Hi! FI at 52, is it time out for fun?

[Physics Guy]

Hello! This is Devo. (sorry about that)

Silliness aside, hi. I'm a married 52 year old. My wife is retired. I'm teaching at an international school (its a great job and its a chance to test out expat living even if the choice of location was determined by the job offers not by our perfect country).

Through a combination of work and luck we're fine on the money side of things. If anything we are likely to be too frugal; we're FI already but I'm working because I still like it (moving to an international school has helped) and because one child is still in college and we both like the idea of active income until graduation (we are in a position to pay tuition and are happy to give that leg up). By the normal metrics we're going to have a SWR significantly higher than our normal spending (if you ignore the tuition we've been paying).

No direct questions but I'm here at the forums to get insight into retiring as an expat (still maintaining US citizenship as we don't see ourselves permanently moving overseas) and breaking some of the mental habits that might make spending difficult during retirement.

 

[The Cosmic Avenger]

Welcome! We have our one child heading off to college in 2020, and although we could probably be FI if we needed to, we prefer to keep working through the college years so that we can travel and have a very comfortable retirement.

As for learning to enjoy your money, there are a lot of threads on safe withdrawal rates (SWR), but while many people like to be more conservative and stay well below 4%, if you and your spouse made a good income in the US for most of your lifetimes, you can probably count on Social Security to give you a decent income at age 65 or 70. Of course, most of us here like to plan as if that will go away, but it probably won't in our lifetimes.

 

[pb4uski]

My bigger fear is not running out of money, but not spending enough and ending up leaving a large legacy to our kids when we could have splurged more. They are both frugal themselves so I'm not worried about the legacy being wasted at all.

Mind you, we live quite well.... but it is hard to flip a switch to spend after decades of frugal living. For example, we have a very nice 18 year-old pontoon boat... still in very nice shape... people constantly complement us on our boat being so "new"... it serves our needs very well and I just can't get myself to spring the $25k or so that we would need for a nice new one even though intellectually I know that we can afford it.

 

[Physics Guy]

My bigger fear is not running out of money, but not spending enough and ending up leaving a large legacy to our kids when we could have splurged more. They are both frugal themselves so I'm not worried about the legacy being wasted at all.

Mind you, we live quite well.... but it is hard to flip a switch to spend after decades of frugal living. For example, we have a very nice 18 year-old pontoon boat... still in very nice shape... people constantly complement us on our boat being so "new"... it serves our needs very well and I just can't get myself to spring the $25k or so that we would need for a nice new one even though intellectually I know that we can afford it.

This, minus the boat, is my exact though. Its a nice worry to have in its own right but I'd like to see other people's thoughts.

In very round numbers we have 60k in salary. Ignoring tuition payments for our two kids (only one is still in college) we've been living on 50k. When I hit 60 (just over 7 years from now) I'll gain approximately 30k in annual pension (and cheapish health care). No SS of any real significance because of an oddity of my employment. Due to a much more frugal lifestyle earlier and some luck we also have a mix of retirement accounts and mutual funds totaling 2,000k.

4% return says we can withdraw 80k a year. Even ignoring the pension that's a big increase. We don't have to spend it of course but the math says we have the money. We just need to figure out how to flip the switch.

 

[DrRoy]

My first year of RE, spending more than I did pre-RE, I only had a WR of 1.9% (plus pension of .8% equivalent). The next year I bumped it to 2.3%, and next year I am thinking of 2.6%. You sort of have to get used to going from accumulation with your investments to consumption.

 

[Dawg52]

I retired at 52 and glad I did. As others have said, not easy flipping the spending switch after being fairly frugal. Especially when retiring at a 'young' age. But it gets easier when you start having teeth implants, new hvac's, vehicles etc etc.

 

[Rianne]

Congratulations and welcome to forum. I don't know what country you're currently living, but we're headed to Eastern Europe (Prague, Vienna, Budapest) in May. I'm toying with relocating to Hungary. My grandparents immigrated from there. It looks like the COL is low compared to where we are now. We booked gorgeous, huge apartments (kitchens, WD, 2 bath, 2 bed) for the cost of a Clarion (U.S. chain of hotels, average) here. And in Budapest these apartments are in prime locations. Hmmmm.

 

[Physics Guy]

I'm from the US but currently working in Seoul.

When I started looking for an international teaching job Eastern Europe was high on my list of interesting destinations. I didn't get an offer from schools in that area but I'd still like to explore it.

 

[JakeinChina]

I'm from the US but currently working in Seoul.

When I started looking for an international teaching job Eastern Europe was high on my list of interesting destinations. I didn't get an offer from schools in that area but I'd still like to explore it.

I'm a long time expat still living in China, and if I were you, I would just keep working if you like the teaching job. I know from some friends and most international teacher gigs are great. They pay well, you save a bunch of money, and you get to live in different countries or can stay in the country where your at if you really like that place. If work isn't stressfull, and your wife is still ok with living abroad, then keep it going as its easy money.

If the wife or you are homesick, then that's a different story.

 

[Physics Guy]

You are correct; international teaching jobs are pretty sweet. I'm in the terrific position of being FI but still happy about my job and lifestyle without RE. Still, it doesn't hurt to think about the next step in life and do some planning.

 

[stepford]

Hey Physics Guy. Just a belated response here from another Physics Guy (at least I got a PhD in it and called myself a physicist for a decade or two before selling out to the Aerospace industry).

While I am curious about what kind of physics you do (or did, if teaching is now your primary gig) I did want to make a comment about the retirement finances you describe. My numbers are not too different from yours (between 1 and 1.5x in total assets, pension and expenses) and I was comfortable retiring at 55.

I don't know exactly how being an expat impacts your situation. If healthcare is likely to be low cost, housing expenses stable and your children financially independent then you are probably OK. If any of these are uncertain then I might want a good sized asset buffer (or equivalently plan on a WR well below 4%). I planned using 3% and projected expenses 30% above my typical level, for instance, but many would say this is unduly conservative. Still, as a fellow physics guy, I prefer to leave uncertainty in the quantum realm as much as possible.

 

[Physics Guy]

Hey Physics Guy. Just a belated response here from another Physics Guy (at least I got a PhD in it and called myself a physicist for a decade or two before selling out to the Aerospace industry).

While I am curious about what kind of physics you do (or did, if teaching is now your primary gig)

I hope I don't disappoint you too much, the forum name is somewhat tongue in cheek. I was trained in materials science and electrical engineering but my career has been as a HS physics teacher.

I did want to make a comment about the retirement finances you describe. My numbers are not too different from yours (between 1 and 1.5x in total assets, pension and expenses) and I was comfortable retiring at 55.

I don't know exactly how being an expat impacts your situation. If healthcare is likely to be low cost, housing expenses stable and your children financially independent then you are probably OK. If any of these are uncertain then I might want a good sized asset buffer (or equivalently plan on a WR well below 4%). I planned using 3% and projected expenses 30% above my typical level, for instance, but many would say this is unduly conservative. Still, as a fellow physics guy, I prefer to leave uncertainty in the quantum realm as much as possible.

Engineering or physics doesn't make much difference - I have a similar attitude. I tend to think in terms of a 3 or 3.5% SWR on my assets and view the pension I will start to get at 60 as a form of buffer.