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I think I can. I think I can.
Old 01-15-2014, 07:00 AM   #1
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I think I can. I think I can.

Hi All!

I have been following this board for years and waiting for the day I could RE. However, my plans were accelerated as I was laid off on New Year's Eve. I need either some reality, or courage. Do I look for a job and work for a few more years, or do I just enjoy life? Here's my info:

48yo
Spouse is 54
0 debt
Health Insurance - Covered for both of us for life! (i know this is HUGE savings)
Spouse receives $75k in pension
150k Cash
$700k - retirement accounts

My plans are to live off $75k/year, and use savings/investments only for emergencies or large purchases. Our expenses/taxes where we currently live are very high. We're spending approximately $75k/year now. We're also looking to relocate to a warmer, more tax friendly state with great views. I figure we'll save between 5-10K/year in tax/heating/cost of living.

I'm currently in limbo deciding if I need to find another job, or if we're ready to go. I'd love to hear what you think.

Thanks!
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Old 01-15-2014, 07:04 AM   #2
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Gil, welcome to E-R.org. I suggest you start here: Some Important Questions to Answer Before Asking - Can I Retire?
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Old 01-15-2014, 07:15 AM   #3
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Originally Posted by Gil24 View Post
Hi All!

My plans are to live off $75k/year, and use savings/investments only for emergencies or large purchases. Our expenses/taxes where we currently live are very high. We're spending approximately $75k/year now. We're also looking to relocate to a warmer, more tax friendly state with great views. I figure we'll save between 5-10K/year in tax/heating/cost of living.
I don't think you've factored in the effect of inflation on your expenses. Unless your spouse's $75,000 pension is fully COLA'd, you will start finding the true value of your pension not keeping up with your expenses after a few years. Even if it is fully COLA'd, many calculations of inflation don't always include how much more it really costs a retiree to live.

I suggest you run your numbers through FireCalc.
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Old 01-15-2014, 07:31 AM   #4
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Welcome to the Early Retirement Forum. Sorry you got laid off, but hope you can make the best of this opportunity.

Something to think about is what you would do if (heaven forbid) your DW should unexpectedly pass away:
  • Would you get survivor's benefits from her pension?
  • Maybe you could use the $700K to live until you are old enough for social security to start?
  • But then, will social security be enough to give you the lifestyle you would need?
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Old 01-15-2014, 07:40 AM   #5
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I get 100% survivor's benefit from her pension. BTW the pension is COLA'd.
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Old 01-15-2014, 07:47 AM   #6
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I get 100% survivor's benefit from her pension. BTW the pension is COLA'd.
Based on the above and assuming you are relatively sure you can live comfortably at $75K annually, you're golden. The $700K is cushion for now and you presumably have SS in your future.
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Old 01-15-2014, 07:59 AM   #7
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I suggest you run your numbers through FireCalc.
+1. You may answer your own question, or at least you'll have a better basis to discuss your probability of success.

Very sorry to hear you were laid off, best of luck either way.
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Old 01-15-2014, 10:43 AM   #8
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Thanks for the replies. I know I can, but my wife is verrry nervous. But then again, she's nervous about most everything. I guess the more support I garner, the better she'll feel going into it.

She knows I can't handle the over 1 hr commute I've had my whole life.
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Old 01-15-2014, 10:48 AM   #9
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Does your wife receive her pension now or is it something to be received in the future? Are you and her eligible for SS?
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Old 01-15-2014, 10:56 AM   #10
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My wife has been receiving her pension & ssdi for the past 10 years. I will be eligible at 67, and she's already collecting.
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Old 01-15-2014, 11:04 AM   #11
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Welcome Gil24, and sorry to hear you have been laid off. There are two issues here: the probability of financial success, and your psychological readiness for ER.

It certainly sounds as if you will benefit mentally and physically from the end of killer commuting. Do you have activities that will make your ER fulfilling? What are your feelings about being ER?

Financially, you and DW may be OK, but it would be a good idea to run your scenario through some calculators such as FireCalc. Another key piece of information is your expenses. I suggest that you analyze the last two years of bank and credit card statements in detail, look for opportunities to cut expenses (e.g. professional licenses, commuting costs, dry cleaning, etc). Taxes will probably fall in ER.

