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Can I RE? Would you?
Old 02-17-2015, 01:27 PM   #1
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Can I RE? Would you?

Could really use a gut check and advice.

I am 53, my wife is 48
We would have about $3.1 MM in investments/cash if I retired now. Would get about $140k more after tax in 2016.
2 kids starting college this fall in Texas at A&M. Figured $200k total needed
$130k per year spending outside of college
My SS would be $36k/yr when I'm 70. My wife would get $16k when I'm 72.

I put all the above into cFIRE with 3% inflation and 50/50 stocks and it says 94% success rate. But I know at least our medical would go from maybe $1300 per year up to $10,000 per year for the Retiree Plan.

Really want to ER bad.
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Old 02-17-2015, 01:37 PM   #2
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We are retiring with $2.5 million, 72K pension, 56 years old and a daughter with 2 years of college left.

Also with expected $130k annual expenses. No debt. Firecalc gives 100% probability of success.

Not too far off your situation and we are going for it-in 3 weeks!
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Old 02-17-2015, 01:40 PM   #3
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Originally Posted by pinejake View Post
We are retiring with $2.5 million, 72K pension, 56 years old and a daughter with 2 years of college left.

Also with expected $130k annual expenses. No debt. Firecalc gives 100% probability of success.

Not too far off your situation and we are going for it-in 3 weeks!
$72k per year pension? If you have $2.5MM plus a $72k/year pension, you are way better off than me I think.
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Old 02-17-2015, 01:41 PM   #4
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You guys make me feel poor. I'll be going for it later this year with $2.1M and $35K pension.

Break on thru to the other side...
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Old 02-17-2015, 01:45 PM   #5
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Welcome to the forum! If you haven't seen it yet take a look at these questions:

Some Important Questions to Answer Before Asking - Can I Retire?
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Old 02-17-2015, 01:50 PM   #6
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Originally Posted by bulbar View Post
Could really use a gut check and advice.

I am 53, my wife is 48
We would have about $3.1 MM in investments/cash if I retired now. Would get about $140k more after tax in 2016.
2 kids starting college this fall in Texas at A&M. Figured $200k total needed
$130k per year spending outside of college
My SS would be $36k/yr when I'm 70. My wife would get $16k when I'm 72.

I put all the above into cFIRE with 3% inflation and 50/50 stocks and it says 94% success rate. But I know at least our medical would go from maybe $1300 per year up to $10,000 per year for the Retiree Plan.

Really want to ER bad.
I would have lowered my expenses, told my kids to take a loan for college, and retired 3-5 years ago. The kids will have their loans paid off, at worst, when you die. In the meantime, they can work for it.

So ya, you can retire.
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Old 02-17-2015, 01:52 PM   #7
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I consider myself FI with $740k or so (single, no kids). There, feel rich again?

To the OP: If you really want to ER badly look at some expenses you consider easy to give up?

Not to gut your budget right away, but as a safety valve if returns aren't what you hope them to be in the early years. May give you extra comfort.
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Old 02-17-2015, 02:07 PM   #8
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Originally Posted by bulbar View Post
Could really use a gut check and advice.

I am 53, my wife is 48
We would have about $3.1 MM in investments/cash if I retired now. Would get about $140k more after tax in 2016.
2 kids starting college this fall in Texas at A&M. Figured $200k total needed
$130k per year spending outside of college
My SS would be $36k/yr when I'm 70. My wife would get $16k when I'm 72.

I put all the above into cFIRE with 3% inflation and 50/50 stocks and it says 94% success rate. But I know at least our medical would go from maybe $1300 per year up to $10,000 per year for the Retiree Plan.

Really want to ER bad.
Welcome to the forum.

We've had several recent threads on "is $3MM enough to retire on?" Generally, people are told they have plenty to retire on but the secret to success is controlling spending. You have a pretty high spending target which is a stretch on your $3MM. You have to ask yourself how much ER means to you.

I think the college costs are probably a little less than what you show but it won't make a material difference.

A FireCalc result of 94% is probably adequate if you are prepared to possibly cut expenses if you find yourself getting low returns in your first decade of retirement. I'm also confused by what you mean by the $140k after tax in 2016. Is this a deferred compensation payout? Have you plugged the higher medical costs into your expenses and FireCalc run? The "classic" 4% rule would say you could withdraw $120,000/yr which is before taxes.
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Old 02-17-2015, 02:14 PM   #9
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Welcome to the forum.

