smurray5991
Recycles dryer sheets
- Joined
- Nov 4, 2012
- Messages
- 103
Hi all – and thanks for a terrific forum! I have spent many MANY hours reading past posts, and it is so comforting (and informative) knowing there is this entire community of FIREs out there to emulate!. Essentially trying to reassure myself about my financial situation to see if I can RE a bit earlier than I would have said I would, not because I haven’t wanted to, but because I’m worried about whether I can do it from a financial perspective.
My anxiety about RE comes entirely from the fact that because I’m still so young and have a few years to go before either my pension or SS kick in (especially since I want to draw the maximum from both), I will have to ‘draw down’ on my assets in the early years at a higher rate than I would have liked. I have run the numbers in many retirement calculators, including FIRECalc, and they all say I should be okay for a lifespan of 95 years old or longer, even with an annual income need of $80,000 (even though I don’t need that much actually).
Apologies in advance for the long and detailed post, but I’ve noticed people can be most helpful with their advice when they know the full story behind a question.
Here is my situation:
57 years old; single; no kids. I’m a federal employee whose job was just unexpectedly eliminated ($152000+) and will be out of work as of March 2013!!! Curiously (or probably not for the FIRE audience! J), despite the shock and the nervousness about no income, I am in many respects relieved because I had been pretty burnt out for a long time and ready to get out of such a political environment and have a much lower stress lifestyle. I have zero anxiety about how I’ll spend my time in RE, etc. – this isn’t to say I have every next step planned out, but I know myself well enough to know that I will find very interesting and fulfilling ways to live, and am really looking forward to being healthier and more balanced than I have been able to be with a high stress job for so many years. My concerns are strictly on the affordability and FI aspects of FIRE, especially when I read the gloomy news about fiscal cliffs, Europe tanking, possibility of recession, etc. etc. etc.
My financials (all figures in today’s dollars, obviously):
Assets:
$360,000 Federal TSP (401k equivalent – non-Roth)
$180,000 Roth IRAs
$500,000 taxable accounts – mainly broad mutual funds but some individual stocks I was gifted by parents many years ago
$60K cash
TOTAL: $1,100,000
Overall asset allocation (including both retirement and non-retirement accounts):
Domestic Bonds: 11%
Large Cap: 45%
Small Cap: 25%
International: 12%
Cash: 7%
[NOTE: I recognize that this is probably too aggressive an AA for retirement, but the prospect of RE came on suddenly, so I haven’t adjusted anything yet…..]
Liabilities:
$140,000 remaining on mortgage for house worth $460,000 (10 more years @4.25%)
No other debt
Retirement income:
I will have about 16 years of federal service at the time I separate, which means that I will have a pension as well as Social Security coming to me eventually.
Now:
$13,000 annual tax-free gift from mother (ongoing, until her death)
Future:
$24,000 federal pension starting at 62
$36,000 SS starting at 70 (I don’t want to take it before then if I can help it!!)
Retirement expenditures:
(Note that I have been anally retentively keeping track of ALL living expenses every month since 1999, so I have an incredibly detailed and accurate sense of where my money goes, and what I’ll need going forward. The figures below are based on my most recent year’s expenditures, since those are the highest, adjusted very conservatively for a few things I won’t spend in retirement, and adding in the cost of individual health care coverage until Medicare).
Now until 2019 (age 64): $70,000 pre-tax (includes ongoing mortgage, and individual health care costs until Medicare kicks in)
(Note that I can continue federal coverage through COBRA until late 2014, then I’m on my own until 2017 (truly individual plan), and then I can purchase federal coverage again once my federal pension kicks in in 2017 until Medicare in 2020)
2020-2022 (age 65-67): $63,000 (ongoing mortgage, but Medicare kicks in)
2023-2050 (age 68-95): $45,000 (mortgage paid, Medicare kicks in)
Beyond all this, I probably will receive some inheritance from my parents’ estate upon the death of my 83 yr old mother (father died many years ago). However, just to be extremely conservative, I have NOT factored in this inheritance in any of my running of the retirement calculators, because you never know what might happen and whether my mom might need those resources herself at some point. (But FYI, the inheritance would probably be $500-$750K – equivalent amount going to my brother).
