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Hi everyone, I've been working on the railroad
Old 09-09-2017, 02:59 PM   #1
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Hi everyone, I've been working on the railroad

Hi all, after reading other sites advice boards you folks seem the most calm, sensible and fun. I've been lurking in the background for some time and finally registered. Would like to FIRE using age 55 rule but leery about what I have and would like outside input.

I'm 56, DW is 55. No kids. I retired out of the Marines in 1999 and went straight to work on the railroad. As for debt I owe about $9000 on a 401k loan ( I have cash in pocket to pay that off if I quit) and $22,000 on auto loan. As for assets, 401k has $400,000 traditional and $7000 Roth in it, military pension is approx $1670 a month (just going into saving at the moment), DW receives $775 a month from SS. She has $15,000 in Roth IRA and I have $6000 in Roth IRA, $20,000 cash on hand plus about $20,000 in Exxon stock that started as a teaching lesson and has now become to be considered as our emergency fund. Also some precious metals just for a very small diversification.

Railroad UHC insurance covers both of us along with myself having Tricare as secondary and DW is covered on Medicare part A. After the auto is paid off I would probably pay the extra to have Tricare be her secondary insurance. We also use the commissary and pharmacy located on the AFB near us which is a big saver.
Bottom line is we spend about $2600 a month for all utilities/auto/dining out/insurance/taxes and anything else we want. I would plan to take $1400 a month from 401k until I'm 62 at which time I'll take railroad retirement which is calc'ed at approx $2000 a month in today's numbers. Wife would get her railroad retirement portion the following year at an estimated $1000 a month.

Right now at work I call in at noon everyday 7 days a week (unless I've worked 5 straight days in a row) to see if I'm working second (starting hours of 2:30-4:00 pm) or third shift (10:30-11:00 pm) that day or if I'm on first shift (6:30-8:00 am) the next day or if I'm off until noon that day. It's a great job but the schedule is really getting hard on me as I get older. I am also open to working part time if I do FIRE.

Thanks in advance for any advice.
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Old 09-09-2017, 05:15 PM   #2
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You seem to be OK for income in the first several years. You do not say if your pensions are COLA or not. If not, I would have some concern about you keeping up with inflation over 30+ years.
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Old 09-10-2017, 06:34 AM   #3
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Both military and railroad pensions having annual cost of living allowances. One other thing I forgot to mention is that 40% of military pension is tax free.
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Old 09-10-2017, 08:20 AM   #4
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The loans bother me. We hate debt in every form. It wears on our psyche and the interest interferes with our comfort zone. It does not sound like you hate your job. It seems the driving force behind FIRE is to get out of a miserable job situation which causes stress and health problems. Sounds like DW got SS early, I assume it will remain $775/month.

There is insufficient emergency back up. Can't use 401K until 59 unless you pay a penalty. This plan seems on the edge. Use Firecalc and Vanguard Nest Egg calculations.
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Old 09-10-2017, 09:03 AM   #5
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Originally Posted by Rianne View Post
The loans bother me. We hate debt in every form. It wears on our psyche and the interest interferes with our comfort zone. It does not sound like you hate your job. It seems the driving force behind FIRE is to get out of a miserable job situation which causes stress and health problems. Sounds like DW got SS early, I assume it will remain $775/month.

There is insufficient emergency back up. Can't use 401K until 59 unless you pay a penalty. This plan seems on the edge. Use Firecalc and Vanguard Nest Egg calculations.
Wrong He say he going to use the rule of 55 to withdraw from 401, no penalty
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Old 09-10-2017, 09:44 AM   #6
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I don't have any suggestion for the OP, but would like to contribute the following song.

My mother has a deceased cousin who, late in life, said that he did not like his pharmacist career and would rather be driving a locomotive to go places.