We've had several recent threads on "is $3MM enough to retire on?" Generally, people are told they have plenty to retire on but the secret to success is controlling spending. You have a pretty high spending target which is a stretch on your $3MM. You have to ask yourself how much ER means to you.

I think the college costs are probably a little less than what you show but it won't make a material difference.

A FireCalc result of 94% is probably adequate if you are prepared to possibly cut expenses if you find yourself getting low returns in your first decade of retirement. I'm also confused by what you mean by the $140k after tax in 2016. Is this a deferred compensation payout? Have you plugged the higher medical costs into your expenses and FireCalc run? The "classic" 4% rule would say you could withdraw $120,000/yr which is before taxes.

The $140k is an "extra" lump sum pension I'd get at age 55. No, I haven't plugged in the extra medical premiums. I know we spend $130k/year now with the kids at home. And so I guess that goes to $140k per year with the higher medical costs. I'm sure we'd look to cut if I did ER. Just don't know how much we can.
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Old 02-17-2015, 02:41 PM   #10
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The $140k is an "extra" lump sum pension I'd get at age 55. No, I haven't plugged in the extra medical premiums. I know we spend $130k/year now with the kids at home. And so I guess that goes to $140k per year with the higher medical costs. I'm sure we'd look to cut if I did ER. Just don't know how much we can.
We were spending north of that and made many cuts. We would do it again if we had to do it over. In fact we would have done it years ago if we had thought of it sooner. We have a couple of small businesses that are scalable and there is a lot of contract work for our skill sets where we live, so we can always work more if we want more income. But most days we end up deciding hiking and spending the day at a museum is more fun.

We've kept the house so far since that has actually been a good, appreciating investment, bought nicer cars (better mileage and repair records so they cost less to own long term), and cut back on a lot of stuff we do not miss.

I put our budget in the same categories as the Consumer Expenditure Survey and printed them out side by side and that helped to see where we were high compared to most U.S. households and where we could cut back. We just kept asking ourselves would we rather work more and have X or not have X and have more free time instead?
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Old 02-17-2015, 03:27 PM   #11
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We were spending $120-130K (excluding direct college costs) when the kids were in high school and college. I think it's wrong to assume that rate of spending continues forever, plus inflation. Our spending dropped like a rock once the kids were off the payroll and after I retired. DW and I now spend about 85-90K (excluding income tax) and our lifestyle hasn't changed a bit. We haven't sacrificed anything. I think you're fine. Even with the aggressive spending assumption, you're at 94%, which is a green light in my book anyway.
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Old 02-17-2015, 03:28 PM   #12
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We were spending $120-130K (excluding direct college costs) when the kids were in high school and college. I think it's wrong to assume that rate of spending continues forever, plus inflation. Our spending dropped like a rock once the kids were off the payroll and after I retired. DW and I now spend about 85-90K (excluding income tax) and our lifestyle hasn't changed a bit. We haven't sacrificed anything. I think you're fine. Even with the aggressive spending assumption, you're at 94%, which is a green light in my book anyway.
Well that makes me feel good. When you say "off the payroll", you mean out of college and got jobs?
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Old 02-17-2015, 03:45 PM   #13
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Well that makes me feel good. When you say "off the payroll", you mean out of college and got jobs?
Actually, we noticed a partial drop when they moved out of the house and went to college. We were clear with them about what we would pay for (tuition, fees, housing, cell phone, car ins, health ins), and what we wouldn't (everything else). So they both found ways to make money to cover all the other stuff college students want to spend money on, and our routine expenses went down. Then obviously, there's another drop when they graduate and get a job and you start kicking them off the car insurance, cellular plan, health insurance, etc. Also, don't underestimate the spending that goes away once you retire. Lots of threads on that; I won't repeat it here. A lot of it comes from just having more time to pay attention to how you're spending money.
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Old 02-17-2015, 05:48 PM   #14
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This thread is particularly interesting for me. Appears that quite a few of us are of similar age and have similar financial profiles. If you told me 25 years ago that I would have accumlated about $3 million in assets by my mid 50s but would feel only marginally secure pulling the trigger on fire I would have been shocked. Then again I would have been equally shocked by the cost of healthcare and the low rate of return on all asset groups other than equities.

