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Old 01-29-2009, 06:11 PM   #21
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SOFL, have you taken a look at the info in our FAQ section? A lot of good info to be found there.

One thread of particular interest to you might be this one: Handling the "just one more year..." syndrome

...and these: (FAQ archive) "How much is enough?"
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Old 01-29-2009, 06:48 PM   #22
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No need for me to comment as I have no where near what you have. But I am retired.
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Old 01-29-2009, 06:57 PM   #23
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If one keeps expanding his/her lifestyle to the current income level, it is always difficult to retire.

I keep reading of CEOs or financiers with hundreds of million or even billionaires who got margin calls recently, and had to liquidate at severe losses. You would think they already had plenty, and would not have to leverage for even more income. But then, I have never incurred yacht, jetliner, and French Riviera villa maintenance expenses. It's tough to make ends meet then.
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Old 01-29-2009, 09:08 PM   #24
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If she has to figure such a low rate now, 2 years won't make much difference. Many prognosticators are saying 4% or higher makes sense now with stocks possibly at a low. If they rise significantly over the next two years I would assume you would want to drop the SWR even further down than 2.5% to adjust to the higher priced equities (albeit, against a larger portfolio).
[...]
Hunh? That is what she is proposing to do but up above you said she shouldn't
I've seen (and participated in) a lot of debate about the SWR topic. It's my opinion that 4% is good for someone retiring in their 60s (25yrs 60/40 asset split, etc.), 3% in their 50s, 2-2.5% in their 40s. Just my 2% cents...

The OP can retire now, but it would not be a secure retirement. Much would depend on how the economy goes, and how quickly the markets can rebound. That's what I meant to say.

BTW - sofl, on a different topic - just out of sheer curiosity, do you consider your lifestyle to be upper middle class, or upper class?
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Old 01-29-2009, 09:13 PM   #25
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If one keeps expanding his/her lifestyle to the current income level, it is always difficult to retire.

I keep reading of CEOs or financiers with hundreds of million or even billionaires who got margin calls recently, and had to liquidate at severe losses. You would think they already had plenty, and would not have to leverage for even more income. But then, I have never incurred yacht, jetliner, and French Riviera villa maintenance expenses. It's tough to make ends meet then.
Right on.

And the same is true even for many people with lesser lifestyles, especially if they want to FIRE young.
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Old 01-29-2009, 09:58 PM   #26
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That in itself is not enough to safely retire at your standard of living and at your age, because at this exact moment in time, stocks and bonds aren't generally producing much income (if at all),
I do not understand this comment. In fact, other than treasuries and MM's, both debt and equities are producing more cash income than they have for some years.

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Old 01-30-2009, 02:06 AM   #27
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I still have trouble even imagining having this much money and wondering if I could retire. I have another couple of years and plan on retiring on $40k a year and plan to be able to live very comfortably on that. Another $150k+ a year on top of that?? I would need to be buying a whole lot of "stuff" to even think about needing this much....downsize.....downsize...
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Old 01-30-2009, 07:51 AM   #28
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I still have trouble even imagining having this much money and wondering if I could retire. I have another couple of years and plan on retiring on $40k a year and plan to be able to live very comfortably on that.
Sometimes it's easy to get sucked into "lifestyle creep." You could be living quite comfortably on (say) $50K with your lifestyle, then you get a couple of big raises and promotions and wind up at $75K. Suddenly -- and sometimes not even consciously -- you ratchet up discretionary spending to take your lifestyle to a new level, and then you look back and wonder how you ever made it with $50K...

Sometimes it's a matter of curing yourself of "affluenza."
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Old 01-30-2009, 08:16 AM   #29
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Actually....I have been living in a fantasy world for most of the last 20+ years. Just starting to try and wake myself up....pretty dang late. I think I had a little help in the fact that I grew up in a small 2 bedroom house in a small town in WA without a whole lot of money so I have always just kept my expenses fairly low. It is only in the last few years that my job as a teacher is bringing in decent money. The catch with this job is my housing/utilities are paid for me so I have no way of KNOWING FOR SURE how much it will cost when I move back to the Spokane area in a year or two. I have FINALLY made the effort to try and track all my little expenses....keeping track of ALL the things I buy, even the packs of candy.....sodas etc. I know I spend more than I think (estimate $1500 a year on just diet coke...nope, not kidding). For me, it still isn't the daily expenses that take my extra money.....it is the occasional "toys". Hadn't bought anything in over a year....just bought 2 new computers for about $1400, which isn't too bad, I am weening myself off the higher end toys. Thinking about trying bicycle racing this spring, and if I do...that new lighter weight bike (I ride a recumbent) will be sweet-talking to me...for a good $4K+.
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Old 01-30-2009, 08:45 AM   #30
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Here is the thing. I had some peak earning years of making well in the 7 figures. I NEVER lived like I was making that. I had a goal to save and build our house on the water here in SoFl. I did that, paid cash for the dream house and the cars, etc. I still have alot of assets and no debt so I feel like I hadn't or haven't lived beyond my means. But those type of earnings come with many sacrfices in time, personal realationships and general life stress.

