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Old 12-11-2014, 04:42 PM   #21
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Yes retire now.

No but would if I had $3 million.

I think you should fire advisors and make your own plan.
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Old 12-11-2014, 04:48 PM   #22
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If your wife is a widower will she need more than $3.1M? In other words, not sure you really need a life insurance policy.

I personally wouldn't do it unless the retirement calculators say 100% success. I sense that you are reluctant to cut spending so I'd keep working or take the severance and look for alternatives (new job/consulting...)
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Old 12-11-2014, 04:58 PM   #23
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Some folks are conservative here. So am I.

At one glance, you would think $3.1M is surely plenty and should be enough to support 4.8% withdrawal rate of $150K/yr.

If I remove $200K for college, and take out 10% for other big ticket purchase (2 cars, roof, other stuff), I will have just $2.6M, then suddenly my WR is now 5.7%.

I have similar asset than yours + 750K home equity. I plan to spend $110K/yr. I am still nervous. DW and I are still working this year. We are 58/53. So, I would not want to spend more than $110K in our case. YMMV.
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Old 12-11-2014, 05:00 PM   #24
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I have my finacial planner guy running cases at $130k spending and a 5.5% return to see what it looks like, with taxes modeled etc.
How much is that financial "planner" charging you?

I'm surprised no one else commented on this giant red flag:

Quote:
Originally Posted by bulbar View Post
The $150k includes property taxes, school taxes, etc. But not Fed taxes. We actually got a small refund on Fed taxes.
If you received a "small refund" on taxes, that doesn't mean you don't get a free ride on taxes with a $150k budget in ER, because you won't have taxes magically withheld from your income by someone else! You still have to pay them. So you will need to withdraw quite a bit more from your portfolio and SS to end up with $150k cash to spend each year on whatever you want. Maybe $175k-$180k?
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Old 12-11-2014, 05:16 PM   #25
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My mega energy company says I could get severance and retire early at 53. If I did that, I would have $3.1MM total. I'd get $23k/yr SS at 62 in today's dollars and my wife would get $9k/year SS when I'm 67. We have twins who go to college next year and assuming that will be $200k over 4 years. We spend $140k/yr right now and my retiree medical would add another $8k/yr on top of that. I ran cFIRE and I think it only had a 70% sucess assuming we could get it back to $140k spending.

The thing is that, if I stay, it takes me 1.5 years here to get to the same $3.1MM I could get right now with the severance. So I'm thinking maybe leave now and have that time for myself?

What do you think?
I say the twins pay for college. Thats the deal breaker to retire at 53.
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Old 12-11-2014, 05:47 PM   #26
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3.1M is enough, but you're spending too much IMO to retire at 53 with 2 college educations yet to pay for
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Old 12-11-2014, 05:51 PM   #27
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How much is that financial "planner" charging you?

I'm surprised no one else commented on this giant red flag:



If you received a "small refund" on taxes, that doesn't mean you don't get a free ride on taxes with a $150k budget in ER, because you won't have taxes magically withheld from your income by someone else! You still have to pay them. So you will need to withdraw quite a bit more from your portfolio and SS to end up with $150k cash to spend each year on whatever you want. Maybe $175k-$180k?
Good catch. That is a big percent to cut off current spending levels, if going to $100Kish has to include income taxes as well.
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Old 12-11-2014, 05:56 PM   #28
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My mega energy company says I could get severance and retire early at 53. If I did that, I would have $3.1MM total. I'd get $23k/yr SS at 62 in today's dollars and my wife would get $9k/year SS when I'm 67. We have twins who go to college next year and assuming that will be $200k over 4 years. We spend $140k/yr right now and my retiree medical would add another $8k/yr on top of that. I ran cFIRE and I think it only had a 70% sucess assuming we could get it back to $140k spending.

The thing is that, if I stay, it takes me 1.5 years here to get to the same $3.1MM I could get right now with the severance. So I'm thinking maybe leave now and have that time for myself?

What do you think?
Can you check the numbers again? If you don't have an income, your kids may be qualified for grants, scholarships, work studies, loans, etc.. I.e, $200k for 4 years may be high even for 2 kids.

9k/year SS for your wife seems to be low. I think spouse gets the higher SS of the spouse's SS or 1/2 of your SS.
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Old 12-11-2014, 06:00 PM   #29
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On spending, we actually spent $150k in 2014. A lot I know. But don't know if we could get down to even $110k with family of 4 and mortgage. I really don't want to retire to a life of pinching pennies (yeah I know $110k is not pinching pennies but you know what I mean).

I have my finacial planner guy running cases at $130k spending and a 5.5% return to see what it looks like, with taxes modeled etc.
1- I understand your concern about not wanting have to "worry" about money after ER. That is just more stress. Can you take the severance and work another j*b for another year or two until the numbers look better for your spending rate? Everyone has their own comfort level but I want firecalc to say 100%. Obviously this is no guarantee but I need that for my peace of mind. Unfortunately if your/our plans don't work, it will be too late in life to do much about it!

