Rustward
Thinks s/he gets paid by the post
- Joined
- Apr 19, 2006
- Messages
- 1,684
I have been lurking for years. Obviously if I have lurked for years I find value here. This is my first post. It is a long post, but contains a lot of detail.
Having recently been in an employment situation with which I was unable to cope, I am now out of my misery. The problem was an incompatibility that could not be reconciled. That chapter is closed.
I have been considering options, FIRE being one of them. Of course the other option is to go back to work. When I mention "not working" to people I usually get a "What are you thinking? Are you crazy?" kind of reaction. I have to admit, this a little scary. We live well below our means, and our lifestyle does not reflect our assets. I had a Scarlet O’Hara experience in 1976 and I do not want to go there again. We have been very fortunate, and for that we are grateful.
Having always put work before just about everything else, I have come to the realization that that may have been a mistake. This is an opportunity for a correction but I am a little uneasy with the idea of quitting work altogether. It is difficult to think of not working when just about all I have done is work.
Us:
Me 52, not working
DW 55, currently earning ~$68,000
No dependents
Expenses: Living expenses have been flat averaging $52,500 over the last 5 years. That 5 year period includes one new vehicle purchase (cash), and a few other extraordinary expenses; I think the 5 year period is representative. This figure does *not* include health insurance or federal income taxes. This state does not have a state income tax.
I am budgeting $15K/year for health insurance and out of pocket health expenses. As long as DW is in her current job we will use her employer's health insurance plan. After that we will be purchasing whatever is available. We are fairly healthy and have no major medical conditions at this time.
My planning number for FIRE calls for a minimum of $67,500 per year in expenses, excluding federal income taxes. This is the minimum that I think we can get by on without moving to a different house. So a $77,500 or 87,500 planning number seems appropriate. I imagine we would be ultra-conservative in the early years then loosen up over time.
Debt: No mortgage, no car payments, no credit card balances, no consumer loans, no debt at all.
Assets: House paid (no mortgage) estimated $233,000 by Zillow.com. House probably needs about $50K or more in remodeling which we intend to do, probably in the next 5 years or so (will probably take $75K - $100K by then). Property taxes have recently ranged between $5K and $6.5K per year. This property tax expense is included in the $52,500 average expenses above. We own a couple of modest vehicles but do not consider them or any other personal property as an asset for planning. The house is not used as an asset for retirement planning purposes either.
Pension and SS: If DW ends her employment in 2009 she will be eligible for a $12K/year uncola pension. The pension does adjust up every now and then but it is not very predictable.
If I start SS at 62 without working between now and then my benefit is projected to be $18.4K/year.
DW's SS benefit at 62 is projected to be $10.4K/year if she does not work between now and then.
These figures come from the SSA's detailed calculator that you download and run on your computer. DW, with a pension, is subject to the SSA's WindFall Elimination Provision (WEP), and the detailed calculator is required to get that estimate. To some degree, the larger her pension benefit, the smaller the SSA benefit. Let’s hope SS does not evaporate.
Financials: Most financial assets are in managed accounts, some containing funds and the others stock. We are pretty well diversified. I know managed accounts are not popular here, but we feel that we have gotten acceptable results with them. Please bear with us. Perhaps we will change at some point in the future.
We have about $761K in taxable accounts and, $320K in cash and MM.
The deferred accounts have about $1327K.
My SS is projected to be $18,400/year in 2018.
DW's SS is projected to be $10,400/year in 2014.
DW's pension will be $12,000/yr if she starts it in 2009.
I have been through FIRECalc and a number of other advanced calculators and get a green light on all of them even after inflating the expenses by 10 or 20k/yr using a 40 year horizon. The paranoids are out to get me, because when entering the data into calculators, I use 90% of the value of the funds and stocks on any given day, and the cash total minus $50K (planning for that remodel or whatever else we decide to spend it on). FIRECalc seems to be the most conservative of the advanced calculators I have used, but I get similar results with the others.
My goal is to quit work someday with no (or very low) probability of being forced back to work for lack of funds. The thought of not working is a little hard to get used to.
