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Hello from Richmond
Old 10-01-2016, 03:01 PM   #1
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Hello from Richmond

I stumbled across this forum a year ago and have been reading it as a guest, but now it's time to exit the shadows.

First, the facts. I am 57, extremely married, with five miraculous offspring. The college years are behind us, although the legacy of educational debt is not. Since everybody else is coming clean with their stats, mine are roughly as follows:

Me and DW: 1.5M in 401Ks & IRAs - this is retirement dough in various piles that converge to something like 75/25/0 AA
170k in Schwab account - this is purely discretionary, used for speculations and charity. If it turns into a million or zero it won't make an atom of difference for retirement
20k in credit unions as cash on hand for running the house
65k in non-COLA pensions starting whenever we take them between now and 65
80k in HELOC (this represents the remaining collegiate carnage) on a 5 year path to pay off
35k in car loans which will be paid off in two years

I calculate we could retire in perfectly suitable comfort for about 115k (including taxes) once the debts are gone. Currently gross twice that. DW loves her j*b, will likely stay at least to 62 but not past 65.

I don't love my j*b. In fact they'd have to pay me to get to go back! My glide path is 65, but if megacorp gave me the golden boot at 62 I'd be happily rubbing my keister all the way home. It's not the worst j*b in the world, so I am willing to endure it for a few more years to work off the debts.

Second, the more personal stuff. I recommend you move on now if you don't want to suffer through my anecdotes. But if you are at all interested in my human story, read on.

I don't have any blogs or websites, not even FB. We are not hardcore LBYMs like some of the ER posters, but we're not extravagant either. We buy non-flashy cars and keep them for 15 years; take one cruise every 25 years whether we need to or not. We don't keep to a written budget, but only spend on sensible stuff. Glam and bling just aren't our style. We max our 401Ks, bank about another 30k per year, and whatever's left we blow on home improvements and repairs in anticipation of NOT having to do much of that once we FIRE in another 5-8 years.

Yeah, I know that 62-65 is not particularly E, but compared to my siblings who will w*rk at crummy j*bs till they croak, it's pretty good. My parents are in their mid-80s and still kicking, so I want to be prepared in case I live a long time. Better a few extra morning commutes than dining on Purina Senior Vittles in my golden years.

However, I admit to having thought about retirement since I started my career in 1980. My very first boss showed me an example of how not to do it. He had lived a frugal lifetime, was debt-free and had saved a generous stack, was fully pension and SS eligible, and was offered an early out when they eliminated his job. But he had that Depression-era mindset that the cushion can never be too thick, so he took a transfer that he hated so as to stay on and pad the stack. He w*rked about 4 years, then got liver cancer and died in 3 months without ever enjoying a minute's retirement.

Of course, thinking about retirement is not the same as doing something about it. I confess to having approached it like an amateur, leaving it up to the mechanisms (pensions, 401Ks, IRAs and SS) prescribed by our megacorp and government masters. Some of my peers over the past decades have been more adventurous, job-hopping for advancement or starting their own businesses and compiling impressive fortunes. OTOH, the risk-takers who did not compile fortunes have been curiously quiet, so draw your own conclusions.

Also, I view retirement from a little different angle than my ancestors. I consider the FI to be more intriguing than the RE. If I could earn a living doing one of my hobby interests, I'd be happy to w*rk forever.

Anyway, that's me. I welcome all your observations, even the ones that say I'm misguided or hypocritical. You could well be right. As long as you say it charitably, I'm happy to hear it.
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Old 10-01-2016, 06:11 PM   #2
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My father died of complications from a brain tumor when he was 74.
He had just retired less than 1 year before.

I am not quite sure why he didn't retire at 65. I never asked him.

Part of it may have been that he didn't really have hobbies, so the job gave him something to do. And since he was FI, he didn't feel the pressure of producing at his job.

I have often wondered if he would have retired earlier had he known he'd die at 74.

