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Hello all; thoughts on my plan?
Old 03-21-2006, 11:02 PM   #1
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Hello all; thoughts on my plan?

My wife and I are planning on "slowing down" our life a little, neither of us are thrilled with our job nor particularly thrilled with living in suburbia (although the part of Cal we live in is nice and comfortable). We're definitely not ready to fully retire yet (I'm still very much interested in doing work that I enjoy), but we are both very excited about the prospect of changing our lifestyle, moving out of state, switching jobs to something we really enjoy and just taking it a little bit easier.

Current situation:

* We are both 35 years old.
* Two children, 6 and 13
* $570K in investable assets ($300K in 401Ks, $270K in taxable accounts)
* Own a company (with a business partner) that provides income of about $250K annually
* Current savings rate of about $80K per year (@ $57K into 401Ks)
* $15K of debt (car) at 2.9%, no other debt
* Currently rent (just sold the McMansion a few months ago)

We're targetting the move in two years, which should allow us to save another $160K, bringing our total to roughly $730K (plus interest hopefully ), plus the sale of our business should net us personally somewhere between $150K and $400K.

We'd like to then move to an area of the country with some wide open space, a slower pace and lower cost of living. My wife has family in rural Missouri, and we are thinking about that area. We're both planning on continuing to work, perhaps starting a small business, but definitely finding something that we enjoy doing.

While we do like our toys and eating out a lot, we have pretty inexpensive tastes and typically live beneath our means. I figure that once we move to a lower cost area, we can get by comfortably on a combined income of $50-60K annually.

The plan is to not touch any of the savings until we're 55 and we'll continue to save until then, however we'll probably only be able to stash away $10K per year. By the time we're 55 (18 more years of saving from that point), our $730K plus the additional $10K annually should be somewhere between $3-4M (barring any major downturns), at which point we will probably consider full retirement.

I welcome your criticism, ideas, thoughts... thanks.
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Re: Hello all; thoughts on my plan?
Old 03-22-2006, 07:48 AM   #2
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Re: Hello all; thoughts on my plan?

Welcome to the board, ash.

Sounds like a great plan, straight out of Bob Clyatt's "Work Less, Live More" or "Life 2.0". (http://early-retirement.org/forums/i...2077#msg112077) Hopefully you're not accused by the Show Me state of being just another California equity bandit.

How's your business partner feel? How do you switch your occupation to that part of the country?
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Re: Hello all; thoughts on my plan?
Old 03-22-2006, 08:05 AM   #3
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Re: Hello all; thoughts on my plan?

Welcome. Sounds like you have really re-positioned your priorities. Good for you. And nice going on the nest egg at such a young age. Couple of questions:

1. Health insurance? Do you have access and budget for that? Lots of healthy young folks tend to underestimate its importance, but its lack can be one of the classic show stoppers.

2. Have you tried a month or two in the area you are considering? The move may be exactly what you need, but it sounds like a pretty drastic change. A leave of absence to check it out (maybe rent a place in the same vicinity for a few months) may help convince you that it is right (or not).

Just some ideas...* Good luck!
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Re: Hello all; thoughts on my plan?
Old 03-22-2006, 08:40 AM   #4
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Re: Hello all; thoughts on my plan?

Quote:
Originally Posted by Nords
Sounds like a great plan, straight out of Bob Clyatt's "Work Less, Live More" or "Life 2.0". (http://early-retirement.org/forums/i...2077#msg112077) Hopefully you're not accused by the Show Me state of being just another California equity bandit.
Ah, The Show Me state...haha. It's definitely different there, that's for sure.

Interesting point, I've always heard of the issues that locals in places like Montana have with "rich" outsiders coming in and driving up land prices. I've never thought of a farming state like Missouri having similar feelings, but I certainly suppose it's possible. Luckily we have family there (actually both my wife and I do) so I think we'll fit in well (but not too well, I still have all my teeth).

Quote:
Originally Posted by Nords
How's your business partner feel? How do you switch your occupation to that part of the country?
He was disappointed at first, however he's older than I am so he's decided he's probably just about ready himself. I hope that we can end up selling the business together to an outside interest, instead of him buying me out.
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Re: Hello all; thoughts on my plan?
Old 03-22-2006, 08:46 AM   #5
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Re: Hello all; thoughts on my plan?

