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Considering retiring this year.???
Old 05-08-2017, 05:25 PM   #1
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Considering retiring this year.???

Hello, new to this forum. I'm 49 years old married with no children. We are considering retiring this year. I ran a few firecalc calculations and base on the info below it gave me a 100% success. What do you think?

Home payed off. Value around 850K. I plan on selling it and downsizing. It should give us another 250k to invest.

Commercial building payed off: value at around 1.1 million after taxes. Currently occupying it but when I rent it out it will give about 75 to 95K in rent.

Market:

Me: 3.2 milllion in a 50/50 vanguard portfolio
Wife: 400 k in 401k

Cash about 300K

I want to retire on about 140 to 170 k per year adjusted for inflation for the next 50 potential years. Most likely around 125 to 130k later in life but at the start I will have more traveling to do. These numbers include healthcare and are pre-tax gross numbers.

SS will be around 36K at 65 years old.

I will have the option to work part time and most likely will at least for the next 5 to 8 years. Most likely will make around 70k.

What do you think? It seems the different fire calculators are in favor. I'd like some experienced people to chime in please.

Thank you.
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Old 05-08-2017, 05:28 PM   #2
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You seem in great shape to me.

Do you have Long Term Care Insurance?
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Old 05-08-2017, 05:35 PM   #3
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I will put aside a portion (about 300K of funds) for the long term. l plan not to touch it for about 35 to 40 years.
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Run the numbers without soc sec
Old 05-08-2017, 05:47 PM   #4
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Run the numbers without soc sec

Quote:
Originally Posted by slv1 View Post
Hello, new to this forum. I'm 49 years old married with no children. We are considering retiring this year. I ran a few firecalc calculations and base on the info below it gave me a 100% success. What do you think?

Home payed off. Value around 850K. I plan on selling it and downsizing. It should give us another 250k to invest.

Commercial building payed off: value at around 1.1 million after taxes. Currently occupying it but when I rent it out it will give about 75 to 95K in rent.

Market:

Me: 3.2 milllion in a 50/50 vanguard portfolio
Wife: 400 k in 401k

Cash about 300K

I want to retire on about 140 to 170 k per year adjusted for inflation for the next 50 potential years. Most likely around 125 to 130k later in life but at the start I will have more traveling to do. These numbers include healthcare and are pre-tax gross numbers.

SS will be around 36K at 65 years old.

I will have the option to work part time and most likely will at least for the next 5 to 8 years. Most likely will make around 70k.

What do you think? It seems the different fire calculators are in favor. I'd like some experienced people to chime in please.

Thank you.
Try running your numbers without the social security, run the rent at a 75 % occupancy
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Old 05-08-2017, 05:52 PM   #5
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Blue collar guy. I still comes out at 100% even if I sell the building in 5 years at 1.25 mil. It was appraised for higher right now.
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Old 05-08-2017, 06:00 PM   #6
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This one is not even a close call. You are more than set financially, so go retire and enjoy!
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Old 05-08-2017, 06:07 PM   #7
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Blue collar guy. I still comes out at 100% even if I sell the building in 5 years at 1.25 mil. It was appraised for higher right now.
You are golden, Best of luck
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Old 05-08-2017, 06:52 PM   #8
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I will put aside a portion (about 300K of funds) for the long term. l plan not to touch it for about 35 to 40 years.
Self-insuring makes sense in your scenario.
Waiting 35 to 40 years isn't something you can plan on.
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Old 05-08-2017, 07:24 PM   #9
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You should have zero worries if you live a very comfortable yet relatively modest life going forward, and you have plenty of headwind to make it through rough weather or make adjustments to adapt as needed. Go for it!
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Old 05-08-2017, 07:44 PM   #10
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congratulations! You've won the game of life!

Just don't develop a gambling problem or an obsession with yachts or cars or girls, and you should be fine.
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Just can't pull the trigger.
Old 05-13-2017, 11:00 AM   #11
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Just can't pull the trigger.

Well guys thank you for support.

Even though the numbers seem to add up I just can't seem to pull the trigger.

