I think I can, I think I can, but why am I afraid?

[behappy]

Hello all! First time poster, been lurking all this time. About me:
44 yo, single,
no kids,
no mortgage/ no debts,
1 primary house ~$600k,
1 vacation house ~$150k,
401k ~$360k (60% S&P index, 20% REITS, 20% Fixed income)
taxable mutual funds ~$470k (60% MMMF, 40% stock mutual funds)
cash balance pension plan ~100k
yearly income ~$125k base + bonus
I save roughly 35% of my income

I'm thinking of retiring before I turn 50. I feel I can, but not really sure. Some days I'm confident, some days I feel like I don't have enough. Maybe my investments are too conservative?
Not a big spender. Not into traveling or vacations. Enjoy books and reading anything. Not into showing off that I have money. Perhaps because I feel I don't have enough? Heck, maybe something is wrong with me!

 

[Sam]

Welcome. Congratulations on your impressive net worth.

I'm thinking of retiring before I turn 50. I feel I can, but not really sure.

You're 44, single, have a net worth over 1.5MM, have 6 more years to grow it, and you're not really sure?

You'll find more than a few here who share your "concern". Have fun.

 

[SteveR]

Welcome to the board. Nice to see folks "decloak" and start posting instead of just lurking.

It would appear you are well on your way to FIRE. The key is to know your expenses and plan for the unexpected in your budget. If your pension and 401k are enough to pay your expenses including all taxes with a comfortable margin then why not pull the trigger?

If you can afford to retire do so as soon as possible. Too many folks wait until they have "enough" and delay retirement well beyond what is really necessary. Some never get a chance to enjoy their retirement.

Keep debt as low as possible and control spending and you can FIRE on a lot less than you think. Run Firecalc and see what you really need vs what you think you need. Nothing is 100% so add some more $$ to cover the unexpected and when you have enough....just do it!

Again, welcome to the board.

 

[DangerMouse]

As Steve mentions, the likely key to the success of your plan is knowing your expenses. It's probably worth taking some time to work out how much you need a year to live the lifestyle you desire. You may be pleasantly surprised and find you can retire sooner rather than later.

 

[TexasGal]

I think you can too!!!! Impressive net worth. Expenses are key as already mentioned.

Welcome to the forum!

Tex

 

[Coach]

Hi, behappy and welcome. If you haven't yet, you should spend some time with FIRECalc and see how the numbers look.

Coach

 

[SamHouston]

You can afford to join the club whenever you feel ready to do so because, for a single man, I think you already have the assets to get you through a nice retirement for the rest of your life. Just be sure that you know what you want to do with the rest of your life and that you fully understand the changes that will come with retirement.

I'm glad that I finally got there and only wish that it had happened for me about five years sooner than it did.

 

[runchman]

If you are single and staying that way, you also have a lot of flexibility compared to those of us with families looking to ER someday.

i.e. you could become a beach bum in hawaii, working at the downhill haleakala bike ride place and living out of your van.

My wife wouldn't be too keen on that idea.

Congrats on having the end in sight !

- John

 

[ajs56]

Behappy,

You have a respectable net worth, congrats on that. Now you have to determine if you can live off your net worth. So you need to determine how much you need annually, and if your nest egg can support that.

As others have suggested, take a good honest look at your annual expenses. Then adjust them for what would likely change if you FIRE (more for health ins, less work expenses, more for travel, etc.). This gives you an annual FIRE cost of living/budget to work with.

Next play with FIREcalc or similar tool to determine if a safe withdrawal rate (SWR) of 4% (or whatever you're comfortable with) can support your annual cost of living. I mention 4% which is a commonly used rate. This rate would mean you need to have saved approximately 25x your annual budget. If you have a 1.5m nest egg, 4% would yield about 60k annually.

If you haven't done so, read up on the theory behind the SWR so you have a basic understanding of how it is derived. Then you can determine if you are comfortable with it.

Once you determine that the numbers work, then you should spend some time thinking about what/why of retirement for you. Why do you want to retire? What will you do with your new found time? This is as important as making the numbers work.

My $.02, FWIW.

 

[behappy]

Thank you all for the warm welcome!

As Steve mentions, the likely key to the success of your plan is knowing your expenses. It's probably worth taking some time to work out how much you need a year to live the lifestyle you desire. You may be pleasantly surprised and find you can retire sooner rather than later.

