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Job Loss need advice whether I can early retire?
Old 08-10-2017, 08:22 PM   #1
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Job Loss need advice whether I can early retire?

My situation:
After 20 years as a electronic engineer in one company, I was laid off few months back. My skills are outdated. Due to critical health issues, I cannot learn any new things or do odd jobs. My career ended!



I am 49, my wife 46 and we have a son age 7. My wife work as a substitute teacher and she intend to continue. She earns about $1500 per month.

Summary of Assets:
Paid off Home (150k) & Paid off Car (Corolla)
400k in Taxable accounts ( Completely in Total stock market & Total International)
450k in retirement accounts (Completely in Stable Value funds and short term bond funds)
About 35k cash in bank.
No Debts.
My total monthly expenses are 3k.
Medical Insurance provided by my former company with nominal charges.


Questions:
How to generate $2000 guaranteed income every month? Annuities Or any dividend funds Please advise, what can I do in my situation.
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Old 08-10-2017, 10:43 PM   #2
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Originally Posted by dallasboy View Post
How to generate $2000 guaranteed income every month? Annuities Or any dividend funds Please advise, what can I do in my situation.
At 49 yrs old and with a 7 yr old kid, my gut feeling is you need to find another job. Doesn't have to be in your old field, but you need more money. Assuming you can get $2000 "guarenteed" income long term (say by investing $800k in stock paying 3% dividends) and that it will cover your family long term needs is very, very risky. Be interested in what others say.

BTW - unless you're a troll (1st post with question that might appear "troll like"), you may want to post an "introduction post".
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Old 08-11-2017, 05:58 AM   #3
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First off, you need to be very, very, very sure of your expenses. Does the $3k/month include paying for the new roof the house will need, the deductible for the car insurance, the out of pocket costs for the kid's broken arm, replacing the car when it's no longer working, repairing the plumbing leak that shows up out of the blue, etc? Or is it just counting your normal recurring bills? The very first thing you should do is to make sure your projected expenses are very, very, very accurate AND take into account infrequent costs and potential expenses that will/could come up, as the last thing you want is to run out of money because you forgot about them.

Next, you need to consider the long-term stability of your wife's job. Sure, your $950k in investments can easily generate the necessary $2k/month if you want in any number of ways (VYM has a ~3% dividend yield which would put off more than $2k/month with $950k invested for instance and plenty of other similar investments are available). However, if your wife loses her substitute teaching job, how quickly could she find additional employment? Does your plan account for such potential periods without her income to supplement your portfolio earnings?
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Old 08-11-2017, 08:49 AM   #4
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While I woud not recommend it, a $600k immediate annuity would probably provide ~$2,000/month but that would be a big chunk of your savings and would not provide inflation protection or income after your wife quits working.... besides, you don't have $600k available.

Did you have long-term disability insurance? If you did and cannot work due to health issues then you may have a claim.

Otherwise, you need to figure out something that you can do to generate income and live off of savings and taxable account.
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Old 08-11-2017, 09:31 AM   #5
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Welcome dallasboy! Here are some things you need to take into account (even though you are already involuntarily "retired".

Some Important Questions to Answer

Not knowing what the critical health issues are (and hoping they are temporary), I do agree that increasing your family income through additional employment would be important. If you are permanently disabled, then you should start the process for Social Security disability payments.

Could your wife get a full-time teaching position rather than substitute? That would also provide her with some retirement benefits in the future. Hopefully you are healthy enough to pick up some of the home-related work she has been doing.

If the health issues are expected to progress, then you and your wife should also be thinking ahead to the future.

Best wishes for sorting all of this out and improved health.
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Old 08-11-2017, 01:25 PM   #6
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Thank You very much for the replies. Let me do some research on annuities.

Basically, I cannot be employed because I have no skills.

I want to hear the words 'that i can retire now'. I can tell my wife that we won the game and out of rat race

I need 30k per year, so for next 12 years I need Just 360k - which I have right now available in Stocks. So, why I should work? I don't want to think about - earth quake, Nuclear War, son leg broken, unexpected expenses, Kid College. Am I missing anything?

