55 yrs old - Should I hit the eject button in 2020?

[SouthBeachGuy]

Hi folks,

55 Years old and worked many years for mega corps which is slowly killing my soul as each day passes.

700K IRA (50/50)
500K Taxable Accounts / CD / MM
300K home (no mortgage)

No debt at all / No State Income tax

Projected SS FRA (67) 33K / Spouse 16K
Retirement Budget 50K - 60K

Health care ACA or Medishare worst-case

FireCalc looks very doable

Thoughts or suggestions? Can 2020 be the FIRE Year?

 

[GoBears]

Need more info. What are your annual expenses? Do those expenses include income tax, healthcare expenditures, a reserve to cover home repairs, car replacement, etc.? I won’t second guess FireCalc, but its analysis is only as good as the data entered/assumptions made.

 

[Dtail]

Need more info. What are your annual expenses? Do those expenses include income tax, healthcare expenditures, a reserve to cover home repairs, car replacement, etc.? I won’t second guess FireCalc, but its analysis is only as good as the data entered/assumptions made.

He stated his retirement budget is 50-60k, but not clear if it includes all expenses mentioned above.

 

[Dtail]

Ran the numbers through Firecalc assuming your DW is the same age and received 100% success rate.
Since you have a good sized Taxable account, you should continue to be able to manage your MAGI for ACA tax subsidies.

 

[joeea]

55 Years old and worked many years for mega corps which is slowly killing my soul as each day passes.

You could choose to find a job in a non soul-killing company.

Retirement Budget 50K - 60K

Health care ACA or Medishare worst-case

Does this budget include healthcare?

FireCalc looks very doable

What does "doable" mean here?

Can 2020 be the FIRE Year?

If 60k includes all expenses, then probably yes.
If not, then maybe.

 

[SouthBeachGuy]

Yes considering Roth conversion or a 72t to ensure I fall between the ACA range.

Any thoughts on the 72t?

 

[SouthBeachGuy]

Excellent points

Yes based on assumptions that the ACA will be around which is the biggest risk I can see.

. My cars are fairly new and we normally keep them 10 plus years My non discretionary budget with ACA is 40k and we are healthy. In reality my Fire will likely be more a transition to another area. Been in the same field for over 20 years and looking for a change. Not sure what at the moment so may take a short sabbatacal.

 

[tmm99]

Ran the numbers through Firecalc assuming your DW is the same age and received 100% success rate.
Since you have a good sized Taxable account, you should continue to be able to manage your MAGI for ACA tax subsidies.

Really? I did it to Age 95 with 50% equity and only received 94.5%. I didn't consider the home in the total number (used $1.2M as the size of the portfolio.)

 

[Mdlerth]

Ready, FIRE, aim?

You could choose to find a job in a non soul-killing company.

+1

I've lost count of how many posts I read on this forum from people seeking early retirement as an escape from an unpleasant w*rk environment. Obviously such a motivation has an element of logic to it. After all, if the j*b weren't an imposition the employer wouldn't have to pay folks to do it.

However, I frequently wonder if what the FIRE aspirant might truly be seeking is a different level of exchange between their time/talents/energy and the compensation offered.

Consider that "talents" encompass a huge range of abilities and virtues such as patience and wisdom in addition to technical expertise in one's profession. Sometimes the hardest part of holding a job is holding one's tongue; I can well envision practicing that skill to be excruciating.

Similarly, "compensation" is more than just financial. Everything they give you, from the paycheck to the attitude, comprises your compensation. We've all known managers who treat their employees as human beings, and others who do not.

That's why "escape" may not mean exiting the w*rkforce as much as it means exiting your w*rkplace.

Yeah, I know this is a forum not merely about retiring but retiring early. So what I'm suggesting here might border on heresy. (I prefer the term "devil's advocate".) If you consider RE as a journey, it makes sense to give a bit more thought to your destination than your origin.

Might some of your urgency to get out dissipate if you did something else besides toil for some corporate exploiter? Something that pays less dough but more satisfaction: hire in at a microbrewery, coach youth sports, give sailing lessons, become a historical re-enactor, perform music or stand-up comedy? Something you'd just about do for free, since you don't actually need the money?

Your numbers suggest you could FIRE at will. Make sure you know what your target is before pulling the trigger. Good luck.

 

[pb4uski]

.... Thoughts or suggestions? Can 2020 be the FIRE Year?

I think it is looking favorable if your 60k of spending is comprehensive and includes health insurance and health care, federal income taxes, car replacements, HVAC repairs, etc.

Looks like you'll get $49k a year in SS combined but have a 12 year gap until SS starts so a SS side fund would need $588k... leaving $612k nestegg.... at a 3.5% WR that would generate $21k of inflation adjusted withdrawals... which when combined with your $49k of SS would be $70k a year of cash flow for spending.

If one of you passes.... then the side fund would only be $396k... leaving $804k nestegg and $28k of withdrawals and $61k of cash flow for spending.

Another risk would be a 25% reduction in SS in 2034 since so much of your retirement inflows are from SS.

 

[joeea]

I've lost count of how many posts I read on this forum from people seeking early retirement as an escape from an unpleasant w*rk environment.

I have never understood why people don't seek enjoyment in their work throughout their career.

After all, if the j*b weren't an imposition the employer wouldn't have to pay folks to do it.

Perhaps I've been lucky, but I've always found work I enjoyed. When it became significantly less enjoyable, I moved on to a different job and sometimes to a different career.

Your numbers suggest you could FIRE at will. Make sure you know what your target is before pulling the trigger.

Among my circle of friends, the most successful are those that retired to something enjoyable rather than just away from something they didn't enjoy.

 

[CaliKid]

I like your idea of a sabbatical and then I would recommend you look for something different work-wise. I would stash a little more cash and get through the next down economic cycle. I completely modified my career over the last few years. I am a business owner so it's a little different but by analogy. I am making about 20-30% less than I used to and working about 60-70% less than I used to. I'll take the less pay for significantly less work. It has made life so much more enjoyable including going to work as my time in the office is short and I take home much less stress as my workload is just lighter all the way around. Look to reinvent your work self before you pull the plug. Good luck.

 

[Dtail]

Really? I did it to Age 95 with 50% equity and only received 94.5%. I didn't consider the home in the total number (used $1.2M as the size of the portfolio.)

Did you use SS at their full numbers or discount it? I used the full numbers.

 

[tmm99]

Did you use SS at their full numbers or discount it? I used the full numbers.

Projected SS FRA (67) 33K / Spouse 16K
I didn't discount the OP's 33K SS, but ignored the spouse SS altogether.
Maybe that's not the right way to to do it, but that's how I do mine, as if the spouse dies early on (hopefully not, but there's that possibility), the spouse SS will be gone as well.

 

[Dtail]

Projected SS FRA (67) 33K / Spouse 16K
I didn't discount the OP's 33K SS, but ignored the spouse SS altogether.
Maybe that's not the right way to to do it, but that's how I do mine, as if the spouse dies early on (hopefully not, but there's that possibility), the spouse SS will be gone as well.

Well there is your difference.

 

[badatmath]

I have never understood why people don't seek enjoyment in their work throughout their career.

I had a job I liked, it became obsolete. I moved to a different job which I hated. Moved again, liked it, and I was reorg'd out of it to another one. Endured that until I could get a job I liked and was forced out in another reorg. But all this is at the same actual employer in order to score that magic pension/insurance I thought I needed. . . .

I guess the point I am making it it seemed like a good idea at the time . . . even if looking back I guess it wasn't. Esp when I have 4 years to go and we are seeing signs of another forced layoff or reassignment brewing soon.