Several concerns and some opportunities seem to be holding me back.

1. I have a opportunity to be part owner in another business that has great potential. It's doing very well right now. If I just go to work for them I can make 200K but being an entrepreneur I fee I many have to get in the game.

2. I worry about running out in 30 to 40 years even though my swr isn't that high.

3. Perhaps I need to learn not be a workaholic. I'm not sure how to transition.
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Old 05-13-2017, 11:41 AM   #12
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Some people like the work & the challenge. What are your plans when you do retire?
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Old 05-13-2017, 11:43 AM   #13
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I would check your rent comps, expenses, vacancy, etc... on the commercial to determine what your net really would be if you keep it. I would seriously consider selling and buying a bunch of single family homes in a cash flow city like Kansas City, Memphis, etc.... $1mil should produce better flow and avoid the long vacancies that commercial properties can have. I have seen multi-year vacancies in commercial properties which can be rough if you are planning on a check arriving every month.
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Old 05-13-2017, 11:49 AM   #14
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With part time work I would just need income from the building for about 5 years. I would put it on the market after that. I'm not too excited about being a landlord for the long haul. Especially if the property is going to be somewhere where I'm not.

I would basically take money from the rental and if it's not rented I would take money from investments until I sell the building. Then it would be all from investments in the marker.

Around 4.5 mil with the building sold and later with the house sold it would be higher. 150K/4.5mil = .0333 wr. If I'm working part time it wr would be even lower. Perhaps .02 until I turn 65.
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Old 05-13-2017, 11:51 AM   #15
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Initially just travel. After I've not devised a plan. What I do know is I want much more time off than I have now.
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Old 05-13-2017, 01:04 PM   #16
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Initially just travel. After I've not devised a plan. What I do know is I want much more time off than I have now.
You can get burned out with constant travel just like you can with playing golf all the time. If you want to remain active retiring early, it makes sense to work up a plan. That plan could even include working part time on your own or for someone else.

The benefit of being able to retire early is you have the flexibility to do whatever you want when you want.
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Old 05-13-2017, 04:12 PM   #17
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At 75% occupancy rate, the low end for the building should generate ~$56k/year. That leaves ~$114k/year need from other sources to max out your upper end desired budget. A 3.5% withdrawal rate would need a portfolio of ~$3.26 million to supply that. As you have $3.6 million currently, not counting proceeds from selling the house or your cash reserves, it seems to me that you're probably good to go. In fact, a $3.8M portfolio can supply that much at a 3% withdrawal rake. If you factor in some of your cash OR some of your proceeds from selling the house you have more than that already. I see no financial reason for you to bother with any kind of work at this point.
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Old 05-14-2017, 05:21 PM   #18
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At 75% occupancy rate, the low end for the building should generate ~$56k/year. That leaves ~$114k/year need from other sources to max out your upper end desired budget. A 3.5% withdrawal rate would need a portfolio of ~$3.26 million to supply that. As you have $3.6 million currently, not counting proceeds from selling the house or your cash reserves, it seems to me that you're probably good to go. In fact, a $3.8M portfolio can supply that much at a 3% withdrawal rake. If you factor in some of your cash OR some of your proceeds from selling the house you have more than that already. I see no financial reason for you to bother with any kind of work at this point.
Well that's the question? Will 3.0% to 3.5% be sustainable for the next 40 to 50 years?
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Old 05-14-2017, 05:48 PM   #19
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Well that's the question? Will 3.0% to 3.5% be sustainable for the next 40 to 50 years?
Some folks reject WR as a conceptual framework for retirement planning and instead use the old fashioned approach of defining 'means' as (passive) income alone. This approach is not popular on this board but I'll throw it out anyway FWIW.
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Old 05-14-2017, 06:10 PM   #20
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Some folks reject WR as a conceptual framework for retirement planning and instead use the old fashioned approach of defining 'means' as (passive) income alone. This approach is not popular on this board but I'll throw it out anyway FWIW.
Not sure what you mean. Rent? or interest earned? Is that what you mean by passive income alone?
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