Introduce yourself here!

[dcar11]

Hi,
I am 56 and forced into early retirement by a company plant closing. My job, mechanical engineer, was exported by far reaching corporate wisdom. My location is in the expensive northeast, Fairfield county, CT. Manufacturing is disappearing from the area, so the job prospects do not look good. Plus I don’t want to get back into the rat race again, the rats always seem to win.
I have read a lot of financial, and retirement planning books, and think I am OK for the next 2 years with severance and unemployment. Thanks to a previous corporate owner, no pension. When I start taking withdrawals from my portfolio, I expect to be at a 3% or lower rate, a bare bones rate.
My current asset allocation is:
53% stock
43% bonds
4% cash
50% of the stock and 75% of the bond funds are in index funds with Vanguard and Fidelity.
I will wait to see what happens in the market over the next couple of years and then decide on a change in employment or asset allocation.
The biggest unknown is heath insurance. I am leaning toward a catastrophic plan with a $5000 to $10000 deductible, the wife and I are both pretty healthy. Any suggestions or experience with this type of health plan?

 

[jack speer]

Welcome!

This is the place to introduce yourself to the others.

We suggest you create a new topic when you introduce yourself, rather than replying to this message or someone else's introduction.

 

[jack_speer]

Welcome!

This is the place to introduce yourself to the others.

We suggest you create a new topic when you introduce yourself, rather than replying to this message or someone else's introduction.

 

[riverrat]

Hi all,

I've read a lot of posts and thought I'd finally join in. Can't contribute too much since I work and toil m-f 7am-4pm.

Hard to find time to do all I want ie kayak rivers, learn piano, develop my small home business, etc. Been married to the love of my life for 36 yrs; We are 57 & lookin to hang it up OCT 9, 2005 unless I am offered the golden boot - then we'll go sooner.

I like my job but would love retirement. My wife doesn't particulary like her job and would quit now. Our first granddaughter arrived last August and our other daughter tells us she's heavy with child and will deliver our grandson May 19th. The pull to leave our jobs is really bearing down on us.

I have a pension that would generate 60k/yr. I have the option of buying 5 years through CALPERS that would increase pension - its new and I haven't done cost/benefit analysis yet. We have 650K - been fortunate with market timing in index funds - ie out of market January 2000 back in March 2003. Owe 19k on house thats worth 580k and owe 37k on 2004 Honda Pilot that I got so my wife could visit grandkids in safe car with navigation system. New cars aren't supposed to be the smart investment but sometimes there's a time to splurge.

I saw some post on what's keepin some from retirement when they seemingly have enough. What has been stopping me is the rapid growth of my portfolio in recent years and pension fund. Pension increases according to age, years of service and salary. So the carrot is always there to work just that extra year.

Sorry, I'm startin to ramble. This is how it might be with me - when I get a chance to get to the computer I have to make the most of it.

My reply to your posts to me may be delayed because of my very busy life. For sure I'll get back to you by 10/09/05.

 

[riverrat]

"What do you need? Directions to your nearest Lexus Dealership or a good Travel Agent?

Just wondering."

Cut Throat

I feel insecure with having any debt at retirement. I have little personal money to pay off house and car debt because most of it goes to maxing out deferred accounts whose limits rise each year. While 60k may seem substantial it isn't compared to our current 120k income. I take the predominant view that 70-80% of pre-retirement income is needed to retire.

My parents are in their late 80s and still hike and play tennis. I'm planning to live to 93 with my wife & I kicking the bucket after simultaneous heart attacks during a frenzy of ..........

I might have enough time to kayak down some of the rivers you've waded in - maybe I'll drive up to em in a Lexus.

Have fun

 

[Martha]

Riverrat:

At the very least, since you seem to have enough for a comfortable retirement, encourage your wife to quit work and enjoy the grandchildren. This seems to be what she wants to do and you both are in a position where she can quit work.

My husband retired before me and I am looking at retirement soon. Sometimes one person is just ready before the other.

Now, since I work from usually 6:30 am to whenever the work is done, I better get back to work. I've spent a lot of time (during work hours) in the last couple of weeks on this site. This must mean I am ready to retire. At least I won't get into trouble with the boss since I am the boss.

Martha

 

[BigMoneyJim]

I feel insecure with having any debt at retirement. I have little personal money to pay off house and car debt because most of it goes to maxing out deferred accounts whose limits rise each year. While 60k may seem substantial it isn't compared to our current 120k income. I take the predominant view that 70-80% of pre-retirement income is needed to retire.

I don't want to nag, but your situation sounds very desirable to many here. Of course you know your situation best, but it seems that many enjoy early retirement because they minimize their spending. Have you read this essay (link) by *****? Just some food for thought.

No matter what your plans are, though, I think you'll learn a few things here.

