Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Having second thoughts....
Old 08-25-2015, 01:15 AM   #1
Recycles dryer sheets
bearkeley's Avatar
 
Join Date: Aug 2005
Posts: 299
Having second thoughts....

Hi - been on this board for awhile but unlike many here, the market correction is causing us to doubt our plans for retiring this November.

Can you review our financials and share your thoughts?

About us: 46 and 48, no kids. Plan to travel and live outside the U.S. Half the year; lifestyle choices include house sitting (free housing and car), long term renal vs hotels, live in low cost markets (like the Philippines)

Financial situation: Planning to live on 8k/month (2200 mortgage; will take advantage of ACA subsidies and put aside 1500/month in HSA; rest is enough to cover living expenses and also fun activities (scuba, sailing, etc)

income from:
- 3k from rental properties (10k rental income a month, 7k for operating expenses and enough cushion, based on 10 yr rental experience for rainy days)

- 2k from an owner financed loan at 8% return (2 years payment history)

- 3k from investments (500k of investments set aside in Vanguard for this purpose....will utilize tax minimization strategies... HSA, Roth Conversions, etc to withdraw but psychologically, this is our pot of money to live off of or access if absolutely needed)


Assets:

- Investments of 1.94 (includes 500k Vanguard and 300k Mortgage Loan) with remainder in 401ks and IRAs as of today....80k drop from 30 days ago.
- 6% cash
- 25% bonds
- 51 % stocks (37 U.S.)
- 16 % mortgage loan (8 percent return)

- primary residence (125k equity...conservative estimate...may sell in a couple of years when market improves or we decide to live internationally)

- rental properties 9 units....5 sfh and 4 condos in 3 states (950k in equity ....conservative estimates). We will eventually liquidate but right now, all have positive cash flows and are profitable so no specific plans....when we do liquidate, will implement tax minimization strategies as well.

- in addition to the 110k cash above, we also have 30k now in savings / checking and expect another 50k by the time we resign in November

- My husband will get a pension of 2k a month at age 55 plus approx 5k for SS benefits between us at retirement age


So....do the numbers make sense for us to be FIRE or are we nuts?


Sent from my iPad using Tapatalk
bearkeley is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-25-2015, 03:25 AM   #2
Full time employment: Posting here.
 
Join Date: May 2011
Location: Twin Cities
Posts: 523
Congrats on your impending retirement! You still look very good to me.

Less than 3% SWR if you lump your investments together (inc. loan) and with the upcoming pension it makes it even more comfortable. Assuming your expense projection is correct you should be fine.

I feel your pain on the loss - my DW is retiring in November as well but I've rerun the numbers multiple times this week and even if stocks lose 30% more we will be fine. More than that and we might have to talk.
Fishingmn is offline   Reply With Quote
Old 08-25-2015, 06:50 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
+1 I get ~3% too before pension or SS. Relax and try to ignore the market lunacy as much as you can.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 08-25-2015, 07:42 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 9,067
If it makes you feel any better, I'm sure there are a lot of people who just retired or about to retire that have raised an eyebrow to the latest correction. On the surface, you look good but there is the 'comfort' factor to consider. Only you can decide if that is good to go.

Best of luck.
__________________
Retired 3/31/2007@52
Investing style: Full time wuss.
Dawg52 is offline   Reply With Quote
Old 08-25-2015, 10:43 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 21,201
Quote:
Originally Posted by Dawg52 View Post
If it makes you feel any better, I'm sure there are a lot of people who just retired or about to retire that have raised an eyebrow to the latest correction. On the surface, you look good but there is the 'comfort' factor to consider. Only you can decide if that is good to go.

Best of luck.
Would depend on whether one is FIRE, SIRE or somewhere in between. Crucial difference...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 08-25-2015, 11:00 AM   #6
Recycles dryer sheets
 
Join Date: Jul 2013
Location: Villa Grande
Posts: 275
I envy your relatively young ages, excellent planning and position, and exciting adventure ahead! Your stats certainly look good to me, but what does Firecalc say? Don't let your careful long-term planning be upended by market volatility. This may in fact be a good test of your emotional resolve. Best of luck!
TimSF is offline   Reply With Quote
Old 08-25-2015, 11:22 AM   #7
Recycles dryer sheets
bearkeley's Avatar
 
Join Date: Aug 2005
Posts: 299
Quote:
Originally Posted by Midpack View Post
Would depend on whether one is FIRE, SIRE or somewhere in between. Crucial difference...

