you are good to go with your plan I'd say.

 

[JoeWras]

Welcome Pilot2013. Firecalc says you are good with current portfolio, DB plan, SS and a spend of $60k. It makes sense, you should be fine as your pension alone covers your $69k expenses. Then add on two SS on top of that.
You'll only need to span the bridge to when you start collecting pension and SS.
Are your expenses really that low though? Do you include taxes and health care?

If your expenses are that low, you are good to go with your plan I'd say.

With all due respect, molof, it was a defined contribution plan. So I think pilot essentially will have a lump sum of ~60k to 90k, not a yearly benefit. Big difference. So, let's reset and hold the phone here!

However, the good news for pilot is that firecalc is working for a 60k spending plan. I think pilot added some of the spanning features you speak of, molof.

Pilot, maybe we're broken records here, but your next big step is to really, really examine your spending. I've been entering data in detail to quicken for 15 years now and have a very good picture of my pre-retirement spending. Next step is to rework those solid numbers for retirement which include extras like health care and travel, but also have reductions like commuting fees, etc.

Rodi has great advice there. My advice is if you haven't done it yet, start accounting for *everything* to get your picture. (Yeah, I even have a category for what I spend at lunch and vending at w*rk. Sounds crazy, but these expenses reduce at retirement.

 

[2017ish]

Played with the FireCalc today.... Using current portfolio information, I input data of wife working 3 more years, me working 5 more years, having a withdrawal of $60k/year. I used SS numbers for me drawing at 62, wife drawing at 67. Based on this, it stated 100% success with no failures. Not sure what I think of this. Need to do more research on what $60k would mean in real income (taxes, etc). I am starting to think this might me doable?

I agree with what has been said, particularly by JoeWras, but your comment on social security deserves some discussion. How comfortable/cognizant are you with the pros/cons of claiming at those ages? (Personally, I would say "the cons," but ymmv.) There are some excellent books out there on claiming strategies, as well as software. The names Mike Piper and Laurence Kotlikoff could be useful in searching for information.

Here are two recent and extensive boglehead threads on the topic; I think the horse was well and truly dead at the end of each (or will be when the active one finally ends!). https://www.bogleheads.org/forum/viewtopic.php?f=2&t=159374 & https://www.bogleheads.org/forum/viewtopic.php?f=2&t=160259

______________________
ETA: WELCOME! This forum is full of knowledgeable people who are eager to assist. Hope it helps you out.

 

[Pilot2013]

Wow! Lots of good comments here, thanks! Yes, JoeWras is right, that is a lump sum, not an annual pension value. If it were Annual, I'd probably already be gone! ;-)

I agree, evaluation of spending, tax impact, HC, etc is my next steps to ATTEMPT to nail down a withdrawal amount, but just wanted to get a first look with $60k/year. Also, while I may spend a good bit now, I think determining my future (ER) spending would be directly relative to my "motivational factors and drivers" to get the hell out of the race? I could be naive, and certainly don't want to be stupid about it. Is there a thread (I am sure there is) where some that are already in the ER stage have actual real world feedback on HC impact within the new ACA environment? Also, has there been any kind of poll about what percentage of current spending that those (on average, or median) that RE'd actually saw once out? Just curious. I am always wary of the "You are going to need $25, million", and "You need to plan 95% of current spending" statements from the retirement company websites.

2017ish - I will definitely take a look at the forums you suggested, and will try to remain open minded, but I think a LOT is individual specific to their particular factors. For example: My DW (I'm starting to figure out these acronyms) family history suggests fairly long life expectancy, while mine suggests I should have RE'd at LEAST 5 years ago.

Thanks everyone, I am enjoying this and learning by the hour!

 

[2017ish]

... Also, has there been any kind of poll about what percentage of current spending that those (on average, or median) that RE'd actually saw once out? Just curious. I am always wary of the "You are going to need $25, million", and "You need to plan 95% of current spending" statements from the retirement company websites.

...

People's spending is all over the board; prior threads on the topic are not helpful in planning. Arguably the best place to look is the annual Consumer Expenditure Survey from the Bureau of Labor Statistics and the biennial Health and Retirement Study from a group at the university of Michigan.