You mentioned that you are planning a move to a warmer and less expensive location. If you are both ER, this is a great opportunity. Consider whether you might have some employment opportunities in the new location. It could be something completely different, perhaps part time. A little income could go a long way and it could be enjoyable without a commute. Why not go and check out some promising locations and do a little job hunting at the same time? You never know, you might find a job that covers moving expenses. If you are moving to start a new job, your moving expenses may be tax deductible (at least they are in Canada where I live).
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Old 01-15-2014, 01:05 PM   #12
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My wife and I have both always said that I was not built for work. Although I have been successful in my career, I have only worked so that I can enjoy my free time. My work has never defined me, nor given me any pleasure. So mentally, I'm ready. As for hobbies I have more than enough to keep me busy.

I like your idea about job hunting and moving expenses! We've done some location scouting, and will be doing more soon.
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Old 01-15-2014, 01:38 PM   #13
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Well...everything looks okay to me except your expenses - $75k a year? We live on around $45k and that's NZD - around $37500 USD, virtually half. I don't think we could spend that much if we tried. I did a spreadsheet where I tallied up every last cent of spending for the last year, and determined what we could cut out/ down on, then lived six months or so prior to my decision to quit , on that reduced amount. It was easy-peasy. Maybe have a trial run first - that will convince the missus it'd be do-able :-)
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Old 01-15-2014, 02:20 PM   #14
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You are unemployed. Why not just move now to a suitable retirement location, and purchase a house costing less than your current house ( $250K will buy a nice house here in Knoxville, TN, and the taxes are low too). Then, if you find that you really don't like living withing your means, you can always look for a part-time or temporary job in your new location.
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Old 01-15-2014, 02:30 PM   #15
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Here's your biggest problem Gil…you're so money, you don't even know you're money!

You clearly have plenty of money to move into retirement and live quite comfortably and as stress free as you choose. You'll never get these years back and so what if you potentially have to cut back your spending as the years go by. In my worldview, this will happen naturally as you age and stop buying stuff to justify your being a wage slave for the system. JMHO.
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Old 01-15-2014, 03:19 PM   #16
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I think you are probably fine, but you shoudl verify it by running your situation through a few tools, like Quicken Lifetime Planner, Firecalc and a few others.

Does your retirement accounts provider offer financial planning? I have a Vanguard financial plan done in addition to others I did and between all of them I became comfortable with hanging it up.

Any part-time employment opportunities in your profession or line of work? If so, you could use this as an opportunity to "try on" semi-retirement.
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Old 01-15-2014, 03:54 PM   #17
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A large hunk of $ goes towards our two 100 lb dogs. They are a big expense, but what they provide to us is priceless.

I really appreciate the reinforcement. It's very simple. Do as we have done our whole lives - live well within your means. I know if I spent too much I'd live until 100. If I save too much that truck would get me with my luck. So I try and stay right in the middle!

Thanks again all!
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Unemployment Compensation?
Old 01-20-2014, 08:19 AM   #18
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Unemployment Compensation?

Shouldn't you draw unemployment compensation for at least 26 weeks.... maybe longer with the federal extensions...

This should give you some time to ponder before you move or anything....
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Old 01-20-2014, 10:31 AM   #19
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Well...everything looks okay to me except your expenses - $75k a year? We live on around $45k and that's NZD - around $37500 USD, virtually half. I don't think we could spend that much if we tried. I did a spreadsheet where I tallied up every last cent of spending for the last year, and determined what we could cut out/ down on, then lived six months or so prior to my decision to quit , on that reduced amount. It was easy-peasy. Maybe have a trial run first - that will convince the missus it'd be do-able :-)
$75k seems about 2x too high to me as well.
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Old 01-20-2014, 10:45 AM   #20
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$75k seems about 2x too high to me as well.
We all have our "desired lifestyle." DW and I are currently living on $75K but that includes several vacations, a patio and significant landscaping. Most of our health care expenses is currently through my employer. I don't expect to build another patio or make major landscaping changes in the future. I would like to increase our vacations. We are living on what I consider our "very comfortable" budget. If needed, I think we could downsize and tighten our belts to easily live on less than $40K but why would I want to? Our SS and small pension should net us $75K so we'd need to economize very little to cover taxes and normal health care.

FireCalc says I can spend significantly more than this since there is only a small part of my portfolio dedicated to bridging between now and full SS and medicare.
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