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A man, a pension, a plan.
Old 07-29-2008, 10:35 PM   #1
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A man, a pension, a plan.

Hello.

I'm a 27 y.o. boy just starting out on the ER path.

Financially:

Assets:
Traditional Government-style Pension (3 years in, 22 to go).
401(k): $11k (contributing 10% of Gross)
Roth IRA: $500 or so (contributing 3% of Net)
House: $40k in equity, paid off in 21 years.

Liabilities:
House: $261k
Car: $14k

So serious negative net worth at the moment, but doesn't bother me too much.

My GF is not concerned about money (makes little, spends less) and makes me extremely happy. Two kids are en route in the next few years.

One problem I have (I hope some of the more experienced members can enlighten me) is that I love the work I do (Librarian at a small neighborhood library) but cannot stop thinking about retiring as early as possible. The question is: if you loved the work you did before ER, was it still worth retiring early?

I would love to travel (by foot) around the country and write more, but those are the only two activities that I can imagine wanting more time for.

It's possible for me to work around 25 hours, but that would put my retirement at 65+.

I'm just not sure which route to take.

Thank you in advance.
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Old 07-30-2008, 12:16 AM   #2
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Originally Posted by gvaschenbach View Post
The question is: if you loved the work you did before ER, was it still worth retiring early?
My job (programming) was a perfect fit for me, yet retiring 2 years ago at 48 was definitely worth it. As stated here many times, my worst day in retirement has been better than my best day at work ever was.
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Old 07-30-2008, 02:51 AM   #3
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I too plan to retire on govt pension after 25 yrs

Quote:
Originally Posted by gvaschenbach View Post
... Assets:
Traditional Government-style Pension (3 years in, 22 to go). ....
What percentage of salary after 25 years? COLA'd or no? If so, COLA indexed by what? As a State employee are you paying into SS?

What's the situation on health insurance after retirement? (or if you decide to go part-time)

You've got a long way to go, many things can change. I note you speak of GF (girlfreind?) & then kids. Why GF & not DW? How does GF fit into an ER plan?

Quote:
Originally Posted by gvaschenbach View Post
.... House: $40k in equity, paid off in 21 years.

Liabilities:
House: $261k
Car: $14k ...
Falling house values cuts directly into equity. Personally I'm not a big fan of 30 year mortgages. Prefer 15. You might want to consider.

While others may, I would not necessarily consider "house debt" to create a negative net worth if your house is somewhat readily saleable & you owe less than it's probable sale value.

Is this a "rest of your life" house you are currently in, or transitional? Is your GF co-owner? 300k sound like quite a bit of house in most places in the US for an unmarried couple who currently have no kids (esp. when contemplating an aggressive ER program). (consider interest/taxes/utilities/furnishings/upkeep)

You don't mention your GF car - or do you share just one? At your age I would consider shifting to a program of saving for the next car in advance of need & then paying cash when the time comes.

In observing my age/income contemporaries over the years I have noted that spending on new cars (for both husband & wife) is a big budget killer for most.

Quote:
Originally Posted by gvaschenbach View Post
It's possible for me to work around 25 hours, but that would put my retirement at 65+.
That's not an ER in my book.
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Old 07-30-2008, 07:20 AM   #4
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You have to spend a lot of time a work no matter what you choose. If you love your work you are blessed. During the course of a 25 year career you will probably change jobs - maybe you will head the library or move into a central administrative post. If you continue to love your job through all of that you are double blessed. In that case you will have two positive choices when you are eligible to retire. My guess is that the best choice will seem obvious at the time - it may or may not be to retire.
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Old 07-30-2008, 01:55 PM   #5
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Quote:
Originally Posted by gvaschenbach View Post
One problem I have (I hope some of the more experienced members can enlighten me) is that I love the work I do (Librarian at a small neighborhood library) but cannot stop thinking about retiring as early as possible. The question is: if you loved the work you did before ER, was it still worth retiring early?
It depends. It was for me. See this thread:

http://www.early-retirement.org/foru...ded-32025.html
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Old 07-30-2008, 03:13 PM   #6
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Quote:
Originally Posted by gvaschenbach View Post
It's possible for me to work around 25 hours, but that would put my retirement at 65+.

I'm just not sure which route to take.

Thank you in advance.
It is very hard for me to imagine funding a marriage and two children on 25 hours a week as a librarian, supplemented by whatever your wife-to-be who currently earns little can or will make.

Essentially, you must either stay in harness or take risks that turn out well. If you are a risk taker, you are probably not a librarian.

So hang onto that job, and see if your wife-to-be can get something equally or more stable, also with a pension.

Ha
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Old 07-30-2008, 03:20 PM   #7
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Quote:
Originally Posted by gvaschenbach View Post
The question is: if you loved the work you did before ER, was it still worth retiring early?

...

It's possible for me to work around 25 hours, but that would put my retirement at 65+.
Well, look at it this way, by starting to save early and invest early, you're giving yourself options. In general, I like having options more than I like not having options.

It looks like another option you have is to work full-time for quite a while and then decide one day that you have a good nest egg, the kids are growing fast, and you want to start working part time. Or, you work full-time longer and keep the job part-time because you still love it. Or you don't retire early. Or you wake up one day and say 'man, where did the years go? I hate my job and it's time for a change'
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Old 07-30-2008, 04:56 PM   #8
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Originally Posted by gvaschenbach View Post
So serious negative net worth at the moment, but doesn't bother me too much.
I'm not sure that you have negative net worth. If the house were placed on the market today, would it necessarily sell for less than your combined debts of $275,000? And doesn't your car have any value?

If you do have serious negative net worth, it should bother you. Think about getting a better paying job; or find a second job to supplement your wages. Starting a family from a position of insolvency is simply a bad idea.