Bottom line, however, is that you really need to build your own spending plan/budget, which may bear little resemblance to what you make now--but is likely to be a close cousin of what you spend now.

 

[JoeWras]

People's spending is all over the board; prior threads on the topic are not helpful in planning. Arguably the best place to look is the annual Consumer Expenditure Survey from the Bureau of Labor Statistics and the biennial Health and Retirement Study from a group at the university of Michigan.

Bottom line, however, is that you really need to build your own spending plan/budget, which may bear little resemblance to what you make now--but is likely to be a close cousin of what you spend now.

And there are many threads on this subject here. pilot2013: keep looking. There's a lot on this subject.

I think pilot2013's suspicions about "standard advice" ($2.5M or x% of income, etc) are well placed. From those threads, the one thing I got is that there is no standard. And finance companies have definite agendas when they give a rule of thumb. So 2017ish's bottom line is right on.

 

[NgineER]

With all due respect, molof, it was a defined contribution plan. So I think pilot essentially will have a lump sum of ~60k to 90k, not a yearly benefit. Big difference. So, let's reset and hold the phone here!

I see... my bad.

 

[bclover]

)

I agree, evaluation of spending, tax impact, HC, etc is my next steps to ATTEMPT to nail down a withdrawal amount, but just wanted to get a first look with $60k/year. Also, while I may spend a good bit now, I think determining my future (ER) spending would be directly relative to my "motivational factors and drivers" to get the hell out of the race? I could be naive, and certainly don't want to be stupid about it. Is there a thread (I am sure there is) where some that are already in the ER stage have actual real world feedback on HC impact within the new ACA environment? Also, has there been any kind of poll about what percentage of current spending that those (on average, or median) that RE'd actually saw once out? Just curious. I am always wary of the "You are going to need $25, million", and "You need to plan 95% of current spending" statements from the retirement company websites.


Thanks everyone, I am enjoying this and learning by the hour!

first of all, Welcom Pilot. next absolutely no judgment from anybody. Life throws all of us curve balls. I'm am soooo with your wife, lol, I ran first and furious away from my ex. didn't want any thing but the divorce papers, best decision ever.

that being said, I hope to retire October of 2016. what I'm doing all this year is tracking all my savings. Then about once a month I evaluate the spending. some things I've been asking, will this category shrink, grow, disappear all together or remain the same. I'm hoping this will give me an more accurate "ball pack" lol of what MY spending will be.

while I love polls and data, nothing beats getting information on how you, yourself live.

 

[Pilot2013]

The five phases....

I'm starting to think that 5 years may be too optimistic. Sucks, I really am/was hating working and all of the stress. Started thinking about potential "fun" ways that I could do some part time work to get me to SS time, but that is a lot easier said than done, and I mean just figuring out what the "fun" way would be.

I took some leave time Friday and left work early because the realization and likelihood of not meeting my goal started to sink in. Really pi$$es me off that much more about the earlier company bankruptcy, etc that killed my initial savings. I would blame myself otherwise, but I had "done the right thing" with early savings...

 

[ivinsfan]

Hold on here, no point in breathing fire,try to settle in and fine tune your planning instead of beating yourself up. You are still 52....even 7 to 8 years will get you out before age 60.

A couple of things for you to think about. You have a fairly expensive hobby and you also mentioned "making your DW happy by buying a home that is 100K more expensive then the one you have now.This will cost you extra working time and extra money.


You mentioned your DW quitting work about 5 years sooner then you even, though you are both the same age. Why? Part time work will lose a lot of it's "fun" when it's necessary to put food on the table.

Why don't you take a deep breath, regroup, start reading and studying to work out the best plan for your family and go from there!

 

[MRG]

I agree with ivivsfan. No sense in looking back and ruminating over the past. Learn from the past, but it's over. You did the best you could with the knowledge you had. I too think 7(or less) more years could be very doable if your both contributing. Of couse it depends on your spending and savings. Best wishes to you.

