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Can I be done please
Old 01-04-2019, 01:14 PM   #1
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Can I be done please

Hi, I've been a lurker for a while and decided I'd get some of your thoughts on my financial readiness. Mental readiness is another story; but Iím sure that is harder to help with on this forum. Iíve been burned out from work for several years now as Iíve essentially had the same high stress/high demand job since college. I dread Mondays and mostly sit around and wait for 4:00 so I can start planning for 5:00. I actually quit about 6 years ago but they talked me into coming back to qualify for my pension which I'm thankful they did. The first few years after that were OK but its bad again.

I'm 51, married and my wife is the same age. We have 2 daughters, one out of college with grad degree and a good job and the other with one more semester of college and her college fund has more than enough for her last year and those funds are not in my numbers below. She gets the remaining balance as a life starter for her. She is in a field that will not need grad school and she has accepted a job offer from her previous internship. Both kids should be self-sufficientÖ void of life errors.

We have paid off our house and have no debt. Two cars, both paid off and less than 3 years old. No CC debt either.

My investment portfolio is roughly as follows as of 1/1/19:

Retirement Funds (a mix of 401(k) and IRA)
Traditional - $1.175M
ROTH - $400K

Other Taxable -
Vanguard $4.1M

All of the above is roughly an 75/25 stock/bond mix. 95% held in broad based mutual funds with only individual 2 stocks owned. Stock fund split is 70% US / 30% foreign.

Current Salary (including average annual bonus) - $450K.

I carry a $2M term policy that goes another 6 years and a $250K whole life policy (I know, I know) that is almost done. That policy will then just sit there with no payments further due and the existing coverage. Wife has a $200K term policy that we took out when the kids were young to pay for full time care, if needed. It only has a few years left to pay and is cheap.

For Social Security, I ran a calculator to see how retiring early before the 30 year credit averaging and itís projected at $2K/month at age 65. The haircut for not working until the full 35 credits are earned was only a few hundred per month. My goal would be to defer SSA payments until 70 to let the payments grow. As I understand SSA I'd be able to qualify for the $2K and my wife would get at least $1K as a spousal benefit if her calculated amount was less than that. If that is correct we'd have $3K monthly payments. But I'm just loosely counting on this in my numbers.


FIRE GOALS

I'm already two years past my first FIRE goal. I had a few life events, namely 2 house floods that forced us to end up selling our house for land value and buying a new property that should be safe as itís off the ground. The good news is it forced us to downsize quicker than we may have otherwise which should cut down on our annual spend. Between flood insurance, IRS casualty loss rules and proceeds from land sale I ended up financially OK. This has all settled down now and we are moving forward with life again.

My current RE goal is late spring of 2019 (age 52). I'd retire with a non-COLA pension of approx. $65K with payments starting at age 58. If I kept working the pension grows at about $4K per year.

I've analyzed our spending over the past 3 years and considered changes in spending such as higher HI. My best guess is our retirement spending would start at around $200K/year. The bulk of the spending goes to (in rough order) taxes (income and property- $35K), HI premiums/deductibles $20K, other insurance (home/car/life/etc.)- $10K, food-$20K, travel-$20K, HOA Dues-$10K, Clothing-$5K, Household-$8K, Gym/Golf-$10K. The rest is miscellaneous including $10K/year to a fund for buying 2 cars every 8-10 years with cash. A lot of this I'm hoping is high but I'd rather be conservative with my thinking.

While I donít know exactly whatís next itís possible that I do some consulting on the side to keep some income coming in but it would be significantly less than my current income levels. However, Iíd prefer it to be nothing for a while but relax and unwind. I have not included anything for future income in my calcs as that would just be extra.

We both come from long life families so I'm budgeting to age 99. I've run the numbers on numerous models with what I believe are conservative estimates of 5% investment returns, 4% spending increases and 4% inflation and most of the models seem to say GO FOR IT.
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Old 01-04-2019, 01:27 PM   #2
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Looks good to me, if all hell broke loose, cancel the GYM, stop buying things and going places, don't buy clothes , eat ramen, bean burritos and week old bananas for a year and you can shave off $45k of your expenses ( and just live off the other 85k or 52% of what you are today!


But in all serious, you seem like after the 2 floods you are more than ready...you called it! GO FOR IT!
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Old 01-04-2019, 02:40 PM   #3
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You have 5.7M in assets. 4% of that is 227k. If you want to go conservative, 3% of that is 170k. You'll be able to live comfortably on that, although if things get rough you may have to move to a cheaper place and cut out e.g. HOA fees. Your choices are:
1. Keep working, burned out, to get more security.
2. Retire now, enjoy life, and maybe cut back your lifestyle a little bit.

Personally I'd much rather have the free time with the risk of a small reduction in lifestyle than working in a job that burned you out already. If you want to keep working, I'd consider moving to another company, a reduced schedule, or simply taking a 2-month sabbatical. Being burnt out is pretty terrible, and you have the opportunity to cut it out of your life starting right now!
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Old 01-04-2019, 02:41 PM   #4
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You should retire. You have enough, and your lifestyle will change and probably be less pricey. How much of your food and clothing budget is work related? And if you donít quit soon, the stress will shorten your life and you wonít live until 99.