Quote:
Originally Posted by gvaschednbach View Post
One problem I have (I hope some of the more experienced members can enlighten me) is that I love the work I do (Librarian at a small neighborhood library) but cannot stop thinking about retiring as early as possible. The question is: if you loved the work you did before ER, was it still worth retiring early? ... .... I would love to travel (by foot) around the country and write more, but those are the only two activities that I can imagine wanting more time for.
If you are in good health, love your work, and have essentially enough time to pursue your goals, you should really be asking yourself why you are obsessed with early retirement. That's a personal issue, and I'm not sure that anyone else can enlighten you.

I do agree with Marquette that building a 'nest egg' at an early stage can help provide options down the road; so LBYM, saving and investing is a good idea. But that's a different subject than constantly thinking about retiring as soon as possible.

Quote:
Originally Posted by gvaschednbach View Post
My GF is not concerned about money (makes little, spends less) and makes me extremely happy. Two kids are en route in the next few years.
Life is about making choices. If you want to work in a low(ish)-paying field, and marry someone who is a low earner, fine: there is more to life than the mighty dollar. And if you want to retire early, and have children, that's great too. But it will be difficult to balance those intentions, which are mutually conflicting to some extent.

I don't believe children necessarily require gold-plated upbringings and educations; but even if you eliminate many of the pricey options, child rearing remains expensive. They need to be fed, clothed and housed, and you will probably want to give them the occasional toy or book. Dental braces aren't free. One way or another, it adds up.

If you want a laid-back, bohemian lifestyle, perhaps you should reconsider whether children are a good idea. Alternatively, resign yourself to working for quite a few years to come. Compromises will need to be made.
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Old 07-31-2008, 12:05 AM   #9
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Hi.

Thank you all for your comments.

The pension is COLA'd (didn't know that until now, thank you) and is 75% of my highest three years salary. Indexed to the CPI (at least I think so. Not the clearest language I've read in that contract.)

I do pay SS (though I don't include it in my retirement calculations. Too uncertain) and I'm eligible to continue with the health plan I use now, paying a few hundred dollars more per month.

Neither I nor my girlfriend are interested in traditional marriage. We want to leave each other free to pursue other dreams (that do not include the other), should they arise. She has the same pension plan I do, though the three highest years salary are likely to be much less than mine.

The house is a long-term house (hence it costing so much) close to city center and minutes walk from work. And the house/mortgage/etc. is all in my name. As is the car. Neither of us truly need a car, so that might be sold soon and thanks to this forum, I'll never buy a new car again. (Even worse, first I leased the car and then bought out the lease. Ah, to be young and stupid.)

The pension gives me full benefits at 30 years and I can buy out the last five years, so it's possible for me to retire at 49 (not excessively early, but enough time to pursue some other dreams while I have a few decades left of active life.) From the comments on the board, I think I might do that, though I realize everything could change in moments. Good to have a plan, regardless.

p.
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Old 07-31-2008, 12:16 AM   #10
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Welcome! Now that FIRE is an interest to you, you'll discover your balance between retiring early and the choices you make now. You are doing all the right things and starting early. What are you invested in? Does your 401k have Vanguard funds (low expense ratio)? I might suggest it's Target Retirement fund until you do some more research to manually set up your portfolio (or keep it there!).

One red light to me: You say two kids in the future but also that you and your girlfriend don't believe in marriage "We want to leave each other free to pursue other dreams (that do not include the other), should they arise."

Okay, that's great between 2 consenting adults - and the children's say on having a parent bail on them? Or the fact that whoever chooses to pursue a dream first might leave the other one anchored to these kids they might end up resenting? Kids are a big commitment, especially if one of them has special needs. Marriage is no guarantee both adults will stick around but I think if two people decide to have a child they should realize they are making a lifetime commitment at that point. Please don't "dabble" in parenting!
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Old 07-31-2008, 12:21 AM   #11
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Marriage is no guarantee both adults will stick around but I think if two people decide to have a child they should realize they are making a lifetime commitment at that point. Please don't "dabble" in parenting!
Nicely said!
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Old 07-31-2008, 02:42 AM   #12
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Quote:
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... Neither I nor my girlfriend are interested in traditional marriage. We want to leave each other free to pursue other dreams (that do not include the other), should they arise. ...
Well, can't say I agree with that either when you have definite plans for kids in the mix - but, hey, whatever floats your boat I suppose.

I presume your finances are pretty much entirely separate then?

Might want to consider a contingency for child support in your ER plan. (maybe even the cost of cross-country trips to visit your kids someday too?)
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Old 07-31-2008, 07:24 AM   #13
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Marriage is no guarantee both adults will stick around but I think if two people decide to have a child they should realize they are making a lifetime commitment at that point. Please don't "dabble" in parenting!
Or marriage.

I worked with a guy who got married in his mid 20s to a wonderful woman. Five years later she came down with MS and for the 12 years that I knew her she was in a wheel chair or on an electric scooter. The last two years of her life she was in bed. Don stayed with her, took care of her, changed her clothes, bathed her, fed her, and changed her diapers when it came to that.

That's marital commitment.

If you're not prepared to do that then don't get married or have kids.

Don must be an optimist - he got married again last year.
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Old 07-31-2008, 08:41 AM   #14
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Neither I nor my girlfriend are interested in traditional marriage. We want to leave each other free to pursue other dreams (that do not include the other), should they arise.... Two kids are en route in the next few years.
As laurence has said, a free-and-easy, 'no strings', temporary relationship between consenting adults is perfectly fine ... but not if it includes children. Then it is simply irresponsible.

You enjoy reading Richard Bach, I presume?
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