From the FAQ here's some great stickys. This is just a subset of the link Gumby posted. There's more out there too.

Questions to ask:
http://www.early-retirement.org/forums/showthread.php?t=69999

When to take SS:
http://www.early-retirement.org/forums/showthread.php?t=69366

Best of the boards:
http://www.early-retirement.org/forums/showthread.php?t=33198

Slang and TLAs:
http://www.early-retirement.org/forums/showthread.php?t=34884

 

[Pilot2013]

I'll check if I made a mistake, but pretty sure I was saying would be downsizing by close to $100k. If I said it wrong, that's what I meant.




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[ivinsfan]

Sorry I got that wrong,... the question was would you actually have a 100K after you swapped homes .....Keep up your spirits and work those numbers!

 

[daylatedollarshort]

We have good income between the two of us ($~200k), which on the one hand allows for some recapturing of funds, but on the other hand gives us a lifestyle that will be hard to maintain with lower than originally planned retirement funds.

What we did was look for ways to trim recurring expenses and increase passive income. We also compared our expenses to the Consumer Expenditure Survey to look for relatively painless opportunities to cut back.

Our taxes dropped quite a bit with a lower AGI in semi-ER, so that was an easy cut. I don't miss paying more in income and SS taxes. I found a better hair stylist with lower rates. We are switching over to all solar and LED lighting. We make pizza in a Presto Pizza oven that uses 70% less energy than the wall oven. We switched from a 1% cash back credit card to 2% back. We started putting our insurance on our credits cards for the 2% back instead of paying cash. With lower expenses we became FI and once FI we could eliminate life and disability insurance.

We just found a few hundred items like that and they all added up to being able to keep the same basic lifestyle, same house and actually nicer cars (better MPG and repair records) with much lower overall expenses. I wish we had done this years ago. If your expenses are already optimized this won't help, but our expenses were not optimized so we saved a bundle doing this. Every $1K you can cut from annual expenses might mean needing $50K less over a 50 year retirement.

 

[purplesky]

Hi- I am 52, wife is the same (6 months ahead of me). We both work, but would like to enjoy more of life sometime relatively soon. I'll give some details, and hope that we are not judged to harshly....

I have worked in various engineering and manufacturing management jobs since 1987. Wife has worked as Admin Asst at various levels since about 1984. Both of us are still working. We both were previously married. I have 2 daughters from my previous marriage, both are grown and out of the house/college and on their own (for the most part). My wife had no children from her previous marriage, but has 2 elderly parents with very limited means that we provide some occasional, although not significant, assistance to.

Divorce, and a company bankruptcy due to asbestos litigation all but depleted my retirement savings in 1999 as unfortunately, that company matched and provided profit sharing as company stock only.
Wife had not even thought about retirement savings up to the point that we met, and she was one of the rare (maybe not too smart?) ex wives that just wanted out of her marriage and did not bring anything from former husbands retirement plan(s). I wasn't quite so lucky....

In any event, we reset our finances and retirement accounts in 2000 after all of these events (divorces, child support, college tuition, company bankruptcy). We have good income between the two of us ($~200k), which on the one hand allows for some recapturing of funds, but on the other hand gives us a lifestyle that will be hard to maintain with lower than originally planned retirement funds.

Our current situation is $564k:
My 401K - $360k;
Wife's 401K - $110k;
Company ESOP and Stock Grants - $38k;
Previous employer defined contribution pension - $56K (accessible at 65, expected value then of ~$90K)

We have no CC debt, $200k mortgage with home value est. at $320k

I would retire tomorrow if I could. Very tired of running manufacturing plants and all that involves, but not possible for sure. Would love for wife to retire in a few more years (55), and then for me to retire at latest, 60.

That's all I have for now. Just came across the site yesterday. Hoping to learn a lot and MAYBE pull in my retirement date!

If you and your wife can both max out your 401ks and Roths doing the catch up contributions you will have no problem retiring at 60.

You are in the 8 to 10 year home stretch savings wise. You have enough saved now to build on. Just keep your eye on the age 60 carrot and super save.