Do I need to go back to work?

[Mdlerth]

Are you genuinely content with 73% success rate? I've been trudging through OMY because I wasn't comfortable with my plan being at only 150% (I am still a little uncertain whether discretionary expenses will jump in concert with more free time).

Also, suppose you were to catch the early bus to heaven? Would your widow still be okay without the dough from your side gig?

[tmm99]

I wouldn't be comfortable retiring with 73% either.

[Spock]

* House value is not part of the retirement calculation. You can't spend the $ without replacing a roof over your heads.
* Your 401K MIGHT go to 600K in 2 years, but then again it might not.
* No where in the math presented is there an allowance for inflation.
* IF the ACA stays in place at your income levels you should qualify for health insurance premium subsidies.
* 73% success rate = a 1 in 4 failure rate. You want to bet your wife's well being at those odds?



If 460K is all you got (no other savings) and a wife that is going to need income for 40 years, it sounds like a very lean retirement to me. As others have stated, with no wiggle room for error, you need to KNOW your actual spending.

[Teacher Terry]

There is no way you could make a informed decision without knowing your expenses. Plus what do you intend to do with your free time? Do you want to travel, eat out, etc.

[DFDubb]

You've made some very bold assumptions that are flat out wrong or inconsistent with history at best.

You might be able to eek it out, but your wife will be on her own.

[pacergal]

Quote:

Originally Posted by bbbamI This link may help... http://www.early-retirement.org/foru...ire-69999.html Welcome to the forum.

Answering these questions was what really helped me decide if we were ready to retire. Plus running firecalc with multiple scenarios.

It sounds a too close for me, but you are the one who knows your true spending budget. Almost 2 years severance pay does give you some time to drill down on your plans.

Welcome!

[unixfreak]

Thanks so much for the responses. There's a lot of food for thought. I agree with heeding the warnings of the 73%. As was mentioned, I do have some time on my side. I don't have to make any decisions in the next - even few months. I am in the mode of preparing though. I don't have much in savings because I've been hammering my mortgage; there's only 16k.... but at this point I'm able to sock away up to a couple of grand a month with such low outgo.

[ivinsfan]

Quote:

Originally Posted by unixfreak Thanks so much for the responses. There's a lot of food for thought. I agree with heeding the warnings of the 73%. As was mentioned, I do have some time on my side. I don't have to make any decisions in the next - even few months. I am in the mode of preparing though. I don't have much in savings because I've been hammering my mortgage; there's only 16k.... but at this point I'm able to sock away up to a couple of grand a month with such low outgo.

Stop with house paydown, if you need to go on ACA you'll need every penny of that prepay money to live on. Hammering your mortgage is the house paid off or not.

So you work a regular job and a side job and does your DW bring in money? You have 16k non-retirement? Your not ready, you need to spend more time educating yourself about spending in retirement. What's your low outgo? Why don't you try laying out your plan a little more clearly. Start with the thing almost everyone has asked about, How much is your annual spend?

[unixfreak]

Quote:

Originally Posted by ivinsfan Stop with house paydown, if you need to go on ACA you'll need every penny of that prepay money to live on. Hammering your mortgage is the house paid off or not. So you work a regular job and a side job and does your DW bring in money? You have 16k non-retirement? Your not ready, you need to spend more time educating yourself about spending in retirement. What's your low outgo? Why don't you try laying out your plan a little more clearly. Start with the thing almost everyone has asked about, How much is your annual spend?

No. My wife doesn't bring any money in at this time.

That's right. I have 16k in liquid assets.

That's what I'm doing here is spending time. Maybe I should have started educated myself earlier. I only just in the past few weeks found that I'm a candidate for the company's voluntary separation program. I am spending even more time on reading and doing the very thing you suggest: educating myself.

Why stop with the house paydown? It's about to roll into a 0% apr for a year credit card. I claim the standard deduction on my taxes so now I'm interest free on my home which will pay off within a year.

I absolutely plan to tap into more freelance as i have plenty of connections in my industry of work.