Yes, I agree I need to work out my expenses, do the math so to speak. I have done some estimation using Fidelity's online retirement planner. Given my frugal lifestyle which I really don't see changing at all, I estimated I can survive on $30k per year. I have not tried FireCalc which several have recommended. I will do that next. I have to also check my assumptions on health insurance, taxes and stuff. Well, thank you all for the advise. I will let you know how I make out. I may have to solicit some more opinions later, so thanks in advance!

 

[behappy]

Irrational fear

Welcome. Congratulations on your impressive net worth.



You're 44, single, have a net worth over 1.5MM, have 6 more years to grow it, and you're not really sure?

You'll find more than a few here who share your "concern". Have fun.

Yes, it's not logical as Spock would say. I've been like this as long as I can remember. I've always been a saver, and I think it is out of fear that someday I will need money and not have enough. I think I have my parents to blame or thank. They always reminded me to save for a rainy day.

 

[behappy]

Thanks!

Behappy,

You have a respectable net worth, congrats on that. Now you have to determine if you can live off your net worth. So you need to determine how much you need annually, and if your nest egg can support that.
....
Once you determine that the numbers work, then you should spend some time thinking about what/why of retirement for you. Why do you want to retire? What will you do with your new found time? This is as important as making the numbers work.

My $.02, FWIW.

I will take your $.02 and save it! Thanks for your holistic advise, i.e., work the numbers and understand the qualitative drivers as well. I still enjoy my job, pay is good, quite challenging and time consumming though. In five years time, I'll be 50 yo, and I figure, there's got to be other things I can do with my life besides work hard. I may get into volunteer work, mentoring, tutoring, spend more quality time with bro, sis, parents and extended family.

 

[jclarksnakes]

behappy,
..You have done well in life. Your net worth is impressive, especially considering your age. As you probably already know the BIG worries for early retirees are inflation and healthcare costs. As you have worked you have probably moved up the income ladder faster than the inflation rate and so inflation may not seem so worrysome to you. We have been lucky and had relatively low inflation over the last 30 years. Inflation rates before that in the 70s did mess up many people's retirement plans. Those kind of inflation rates could very possibly happen again sometime in your future. Healthcare costs are already high and will likely go much higher as you age and may need more healthcare. Your estimate of needing 30K to live seems low considering your two homes are worth 750K. I would think that taxes and utilities on those two homes would have you needing more than 30K a year. Early retirement looks very doable for you but you may need to look at your current expenses more carefully and consider what inflation and healthcare costs might add to them.
Good luck,
Jeff

 

[hayekcapitalist]

Why are you afraid...you'r human and you have been conditioned by a society to fear being different, instead be like everyone else, in order to be liked and fit in: Remember, as Dave Ramsey says, "normal in America is broke" YOU ARE NOT NORMAL! You are where most people wish they were, but are AFRAID of going, because it takes vision, hard work, and deferral of tangible symbols. The cool thing is, once you reach the land of FIRE you don't really care about alot of those things anyway.

You probably are not really afraid, you are wise enough to consider hypothetical scenarios and play what if? That's a smart strategy.

 

[SteveR]

Yes, it's not logical as Spock would say. I've been like this as long as I can remember. I've always been a saver, and I think it is out of fear that someday I will need money and not have enough. I think I have my parents to blame or thank. They always reminded me to save for a rainy day.

Your feelings are not uncommon. Most of us who have reached FIRE or are actively chasing it have a mindset to cut expenses; save the excess; invest...repeat often. Once you retire you must be prepared to flip the switch the other direction and essentially stop saying and start spending. For some this is a seemingly impossible task. We have saved so long it is a real brain pain to think about switching gears and reversing the flow.

Some folks take the saving thing a bit too far and get to a place where they dwell on the amount of money they have so much they forget why they were saving it. I call this the Scrooge McDuck syndrome. Like Scrooge, they like to dive into their vat of money and roll around in it for pleasure. While there is nothing wrong with being proud of a personal accomplishment; some folks need to get past the total figure and start planning to spend it for the rest of their lives.

 

[tightasadrum]

Some folks take the saving thing a bit too far and get to a place where they dwell on the amount of money they have so much they forget why they were saving it. .. some folks need to get past the total figure and start planning to spend it for the rest of their lives.

Well SteveR, I think you nailed me on that one! After 30+ years of work-save-monitor-adjust, again and again, it becomes a habit hard to break. At 44, BeHappy may be able to break out of it easier. The larger the stash, the more comfortable the support level. But I know I can do this spending thing, I really can, can't I?

 

[behappy]

Lol!