I have a hard time saying whether we are upper middle or upper. We don't fly around on a private jet. I have no car newer then 5 years old. We do have nice cars. We do have a beautiful home. But I didn't hire a designer or decorater. My couch is 10 years old. I don't have original art or masterpieces in the house. I have no pool boy or landscaper. I do have a cleaning lady once a week. I clip coupons and shop for food and clothes on sale. My son does go to private school. I do like to vacation nicely and we go on two week long trips per year. I had used miles for the airfare. So I feel like I have a mix of upper middle and upper. I don't usually worry about money and I like that. SO that I know is an upper class luxury. As I said, I grew up lower middle class.

My expenses are high for the house. So I think I need to make a decision about how long I am willing to keep those expenses versus retiring.

Maybe I should start thinking about the lower paying job and start transitioning to that. If I work and make anything and get benefits, it makes the math a whole lot easier. Or I'd like to send my DH back to work. I don't think that will happen.

I was looking at the bucket approach someone suggested on another thread. It is hard to make that work with current CD rates.

Keep your thoughts coming. I do appreciate them.
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Old 01-30-2009, 09:06 AM   #31
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Maybe I should start thinking about the lower paying job and start transitioning to that. If I work and make anything and get benefits, it makes the math a whole lot easier. Or I'd like to send my DH back to work. I don't think that will happen.
You can save some money, make DH the house cleaner........
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Old 01-30-2009, 09:12 AM   #32
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Even though it is a hassle, you might want to try doing what I have just started with the checking of all expenditures. I am 51, British wife that will get about $2000 a year pension if she is lucky. I am making about $60k now and her about $20k and we are saving about half of what we are taking in right now. Jeez...if I had only started doing this more seriously 10 years ago.....I am hoping to retire at 53-54...house paid for and probably around $500K in various places. Luckily I get the health insurance through the Govt which I can keep and will get about a $16k pension. But, I work with another teacher (single) who's salary has got to be at least $70K and she can't save any money. Turns out when I got more details....she just "small stuffs" herself to death. Doesn't do her own laundry, goes to London every chance she gets, she just leads that lifestyle. Nothing wrong with that.....but she doesn't save much. But, I am tired of doing what I am doing....I wouldn't be surprised if I have to do a little part time work for a couple of years until my SS supplement kicks in....but that is a tradeoff that I will probably go with. Or.....I can just keep working "one more year" so that the finances will be easier (and they would be)....year.....after year....
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Old 01-30-2009, 11:39 AM   #33
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Here is the thing. I had some peak earning years of making well in the 7 figures. I NEVER lived like I was making that. I had a goal to save and build our house on the water here in SoFl. I did that, paid cash for the dream house and the cars, etc. I still have alot of assets and no debt so I feel like I hadn't or haven't lived beyond my means. But those type of earnings come with many sacrfices in time, personal realationships and general life stress.

I have a hard time saying whether we are upper middle or upper. We don't fly around on a private jet. I have no car newer then 5 years old. We do have nice cars. We do have a beautiful home. But I didn't hire a designer or decorater. My couch is 10 years old. I don't have original art or masterpieces in the house. I have no pool boy or landscaper. I do have a cleaning lady once a week. I clip coupons and shop for food and clothes on sale. My son does go to private school. I do like to vacation nicely and we go on two week long trips per year. I had used miles for the airfare. So I feel like I have a mix of upper middle and upper. I don't usually worry about money and I like that. SO that I know is an upper class luxury. As I said, I grew up lower middle class.

My expenses are high for the house. So I think I need to make a decision about how long I am willing to keep those expenses versus retiring.

Maybe I should start thinking about the lower paying job and start transitioning to that. If I work and make anything and get benefits, it makes the math a whole lot easier. Or I'd like to send my DH back to work. I don't think that will happen.

I was looking at the bucket approach someone suggested on another thread. It is hard to make that work with current CD rates.

Keep your thoughts coming. I do appreciate them.
Good lord woman, you are rich by most people's standards. Make a decision. Do you want to pay attention to how much money you have to be sure to not overspend? Or do you want to keep working so you don't have to think about it?
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Old 01-30-2009, 12:46 PM   #34
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Welcome ,
I also live in South Florida . You must be paying incredible insurance and property taxes if your house is valued at 5 million . So you need a hefty amount to keep the property plus the maintenance .
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Old 01-30-2009, 01:09 PM   #35
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Could the $5 million house be downsized to a $2 million house nearby with similar amenities? Many areas of South Florida are hurting real estate wise, and you can get a pretty nice canal front home for under $500,000.

