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Hi, I am Class of 2017 ............. Maybe????
Old 09-23-2016, 10:03 AM   #1
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Hi, I am Class of 2017 ............. Maybe????

Long time lurker, relatively infrequent poster. Like many here, I am struggling a bit on when to pull the trigger. Family is me (52) DW (45) and five kids.

Yep, looked through the questions to ask before retiring and have been following the forums also. Lots of great advice and appreciate the collective wisdom here.

Here is our situation in a nutshell:

“Core” Expenses: ~ $6 – 6.5K/month (been tracking these for a while)

Includes the following:
Insurance (house + cars)
Property Tax ($1K/month - ouch!!!)
Food, dining, entertainment, music lessons, clothing, sports, etc.
Non-college educational expenses
$1250 into college savings plans ($250/month for each kids 529)
lumpy expenses (car repair, unexpected items) are averaged in here

Does NOT include
College expenses (more on that below)
Medical insurance + out of pocket medical costs
Federal and State Taxes

Miscellaneous Notes
House is fully paid for (i.e. no mortgage). No plans to move for the foreseeable future
We have made the decision that we will pay for four years of college education for each of our kids. So, we have 20 years of college to fund. Between what has already been paid (two kids currently in college, one starting next year, the last two in 4-5 years), and what we have saved, we currently have about 15 years fully funded with monies outside of retirement savings
DW is a SAHM. Does some minor odd jobs, but that is her "mad" money, and not included in monthly income.

Current Assets:
$1.1MM before tax accounts
$0.3MM after tax accounts

Both are mainly stock funds (~85%) the the majority of that in an S&P 500 indiex fund. The rest is in a bond fund. Low expense ratios on all funds so no plans to change. Should also note that these will be accessible with no penalty.

Have a pension that will currently pay ~ $50,000/year (bit over $4K/month) though non-COLA’d. This will go up about $4500/year if I continue working, or will increase 4%/year every year I delay after retiring. If I retire, the plan is to take the pension immediately.

If I do pull the plug, I have “guaranteed” side gigs that will pay roughly $1K/month

SS would be ~ $30K for me and $13K for DW at FRA. *Actually took 75% of what SSA indicates mine will be to be conservative

When I ran FIRE Calc and cFIRE sim, I make the following assumptions:

$75K/year in expenses

  • $20K/year for insurance (through Medicaid age, then drop to $12K/year) (Ran a test on and it looks like we would be eligible for significant subsidies, but am not counting on it, hence the $20k/year)
  • Added $40K/year for six years beginning in 2018 to cover college costs.
FIRE calc says 100%. cFIRE sim says 90%.
Job is medium stress, but like a lot of people who work for a mega corp, it has been death by 1000 cuts over the past few years (reduction in benefits, minimal/zero pay increases, layoffs, etc.). I have come to the realization that money can buy a lot of things, but it cant buy time.

I was initially thinking 2022, then thought 2020, but after looking at the numbers, maybe mid 2017 is the time to go.


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Old 09-23-2016, 11:15 AM   #2
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Sir, I am 57, with a beautiful wife and 2 kids we had.
Kids are 31 and 26 and we are still paying for multiple college degree's.....our choice and perhaps not a good one....but be careful...
We have paid cash $500K+ for schooling for kids....and not done yet....
Be careful....
I went to the oilfield at age 18 near 40 year ago...still working the oilfield....and I am not qualified to give much advice other than I recommend that you be careful
Life happens...
Cars get wrecked
Kids get in accidents
Kids make poor decisions...
In our case Mom and Dad have been paying for the kids....(enabling?) maybe...
All I can say for sure is
Be Careful

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Old 09-23-2016, 12:54 PM   #3
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Congratulations on reaching the point where you are close enough to FI that you can choose when to ER!

I personally would think this could have some risk in it - severe market downturn (30% or more) between now and 2022 would severely eat into your principal at the same time you are making large withdrawals to cover college costs. I would also look at your asset allocation before pulling the trigger - if you are depending on those investments to cover some of your basic living expenses (at least until you take SS), then I think it's prudent to be a bit more conservative.

If you are prepared to go back to w*rk (at least part time) if needed, or reduce your basic expenses if needed, that would make a difference to me.

Also, once all the kids are out of the house, I would expect your basic expenses to drop, so that does give some cushion down the road.

Good luck with your decision and I'm sure you'll get more opinions!
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Old 09-23-2016, 01:51 PM   #4
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Can you increase your side gig to bring in 2k/month? As to the poster that said to "be careful" yes unplanned things do happen but you can help adult kids by letting them live with you if they hit a rough patch. It sounds like that couple chose the expensive solution to every problem their kids had. 500K for college-ridiculous.
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Old 09-23-2016, 04:26 PM   #5
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If I were in your shoes, it would depend on how I felt come Sunday nights and Monday mornings. How close are those 1000 cuts to an artery? You can make it work, but as others have said, more cushion would be better.
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Old 09-23-2016, 10:48 PM   #6
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TT - agree looking back on paying for multiple degree's..... I could not agree more with you.
Just to be clear, total cost includes living expenses, medical bills, life stuff that happens.....
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Old 09-23-2016, 10:54 PM   #7
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Thanks for the thoughtful replies so far. Things to think about.

once all the kids are out of the house, I would expect your basic expenses to drop, so that does give some cushion down the road.
This was in the back of my mind, but was not trying to count on this. We have seen a decrease in the food budget now that during the school year we are down to 5/7 of previous. Although relatively minor, there would also be a decrease in the budget due to the elimination of work related expense.

I am thinking/hoping that college may become a bit cheaper. We are currently paying close to full boat for the two currently in college. (Un)fortunately, we make enough and have enough in college savings to limit the amount of grants and other aid. $40K/year for six years is probably overkill but trying to be as conservative as possible.

Originally Posted by bigcmagor View Post
How close are those 1000 cuts to an artery?
I like this quote - had not thought of it before. Sometimes, it certainly feels pretty close - like the nights waking up at 0300 in a sweat because I just know that project X or contract X has to be done and the department still has a ways to go. THings that probably would not have been an issue 15 years ago now weigh more on the mind.

Can you increase your side gig to bring in 2k/month?
Possibly, but am not sure. It may start to feel more like work if I do that. LOL

Anyway, lots to think about and again, appreciate the replies.
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Old 09-23-2016, 11:18 PM   #8
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I would work until 55 and bank more money. That's what I did. Now I'm just over 14 months into my retirement and happier than ever.
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Old 09-24-2016, 12:37 AM   #9
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I am also class of 2017. 57, smaller pension, more investments. The kids are on their own. Community college is a very inexpensive way for them to start out. I am not planning for spending to change after RE, just be different, like more travel.
"The mountains are calling, and I must go." John Muir
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Old 09-24-2016, 06:14 AM   #10
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If it were me I would work enough longer to fund the additional $240,000 (6x$40,000) and then retire. Perhaps you could achieve that specific goal in less than 6 years By doing this you would increase your pension fairly significantly($4,500 per year). For each year of increased pension it would be like adding $112,500 to your nest egg (using the safe withdrawal rate of 4% principle) and reduce the number of years between your retirement date and FRA where you substantially increase your income sources.

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