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56 and just received the ER package
Old 03-04-2014, 09:28 AM   #1
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56 and just received the ER package

Hi,

I am 56 and just received "the package" from the Mega Corp after 33 years. DW is absolutely freaked out by it as she just retired last year. Some things about us - we have about 3.6 million in stocks and bonds, split about 50/50 in before tax holdings and after tax holdings, and at a 65/35 stock/bond split. We have no debt and no children at home and all their education is paid off. We just built our "downsized" dream retirement home and have no mortgage on it. DW recieves a pension of about $1000 month, and is just starting SS in May at 63 1/2 (she robbed the cradle). I am eligible for a pension of about $2000/month, but plan to put it off for a while as it grows about 5% a year if it is not used. The package will pay my salary ($125,000 annually) until July of 2015, when I will be almost 58. When DW retired, we started a 72T distribution of $85,000 annually to have extra cash to enjoy our new house and ourselves. That will run for 5 years, until 2019.

I have run all types of calculations on the different web sites and with our FA, and all show us at 100% success rate. We do have to get a better handle on our expenses as we will spend about $140,000 per year including taxes.

Insurance is one of our concerns. It will be paid for until Nov 2014 by the company, then we will pay Cobra payments of about $1200 per month until Sept 2015, when DW goes on Medicare. After that we will get her a supplemental policy and I will go on a high deductable plan. Haven't spent anytime looking at plans yet as it is still 18 months away, but I like to plan ahead.

I keep telling my DW finacially we will be fine and our life style will not need to change. As I am still young, another job, although less stress and headaches, will be in the plans.

Any suggestions on how to better approach this with my DW to calm her down some, and also any approaches to starting a new job search this late in one's career?

thanks
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Old 03-04-2014, 09:43 AM   #2
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Welcome to the forum, and congratulations!

As for the job search, you could start one if you wish, but why bother? If you want another job just to have something to do, then figure out what type of job would be a lot of fun. But I see no need to put pressure on yourself to be in any hurry.

If your DW does not understand how to assess your financial stability, you may have to run a few different reports, such as Fidelity RIP, Quicken Lifetime Planner, or Vanguard Nest Egg Calculator. But I suspect between the pensions and social security, you have more than enough to cover your expenses.

$140K in expenses are a bit high, BTW, but you really do have enough. If there is some fat you could cut out without it mattering much, that might not be a bad idea. But I don't see it being absolutely necessary.

Just enjoy the fantastic situation you find yourself in and spend some time celebrating. Work will always be there if you want it later. There is no rush.
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Old 03-04-2014, 09:55 AM   #3
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Welcome IndyGolfer. And congratulations on the package - I wish I had been offered one!

Change is hard. From what you wrote, it sounds like your DW just needs time to digest this new opportunity. Or perhaps she like having the house to herself and is concerned about the disruption to her retirement lifestyle. You may just need to tell her that you really want to do this and just do it.

The KISS analysis is that you need $140k to live on and will receive $36k once your pensions are on line (igniring SS) so your "gap" is $104k a year. Let's say that you defer your pension from when your severance runs out until you are 65 - that would use $168k and reduce your nestegg from $3.6m to $3.4m. Your $104k need in relation to $3.4m is a hair over 3% - very conservative. Absent asteroids, you're all set financially.

I ERd two years ago at 56. Best this I ever did. Go for it.

Medical insurance should not be a problem given your numbers. Check out healthsherpa.com to get some numbers based on your zip code and ages. I suspect it will be a tad more than your COBRA.
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Old 03-04-2014, 09:57 AM   #4
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...As for the job search, you could start one if you wish, but why bother? ....
+1
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Old 03-04-2014, 10:23 AM   #5
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Good things come to those who are prepared.
Congratulations!
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Old 03-04-2014, 11:14 AM   #6
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You situation brings to mind a phrase in a song: "Go on, take the money and run" You're in great shape- go enjoy what you worked for.
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Old 03-04-2014, 11:37 AM   #7
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thanks to everyone's quick responses. Part of my DW's freaking out is she worked later in her years than I am, and somewhere that bothers her. And also part of it is she worked her entire life and now does enjoy being home in the new house alone doing whatever she feels like without me there.

And I thought the financial part was going to be the difficult part!
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Old 03-04-2014, 11:39 AM   #8
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This might be a good time to read the current thread "More Arguing After ER" if you haven't already done so, and see if any of this might apply to the two of you.
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Old 03-04-2014, 11:40 AM   #9
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I divided 3.6 million by 140k and it would take over 25 years to go through all your money. Tell your wife that you are fine.
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Old 03-04-2014, 11:45 AM   #10
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Originally Posted by Indy Golfer View Post
I keep telling my DW finacially we will be fine and our life style will not need to change. As I am still young, another job, although less stress and headaches, will be in the plans.

Any suggestions on how to better approach this with my DW to calm her down some, and also any approaches to starting a new job search this late in one's career?

thanks
I had a similar issue years back when DH's job was transferred to another state and I didn't want to move. I had a friend who was a financial planner come over and go over all our numbers with him and he agreed to just be laid off instead of move. (He got rehired right away by a different department that had not relocated anyway.)