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Old 09-10-2017, 09:59 AM   #7
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Originally Posted by Rianne View Post
The loans bother me. We hate debt in every form. It wears on our psyche and the interest interferes with our comfort zone. It does not sound like you hate your job. It seems the driving force behind FIRE is to get out of a miserable job situation which causes stress and health problems. Sounds like DW got SS early, I assume it will remain $775/month.

There is insufficient emergency back up. Can't use 401K until 59 unless you pay a penalty. This plan seems on the edge. Use Firecalc and Vanguard Nest Egg calculations.
As I mentioned I do have the cash to pay off the 401k loan immediately. As for the DW's SS, she is bipolar 1 and is pretty much a hermit (and not a spender even when the manic cycle kicks in). We use her $$ for auto payment. I would probably get rid of it if I did pull the retirement cord for the reason that I do all the driving when together and I prefer my truck.
As for job, my doctor told me to tell them that they need to keep me on a regular schedule, management just laughed. Can't blame them, the railroad is a different critter when it comes to work.
Firecalc shows 100% with a small decrease until the 6 year mark when I'd start collecting RR retirement. I used two different amounts on spending, $20k and $24k, both more than I expect it to be.
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Old 09-10-2017, 10:06 AM   #8
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Wrong He say he going to use the rule of 55 to withdraw from 401, no penalty
alaska55,

One thing I did learn about leaving my 401k with our company plan is that it doesn't allow for a constant fixed amount to be sent every month, I would have to fill out paperwork requesting an amount when I need the funds. Also that when they sell funds that it's done by pro rata, so 60% would come from stocks and 40% from bonds. I'm not hip on that idea and may look to moving what I don't need over those 5 - 6 years to an IRA and let it grow.
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Old 09-10-2017, 10:28 AM   #9
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Originally Posted by Rianne View Post
The loans bother me. We hate debt in every form. It wears on our psyche and the interest interferes with our comfort zone. It does not sound like you hate your job. It seems the driving force behind FIRE is to get out of a miserable job situation which causes stress and health problems. Sounds like DW got SS early, I assume it will remain $775/month.

There is insufficient emergency back up. Can't use 401K until 59 unless you pay a penalty. This plan seems on the edge. Use Firecalc and Vanguard Nest Egg calculations.
Thanks for the reply Rianne,
DW would receive approx $1000 in 2024 (age 62) according to Railroad Retirement future estimates calculator using today's numbers. What would you recommend would be a sufficient emergency back up amount?
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Old 09-10-2017, 10:41 AM   #10
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I think you are in good shape. I'm also retired military and with medicare and Tricare my monthly medical/prescription costs are very low which is a huge advantage. Your car loan does not bother me because you have the cash backup and your probably are at the moment making more on your investments than the very low loan rate is costing you.

I waited until 69 to take SS and DW is waiting until 66. I sometimes wonder if paying off my house was the wrong thing to do from an investment standpoint, but knowing it's ours is a very welcome feeling. You might also check the Boglehead's forum. Jack Bogle should receive a freedom award for what he did for investors with his Vanguard index funds. I find retirement wonderful, and not worrying about money makes it even better
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Old 09-10-2017, 11:19 AM   #11
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Originally Posted by NW-Bound View Post
I don't have any suggestion for the OP, but would like to contribute the following song.

My mother has a deceased cousin who, late in life, said that he did not like his pharmacist career and would rather be driving a locomotive to go places.

I thought about making a video of me singing that song to make my post unique but then thought I'd rather have others folks input on retirement than boo's and hisses about my musical talent! LOL!
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Old 09-10-2017, 11:20 AM   #12
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I think you should still go for it. You'll never know if you don't try.
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Old 09-10-2017, 01:10 PM   #13
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Originally Posted by Swordplay Charlie View Post
Thanks for the reply Rianne,
DW would receive approx $1000 in 2024 (age 62) according to Railroad Retirement future estimates calculator using today's numbers. What would you recommend would be a sufficient emergency back up amount?
I think about emergencies often. I guess my nickname should be "chicken little." We have an unusual amount in paper bonds that can be cashed instantly. The EE bonds are making 4%, had them for years. Also have I bonds and cash to last, don't laugh at me, 6 years. This would be without touching our actual RE acct. Uhhh, hurricane, tornado, getting sued for stupid driving error, or getting sued for anything...my emergency radar is pretty big. Plus, I had cancer, pretty good health insurance, but have to be prepared for "pre-existing condition" clause going by the wayside. Did you know one treatment of chemo is @ $25,000.

