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Hi, I'm trying to make an informed decision
Old 08-29-2009, 12:14 PM   #1
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Hi, I'm trying to make an informed decision

I'm 38 and work for the federal government in the DC area, making $86000. I have about $73k in taxable accounts, $62k in TSP, and $27k in my Roth. I also have a bit less than $24k in emergency fund, about 8 months of emergency funds. I have a couple thousand in I bonds and another couple thousand in an account for my rental property.

I max my TSP and Roth, but no longer contribute to the taxable account, as I'm trying to pay off my HELOC. I live in a tiny condo in a lovely location near metro and about two miles from my job. I also have a rental property that breaks even. The HELOC is at $24k, and the first mortgages are $162k and $155k. No CC debt, school loans and 4 y/o car are paid off.

I really, really want to retire early, in part because I'm bored with my job, and partly because I want to sit and write The Great American Novel. But the main reason is that I don't think my health (mental and physical) will support me working full time to traditional retirement age. I know that sounds a little melodramatic, but I've been watching my mom grow confused and forgetful as early as her 50s, but she has my dad; I have to rely on myself.

I'm trying to figure out my ER options under the FERS program. I currently have 5 years in, so at my minimum retirement age (MRA) of 57, I'd have 23 years. If I understand correctly, I could take an immediate annuity, reduced 25% and keep my FEHB health benefits. Or I could defer my annuity at that point until 60 (no reduction as I'd have >20 yrs service) and lose health benefits 57-60. If I waited until 60 to retire, then I'd have the full annuity, FEHB plus an annuity supplement until 62.

What I can't figure out is how much those things are worth, i.e., if I left before my MRA with no health insurance, deferred annuity, no COLA, and no supplement. I've put various scenarios in FIREcalc, ranging from retiring at 52-62, and in each case, it gives 100% success, which makes me suspicious that I'm feeding it bad input.

I also need to figure out an estate plan. My IRA and TSP have my parents as beneficiaries, I think. Beyond that, I keep making excuses: I don't have enough to worry about; my parents/siblings will get it anyway etc.
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Old 08-29-2009, 12:38 PM   #2
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I know very little about federal employment, so I'll leave those questions to others more knowledgeable. I do have two observation however:

1. If you are not already on some program of exercise, you should get on one. Physical health makes a huge difference in mental attitude and acuity. You don't have to become a gym rat, or even join a gym, but doing SOMETHING regularly makes a huge difference in quality (and longevity) both physical and mental.

2. I too love the idea of having time to devote to my writing. I am so looking forward to early retirement to devote concentrated attention to it. But I also see many writers who describe how they got started. So many of them were writing part time while they were employed full time elsewhere. In fact, quite a few who are now full time writers describe their lifestyle as impossible to devote full time to writing. They still write part-time and do something else the rest of the time. If you really really think writing is the thing you want to do in retirement, why not start at least some doing it NOW. You can find out if it's really as much fun as you hope. You can start getting your voice and skills. You can learn a lot more about the craft before you pitch into it full time.

Oh, and I'll also add: everyone suggests having a will is required and you need to have an estate plan. If you have dependents that certainly makes sense. But if you don't have a cause you want to support and you are content to let your assets be divided among surviving parents and siblings with no particular wishes for who gets what or who gets what share, then you can worry about that another day. At worst there is a probate process, which can be expensive some places, or maybe you miss an opportunity to minimize taxes. Don't know about where you live. Either way, if you can fine tune this with an estate plan that's nice, but if not, it's not that important to you. You'll be dead.
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Old 08-29-2009, 01:25 PM   #3
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Hi Quietman,
Thanks for replying.

I agree 100% about exercising. I just started exercising regularly at the gym this year. I made some changes to my diet and lost 11lbs since July 27. I also joined a hiking club and have been going about once a month. I walk home from work when I can (about 45 min walk). I was in physical therapy earlier this year for my back/shoulder. I couldn't sleep because I'd roll over on my shoulder and wake up in pain. Let me tell you, the combination of exercise is the equivalent of the physical therapy!

I do need to make the time to write instead of making excuses. I'm not too worried about doing it full time. I figure I'll cross that bridge when I get to it.