 

[sgeeeee]

. . . While 60k may seem substantial it isn't compared to our current 120k income.   I take the predominant view that 70-80% of pre-retirement income is needed to retire.

I'm not sure why you take that view. If it's because you've worked out a thorough pre-retirement account of all your spending for several years, then modified it to try to approximate your projected retirement spending needs, then you are probably making the right assumptions. But I think that blindly following that rule-of-thumb is extremely dangerous. Some people spend more in retirement than they did pre-retirement. And pre-retirement, some people live off of nearly all of their salary while others live off of a small percentage of it (about 10% for my DW and I). The rule-of-thumb just doesn't make much sense to me and never has. The assumptions behind it are far from accurate for many people.

 

[John Galt]

Re. the old "what % of income do you need to retire?"
question, here is my situation.

I guess maybe I had a couple of working years when I got
into the lower six figures (gross). Now (6 years
fully retired in 2004), I am showing GROSS annual taxable income under $10,000. We don't feel the least bit deprived at this level (the numbers exclude my wife's income). Still, if you combine our taxable gross, we are still under 25% of combined income just prior to retirement.

John Galt

 

[riverrat]

I've been offered a 2 year service credit to retire by July 5, 2004 - a 4% retirement increase. This would give me 32 yrs service credit. If I bought 5 years the 37 yrs would give me 80% of salary.

In the next few weeks I'll be crunchin numbers on the cost of the 1 to 5 yr purchase option.

Martha - my wife is ecstatic thinking of retirement in July and the opportunity to enjoy grandkids. I didn't sleep for two nites thinking of all the possibilities - freedom, time to do so many things, options for paying off debt & a myriad of money matters etc. etc..........

Big$Jim - Read the essay post by ***** - I like the bit about what is a luxury. That and a few fast reads at the bookstore like "Your Money or Your Life" has persuaded me that retirement is doable and "shouldable".

Salarygaru - "You Can Retire on Less Than You Think" supports your viewpoint that the 70 - 80% issue has no merit and is primarily supported by financial institutions -for their own interests.

I now agree that the % issue is fraught with false assumptions and variables and am reevaluating how it applies to my situation ie examining actual expenses.

John Galt - I don't know how you do it (25%). You must have duct tape in the same tool box with your dryer sheets!

I'm 90% sure at this point that retirement is July 5th

 

[John Galt]

Hello riverrat! Actually it (25%) of pre ER income
is not all that difficult. Say I made $100,000 when I was
working. Then, the 25K we have to live on is a
no-brainer, when you factor in no debt at all and a
low maintenance life style. My wife and I buy low
and when we sell, we sell high. In between, we
try to live in the moment. Planning 20 years ahead
is out. About a week is as far out as we go. Of course,
I am in charge of providing a back up plan in the event
we are still here 20 years hence. The point is, we
don't plan on that and we don't let it control our day to day activities. If you do, there is a good chance you'll
wake up dead (or worse). Then, what good will all that
long term planning do? It won't amount to Jack S___t!!!

John Galt

 

[BigMoneyJim]

Big$Jim - Read the essay post by ***** - I like the bit about what is a luxury. That and a few fast reads at the bookstore like "Your Money or Your Life" has persuaded me that retirement is doable and "shouldable".

I'm glad to help, even if all I can do is point to people who know more and express ideas better!

I love that new term: "shouldable". If I get the itch to play with the paint programs again I'll work on a slogan design of something like: "ER: shouldable". If anything is shouldable, it's ER.

 

[gunner58]

Re: Hoping to retire at 47

Hello All

I just found this site and am excited to find there is a entire group of like minded folks out there!

I will be turning 46 in a couple of months and over the past year have thought seriously of retiring over the next year. My wife and I have been consistent savers for the past 18 years and have no debt other than our home mortgage. We do not have children but would like to help with nieces and nephews educational needs.

I have been with my current company for 17 years and my annual income is 185k and due to the work enviroment feel I could negotiate a one year severence package. My wife is 44 and would like to continue working for 6-7 more years. Currently her  has annual income averages 325k. Our current savings (taxable, taxed deferred) is approximatly 3.2m with another 600-700k in home equity. We have no debt other than a 415k home mortgage (5 year arm @4.6%). I am currently paying an additional $600 in principle per month on our mortgage. If I retire we would still  plan to fund our retirement with 100k invested annually for the next 6-7 years.
Our goal is to be able to draw 175- 200k (current value) annually starting as early as 2009.  
With the recent market volitility, I worry I may be walking away to early and should hang in there for a few more years.

 

[John Galt]

Welcome! If I was ever in your situation, I would be gone so fast I wouldn't even leave a vapor trail. We could live on 10% of what you say you would like to
draw by 2009. However, I try never to impose my standards on anyone else. Still, I'd be gone in a heartbeat!