Many of us here have much less and no pension. Youíll be fine.
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Old 01-04-2019, 03:44 PM   #5
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Congrats! You’re in great shape and congrats on successfully launching the two kids. You are ready and able! Just do it.
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Old 01-04-2019, 03:55 PM   #6
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Welcome to the forum. With your assets, pension and SS, you are in great shape. As others have mentioned, you also have a budget with a lot of discretionary spending that could easily be cut if the need arises. Congrats! Well done. If you can't make it, a lot of us are in trouble.
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Old 01-04-2019, 03:59 PM   #7
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You are I great shape to, go for it!
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Old 01-04-2019, 05:03 PM   #8
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I will defer to the more experienced on FIRE assessment for you.

One thing I can comment on from first hand experience is retiring at 51 was the best thing I did. I will have to live a bit more modest life because of FIRE but I am trading time for money and that was the right call for my life situation.

My health has improved dramatically. I have reduced my prescription medications by 50% under my doctors care & guidance. Hypertension, elevated heart rate issues. All gone!

I hindsight, I truly feel that my job was indeed, actually killing me.
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Old 01-04-2019, 05:55 PM   #9
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You do realize that the average family income in the US is about $54K and most of them are paying a mortgage and saving for retirement and college costs? So, yea you can probably squeak by.
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Old 01-04-2019, 06:22 PM   #10
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Financially this is a no -brainer. A nice pension at age 58 (wow), no debt, and ton of assets in non-retirement.

The fact that you dread your, high paying but presumably high stress, job is easily worth a couple million more in savings on deciding if you're ready to pull the plug.

So what is your mental reservations?
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Old 01-04-2019, 06:41 PM   #11
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Welcome! Yes, I think you can be done. You have a nearly ideal AA, you have a reasonable withdrawal rate, you have boku insurance (maybe a bit too much), and you appear to be fully prepared financially!

As for SS, did you run the Excel version of their detailed calculator, called PIA? For those retiring early, with less than 35 years of earning history, it's the only way to complete an accurate estimate that I'm aware of:

https://www.ssa.gov/oact/anypia/anypia.html

If you make $2K at 65, and your FRA is 67, you should make a bit more than that (say, $2500); your spouse should qualify for 50% of your FRA amount. At 70, I'm guessing you'd qualify for $3K, and your wife $1.2K. The PIA calculator should give you a much more precise idea, as you have to enter each year's salary subject to SS withholding.

Cheers!
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Old 01-04-2019, 06:51 PM   #12
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The emotional side of ER is the hardest and takes a lot of time to prepare. You are smart to be thinking about it. Financially you are good IMO and with those numbers you have a lot of flexibility of the SHTF as long as you are realistic about what worse case would look like. I am amazed about how my health changed for the better after retiring. There is no way I would ever do anything to reverse those trends. High stress work takes a lot more out of you than you probably even know. And each year extra working is one less year you have for other things. You will make the right decision. Good luck!
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Old 01-06-2019, 10:18 AM   #13
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Quote:
Originally Posted by travelover View Post
You do realize that the average family income in the US is about $54K and most of them are paying a mortgage and saving for retirement and college costs? So, yea you can probably squeak by.
Does it really matter what the "average" American makes and spends.

Sounds like soar grapes.

The OP makes more and spends more so 54k would not allow him to survive in retirement,

Since you have a substantial after tax fund you may find your taxes reduced in retirement compared to you working years.

I would retire and feel confident with your assets.
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Old 01-06-2019, 11:11 AM   #14
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I agree with the rest, you are plenty safe financially. You have more than enough after tax savings to bridge the years from 52 until pension at 58, where the after tax needs will reduce, and then reduce again once SS hits when you decide to take it between 62 and 70. You do have high expenses and seem to live in a high COL area, so that is some concern. But you have enough, so retire. Enjoy the freedom and lower stress.
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Old 01-06-2019, 06:00 PM   #15
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Quote:
Originally Posted by Vacation4us View Post
Does it really matter what the "average" American makes and spends.
It does to the extent that one might worry if they had enough margin in their budget to keep their family safe and housed. Sometimes it is easy to lose perspective of how much it costs to have a middle class life if you have been living at the higher end.

Quote:
Sounds like soar grapes.
Thanks for the concern, but my grapes are fine. Actually, we are living on about half our potential spending.

Quote:
The OP makes more and spends more so 54k would not allow him to survive in retirement,
I guess it depends on how you define survive.

Quote:
Since you have a substantial after tax fund you may find your taxes reduced in retirement compared to you working years.

I would retire and feel confident with your assets.
I agree.
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Old 01-06-2019, 08:13 PM   #16
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I'm just wondering... surely you sense that you "have enough" and "have had enough" (your BS bucket is full).... so why are you still working?
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Old 01-06-2019, 11:29 PM   #17
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To the OP - based on what you have posted, in my view, with you assets, it is no longer a financial decision for you on when to ER. It is an emotional decision.
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Old 01-07-2019, 04:04 AM   #18
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Go.
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Old 01-07-2019, 04:40 AM   #19
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Yes you can be done. Turn in your resignation, walk out the door, decompress for a while, and then live a full retirement life.
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Old 01-07-2019, 06:04 AM   #20
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You are set up nicely and ready to go. Like you said, you can always go back and consult if you felt the desire. there is so much more than the daily grind. Looking forward to being in your position and taking the leap. Good luck.
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