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Old 12-05-2013, 11:21 AM   #1
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Hi, new member here ...

Hi All. Was referred to the forums by a recently ER'd friend, who thought I would enjoy this site -- he was so right!

Starting to look over the rim at 47 (DW is 45) and thinking about when we might be able to exit...

Total port right around $3MM, $800k in tax advantaged accounts, $550k in company (employer equity grants) and the remaining $1.8 MM or so in brokerage accts that I actively manage/trade, earning about 15-20% per yr the past 5 yrs or so. No debt.

DW is at the moment SAHM to our 15 & 16 YO kids, but started a business a couple yrs ago ($30+k investment in that) that is now slightly cash-flow +, though we're not counting on it funding much.

I am well paid, and mostly like what I do -- but ready to do less. Risk is of course we have to pay for college (I think we're OK there), live in an expensive area of So Cal. and will (hopefully) be long-lived (DH's 4 GP's lived to 102, 99, 96 and 94 and my ILs are both VERY active, think daily tennis and extensive global travel, into their mid 70s now).

Have run several FIRECALC based on my current port and investment mix, delayed SS to 70, 45 yr plan as well as other plans, and they suggest we could pull the pin as early as 50, provided we can keep a reasonable level of control on our COL (aside from educational expenses - most of which will be done via 529 or trust accts).

Anyway, glad to have found the site and looking to watch/read/discuss and learn how to make FIRE into reality
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Old 12-05-2013, 11:36 AM   #2
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Was referred to the forums by a recently ER'd friend, who thought I would enjoy this site -- he was so right!
You have a good friend! Stay in touch with him.

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DW is at the moment SAHM to our 15 & 16 YO kids, but started a business a couple yrs ago ($30+k investment in that) that is now slightly cash-flow +, though we're not counting on it funding much.
How much is slightly positive? Is there a reasonable likelihood of this increasing in the near future?

If the earnings and future prospects are minimal, it might be more efficient for your wife to close down the hobby business and find a part-time job that pays a reasonable salary. Worth considering, anyway. And don't worry abut the $30,000 in sunk costs: that's now water under the bridge.

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I am well paid, and mostly like what I do -- but ready to do less.
Hope you can work something out with your employer. Unfortunately it is often difficult to significantly cut back, as most well-paying jobs tend to be all-or-nothing propositions.

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Risk is of course we have to pay for college, live in an expensive area of So Cal. and will be long-lived
All those risks can be managed:

(1) impress upon your teenagers that they will be responsible for funding much of their own education costs. So, they need to get excellent grades (= scholarships) and save the money earned at summer and p-t jobs. If they can't manage that, tell them to plan on attending the local state college so that they can live at home and save on tuition fees;

(2) move to a fly over state where the cost of real estate and living are both substantially cheaper;

(3) not much that you can do about this one, but I recommend eating plenty of fatty foods.
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Old 12-05-2013, 11:59 AM   #3
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Welcome to the forum. You've done fantastic in building your retirement funds - congratulations!

I am also 47 and switched to part time about six months ago. I also live in Southern California and love it here. I go swimming and bicycling almost every day now, and take long walks along the beach.

If Firecalc is telling you that you need to work 3 more years at that savings level, I'm guessing you have fairly high expenses. You may find that if you are willing to cut your expenses back a bit you have more than enough to retire. Then again, if you only need to work three more years to maintain your current lifestyle, and you don't mind doing so, it sounds like you are in terrific shape.
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Old 12-05-2013, 12:52 PM   #4
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Thanks Milton -- insightful points.

Our deal with the kids is we will pay for undergrad, but if they want to go to grad/law/med/bus school, its up to them to find a way to cover those costs.

As far as my employer goes, you're basically correct. Given my role and resp., asking for part- or reduced-time is effectively resigning. And I may yet downshift by moving to a consulting model or other less intensive kinds of service (board, etc.).

DW's business is a hobby and is extremely fulfilling for her after 10+ yrs of SAHM grind ... she loves and deserves it, so as long as it was cost neutral I would like her to keep at it; it probably earns $10k per year, net - essentially enough for DW to make a Roth/IRA contribution or pay for a nice family trip somewhere.

On location, we're highly likely to stay in CA, as all DW's liviing relatives are in the state. We sold the large suburban home last year, and are now renting in a very nice location - more or less same monthly costs as before, but no taxes or maintenance to pay for ... and may continue to rent for a while.
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Old 12-05-2013, 01:08 PM   #5
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Thanks Ready ... we've been fortunate to benefit from the release of a chunk of home equity, a bit of inheritance from my parents and good market returns. We've also been pretty much 100% banking any bonuses or incentives for the past several years as well as maxing out 401(k) contributions and company matching for every employer I've had.

In terms of FIRECALC, I have been playing with alot of assumptions and we could probably get out sooner ... but not with 90+% confidence. I am torn between feeling compelled to work at least until I have line of sight to specific college and healthcare costs vs. just planning for (~500k for school and 4-5k/month for indiv policies).

