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Old 12-11-2014, 09:48 PM   #41
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OP what city do you live in?
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Old 12-11-2014, 09:49 PM   #42
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Don't let the folks here beat you up for spending a little too much.
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Old 12-11-2014, 09:52 PM   #43
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Working a couple of years only to end up at the same place really has me bugged. I have a welding hobby that I really like and I actually sell some of the stuff, very small amounts but it pays for materials. I would love to do more welding. I also do some music stuff. I'd have more than enough to do. And me and the wife could travel around the US. She doesn't work. Yes, I'm considering it because the company may give me severance. Otherwise I wouldn't.
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Old 12-11-2014, 09:54 PM   #44
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OP what city do you live in?
I live in Houston but not sure if you're talking to me
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Old 12-11-2014, 10:01 PM   #45
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I live in Houston but not sure if you're talking to me
OP = Original Poster.

Yes, he was talking to you.
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Old 12-12-2014, 12:03 AM   #46
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I would not feel comfortable living on $3.1M with a $150K/yr budget and 2 kids going to college. Plus for the next 4 yrs your expenses will be bumped up to $200K? That's more than 6% of annual withdrawal on your existing assets! At 53 it's way too high, too early and too fast to draw down on your nest egg. You've got to find a way to cut your costs.
Is there a way you can downsize your house? You say you have $150K in home equity, so what's left on your mortgage and for how long? In Houston you can find nice houses for $300k, and with the kids out of the house soon you may want to consider moving to a smaller place?
Can you do your own gardening, pool cleaning (or move somewhere with a community pool), car washing, house cleaning, etc? All the little things that will save you lots of $ on an annual basis...
We currently have a similar budget with your $200k, but 3x of your assets, and we are still working. When we retire (DH slightly older than you), we will definitely look to cut our budget down by 1/4.
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Old 12-12-2014, 12:04 AM   #47
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Working a couple of years only to end up at the same place really has me bugged. I have a welding hobby that I really like and I actually sell some of the stuff, very small amounts but it pays for materials. I would love to do more welding. I also do some music stuff. I'd have more than enough to do. And me and the wife could travel around the US. She doesn't work. Yes, I'm considering it because the company may give me severance. Otherwise I wouldn't.
We made cuts of the same order of magnitude you would need to do. I would do it again, but obviously we had to cut tens of thousands off our annual expenses. I put our budget in the same format as the Consumer Expenditure Survey and we compared them line by line and asked could we get closer to these amounts? Would we rather do that than have to work? We looked at less expensive houses and asked ourselves if we needed to downsize, would we rather do that than work? The answer was usually yes.

We just looked at every expense and with more free time we were able to cut many ongoing expenses in half or more. I bought a Mother Earth News book on reducing energy bills and we went from around $3.5K a year or more to under $1.3K. We used to be in the highest tier on the utility reports and now we are one of the lowest for comparable homes. I don't really miss not using the extra kw of electricity and therms of gas.

We can actually work from home for decent income but for some reason cutting expenses seems more fun these days. $1K in earned income is $1K for one year less taxes, while cutting expenses $1K off our annual run rate for the next 50 years is equal to needing $50K less in after tax money for total retirement funding. In hindsight we both wish we had lived more like this our whole lives and downshifted or retired much earlier.
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Can I retire on $3.1MM? Anybody here done it?
Old 12-12-2014, 01:06 AM   #48
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Can I retire on $3.1MM? Anybody here done it?

Retire now and cut spending as required. It's not as hard as it seems.
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Old 12-12-2014, 02:07 AM   #49
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We currently have a similar budget with your $200k, but 3x of your assets, and we are still working. When we retire (DH slightly older than you), we will definitely look to cut our budget down by 1/4.
Speaking of working too long ...
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Old 12-12-2014, 06:24 AM   #50
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Retire now and spend time with your kids before they disappear to college.
This is time you can never get back with them.
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Old 12-12-2014, 09:52 AM   #51
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Speaking of working too long ...
I caught that also. 9.3 in assets? Not sure why a person like that would need a board like this. Guess I am just jealous.
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If you can't live in Houston with 3.1M...
Old 12-12-2014, 10:02 AM   #52
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If you can't live in Houston with 3.1M...

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I live in Houston but not sure if you're talking to me
...I figured you lived in NYC or Seattle. Must be "the Heights."
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Old 12-12-2014, 10:34 AM   #53
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Speaking of working too long ...
I was more than ready to retire earlier in the year but was having OMY syndrome. Then I got a big promotion, MUCH better pay and international travel opportunities. So I now like my job, so far. Had been pushing DH to retire for a while (even posted a thread about that) but now the tide has turned. DH's trying to convince me to quit, while finally ready for his own retiring. So we will see. We are in our mid 40s/50s, and hopefully it will still be "early retirement" by the time the joy of work finally diminishs.