It looks like we might have the financial part covered. I might be more concerned with the non-financial part, though.
Did I miss anything? Any comments?
Having recently been in an employment situation with which I was unable to cope, I am now out of my misery. The problem was an incompatibility that could not be reconciled. That chapter is closed.
I have been considering options, FIRE being one of them. Of course the other option is to go back to work. When I mention "not working" to people I usually get a "What are you thinking? Are you crazy?" kind of reaction. I have to admit, this a little scary. We live well below our means, and our lifestyle does not reflect our assets. I had a Scarlet O’Hara experience in 1976 and I do not want to go there again. We have been very fortunate, and for that we are grateful.
Having always put work before just about everything else, I have come to the realization that that may have been a mistake. This is an opportunity for a correction but I am a little uneasy with the idea of quitting work altogether. It is difficult to think of not working when just about all I have done is work.
Us:
Me 52, not working
DW 55, currently earning ~$68,000
No dependents
Expenses: Living expenses have been flat averaging $52,500 over the last 5 years. That 5 year period includes one new vehicle purchase (cash), and a few other extraordinary expenses; I think the 5 year period is representative. This figure does *not* include health insurance or federal income taxes. This state does not have a state income tax.
I am budgeting $15K/year for health insurance and out of pocket health expenses. As long as DW is in her current job we will use her employer's health insurance plan. After that we will be purchasing whatever is available. We are fairly healthy and have no major medical conditions at this time.
My planning number for FIRE calls for a minimum of $67,500 per year in expenses, excluding federal income taxes. This is the minimum that I think we can get by on without moving to a different house. So a $77,500 or 87,500 planning number seems appropriate. I imagine we would be ultra-conservative in the early years then loosen up over time.
Debt: No mortgage, no car payments, no credit card balances, no consumer loans, no debt at all.
Assets: House paid (no mortgage) estimated $233,000 by Zillow.com. House probably needs about $50K or more in remodeling which we intend to do, probably in the next 5 years or so (will probably take $75K - $100K by then). Property taxes have recently ranged between $5K and $6.5K per year. This property tax expense is included in the $52,500 average expenses above. We own a couple of modest vehicles but do not consider them or any other personal property as an asset for planning. The house is not used as an asset for retirement planning purposes either.
Pension and SS: If DW ends her employment in 2009 she will be eligible for a $12K/year uncola pension. The pension does adjust up every now and then but it is not very predictable.
If I start SS at 62 without working between now and then my benefit is projected to be $18.4K/year.
DW's SS benefit at 62 is projected to be $10.4K/year if she does not work between now and then.
These figures come from the SSA's detailed calculator that you download and run on your computer. DW, with a pension, is subject to the SSA's WindFall Elimination Provision (WEP), and the detailed calculator is required to get that estimate. To some degree, the larger her pension benefit, the smaller the SSA benefit. Let’s hope SS does not evaporate.
Financials: Most financial assets are in managed accounts, some containing funds and the others stock. We are pretty well diversified. I know managed accounts are not popular here, but we feel that we have gotten acceptable results with them. Please bear with us. Perhaps we will change at some point in the future.
We have about $761K in taxable accounts and, $320K in cash and MM.
The deferred accounts have about $1327K.
My SS is projected to be $18,400/year in 2018.
DW's SS is projected to be $10,400/year in 2014.
DW's pension will be $12,000/yr if she starts it in 2009.
I have been through FIRECalc and a number of other advanced calculators and get a green light on all of them even after inflating the expenses by 10 or 20k/yr using a 40 year horizon. The paranoids are out to get me, because when entering the data into calculators, I use 90% of the value of the funds and stocks on any given day, and the cash total minus $50K (planning for that remodel or whatever else we decide to spend it on). FIRECalc seems to be the most conservative of the advanced calculators I have used, but I get similar results with the others.
My goal is to quit work someday with no (or very low) probability of being forced back to work for lack of funds. The thought of not working is a little hard to get used to.
It looks like we might have the financial part covered. I might be more concerned with the non-financial part, though.
Did I miss anything? Any comments?