Our expenses are admittedly high - as you might expect given where we live and our typical entanglements with kids at this age (extra car, insurance, enrichment activities, travel, etc.) and we are now modeling how much and where we can and will plan to reduce things once they're off to school. We have at least 15 and likely 20 yrs living expense right now, assuming no returns and straight-line withdrawls -- but of course it needs to last 2x that long.

I know it's a topic for a different thread/forum, but I've also read that FIRECALC is very conservative in its assumptions. I have built an Excel model that suggest we can do OK even now with 4% WD rates, adjusted for inflation (and with assumptions for taxes COLA, education costs, etc.) for a long time.
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Old 12-05-2013, 01:15 PM   #6
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I know it's a topic for a different thread/forum, but I've also read that FIRECALC is very conservative in its assumptions.
You may have already seen this description of how FIRECalc works. Not sure if I'd call it 'conservative in its assumptions' as it looks at both the best and worst times over the past 142 years of history.
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Old 12-05-2013, 02:44 PM   #7
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I'm a little older, but with younger kids than yours (52 with an 11 and 13 year old)

I found quicken's lifetime planner to be very useful for modelling in the planned saving/change in spending for college expenses. Our plan is that DH retires within the next few months (he's turning 62) and for me to retire in 3 years, when I'm 55. But the kids won't be in college yet - and their 529's still need some funding. So with Quicken we set up our savings plan for their 529's, ending when they turn 21.

Southern CA is expensive - primarily in housing and gas for the car. But other things are far cheaper (home heating in the winter, AC in the summer... we barely use the former and don't use the latter.)

The biggest issue with So Cal is lifestyle creep... you see friends/acquaintances getting new cars, eating at chic restaurants every night, having all the toys.... and it's natural to want to do the same. I just remind myself that they are likely doing it on credit and will never be able to retire. For me - I've figured out my path to retirement is frugal living. And So Cal offers lots of FREE opportunities for great recreation - beach, good weather for sporting activities, good libraries, hiking in the local mountains and deserts... The key is to not have lifestyle creep to keep up with the jones.
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Old 12-05-2013, 07:11 PM   #8
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The government has changed college repayment options a few times in the past few years allowing much of the loans to be forgiven under certain circumstances. I think if I had to do it again, I would have the kids take out loans and check options for repayment after graduation. You can always write the check at that time if you wanted to. You may easily save 6 figures or at worst have to pay loan fees. Being able to keep your 500k for the next 7 to 12 years would cover any loan origination fees and then some.
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Old 12-05-2013, 07:33 PM   #9
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Being able to keep your 500k for the next 7 to 12 years would cover any loan origination fees and then some.
$500,000: what does that represent?
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Old 12-06-2013, 06:25 AM   #10
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$500,000: what does that represent?
The OP stated that he planned for 500k in expenses. But that doesn't mean he has it now. My bad. Either way, I think I would wait and see what the government was offering in the way of assistance. Much like our new healthcare payment system, our higher education payment system has become a wealth transferring vehicle begging to be played.
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Old 12-06-2013, 06:58 AM   #11
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Welcome!
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Old 12-06-2013, 10:33 AM   #12
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Sorry guys .. to clarify on the $500K. We are planning on spending $500k between 2018 and 2023 to put our 2 kids through college and have planned on funding private/competitive schools in the event that they are admitted and matriculate at those kinds of schools ($60k per year/4 yrs per kid plus a little for inflation). That $ is already fully funded via 529 and UTMA accounts. If they end up at other schools, then they will have more flexibility to use the money for grad school (if they go) or if not, then they can have the UTMA dollars to get themselves started. Our only rule in exchange for the funding is they attend and graduate from college.
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Old 12-06-2013, 01:40 PM   #13
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Welcome! Sounds like you are well on your way. Lots of good information about important (and not-so-important) things related (or not so much) to living FI and ER. Enjoy!
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Old 08-25-2014, 03:52 PM   #14
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Hi everyone ... just a brief update on things.

Corp employer announced a sale last week to a large co buyer @ a very healthy premium. If/when this closes, much of my equity position in corp employer will both accelerate and vest (some sooner, some a little later), but in any case will likely make a big dent in FI needs, and potentially pull in RE timing.

Need to actually get to a closing and get final numbers worked out, but this could be a very good thing, personally. I am thinking with only back-of-the-envelope and other portfolio YTD inputs so far, but we could be moving into the Class of 2015 ...

Should be an interesting few months.
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Old 08-25-2014, 03:56 PM   #15
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sounds like a nice development for you. Hope you make it!
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Old 01-29-2015, 01:07 PM   #16
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Just a quick update on the above ... our transaction (sale of co) closed a couple weeks ago and the cash (net of painful tax bite, thank you Uncles Sam and Jerry) has landed.

Currently:

$~1MM in tax advantaged
$~500k in UTMA/529s
$~$4.5 in taxable brokerage

We believe we're now FI.

Now to see how long I end up in OMY with new mega-corp owner. I've got strong financial incentive for 6-9 months, but after that we'll see.
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Old 01-29-2015, 01:47 PM   #17
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Congrats, and thanks for keeping us updated!
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