Back to the OP, it's not the size of their $3.1M NW but the $150-200k annual budget that concerns me, and led me to suggest they either have to continue working or seriously cut back on spending.
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Old 12-12-2014, 10:51 AM   #54
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Our avg yearly spend from 2008-2013 was $135k. Defintely areas we can cut back, but $30k per year I dont know. But then we've never really tried to. It's not like we're living over our heads, but we don't have a budget either. We spend what I make and we should be on a budget and putting money into savings beyond 20% or so I put into 401k.
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Old 12-12-2014, 11:21 AM   #55
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Our avg yearly spend from 2008-2013 was $135k. Defintely areas we can cut back, but $30k per year I dont know. But then we've never really tried to. It's not like we're living over our heads, but we don't have a budget either. We spend what I make and we should be on a budget and putting money into savings beyond 20% or so I put into 401k.
We cut more than $30K, not including reduced income taxes, and it has been less painful than we thought it might be. I keep a spreadsheet. It is kind of like a game to me now. We switched to off brand ink cartridges ($2 cost and recyclable for $2 store credit), bought soap pumps that only use 25% the soap of regular pumps, weather stripped, price shopped car insurance, bought cars with better repair records and MPG, use the library more, cut out job and commute costs, and just over a hundred things big and small, many small, but they all added up.

If you do not cut your budget and take the severance now, when would you be able to retire? Are you going to have to make cuts to retire anyway eventually, if you retire at whatever age you planned before you were offered the current severance package?
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Old 12-12-2014, 11:21 AM   #56
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Our avg yearly spend from 2008-2013 was $135k. Defintely areas we can cut back, but $30k per year I dont know. But then we've never really tried to. It's not like we're living over our heads, but we don't have a budget either. We spend what I make and we should be on a budget and putting money into savings beyond 20% or so I put into 401k.
As others have said, you can't retire with 3.1mm and 145k in expenses with alot of confidence. I definitely hear you on not wanting to have to watch your pennies in retirement.

Do you have an itemization of the 135k in spending ? If you give that a look you may find ways to save that aren't painful. If not, then keep working. I know severance feels like 'free money' and its TOUGH turning it down, but unless you know that you can find another job at a comparable salary I'd let the company find me another role, do it with pride, spend the next few years looking at spending and creating a "budget" (spending plan), wait until I had 100% in FIRECALC and a comfortable shortfall age in FIDO's Retirement Income Planner, and retire when those stars align so you can sleep at night after you leave the workforce.
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Old 12-12-2014, 11:22 AM   #57
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I think you have been informed that you can make it if you want to. You have to have the will to make the changes. It is a free 1.5 years that you cannot get any other way. Get serious about looking at all aspects of your finances and make changes to improve your lot.
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Old 12-12-2014, 11:40 AM   #58
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Our avg yearly spend from 2008-2013 was $135k. Defintely areas we can cut back, but $30k per year I dont know. But then we've never really tried to. It's not like we're living over our heads, but we don't have a budget either. We spend what I make and we should be on a budget and putting money into savings beyond 20% or so I put into 401k.
You could try to cut expenses over the next few months to see how it feels. Over the past year, we have cut back on expenses to see how low we could go. Now we have a pretty good idea about how much we actually need in retirement. And it's less than we thought.
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Old 12-12-2014, 12:04 PM   #59
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I think you've figured out that you could easily retire with $3.1 MM but you have to control your expenses. By not being tied to a job, you can look at moving to a lower cost location. You could (gasp!) move into a smaller and/or lower cost house after the twins head off to college. You could figure out where all $140K/yr goes and actually reduce (or get) the budget.

With $3.1 MM, you can definitely retire whether it is now or in 1.5 years. Heck, you have plenty to retire on now by controlling expenses. The retiree medical benefits help a little although you could get an ACA subsidy by manipulating your taxable income.

I'm retiring in a few weeks in Houston. My basic budget is nowhere near $140K but I've got a variable budget that would allow me to spend that much on traveling. I think if you look at what you spend your money on you will see definite ways to make it work. There are many nice areas of Houston if you want to stay in the general area. Housing is usually the largest single line item of any retirement budget.

I found that when my kids went off to college the overall expenses dropped significantly. No horde of kids routinely eating and drinking everything in the house on a daily basis. No free flow of $20+ in school expenses seemingly every other day. When they are in school, they're pretty much on their own. I told my kids I'd pay for tuition, fees and the equivalent cost of a nice dorm with full meal plan. They were expected to cover books, personal expenses and whatever else with summer or part-time jobs. The bank of "Dad" started to scale back operations.
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Old 12-12-2014, 12:11 PM   #60
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Hmm, I wasn't a member back when the board began, but...wasn't it started partly for the benefit of younger "dot-com millionaires" who wanted to know if their fortunes would last a lifetime?

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I caught that also. 9.3 in assets? Not sure why a person like that would need a board like this. Guess I am just jealous.
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