Part of the goal of ER to me is doing at the spending rate I want. That does not necessary mean having to be as frugal as possible.

2-There are plenty of calculators to help you run these numbers. And, as a source of expense, how does this financial planner factor in? Perhaps this IS an expense you could decrease? Just a thought... Good luck!
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Old 12-11-2014, 06:02 PM   #30
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We could probably have $3.1M at age 53 but are retiring at 45 with much less. I priced life and you wouldn't believe how much they are charging these days for more.
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Old 12-11-2014, 06:22 PM   #31
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Oh, not us! We like to flaunt our shameless frugality, while acting like we think we're just as good as anybody else.
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Old 12-11-2014, 06:41 PM   #32
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To me the red flag is that you apparently have high income, (enough to support the $150k/year spend)... but haven't saved anything for your kids college?
I retired this year at age 52- but had college covered in 529's. We also have a family of 4 - but paid off our mortgage and funded 529's during the last decade... so our budget is only 84k/year going forward.

You mention you have a financial advisor - does this mean you haven't been paying attention to your financial goals? Why didn't the financial advisor have you planning for very expected events - like kids college? Why didn't you notice that?

I retired on a lot less... and am confident of the retirement success... But my budget is smaller... Yet somehow, I still live a very comfortable, upper middle class life.
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Old 12-11-2014, 06:57 PM   #33
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I'm going to live under an I-10 bridge!

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No one should have to endure the indignity of living on less than $150,000 a year. Keep working.
How will I ever live comfortably in a paid-off home on $30K SS and about the same in dividends?

VERY, is my guess.
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Old 12-11-2014, 07:24 PM   #34
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Old 12-11-2014, 07:38 PM   #35
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The $150k includes property taxes, school taxes, etc. But not Fed taxes. We actually got a small refund on Fed taxes.
Either you have a really really good tax adviser, or you have a quite terrible one who has not explained properly how income taxes work. Getting a refund usually means that you overpaid your federal taxes (usually through payroll deductions). It does not mean that your federal taxes were zero or negative, only that you prepaid more during the year than were actually needed once the final accounting for the year was done. Once you are retired, you will not have the same taxes taken out of your paycheck, so will have to pay them from your assets. You most likely DO HAVE federal taxes that you will need to pay in retirement, especially at these levels of spending.
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Old 12-11-2014, 08:01 PM   #36
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I make 250, and i ask myself if i can retire on 500. I pity threads like these.


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Old 12-11-2014, 08:05 PM   #37
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Good comments. The other catch is that I have a short window to decide. They are looking for another job for me. When they find it, severance is off the table.

On spending, we actually spent $150k in 2014. A lot I know. But don't know if we could get down to even $110k with family of 4 and mortgage. I really don't want to retire to a life of pinching pennies (yeah I know $110k is not pinching pennies but you know what I mean).

I have my finacial planner guy running cases at $130k spending and a 5.5% return to see what it looks like, with taxes modeled etc.
Unless you're using a fee based planner, shoot the financial planner and you just found $20-30k/yr...
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Old 12-11-2014, 08:46 PM   #38
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How much is that financial "planner" charging you?

I'm surprised no one else commented on this giant red flag:



If you received a "small refund" on taxes, that doesn't mean you don't get a free ride on taxes with a $150k budget in ER, because you won't have taxes magically withheld from your income by someone else! You still have to pay them. So you will need to withdraw quite a bit more from your portfolio and SS to end up with $150k cash to spend each year on whatever you want. Maybe $175k-$180k?

Saw it, just didn't want to respond to it...
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Old 12-11-2014, 08:55 PM   #39
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Sorry, had to cut out for a while.

Yeah, I realize that I would have to pay fed taxes in retirement and that would be part of the equation. I've been thinking that might be maybe $10k-$15k per year which means I need to get our spending down to maybe $95k, ex Fed taxes. A far cry from $140k-$150k today.

We have the $200k college expenses saved up, but that's part of the $3.1MM.

Yes, I'd love to take the sevarance and find another job for a few years but with oil crashing right now, everybody is pulling back so my guess is I'd have a hard time finding anything. So I need to be confident that I could stay out of work.

We have about $150k in home equity that I don't include in the $3.1mm

Thanks everyone for all the comments
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Old 12-11-2014, 09:19 PM   #40
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Do you have a big travel budget or other discretionary spending?

Also what would you do in retirement? Some expenses might go up in retirement, unless you plan to hang around the house all the time.

It sounds like you're considering this only because of the early retirement offer by the company. Or is it that the idea of working a couple more years to end up with the same amount is unappealing to you because it doesn't make financial sense?

Or because you don't want to work any more?
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