My annual spend is 42k.

[nhcycling]

You really need a detail account of your expenses for an extended period of time. And plan for some future large unexpected items - example, new roof. Can’t really say if you’ll be okay. Not a luxurious retirement but you could end up struggling financially.

Who really knows where healthcare is headed in the next 5-10 years and what’ll cost - it could be and is for some a very large monthly expense.

Does your wife have a full time job with health insurance? If not could she consider finding one?

[ivinsfan]

Quote:

Originally Posted by unixfreak No. My wife doesn't bring any money in at this time. That's right. I have 16k in liquid assets. That's what I'm doing here is spending time. Maybe I should have started educated myself earlier. I only just in the past few weeks found that I'm a candidate for the company's voluntary separation program. I am spending even more time on reading and doing the very thing you suggest: educating myself. Why stop with the house paydown? It's about to roll into a 0% apr for a year credit card. I claim the standard deduction on my taxes so now I'm interest free on my home which will pay off within a year. I absolutely plan to tap into more freelance as i have plenty of connections in my industry of work. My annual spend is 42k.

Your original post said your house was paid off and you had no debt. What is rolling into a 0 apr on a CC..I can't follow what you saying.

If you want to take advantage of a cheap ACA plan you will need after tax money to supplement your part time earnings. If you start pulling money out of your 401, it's taxable and might put you over the income limits.

[REWahoo]

Quote:

Originally Posted by unixfreak FireCalc said that I have a 73% chance of success. 32 of the 119 cycles failed.

This tells me the answer to your thread question is "Yes".

[unixfreak]

Quote:

Originally Posted by ivinsfan Your original post said your house was paid off and you had no debt. What is rolling into a 0 apr on a CC..I can't follow what you saying. If you want to take advantage of a cheap ACA plan you will need after tax money to supplement your part time earnings. If you start pulling money out of your 401, it's taxable and might put you over the income limits.

Sorry ... I am getting a one time payoff for the unused PTO upon departure from work. That will pay it off.

[euro]

Quote:

Originally Posted by unixfreak Sorry ... I am getting a one time payoff for the unused PTO upon departure from work. That will pay it off.

OK, that makes sense then, so your house will be paid off when the severance period starts.
One thing to consider about that: see if you can get a HELOC on the house before your job ends - this is a line of credit that you don't have to use if you don't want to, but is basically readily available cash in case of an unexpected need. It'll be very easy to qualify for now, but very hard, once you don't have a W2.

[unixfreak]

Quote:

Originally Posted by euro OK, that makes sense then, so your house will be paid off when the severance period starts. One thing to consider about that: see if you can get a HELOC on the house before your job ends - this is a line of credit that you don't have to use if you don't want to, but is basically readily available cash in case of an unexpected need. It'll be very easy to qualify for now, but very hard, once you don't have a W2.

Actually I do have a HELOC which is part of the 12k balance on the mortgage.

[ivinsfan]

Quote:

Originally Posted by unixfreak Actually I do have a HELOC which is part of the 12k balance on the mortgage.

OK you have a HELOC on your home so at one point you borrowed against your home equity. You are using a part of your severance package to pay this off.

Your numbers do not add up for you to stop working however, if you can get a job instead of using up all your severance weeks for living expenses, in a few years you will be in a better position.

[HI Bill]

Quote:

Originally Posted by ivinsfan Your numbers do not add for you to stop working however, if you can get a job instead of using up all your severance weeks for living expenses, in a few years you will be in a better position.

Agree. There is no contingency for anything unexpeceted, including long term care, or emergency house repairs, etc. I would work a few more years.

[badatmath]

Is that your after tax spend rate? How much did you budget for health insurance?

[MarieIG]

Yes. Plan looks shaky for you and worse for you wife.

[Dtail]

Quote:

Originally Posted by REWahoo This tells me the answer to your thread question is "Yes".

+1
No retirement calculator is perfect, but would not retire with a 73% success rate.