After 12 years - I am eligible for Social security and i can withdraw from my 401k.
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Old 08-11-2017, 01:35 PM   #7
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Agree with the comment above that you really need to be sure of your expenses, but if you ARE, and if there is a good chance that health care costs will stay "nominal" for the next 16 years, then I think your portfolio should produce enough with DWs income providing an extra safety net.
Do look into potential insurance claims or SS benefits for your disability.

Oh, and welcome to the board!
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Old 08-11-2017, 01:35 PM   #8
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Quote:
Originally Posted by dallasboy View Post
Let me do some research on annuities.
Mel Lindauer wrote a comprehensive series of columns for Forbes Magazine regarding annuities. Recommend you start your research there: Annuities: Good, Bad Or Ugly?
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Old 08-11-2017, 02:21 PM   #9
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Agree with the comment above that you really need to be sure of your expenses, but if you ARE, and if there is a good chance that health care costs will stay "nominal" for the next 16 years, then I think your portfolio should produce enough with DWs income providing an extra safety net.
Do look into potential insurance claims or SS benefits for your disability.

Oh, and welcome to the board!
Thank YOU, Euro. Good to hear.
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Old 08-11-2017, 02:22 PM   #10
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Basically, I cannot be employed because I have no skills.
If you decide you need "topping off" money (ie...not a high paying job, just some extra spending cash to cover minor part of finanical need), a willingness to work is the only "skill" needed for some lower paying jobs.

I want to hear the words 'that i can retire now'.
Ok, you can retire now. I'll guess that your money will even outlast you as long as life doesn't throw you any curves. Suggest you get familiar with and run www.Firecalc.com to confirm this for yourself if you haven't already.

I don't want to think about - earth quake, Nuclear War, son leg broken, unexpected expenses, Kid College.
Great! That makes retirement planning easy. Lots of financial plnaning concerns come from planning for those little life curveballs most of us get hit by at one time or another.

Am I missing anything?
Might want to consider a couple possible scenarios before pulling the plug.
(a) Are you still comfortable if the market takes a dive of say 30-40%? Might be a selling point for the right type of annuities I suppose.
(b) At some point you will be collecting SS for yourself plus SS for your wife (I assume about 50% of your SS value). Are you still comfortable if one of you dies early and the other has to live off just one SS check?

Best of luck to you. I hope your situation works out well.
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Old 08-11-2017, 04:21 PM   #11
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Basically, I cannot be employed because I have no skills.

I want to hear the words 'that i can retire now'.
I know that this is going to sound like it's coming out of left field, and I'll apologize in advance if it's totally out there...

As someone who has been in an psychologically abusive work situation, your words jump out at me.

Have you considered a mental health or career counseling evaluation? Being told you can't or won't ever make any money somewhere else is a hallmark of such a workplace. Such a counselor could also show provide referrals for Social Security disability if you simply can't continue--as well as showing your efforts in trying to keep working in your application.

If you were 59, I'd say you'd be OK. But being over a decade away from retirement age, with child raising less than half through brings a lot of uncertainty.

For example, nobody predicted under 1% interest on bank deposits 20 years ago.
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Old 08-11-2017, 04:46 PM   #12
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Welcome Out of Steam. I'm sorry to hear about your job loss.

I think most of us can relate to your desire to retire NOW... I was definitely in that state of mind my last several years of work.

Here are my thoughts:

You mention that your company gives you medical insurance. Is this a retiree plan? A layoff package that will expire after a year? I think you need to get a handle on what insurance will be if this plan goes away.

Does the $3k /month include income taxes (feds, property, etc.)

Does the $3k/month include all the various insurances (car, home, umbrella, etc.)

I have a family of 4 (two teenage boys) and we spend more than $3k... Heck our groceries are $1k... and that's with shopping carefully for value at Costco. Your son may not eat a lot now - but he will when he turns into a teenager.

Your nest egg is impressive for your age... but I'm not sure you're "there" to safely pull the plug. I suspect you've underestimated your expenses (but I could be wrong). (Just occurred to me that a member here, FUEGO, has a similar budget for a bigger family.)

I would stay away from annuities... The interest rates are too low to make them a good investment now.

