Introduction from another newcomer

[Ben808]

Hi,

Posting to introduce myself. I'm a newcomer to this site and have not been nearly as dedicated to FI/RE as others here, although I have been fortunate enough to have received sound financial advice some of which I actually listened to

Stats:
Age: 55 / 56 (DW), both still working
NW (excluding home): 2.1MM (~1MM 401k/IRA, 1.1 after tax).
Home: (have mortgage and don't plan to move) roughly 1.1MM equity. Zillow valuation 1.4MM, remaining mortgage of about $300k
Pension: eligible for tiny pension of ~$500/month @age 65, half that @55 from short stint @large corp first job out of school
Debts: $300k mortgage
Children: 1 DS, 1 DD. Both in college with 2 and 1 year left, respectively. Tuition mostly covered by 529 accounts but will have to pay for last year of DS (~$8k) out of non-retirement accounts

Some of the significant factors that influenced where we are today:

- maxed out 401k from early stage in career
- established monthly automatic withdrawal from checking to savings
- increased monthly savings each time received raises
- invested portion of any windfall (e.g. bonus) into savings
- LBYM carry no CC balances
- scrutinized any increases/additions of recurring monthly expenses.
- practiced delayed gratification. Generally saved for large purchases so that they could be paid for with cash or rare exception short term low interest loan (e.g. auto)

While the NW figure looks good on paper, the reason we are still working is 1) want to wait until children are established (out of school and working), 2) we live in SF bay area which is horribly expensive. We have no plans to move atm (partly depends on where children end up although nothing is guaranteed). So we want to stash away as much as possible in case we are still in area during retirement.

We have not been tracking our FI/RE nearly as diligently as others here. We sort of had our heads down, busy with life, and not thinking too far ahead about this nebulous retirement phase. Now that it's becoming a reality, it's both gratifying but scary at the same time. Scary in the sense that we won't have regular work income. One thought is that if we remain in the area, I could continue to work part time doing short-term contracts which I've done in the past.

 

[rodi]

Welcome Ben808 -

You're right - your stats on paper are excellent. But like anything - it comes down to the other side of the equation - spending...

Have you plugged your numbers in firecalc? (see link at bottom of page)... make sure you click through all the tabs. But you need to know your gross spending (taxes are part of your spending number).

Again - welcome.

 

[kimcdougc]

Welcome Ben808.

 

[Koolau]

Welcome Ben808. I agree with rodi that spending is the key. Until you hit SS in a few years, you will need to live from your stash.

My suggestion would be to consider reducing your deferred money (first) to the limits of your expected FIRE tax bracket. Eventually, you will be taking RMDs and they can have unexpected consequences on taxes as well as qualifying for other things (ACA, MC, SS taxability, etc.)

The other thing - you mentioned waiting to find out where the kids go - You may find out that they don't stay put. We have friends who moved to some boondocks boondoggle place to be close to the kids. The kids got a "better offer" and promptly left. We always just say "The planes go both ways, kids." Naturally, YMMV.

 

[Ben808]

Hi,

Thanks for welcome and feedback!

Spot on with the spending. I have been working on compiling details from past spending history. I haven't run thru firecalc yet but will do so.

@Koolau
Good point about moving within proximity of children. Coincidentally we were on a tour couple years back where one of the fellow tour members experienced just that. She originally lived in South Africa. Her two sons went to university in Canada. After graduating both stayed and established families there. The woman and her husband eventually retired and relocated to Canada to be close to children/grand children. Her husband passed and her sons one by one relocated to the US for work. Now she's still in Canada and feeling lonely w/o husband or extended family in SA. She doesn't want to move to US because of past experience plus sons live far apart (east coast/west coast).

 

[Dash man]

Welcome! What are your plans to cover health care spending? It's a long way to Medicare!

 

[MBAustin]

Welcome, Ben! As others have noted, tracking spending and using calculators such as FIREcalc are really good ways to get serious about FI - the whole point of FI is that then you can RE when you are ready. Hope we can be helpful in getting you there sooner rather than later!