So, unless you enjoy your job, there isn't a reason to overstay your welcome. :-)
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Old 10-01-2016, 07:12 PM   #3
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Welcome! And as you pointed out, 65 is early for a lot of people, especially for a comfortable retirement.
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Old 10-02-2016, 05:02 AM   #4
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Welcome! Better to retire happy at 65 than in constant fear at 60.
You might like to check out " Get a life: you do not need a million to retire" by Ralph Warner and "How to retire happy, wild and free" by Ernie Zelinsky. Lots of interesting ideas.
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Old 10-02-2016, 05:53 AM   #5
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Welcome! Sounds like you're on a comfortable path. Also nice to see there's one other person on the planet besides me who's not on FB!
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Old 10-02-2016, 08:35 AM   #6
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Welcome to the light from the shadows.

Have you run your situation through Firecalc or Quicken Lifetime Planner? With SS you may be closer than you think.

How much of your $115k is for taxes? Many REs provide more than is necessary for income taxes since taxes commonly drop precipitously when you are no longer working. Our is about 10%.. 7% federal and 3% state... (vs. more than 30% when we were working) and our federal rate would be zero if we didn't do Roth conversions. You can get a good idea on what your taxes in retirement might be by doing a practice return in TurboTax or Taxcaster or the taxrates.org calculator.

Also, $115k is higher than most here but spending is often a function of lifestyle. Have you tracked your expenses or is the $115k an educated guess?

Also see: Some Important Questions to Answer Before Asking - Can I Retire?
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Old 10-02-2016, 09:41 AM   #7
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welcome aboard
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Old 10-02-2016, 11:47 AM   #8
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Welcome!
Is 65K in annual pensions? What about SS? If you have 65K in annual pension and will have SS, you may be able to retire now. Maybe do something else you love for a fraction of the pay. Looks like DW loves her job and can continue working if she prefers.
And as pb4uski pointed out, you may want to better estimated expected taxes (as part of your 115K expenses).
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Old 10-02-2016, 11:54 AM   #9
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Welcome to the board. Like you, I lurked for a while before decloaking.

Looks like you're in good shape and have a good plan going. I agree with pb4uski's suggestion to run your numbers through firecalc, quicken lifetime planner, and fidelity RIP. They helped me gain confidence in my plan, also identified areas I hadn't really thought about.

I also agree that taxes might not be as onerous once you stop working... You'll no longer be paying SS and Medicare taxes. But you might have higher health insurance costs...
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Old 10-02-2016, 12:41 PM   #10
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Quote:
Originally Posted by pb4uski View Post
Welcome to the light from the shadows.

Have you run your situation through Firecalc or Quicken Lifetime Planner? With SS you may be closer than you think.

How much of your $115k is for taxes? Many REs provide more than is necessary for income taxes since taxes commonly drop precipitously when you are no longer working. Our is about 10%.. 7% federal and 3% state... (vs. more than 30% when we were working) and our federal rate would be zero if we didn't do Roth conversions. You can get a good idea on what your taxes in retirement might be by doing a practice return in TurboTax or Taxcaster or the taxrates.org calculator.

Also, $115k is higher than most here but spending is often a function of lifestyle. Have you tracked your expenses or is the $115k an educated guess?

Also see: Some Important Questions to Answer Before Asking - Can I Retire?
Excellent questions. I do not have all the answers yet.

Firecalc says I'm 100% in 2017 if I either take SS asap or if I squeeze 5k from the 115; alternatively I need to wait till 2018 to reach 100% if I delay SS to 70 (which had been my intent).

But Firecalc only addresses the income side. It is a curious feature of the RE planning process that the factor over which I should have the most control - spending - is the one which presents the greatest uncertainty.

The 115k is indeed an educated guess which includes some actual data on costs like food and utilities, and then has a great honking contingency allowance in it. For example, you are right that I am overestimating taxes. One calculator says I'm over by 30%. But I am not confident the existing tax structure will remain constant. Same thing with medical costs. A lot can change over the next 30 years.

Similarly, I wonder whether being on permanent vacation will prompt us to spend more because we will have more time to do stuff. Will DW get the travel bug? Will I go from model trains to flying RC planes? Everyone we work with is employed; will we feel more charitable because we will encounter more unemployed people? I don't know that any of those will happen, but I also don't want the answer to be always "No".

Obviously we could survive on considerably under 115k. Half of America lives on half of that. But I'm less concerned about retiring from than retiring to. Perhaps I'm hoping that, like that first boss I had, an event will alert me that it's time. And unlike that boss, I hope I won't make the wrong decision.
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