You state that you don't have marketable skills - but I think you'd be surprised. Like you, I had a career in engineering... and yes, my skill set was not the most current (although I was very good at maintaining the legacy products... C and Assembly may not be in vogue - but they still had their place in embedded code.) That said - I did a survey of what jobs I'd qualify for and found many that would pay enough to supplement my retirement income... everything from city park maintenance, working at costco, working at starbucks. I looked at companies that offered benefits and 401k... That continues to be a plan F back up plan.

I have a lot of empathy for your wanting to retire right now. If you didn't have a family involved in the decision I'd tell you to go for it!
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Old 08-11-2017, 05:56 PM   #13
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Thank You Rodi, Thank You Out of Steam, Whisper, Euro and others!!!

Yes, the idea to work again is bringing shivers in my spine, I wish I am 59

The 3k may not be all inclusive, additional $500 for insurances. But, I pay annually.

My family thinks humans has to work 60 and beyond & they don't trust my numbers. This post is to get validation from senior members. But, looks like I may have to re-think my strategy.
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Old 08-11-2017, 06:45 PM   #14
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Welcome Out of Steam. I'm sorry to hear about your job loss.
<snip>
I did a survey of what jobs I'd qualify for and found many that would pay enough to supplement my retirement income... everything from city park maintenance, working at costco, working at starbucks.
Rodi, I'm not the member starting the thread--I'll be working full time for at least another year. After that, I'm open to an early retirement offer.

Like you, it looks to me like there are a lot of ways for a reliable person who presents well to make $1200-1500 or so a month--especially if you don't need benefits.
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Old 08-11-2017, 09:29 PM   #15
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Rodi, I'm not the member starting the thread.
In the immortal words of Homer Simpson, Doh!

Welcome Dallasboy.
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Old 08-11-2017, 10:27 PM   #16
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Do we normally have a Walmart greeter job available?
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Old 08-12-2017, 06:46 AM   #17
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Do they even have Walmart greeters anymore? I go to Walmart quite frequently and never see them.... I used to see them all the time.
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Old 08-12-2017, 07:36 AM   #18
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I went to one here in Ontario Canada yesterday, and the security lady was doing the greetings and helping the customers... They may be downsizing?


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Old 08-12-2017, 07:54 AM   #19
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In my area, Walmart's practice of hiring seniors as greeters (they're actually a security filter against shoplifting) got the company into a PR bind when their 100-year-old (!) greeter confronted a shopper and made some racially insensitive remarks. During the encounter the older woman got bumped and she fell, leading to a trip to the hospital. No charges in fall of 100-year-old Walmart greeter
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Old 08-12-2017, 08:03 AM   #20
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Originally Posted by dallasboy View Post
My situation:
My skills are outdated.

400k in Taxable accounts ( Completely in Total stock market & Total International)
450k in retirement accounts (Completely in Stable Value funds and short term bond funds)
About 35k cash in bank.
No Debts.
My total monthly expenses are 3k.
Medical Insurance provided by my former company with nominal charges.
Sorry to spoil your plan. But honestly....You can not afford to retire. You're taking a huge risk and betting on market which can drop significantly anytime...No one knows when that will happen.

You can work. You can drive Uber, work at Costco/Walmart/Sell things on ebay/write a blog etc.... Just last week I had a uber driver who picked me up from AirBnb in Montreal and dropped me at central station. He had hearing issues and speech disability. He did just fine and I was so happy that I tipped him well after the ride.....so yes, you can do some work and your skills are not outdated... I've been picked up by college students and women drivers late at night and never had any issues...kudos to them for helping themselves. Remember, you're an Engineer and can figure things out.

400K -- all in equity in taxable. Move enough to short term bonds to cover you when market tanks. You can reduce your fixed income in after tax account and have that equity portion you reduced in taxable balanced in after tax account. You're 49 and can not touch after tax money for another 11 years without penalty(72t may be.. ). I'm sure you can earn at least 1K by doing anything which cuts your withdrawal by 50%.

There are lots of unknowns about expenses....my first year of RE---> new roof, car broke down, AC stopped working, sprinkler died, kids and my laptop died, new mattress and list keeps on going...and I've not even finished one year of retirement!

Just my 2cents.. trying to help you and not lecturing you. All the best in whatever you decide to do.
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