Deciding when to fire is difficult for me without a very major cushion given the changes I have seen in the past 25 years. Feels like we are so close but would have to live with some uncertainty if we FIRE in the near future. The other choice, grinding it out for another ?? years to grow a cushion, is equally unappealing. Suspect we all wrestle with the same issues and feelings when pondering fire. Then again being in a position to even consider FIRE it is a good problem to have.
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Old 02-17-2015, 06:28 PM   #15
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We retired at 56 on less, though you spend a bit more than we do. Go for it!
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Old 02-17-2015, 08:05 PM   #16
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I've spent that much in the past - but in anticipation of retirement I started looking at ways to trim the budget. My main approach was to look at recurring expenses first. So cable - found a package I could live with (basic - not even hi def) that has my combined internet and cable at $35/mo, vs the $120 month the "expanded basic" charged. That's a chunk of change reduced from my annual budget. Then I tackled cell phones. I have 2 kids and a husband, we all have phones... and my bill is less than $100/month with Ting. We landscaped in a way to be water wise - our water bills dropped. We put in new windows while still working - improving our energy efficiency. We cook from scratch rather than eating in restaurants a lot - HUGE savings (and we enjoy the cooking and the eating of our own food.) We also set a goal to pay off our house before retiring... That's a personal choice - but you can make a nest egg last longer if you don't have to support a mortgage. I made the final payment on the mortgage the same month I retired. We were able, over a few years, to knock our budget from $120-130kish.... down to $84k. You'd be surprised at how much fat is in most folks budgets. For me - it was more important to have free time and freedom from bosses than to have a bigger cable package or to buy books rather than using the library.
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Old 02-17-2015, 09:17 PM   #17
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We follow Dave Ramsey and it has a huge impact on our budget. What a blessing
We had no idea how much money were spending.
2 years left on house and kids out of college.


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Old 02-17-2015, 10:00 PM   #18
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The $140k is an "extra" lump sum pension I'd get at age 55. No, I haven't plugged in the extra medical premiums. I know we spend $130k/year now with the kids at home. And so I guess that goes to $140k per year with the higher medical costs. I'm sure we'd look to cut if I did ER. Just don't know how much we can.
You need to better understand your retirement budget. Unless you have way more than you need on your current budget, and you don't, I wouldn't tell anyone they can (or can't) ER unless they have a good handle on their future budget. Sure, it seems high to many of us and some expenses will go away with the kids, but are you and your wife on the same page with cutting back, or do you see ER as a chance to travel a lot more which may very well increase your budget? Does it include major non-annual expenses like replacing cars?
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Old 02-18-2015, 10:04 AM   #19
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You need to better understand your retirement budget. Unless you have way more than you need on your current budget, and you don't, I wouldn't tell anyone they can (or can't) ER unless they have a good handle on their future budget. Sure, it seems high to many of us and some expenses will go away with the kids, but are you and your wife on the same page with cutting back, or do you see ER as a chance to travel a lot more which may very well increase your budget? Does it include major non-annual expenses like replacing cars?
Yeah, my wife is on the same page for cutting back. We're already starting. Our budget includes some money for replacing cars
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Old 02-18-2015, 10:06 AM   #20
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I've spent that much in the past - but in anticipation of retirement I started looking at ways to trim the budget. My main approach was to look at recurring expenses first. So cable - found a package I could live with (basic - not even hi def) that has my combined internet and cable at $35/mo, vs the $120 month the "expanded basic" charged. That's a chunk of change reduced from my annual budget. Then I tackled cell phones. I have 2 kids and a husband, we all have phones... and my bill is less than $100/month with Ting. We landscaped in a way to be water wise - our water bills dropped. We put in new windows while still working - improving our energy efficiency. We cook from scratch rather than eating in restaurants a lot - HUGE savings (and we enjoy the cooking and the eating of our own food.) We also set a goal to pay off our house before retiring... That's a personal choice - but you can make a nest egg last longer if you don't have to support a mortgage. I made the final payment on the mortgage the same month I retired. We were able, over a few years, to knock our budget from $120-130kish.... down to $84k. You'd be surprised at how much fat is in most folks budgets. For me - it was more important to have free time and freedom from bosses than to have a bigger cable package or to buy books rather than using the library.
Ok - what is Ting? Our cell phone bills are really high and will get higher if I retire and lose my company phone. And our DISH cable bill is over $100/month.
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