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but if not, it's not that important to you. You'll be dead.
Totally agree. But I still feel guilty every now and again
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Old 08-29-2009, 09:16 PM   #4
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I agree that its important to check out your fantasies BEFORE retiring.

A number of things I tried ended up with the same hassles as work, but I wasn't getting paid for it!

I am currently working harder at making the existing job more enjoyable.

is there no opportunity for you to move around within your division or department?

a change of scene can make a world of difference...though, you have to look before you leap
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Old 08-29-2009, 09:32 PM   #5
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I am a federal employee about to retire under the FERS retirement system.

It is really difficult to tell how easy it will (or will not) be for you to retire before your MRA without health insurance, when we don't really know what the future of health insurance will be in this country. Maybe you could get a high deductible policy, or maybe by that time we will be under some universal health plan or who knows?

Also, Social Security is a big part of a FERS retirement, and who knows if it will even exist by the time you are ready for it? Another unknown.

But there are some things that I do know. First, you are making financial progress and that puts you far ahead of most people in the country. Second, I think a federal retirement is still a good deal.

What I would do if I were you is to keep working, keep paying off that HELOC and keep saving as much as you can. As the time gets closer you will have a better idea of what your options are. Also I would recommend going to a retirement seminar through your agency if you have that opportunity, and reading about the intricacies of FERS retirements at http://www.opm.gov/retire
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Old 08-30-2009, 08:48 AM   #6
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I do need to make the time to write instead of making excuses.
It is hard to get off the couch and turn Oprah off, and work on that story, and that is what separates the men from the boys...writerwise

my story is called the Bohemian Bahamian....stuck on chapter three!

Whether we act on our dreams or not, the dream itself has value to get us through the reality of commuting, negative collegues, sociopathic bosses.

I read somewhere that there are a million novels "published" in one form or another each year, which I found to be a bit demoralizing.

We also have to ask ourselves the real purpose of the writing urge...to help others, to establish an identity, the fulfill the creative urge

Increasingly, I am wondering, if most eyeballs are rather on sites like this and not actually reading novels

It is possible that a writer might have more influence and immediate gratification from contributing to forums such as this.

It is also possible that we can achieve a deeper truer contentment by figuring out how to be happy, even fulfilled, in our grey cubical rabbithole, or the corner office for that matter.

what comes to mind is the buddhist concept....neurosis in, sanity out, neurosis in, sanity out

sorry for getting squishy...it is Sunday!
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Old 09-01-2009, 08:28 AM   #7
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want2retire:
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What I would do if I were you is to keep working, keep paying off that HELOC and keep saving as much as you can. As the time gets closer you will have a better idea of what your options are. Also I would recommend going to a retirement seminar through your agency if you have that opportunity, and reading about the intricacies of FERS retirements at Retirement Information and Services
Good idea. I actually took a mid career retirement class last week, hence the struggle with putting it all together. I plan to pay the HELOC off within 1.5-2 years. I know what you're telling me is the mature thing to do, but I still wanna stamp my feet and pout that I can't retire at 50
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Old 09-01-2009, 08:44 AM   #8
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Get a copy of Quicken and use the retirement planner. Once you plug in numbers, expected inflation, and tax rates (likely to chage over time), then you will at least have some idea what the future might look like, as least as it exists today.
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Old 09-01-2009, 08:50 AM   #9
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my story is called the Bohemian Bahamian....stuck on chapter three!
Hey, I'm really good at getting other writers unstuck. Of course, my methods usually involve beating up one of your beloved characters. You can't have an interesting plot without conflict, you can't have conflict without struggle, and you can't have a struggle without a big ol' obstacle in the way.