Midpack....not familiar with SIRE....or in between...can you elaborate?

All - thank you for the reassurance. It truly makes a difference! (Funny how strangers online can make such a huge difference!) :-)

FireCalc looks good for us as well....I guess it also helps to not have kids to leave $s too....we could totally use it all up if we wanted to, assuming of course we can successfully transition from a savings mentality! (We plan to play psychological tricks on how we 'pay' ourselves monthly to avoid meltdown during times like these!)




Sent from my iPad using Tapatalk
bearkeley is offline   Reply With Quote
Old 08-25-2015, 11:34 AM   #8
Recycles dryer sheets
 
Join Date: Jul 2013
Location: Villa Grande
Posts: 275
Quote:
Originally Posted by bearkeley View Post
All - thank you for the reassurance. It truly makes a difference! (Funny how strangers online can make such a huge difference!) :-)





Sent from my iPad using Tapatalk
Agree with this wholeheartedly. We can talk about this stuff here whereas it is next to impossible to discuss our detailed financial situation and early-retirement plans with our closest friends and colleagues.
What a gift this site is. Thank you, "early retirement.org"!
TimSF is offline   Reply With Quote
Old 08-25-2015, 11:39 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by pb4uski View Post
+1 I get ~3% too before pension or SS. Relax and try to ignore the market lunacy as much as you can.
Certainly good advice. But which is the market lunacy, this abrupt downdraft, or the bloated valuations that most of us tolerated in our portfolios prior to the downturn?

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 08-25-2015, 11:44 AM   #10
Full time employment: Posting here.
Willers's Avatar
 
Join Date: May 2013
Posts: 725
Quote:
Originally Posted by bearkeley View Post
Midpack....not familiar with SIRE....or in between...can you elaborate?
SIRE = Secure income, retire(d) early

One other thing to keep in mind is that when the pension kicks in it may limit your ability to do Roth conversions if you want to keep the ACA subsidies. It appears that you are still OK, but it's something to take into account in your planning. A good problem to have.
__________________
“If you don't do it this year, you will be one year older when you do.” - Warren Miller
Willers is offline   Reply With Quote
Old 08-25-2015, 11:46 AM   #11
Full time employment: Posting here.
Willers's Avatar
 
Join Date: May 2013
Posts: 725
Quote:
Originally Posted by haha View Post
But which is the market lunacy, this abrupt downdraft, or the bloated valuations that most of us tolerated in our portfolios prior to the downturn?

Ha
Do we have to choose? Both?
__________________
“If you don't do it this year, you will be one year older when you do.” - Warren Miller
Willers is offline   Reply With Quote
Old 08-25-2015, 03:18 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
Quote:
Originally Posted by haha View Post
...But which is the market lunacy, this abrupt downdraft, or the bloated valuations that most of us tolerated in our portfolios prior to the downturn?...
My answer: Yes.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 08-25-2015, 03:25 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2012
Location: Seattle
Posts: 6,005
You need 8k a month to live on (which doesn't sound like cheap areas to me) and your pension plus SS gives you 7k, plus you have a 2 million net worth? I think you need to work another 10 years. Just to be extra safe.
Fermion is offline   Reply With Quote
Having second thoughts....
Old 08-25-2015, 06:16 PM   #14
Recycles dryer sheets
bearkeley's Avatar
 
Join Date: Aug 2005
Posts: 299
Having second thoughts....

Quote:
Originally Posted by Fermion View Post
You need 8k a month to live on (which doesn't sound like cheap areas to me) and your pension plus SS gives you 7k, plus you have a 2 million net worth? I think you need to work another 10 years. Just to be extra safe.