John Galt

 

[cute fuzzy bunny]

I'd leave skid marks from my shoes from the rapid acceleration

As John said, the income and cost levels are a bit higher than we work with. I used to make the kind of income you folks do, and spent just about as extravagantly. I now live a comparable quality of life at 1/10th the cost, leveraging my time to cut costs a little.

If you can come up with a couple of ways to reduce your spending a little without making any major compromises, I'd say Go Now. Otherwise you might want to pad our the investments a little bit...that withdrawal amount is very high.

Read: Simplify your life, and The millionaire next door.

 

[sgeeeee]

Your numbers seem to be in the right ballpark. Based on your post, I assume you are saving/investing about $100K per year. If you continue to do something like that through 2009 and you earn a reasonable return on your investments, you should be safe to withdraw something close to $200K per year.

Good luck and congratulations on your emminent retirement.

 

[gunner58]

Thanks for your encouragement and positive feedback. My wife and I have worked toward this goal for the past 18 years and I guess we are overly cautious now that the light at the end the tunnel may be in sight.

I have gone back and reworked the annual expense numbers and estimate we can lower our annual draw starting in 2009 to 165k (current value). This adjusted expense estimate does include 40k annually for a home mortgage that could be paid off by 2009.
In addition, the estimate annual draw reflects after tax dollars and does include 35k in guestimated educational expenses for our niece/nephews estimated to run 5 years starting in 2009.

Thanks again for all the feedback!

 

[Saver]

Gunner58

You may spark some useful feedback if you tell everyone how your savings are broken out betwen taxable and nontaxable assets, and how your savings are broken out between stocks, bonds, cash, etc.

IMHO, that 165K after-tax number could be high given your current asset base plus $100k/year extra for 6-7 years. You will have to withdraw well over $200k/ year to have that left after tax.

Saver

 

[gunner58]

Re: Hoping to retire at 47

Hello Saver

Thanks for your constructive feedback. My assets break down as follows:
Taxable
$1.3M (stocks,mutual funds)
$162K (employee stk subscription)
$315K (exercised company stock options)
$644K (cash /short term bond fund)

Home Equity
610K (approx.)

Non -Taxable

950K (401ks/IRAs/Def. Annuties/Var.Annuties)

 

[Zipper]

I'm a 60 year old Canadian and just started drawing CPP, similar to your Social Security. I retired 6 years ago after teaching 33 years in Ontario. I took a commuted payout and began withdrawing about 5%/year from a 60/40 portfolio at age 55. My wife (55) is still working at a hospital and plans to retire in a year or two.  At 65 Canadians get what is called OAS or Old Age Security which is about $450/mo today in addition to CPP (Canada Pension Plan). Our house has long been paid for and our 2 sons, one in London ON and the other in Vancouver BC are independent and thriving. Our health is good and we are happy with our Canadian Medical care. We never buy new vehicles, but just bought a year old Impala. I've always gone GM.

 

[Bob_Smith]

Hey Jarhead! Good to have you back.

 

[cute fuzzy bunny]

Funny but I thought about you a couple of times the last month or so and almost posted a "where the heck is jarhead?" last night.

Very good to have you back, and I hope you waved heartily as you drove by.

Our heat wave seems to have subsided. Its a frosty 68 here today and looks like we might get a little rain.

No fool like an old fool...my dads favorite saying. He used it recently when I showed him a news story about a bunch of 80 and 90 year olds that mixed it up over one guys overhandling of the lettuce at the retirement homes salad bar.

 

[John Galt]

Hello Cut-throat.............yep, Wyoming and Montana;
great country. Hell, even if you never catch a fish,
it's worth the trip. Most of my time out there has been
on the bike. No fishing Sure is beautiful though.
But, couldn't live there due to the winters.

John Galt

 

[Homestead]

Hi everyone,
Enjoying this forum for some time now.
I am 51 year old oregon engineer (what else) who is looking forward to ER some day. My wife is 56 and
is not employed since 1978. Our kids are moved out and we are finished paying for their college.
Our current net worth is about 550k.
We are both fairly frugal and our living expenses are running about 24k /year
with 72k of income. We are saving 14k per year into my 401k and 14k per year into roth and std ira.
Also saving 7k/year into company stock for a total yearly savings of 35k / year.
We have had no debt and have our house paid off , it has a value of about 280k. We have 250k of investments.
70% in equities and 30% in bonds and securities. 45k of this is in company stock (tech) and options everything
else is in the 401k or ira's.
I have a small fixed pension that kicks in at 55 for $350/month and projected combined SS benefits of about 22k
when I reach 62.(if they don't change it)
I am hoping I can ER in 5-7 years (the good Lord willing) .
I plan on dumping my company stock and options in a year or 2.

Cheers
Homestead

 

[Paul]

I thought the maximum combined IRA/RIRA is $3,500 (for those over 50 years of age). That means you and your wife can only contribute to $7000 per year.

You should try out some of retirement calculator to determine when you can retire. Good luck.