Even if you don't want to sell it today, you could always do so in the future. Otherwise, you might meet with failure at some point in your ER.

What type of work do you do that formerly earned you 7 figure salaries in the past, if you don't mind me asking?
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Old 01-30-2009, 01:51 PM   #36
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I did a tear down - and reaped some homestead rewards for taxes. But they are still high. My insurance is not that bad as I did bunker style construction and found an insurance company that would take that in to account. Also, with no financing and decent assets, I can choose my own deductible. I picked a high one for wind as I am confident that the house will not blow away. Also, much of the $5 mm value is in the land, not the house. I do have excess flood insurance as I am more worried about that.

I ran my own business providing an obscure financial service to banks. I sold the business 2 years ago and had almost perfect timing in hindsight. Funny, just today I had two people call and ask if I wanted to do it again as they would like my services. So maybe I wouldn't be retired long any way. My non-compete just expired.

I took a job 3 months after the sale to keep income flowing and have found it hard to adapt. It is a unpleasant industry that I don't really like.

The whole answer comes down to the house. I wouldn't even need to sell it now. Just commit that I will sell it at some point in the future - if necessary. I just have to accept that if I want to retire. Hmmm... more thinking to do.
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Old 01-30-2009, 01:56 PM   #37
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More and more people are telling you that:

1) You are rich. What are you suffering and waiting for? Retire already!
2) Your house is a staggering weight and also a huge asset that has to go at some point, almost regardless of whether you work or not. I'm sure it would hurt to say goodbye to it, but the freedom is worth it.

I'll add: looking at the ratio of your current income vs. your net worth, your salary is the equivalent of what a Wal-mart greeter would earn. That is, your $200k vs. your $10M is what $20k would mean to someone who has $1M (I'd argue that your 200k, never mind 50k, means even less - far less - given the reduced marginal utility of each additional dollar).

How many people would keep a hated job at either level who are financially independent and had any choice at all to downsize a bit instead? That's what most people do in retirement, early or not, after all.

Cheers.
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Old 01-30-2009, 02:21 PM   #38
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I did a tear down - and reaped some homestead rewards for taxes. But they are still high. My insurance is not that bad as I did bunker style construction and found an insurance company that would take that in to account. Also, with no financing and decent assets, I can choose my own deductible. I picked a high one for wind as I am confident that the house will not blow away. Also, much of the $5 mm value is in the land, not the house. I do have excess flood insurance as I am more worried about that.

I ran my own business providing an obscure financial service to banks. I sold the business 2 years ago and had almost perfect timing in hindsight. Funny, just today I had two people call and ask if I wanted to do it again as they would like my services. So maybe I wouldn't be retired long any way. My non-compete just expired.

I took a job 3 months after the sale to keep income flowing and have found it hard to adapt. It is a unpleasant industry that I don't really like.

The whole answer comes down to the house. I wouldn't even need to sell it now. Just commit that I will sell it at some point in the future - if necessary. I just have to accept that if I want to retire. Hmmm... more thinking to do.
It is not clear why you are here. If your story is accurate, you know more about money than 95% of us, and probably have more net worth than 99% of us. You seem to be in control of your marriage .

While you say you are desperate to retire, you nevertheless appear to be considering a new go at business. It would seem that you are overfunded for what most of us would consider a comfortable retirement.


Realistically, what could anyone here say that could make any difference to how you proceed?

Ha
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Old 01-30-2009, 02:31 PM   #39
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When I was running the business, I was laser focused on it and it's success. I never thought about after. I never thought about investments outside of the business. (My DH runs our personal investments.) My business had nothing to do with generating income for retirement. That is where I have questions. I doubt I know more then 95% of you on this topic.

Someone mentioned earlier, that despite my assets it is "normal" to be afraid. Comments here are helping me through that thought process.

It is interesting that some have said I am rich and some have said I don't have enough to retire. I guess it is all a matter of perspective.
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Old 01-30-2009, 02:39 PM   #40
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It is interesting that some have said I am rich and some have said I don't have enough to retire. I guess it is all a matter of perspective.
You have plenty to retire -- easily -- IF you're willing to make some lifestyle compromises and perhaps sell that house and downsize to something a lot cheaper. That provides you with capital to invest and generate an income stream, and it frees you from HUGE insurance and property tax bills.

If you two aren't willing to "downsize" your lifestyle and housing situation much (if at all) in the years to come, then it's not as much a slam-dunk.

But for me, if I really hated my job (as you seem to) and I had your assets, I'd be downsizing, quitting and living off of return on my investments so fast it would make your head spin.
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