My DH got sued personally, for barely bumping a pizza driver teenager in the rear. I really mean barely bumping. We thankfully have excellent car insurance who sent spies out to monitor the behavior of this kid. They took pictures of him in Chicago in a band as a drummer. So much for neck and back injuries. We had to pay a minimal amount and the judge threw the rest out. Little experiences like this get to me.

I certainly hope you skirt anything having to do with an emergency. So that's what I mean. Most people say 6 months of living expenses, but since you asked me, I gave you my big picture.
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Old 09-10-2017, 02:20 PM   #14
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I did the testicular cancer thing back in 2004/2005. Pretty good recovery rate for that type and have been free since then. Half way to becoming a eunuch.
I appreciate all your input. It's just more to learn and consider.
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Old 09-10-2017, 05:44 PM   #15
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As for job, my doctor told me to tell them that they need to keep me on a regular schedule, management just laughed. Can't blame them, the railroad is a different critter when it comes to work.
File a disability/worker's comp. claim, using a letter from your Doctor. Document your recent request for change of schedule and mgmt. response. Submit copies to HR. Bet mgmt. will stop laughing..............if not, let 'em fire you...

Welcome...I was going to say "aboard", but caught the pun in time....
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Old 09-10-2017, 06:20 PM   #16
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Welcome. I can imagine how difficult that schedule must be and can understand why you'd want to have a more predictable schedule. Your plan looks good to me, but I have one question. You say you spend 'about" $2,600 a month - is that just an approximation for the post? You should make sure you have a very clear idea for your own purposes and that you've actually tracked your expenses for at least a year.
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Old 09-11-2017, 08:11 AM   #17
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Katiek, I have tracked expenses in the past and am embarrassed.
Electric/gas, cell phones, water, internet, sewer, landline phone average out at about (there's that word again!) $600 a month. Auto loan is $434. Grocery - $400. Property tax and auto/home insurance $365 a month and are paid annually. Many times our grocery bill usually isn't that high since the DW doesn't like to cook (but I do) and with my schedule that means a lot of ordering out or I bring fast food home, ugh!, that's where a lot of the money goes to.
Thanks for the idea. I will definitely go over our spending.
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Old 09-11-2017, 01:02 PM   #18
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Welcome, Swordplay! If you haven't found them already, we have a helpful list of things to think about before you make the leap:

Some Important Questions to Answer

Glad to have you on board with us!
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Old 09-11-2017, 01:10 PM   #19
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Welcome. I can imagine how difficult that schedule must be and can understand why you'd want to have a more predictable schedule. Your plan looks good to me, but I have one question. You say you spend 'about" $2,600 a month - is that just an approximation for the post? You should make sure you have a very clear idea for your own purposes and that you've actually tracked your expenses for at least a year.
Katiek:

As I had mentioned before, I'm embarrassed and I'll show you why.
Just went over May, June, July, Aug 2017 checking acct. These numbers are from only convenience stores, grocery stores, Taco Bell, Chipotles, McD's, Burger King, pizza, chinese, Steak n Shake, Steak-Out, Red Robin, Longhorn Steak House, etc. etc. etc...
May - $613.84
June - $661.53
July - $618.84
Aug - $555.92

I'm totally ashamed of myself now. I'll head back to square one and review what's coming in and going out and where to. Then I'll repost with a video of me singing "I've been working on the railroad" for NW-Bound. Thank you all for the replies, I picked the right board and people to ask my questions to. Hope to hear from you next time Brucethebroker - All aboard!
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