Quote:
Originally Posted by Rich_in_Tampa
1. Health insurance? Do you have access and budget for that? Lots of healthy young folks tend to underestimate its importance, but its lack can be one of the classic show stoppers.
My wife works for a large (huge) HMO and is already vested in the lifelong medical benefits plan with the following caveats: 1) She has to be employed by the HMO at age 55, and 2) Benefits don't start until age 65.

Unfortunately, this HMO doesn't have a presence in the area we are considering. So, in the short term, we will have to get benefits through other employment in that area or pay directly. In the long term, we plan on taking advantage of the HMO's retirement benefits (when we turn 65).

Quote:
Originally Posted by Rich_in_Tampa
2. Have you tried a month or two in the area you are considering? The move may be exactly what you need, but it sounds like a pretty drastic change. A leave of absence to check it out (maybe rent a place in the same vicinity for a few months) may help convince you that it is right (or not).
Good point. My wife grew up spending a month each summer there. Since we've been married, we typically spend a week a year back there with the kids. None of this is to say though that once we actually plant ourselves there full time we won't find all sorts of surprises!

The winter is very cold and dry and the summer is hot and wet, but I hear spring and especially fall are really nice (although I've never been during spring or fall).
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Re: Hello all; thoughts on my plan?
Old 03-22-2006, 09:23 AM   #6
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Re: Hello all; thoughts on my plan?

Quote:
Originally Posted by ash
My wife works for a large (huge) HMO and is already vested in the lifelong medical benefits plan with the following caveats: 1) She has to be employed by the HMO at age 55, and 2) Benefits don't start until age 65.Unfortunately, this HMO doesn't have a presence in the area we are considering. So, in the short term, we will have to get benefits through other employment in that area or pay directly.
If you get insured through new employment that should cover it. You can COBRA until then.

One of my kids and grandkids live in Columbia. Your weather summary is just right. They seem to like it, with the only regret being that they'd like to be closer to a big city for recreation and travelling. We enjoy visiting there.
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Re: Hello all; thoughts on my plan?
Old 03-25-2006, 11:13 PM   #7
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Re: Hello all; thoughts on my plan?

Quote:
Originally Posted by Rich_in_Tampa
One of my kids and grandkids live in Columbia. Your weather summary is just right. They seem to like it, with the only regret being that they'd like to be closer to a big city for recreation and travelling. We enjoy visiting there.
Checked the map, Columbia is out in the middle of nowhere. If I might ask, what do your kids do there, career-wise? Where did they move from? How did they adapt? What made them choose Columbia? Lots of questions...
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Re: Hello all; thoughts on my plan?
Old 03-26-2006, 06:16 AM   #8
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Re: Hello all; thoughts on my plan?

Quote:
Originally Posted by ash
Checked the map, Columbia is out in the middle of nowhere. If I might ask, what do your kids do there, career-wise? Where did they move from? How did they adapt? What made them choose Columbia? Lots of questions...
Columbia is home to the University of Missouri, and they are a faculty family. It's kind of an oasis, I guess, because of the U. Might be comparable to Chapel Hill, Ann Arbor, Madison, Bloomington, etc. - disproportionate number of cultural amenities, sports, recreation because of a giant university in a smaller town. They are midwesterners from the start.

If you are set on living in Missouri, it might be a good place to check out: all the above, close to your family but perhaps not too close, concentration of young people with wide interests. Not as cheap as other towns but nothing compared to California I'd guess.

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Re: Hello all; thoughts on my plan?
Old 03-26-2006, 08:01 AM   #9
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Re: Hello all; thoughts on my plan?

ash, your plan sounds great, and I hope you & your children will be delighted with your eventual move.

Here's my story...
Although I love the slower pace at this stage of life (we moved from CA to SC in our early 50s and are now in our mid-50s), I miss getting that exhilarating metropolitan hit once in a while, so I've spent some time in SF, DC, or NYC at least once a year so far, and international travel has included a few cities as well, but not quite enough for me (I'm an urban kid and always lived in or near a major city till now). Speaking of urban life, I miss having more races & religions around--it really looked blandly "white bread" to me here at first. Again, travel helps some.