Quote:
I read somewhere that there are a million novels "published" in one form or another each year, which I found to be a bit demoralizing. We also have to ask ourselves the real purpose of the writing urge...to help others, to establish an identity, the fulfill the creative urge
So what's the answer for you? For me, story fragments bubble up out of some creative ooze. If I fail to write them down, then they pop and disappear. When I do write them down, then I am like both the storyteller and the Sultan who keeps her alive for 1001 nights wondering what will happen next. It's intensely personal, and it doesn't matter that a million other people are doing it.
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Old 09-01-2009, 08:57 AM   #10
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bizlady, I've used both the firecalc planner and the monte carlo retirement planner that someone here recommended. Is the quicken planner similar?
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Old 09-01-2009, 09:40 AM   #11
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Hey, I'm really good at getting other writers unstuck. Of course, my methods usually involve beating up one of your beloved characters. You can't have an interesting plot without conflict, you can't have conflict without struggle, and you can't have a struggle without a big ol' obstacle in the way.



So what's the answer for you? For me, story fragments bubble up out of some creative ooze. If I fail to write them down, then they pop and disappear. When I do write them down, then I am like both the storyteller and the Sultan who keeps her alive for 1001 nights wondering what will happen next. It's intensely personal, and it doesn't matter that a million other people are doing it.
a relative of mine is a bank examiner. His life is dropping into towns and doing surprise audits.

I have spent some time in the Caribbean and thought it would be an attractive venue to change him into a chain hotel examiner who drops into a hotel in the Barbados (my favorite island) with his slightly older blond cougar female supervisor, only to have the hotel management and staff abandon a hotel full of guests...and they have to stay on to keep things running!

the boss is also a follower of a financial district cult...through this ficticious cult I was hoping to communicate some of my crazy philosophy of life and whatnot

so, we have the sexual tension between the main character and the boss, we have the problem of the abandoned hotel, and the mystery of this weird cult

by the way, I am a big fan of J.D. MacDonald's style.
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Old 09-08-2009, 09:17 AM   #12
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I hadn't heard of JD McDonald before. I googled him and saw that Cape Fear was based on one of his novels. That movie gave me nightmares, so not my genre. Which totally makes me a liar since I just finishes Stieg Larsson's "The Girl who Played with Fire" in a marathon session on Sunday. I've been driving myself nuts because the third book in the trilogy is at our public library...in French. The movie version of "The Girl with the Dragon Tattoo" came out in Europe in February. We may not get it in the US until next year. Argh!

OK, now that that's out of my system. Your plot sounds hilarious. Is that the vibe you were going for? A zany comedy where the examiner tries to juggle the wacky, blonde cougar, and running a hotel while maintaining his sanity? Or is it more of a "of all the gin joints in all the world, she had to walk into mine" kind of vibe? I'll check out some of McDonald's books to get a better handle on the style.
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Old 09-08-2009, 10:09 AM   #13
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the tack I am looking for is zany and unexpected. The opening chapter has them travelling by water taxi to the hotel with a cadaver frozen in the limbo position (being transported to the morgue).

I also want to use it as a platform for my life philosophy and have a character sort of like the guy over the fence in home improvement, who is leader of a cult for yuppies. As part of the philosophy is the importance and validity of ordinary anonymous living, I would make him vice president of a lawn bowling club or something.

Cape Fear is very untypical of JDM. Try one of his light Travis Mcgee books, they all have a colour in the book titles. Travis is a sort of private investigator who lives on a houseboat in Fort Lauderdale. He makes his money recovering stolen or fraud money from con men and crooks, collecting 50%. JDM has a lot to offer regarding life, love and money. He had his MBA and was stationed in India during WWII.

His non-Travis books are deeper. Only a handful of his books are thrillers.

one oddity, I became obsessed with JDM novels in my 40s, having stumbled on him in my never ending quest for novels set in Florida or other warm climes (for us, Syracuse is the deep south and half a days travel from our location) and eventually tracked down every one and read through the collection at at least twice. This was near the end of my father's life, and speaking to him about it, he said the exact same thing happened to him in middle age, an obsession with JDM novels that is.
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Old 09-08-2009, 08:49 PM   #14
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....in the Barbados (my favorite island) ...
absolutely one of our favorites as well... now what is all this talk about Cape Fear... are we talking North Carolina?
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Old 09-09-2009, 08:01 AM   #15
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we were just talking about writing and my admiration for John D MacDonald's books.

The Travis McGee series is great beach or light reading.

More of a guys writer than a gals, and not very politically correct.

If you have fallen out of the habit of reading, this would be an easy reentry point.
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