8k is huge because of a mortgage we still have on our primary. We love the place but with our lifestyle (traveling), it doesn't make sense to keep it. Figured we would get it ready to sell next year (yard work mostly) and see if the market picks up. (It's a rural waterfront area so it's just starting to recover now). When we sell, we would definitely move into a lower cost of living option. If we find a location we like during our travels (Philippines, for example), our insurance expenses would also drop significantly. Until then, we still need to set about 5k aside.

2m in investments plus real estate as of yesterday...trying not to look at the market today given recent advice from 'above' ....


Sent from my iPad using Tapatalk
bearkeley is offline   Reply With Quote
Old 08-25-2015, 06:50 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2012
Location: Seattle
Posts: 6,005
Sounds exactly like our place (rural waterfront). Everyone wants to live in a high rise in the city. Property prices even for waterfront in rural areas still have not recovered from the crash.
Fermion is offline   Reply With Quote
Old 08-25-2015, 06:58 PM   #16
Recycles dryer sheets
 
Join Date: Jul 2013
Location: Villa Grande
Posts: 275
Quote:
Originally Posted by Fermion View Post
Sounds exactly like our place (rural waterfront). Everyone wants to live in a high rise in the city. Property prices even for waterfront in rural areas still have not recovered from the crash.
True. Our lovely place on a rural river in NorCal is still about 10% below the 2005 price we paid for it.
TimSF is offline   Reply With Quote
Old 08-25-2015, 09:21 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,003
Quote:
Originally Posted by haha View Post
Certainly good advice. But which is the market lunacy, this abrupt downdraft, or the bloated valuations that most of us tolerated in our portfolios prior to the downturn?

Ha
I do tend to think valuations were bloated. And I'm glad I took withdrawals when valuations seemed high, even if it was more than we needed to live on.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 08-25-2015, 10:16 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by Willers View Post
Do we have to choose? Both?
Don't have to do anything, But I can't think of a more relevant distinction to make

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 08-28-2015, 08:10 PM   #19
Recycles dryer sheets
Rothman's Avatar
 
Join Date: Apr 2013
Posts: 252
Quote:
Originally Posted by Fermion View Post
You need 8k a month to live on (which doesn't sound like cheap areas to me) and your pension plus SS gives you 7k, plus you have a 2 million net worth? I think you need to work another 10 years. Just to be extra safe.

+1 let me jump on the SWR < 1% bandwagon! at that level about 1/2 your dividend income can add to your equities holdings to be safe for market downturns. Or you could retire today, since you really do have enough for any reasonable scenario of risk.


Sent from my iPad using Early Retirement Forum
Rothman is offline   Reply With Quote
Old 08-29-2015, 08:15 AM   #20
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
You are clearly scrappy folks to have put together such diverse assets so young, and have a pension to boot. I bet you could quit and adapt as necessary. We are a couple years older and also don't have children, which takes away a lot of risk and mental burden since we don't have to be tethered to school districts and save for college. Still, just to play "What Ifs", do you really want to try to manage U.S. real estate from the Philippines and traveling the world? I am not experienced in real estate, on purpose, but that seems a headache to this novice. If all of the RE was liquidated and something like $2 million invested, a 4% SWR would kick off enough to live really comfortably wherever you want to be. Also, in case you don't know it yet, the Go Curry Cracker site/blog seems a perfect fit for your interests. You are inspiring!


Sent from my iPad using Early Retirement Forum
Markola is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What is the difference b/w having or NOT having a beneficiary? swampwiz Life after FIRE 14 06-15-2010 12:16 AM
My Second thoughts on Prepaying Mortgage stephenandrew FIRE and Money 15 04-11-2008 03:20 PM
FIRE Plans - Confident Or Second thoughts given US Economics chinaco FIRE and Money 28 09-24-2007 12:56 PM
Second thoughts on Roth Conversions ESRBob FIRE and Money 18 04-19-2007 09:53 AM
Second Home Thoughts Rich Life after FIRE 12 05-24-2005 04:26 PM

» Quick Links

 
All times are GMT -6. The time now is 06:16 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.