Although I typically go clothes shopping maybe once a year, I miss Nordstrom and the little natural-fiber clothing shops of SF where I was used to shopping, but since I only buy clothes to replace clothes that have died, it's a much smaller part of my life than most women's--but shopping is something everyone should look into before moving to a less cosmopolitan area. Obviously internet and catalogue shopping works everywhere, but I like to see & handle merchandise before buying, especially clothes and shoes.

Before we relocated from San Francisco to Charleston, South Carolina, we "auditioned" the Charleston Symphony--let's face it--the San Francisco Symphony under Michael Tilson Thomas is a tough act to follow! Having the SpoletoUSA Festival here, a couple of good theatre groups, and a strong music department at the College of Charleston helped us say Yes to Chucktown. We also love Asian food and wanted*at least one good Chinese, Japanese, Thai, Vietnamese, and Indian restaurant--check!

It can be a little dangerous to relocate based on where particular people live. After all, they can always move themselves, although tenured professors are very unlikely to do so. When we left SF, we considered moving to the San Diego area, but our friends there are considering leaving themselves, and I haven't even heard from them for months. One major reason we returned to the East coast is that hte kids live here--I see them a lot more often now that I'm on the same coast. I wouldn't relocate to their exact cities or even states, though--they may move again after all. In fact my daughter is relocating to England for a few years! So I'm planning to do more European travel and less Asian travel during that time.
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Re: Hello all; thoughts on my plan?
Old 03-27-2006, 01:46 PM   #10
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Re: Hello all; thoughts on my plan?

Excel FV of $750,000 at 9% for 15 years is $2,731,861.84

Present Value of $2,731,861 at 4% (long term inflation) is $1,516,905.91

At a 4% SWR you will have about $60,000 a year in present day dollars to live on. (before Tax)

Add in the $150,000 in savings during the 15 years and you look good.
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Re: Hello all; thoughts on my plan?
Old 03-27-2006, 02:07 PM   #11
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Re: Hello all; thoughts on my plan?

We are planning a move to the Ozarks area in or around Branson.* It has definately been discovered by Callyfornia as something like 30% of new condos go that way.
I've been watching the area for about two years and have not seen a huge rise in prices yet, but it is bound to happen.
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Re: Hello all; thoughts on my plan?
Old 03-27-2006, 09:16 PM   #12
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Re: Hello all; thoughts on my plan?

Quote:
Originally Posted by Rich_in_Tampa
If you are set on living in Missouri, it might be a good place to check out: all the above, close to your family but perhaps not too close,
Excellent advice!

Quote:
Originally Posted by Rustic23
At a 4% SWR you will have about $60,000 a year in present day dollars to live on. (before Tax)
Thanks rustic. I think $60K will be plenty for us once we factor in my wifes (small) pension and SS (while I'm not counting on SS, I am sure that the feds will keep raising taxes to support it).

Quote:
Originally Posted by JPatrick
We are planning a move to the Ozarks area in or around Branson. It has definately been discovered by Callyfornia as something like 30% of new condos go that way.
I've been watching the area for about two years and have not seen a huge rise in prices yet, but it is bound to happen.
If you don't mind; where are you moving from and what made you decide on Missouri, or are you making an intrastate move?
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Re: Hello all; thoughts on my plan?
Old 03-27-2006, 10:10 PM   #13
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Re: Hello all; thoughts on my plan?

Quote:
Originally Posted by ash
Excellent advice!*
If you don't mind; where are you moving from and what made you decide on Missouri, or are you making an intrastate move?
Moving from Texas.* A few reasons, not in any particular order;
*I need a lake nearby.
*Reasonable cost of living
*Central location
*We actually like the climate.* Disclosure- - Half our lives in cold climates and the other half in very hot climates.* MO is in the middle.
*Lots of opportunities for small business or part time work if we are so foolish.
*Ready for some small town living again.
*Endless entertainment.
*It's an area our kids might want to settle in and one I'd like to see some Grand Kids growing up some day.

*We have test driven the area while on vacation.
*Just a few miles from a midsize city (Springfield)
*Medical seems decent
Plus, our original plan to move to the Gulf Coast was scuttled by you know what.
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