Anyway, those are all the details. My ideal situation would be not to have to work at all for money EVER AGAIN, but really want the critical and realistic eye of experienced FIREs to give me your unvarnished opinions and advice. Thanks for your patience in reading all of this, and for sharing your wisdom.
My anxiety about RE comes entirely from the fact that because I’m still so young and have a few years to go before either my pension or SS kick in (especially since I want to draw the maximum from both), I will have to ‘draw down’ on my assets in the early years at a higher rate than I would have liked. I have run the numbers in many retirement calculators, including FIRECalc, and they all say I should be okay for a lifespan of 95 years old or longer, even with an annual income need of $80,000 (even though I don’t need that much actually).
Apologies in advance for the long and detailed post, but I’ve noticed people can be most helpful with their advice when they know the full story behind a question.
Here is my situation:
57 years old; single; no kids. I’m a federal employee whose job was just unexpectedly eliminated ($152000+) and will be out of work as of March 2013!!! Curiously (or probably not for the FIRE audience! J), despite the shock and the nervousness about no income, I am in many respects relieved because I had been pretty burnt out for a long time and ready to get out of such a political environment and have a much lower stress lifestyle. I have zero anxiety about how I’ll spend my time in RE, etc. – this isn’t to say I have every next step planned out, but I know myself well enough to know that I will find very interesting and fulfilling ways to live, and am really looking forward to being healthier and more balanced than I have been able to be with a high stress job for so many years. My concerns are strictly on the affordability and FI aspects of FIRE, especially when I read the gloomy news about fiscal cliffs, Europe tanking, possibility of recession, etc. etc. etc.
My financials (all figures in today’s dollars, obviously):
Assets:
$360,000 Federal TSP (401k equivalent – non-Roth)
$180,000 Roth IRAs
$500,000 taxable accounts – mainly broad mutual funds but some individual stocks I was gifted by parents many years ago
$60K cash
TOTAL: $1,100,000
Overall asset allocation (including both retirement and non-retirement accounts):
Domestic Bonds: 11%
Large Cap: 45%
Small Cap: 25%
International: 12%
Cash: 7%
[NOTE: I recognize that this is probably too aggressive an AA for retirement, but the prospect of RE came on suddenly, so I haven’t adjusted anything yet…..]
Liabilities:
$140,000 remaining on mortgage for house worth $460,000 (10 more years @4.25%)
No other debt
Retirement income:
I will have about 16 years of federal service at the time I separate, which means that I will have a pension as well as Social Security coming to me eventually.
Now:
$13,000 annual tax-free gift from mother (ongoing, until her death)
Future:
$24,000 federal pension starting at 62
$36,000 SS starting at 70 (I don’t want to take it before then if I can help it!!)
Retirement expenditures:
(Note that I have been anally retentively keeping track of ALL living expenses every month since 1999, so I have an incredibly detailed and accurate sense of where my money goes, and what I’ll need going forward. The figures below are based on my most recent year’s expenditures, since those are the highest, adjusted very conservatively for a few things I won’t spend in retirement, and adding in the cost of individual health care coverage until Medicare).
Now until 2019 (age 64): $70,000 pre-tax (includes ongoing mortgage, and individual health care costs until Medicare kicks in)
(Note that I can continue federal coverage through COBRA until late 2014, then I’m on my own until 2017 (truly individual plan), and then I can purchase federal coverage again once my federal pension kicks in in 2017 until Medicare in 2020)
2020-2022 (age 65-67): $63,000 (ongoing mortgage, but Medicare kicks in)
2023-2050 (age 68-95): $45,000 (mortgage paid, Medicare kicks in)
Beyond all this, I probably will receive some inheritance from my parents’ estate upon the death of my 83 yr old mother (father died many years ago). However, just to be extremely conservative, I have NOT factored in this inheritance in any of my running of the retirement calculators, because you never know what might happen and whether my mom might need those resources herself at some point. (But FYI, the inheritance would probably be $500-$750K – equivalent amount going to my brother).
Anyway, those are all the details. My ideal situation would be not to have to work at all for money EVER AGAIN, but really want the critical and realistic eye of experienced FIREs to give me your unvarnished opinions and advice. Thanks for your patience in reading all of this, and for sharing your wisdom.