His co-workers who moved had their jobs all outsourced to another country soon after the relocation, so in the end we were better off not selling the house and uprooting the kids and then still have him get laid off anyway.

I have not looked for a job in my fifties. I did in my forties. I worked in IT so I just went back to school to update my skills and learn whatever was new and marketable at the time. I built up a portfolio of hobby and nonprofit work to get my first contract.

Good luck. It sounds like you are in great shape and don't need to work if you don't want to. We had expenses like yours and were kind of amazed at when we had more free time to review all our expense items how much we could cut without changing our basic lifestyle. If you can cut $20K a year then there's $1M less you need in retirement funding, assuming a 50 year retirement horizon. We figured out that at our ages our ROI was greater on cutting our annual run rate than it was working full time another year or two.
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Old 03-04-2014, 11:47 AM   #11
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(I only dream about getting an ER package but my megacorp, as a policy, never does that. I envy you.)

I simply don't understand your wife's reaction. Perhaps, you should take her to firecalc.com and let her run her own figures.
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Old 03-04-2014, 12:30 PM   #12
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thanks to everyone's quick responses. Part of my DW's freaking out is she worked later in her years than I am, and somewhere that bothers her. And also part of it is she worked her entire life and now does enjoy being home in the new house alone doing whatever she feels like without me there.

And I thought the financial part was going to be the difficult part!
Simple solution- Play 36 daily M-F & she'll never know the difference vs when you were w#rking

Congrats on your success story, and Welcome Aboard!!!!
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Old 03-04-2014, 01:00 PM   #13
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Your assets are plenty to be safe and still maintain your current spending rates. That seems high to me, but your area may be high COL. Or you just like to spend a lot on stuff, travel, entertainment, whatever. That is a moot point though as you have sufficient assets to cover your current spending.

So take the package and be happy. Do you have a hobby that you can do more of?
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Old 03-04-2014, 03:55 PM   #14
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......So take the package and be happy. Do you have a hobby that you can do more of?
Didn't you notice his user name "Indy Golfer"?
Golfers are notorious for wasting spending too much time on or around the course. Beyond stretching the typical 4hr round into 5:30 or 6hrs,there's the driving range, practice greens, and telling endless stories at the 19th Hole (aka course's bar & grill). Every course seems to have a few retired guys who might live there if they could.
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Old 03-04-2014, 05:05 PM   #15
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Didn't you notice his user name "Indy Golfer"?
Golfers are notorious for wasting spending too much time on or around the course. Beyond stretching the typical 4hr round into 5:30 or 6hrs,there's the driving range, practice greens, and telling endless stories at the 19th Hole (aka course's bar & grill). Every course seems to have a few retired guys who might live there if they could.
Can easily replace a full time job. Easy!
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Old 03-05-2014, 12:23 AM   #16
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Time to check for sure. Maybe having a trusted neutral person go over the finances with you both together. That may help her from the finial perspective. Then there's the more difficult emotional part for her. That you two will need to talk through to determine how to make life even more enjoyable during retirement.
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Old 03-05-2014, 07:31 AM   #17
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ERhoosier - I am still laughing at your response because those were the first words out of my DW's mouth - all you are going to do is play golf all the time now -

We each have enough going on that we will be spending time doing our own thing daily so I don't think we will get in each other's way

Getting over the emotional part is going to take some time - with her retiring at an higher age than I will is not sitting well at this point. This is something we will be talking about for a while.

On our budget, I do have a lot of fluff in it for travel, gifts, shopping, etc., but that is my nature to be over conservative. We can do less but I have used this figure on all the calculators. She has been to our FA with me and he has told her we are in great shape - it just makes her nervous.

thanks for everyone's thoughts
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Old 03-05-2014, 08:31 AM   #18
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thanks to everyone's quick responses. Part of my DW's freaking out is she worked later in her years than I am, and somewhere that bothers her. And also part of it is she worked her entire life and now does enjoy being home in the new house alone doing whatever she feels like without me there.

And I thought the financial part was going to be the difficult part!
Looking at the total, it is possible you could find an easy $50K by firing the advisor. In two years you'd have enough saved in your dresser drawer to build - a detached garage. You stay there during the day, and walk in the back door just like you've done all these years. You need wireless, refrigerator, couch, power tools, and not much else...
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Old 03-05-2014, 09:17 AM   #19
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My husband and I have a big enough house that we can be together and be alone at the same time if we wish. I think the change is novel to her. Also, we have been drilled into thinking ER is age 62 (I decided ER by 55 when I was in my 20s) and that might be freaking her out. Probably wouldn't her to honestly discuss her needs for her alone time and acknowledge that she needs that and it's ok.
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Old 03-05-2014, 09:29 AM   #20
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My husband and I have a big enough house that we can be together and be alone at the same time if we wish.
That's a really good point. I see a lot of comments on downsizing a home after ER, and I often wonder if people try to predict what it will be like to be in a small home where there is little room to escape when you want some alone time.
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