....I call this the Scrooge McDuck syndrome. Like Scrooge, they like to dive into their vat of money and roll around in it for pleasure. ...

LOL! Too funny, I have to compose myself. LOL!

You are correct. I have been a saver for a long time and always mindful of what I spend, so I think it will take as much discipline to switch gears and not worry too much about spending a little. Thanks for your wisdom.

 

[behappy]

behappy,
... Your estimate of needing 30K to live seems low considering your two homes are worth 750K. I would think that taxes and utilities on those two homes would have you needing more than 30K a year. Early retirement looks very doable for you but you may need to look at your current expenses more carefully and consider what inflation and healthcare costs might add to them.
Good luck,
Jeff

Hi Jeff, yes, healthcare is one of my main worries. Although I am quite healthy now, who's to say how things will be years from now? I'm hoping and praying that I continue to remain healthy. I appreciate the advice and reassess my $30k yearly estimate. I will run several scenarios and will make sure to leave room for contingencies. Regarding the maintenance of my house, I will sell my vacation house when I RE. Thanks!

 

[behappy]

Why are you afraid...you'r human and you have been conditioned by a society to fear being different, instead be like everyone else, in order to be liked and fit in: Remember, as Dave Ramsey says, "normal in America is broke" YOU ARE NOT NORMAL! You are where most people wish they were, but are AFRAID of going, because it takes vision, hard work, and deferral of tangible symbols. The cool thing is, once you reach the land of FIRE you don't really care about alot of those things anyway.

You probably are not really afraid, you are wise enough to consider hypothetical scenarios and play what if? That's a smart strategy.

Hi, thanks for the kind words. Who wants to be normal if it means I will be broke or up to my eyeballs in debt? I've learned a long time ago not to compare myself to or keep up with the Joneses. I take comfort in the fact that everything I own have been paid for in cash, and if I cannot pay cash it simply means I cannot afford it.

 

[CourtneyC]

You could always retire and find a way or two to earn money on the side, such as consulting. By doing that, you could defer some or all of your expenses and continue to build wealth with your investments.

 

[behappy]

Thanks CourtneyC

You could always retire and find a way or two to earn money on the side, such as consulting. By doing that, you could defer some or all of your expenses and continue to build wealth with your investments.

Thanks CourtneyC for the advise. I've done various permutations using FireCalc and all scenarios point to a high probability of success retiring within 5 years! Yes, sweeeet! However, I like the idea of retiring early and making extra money on the side ... working on my terms. This will provide an extra level of protection/ insurance for many unknowns, which continue to worry me.

 

[Grizz]

Why are you afraid...you'r human and you have been conditioned by a society to fear being different

Very insightful, and though I wish that it weren't the case, I know that to a degree your statement fits me, and I expect many others who are already FI but are also jittery about the RE part.

 

[behappy]

If you are single and staying that way, you also have a lot of flexibility compared to those of us with families looking to ER someday.

i.e. you could become a beach bum in hawaii, working at the downhill haleakala bike ride place and living out of your van.

My wife wouldn't be too keen on that idea.

Congrats on having the end in sight !

- John

Hi runchman, when I posted this thread, I was pretty sure I was going to stay single all my life. I've never had much success finding the right girl. I've pretty much given up. However, recently I met someone. She is really intelligent and beautiful, and I would say mature for her age. Now I'm thinking perhaps I need to plan for two?... The journey continues ...

 

[chinaco]

Hi runchman, when I posted this thread, I was pretty sure I was going to stay single all my life. I've never had much success finding the right girl. I've pretty much given up. However, recently I met someone. She is really intelligent and beautiful, and I would say mature for her age. Now I'm thinking perhaps I need to plan for two?... The journey continues ...

Good for you Dude. Be yourself, take it slow and and don't rush things. There ain't no destination to hurry to... you are there, enjoy yourself! Good luck.

 

[behappy]

Good for you Dude. Be yourself, take it slow and and don't rush things. There ain't no destination to hurry to... you are there, enjoy yourself! Good luck.

Thanks chinaco! having reached a certain level of financial independence is great! I see more possibilities and I'm beginning to discover and know myself more. I do things because I want to, not because I have to. Work is even more enjoyable despite the long hours I put in, because now it is my choice to do so. At a personal level, I think I've become more generous and more emotionally intelligent. I guess this also comes with maturity... but this is the real me starting to come out... I'm enjoying the journey. If along the way I finally meet that someone to share my life with, I am ready.