Just saying hello

[ESRwannabe]

I've been a lurker for I guess two or three years. You all have a really great message board here. I have really enjoyed reading the posts, especially during the financial crises not too long ago.

I am 33 and work in IT. My goal is to semi-retire around age 45, probably continuing to work in IT but as part-time or as a consultant. I'd also like to try expating (no particular country in mind) someday if I can convince a company to pay for it.

I am a natural when it comes to LBYM. I've always had extra savings available but for a long time had no idea how to invest. I found the morningstar forums and bogleheads around three years ago and have learned a lot from them. I would say I follow a mixture of both the boglehead strategy and the "income and dividend", devotees over at morningstar, strategy. I prefer to use broad market cap weighted indexes when possible, while also keeping an overall dividend yield of between 3% and 4%. I'm also a "PSSST Wellessley" fan, which takes up all of my Roth IRA. Overall I am about 80% stocks and 20% bonds.

Ok, back to lurking.

 

[bbbamI]

Hi...nice to see a lurker...ummm...unlurk.

Jump in and post more often...after all you'll get all those nifty stars under your user name!

 

[Uncle Drew]

Hey, glad you came out of the shadows.

We share some commonalities. I am 36 and work in IT. Like you, my goal is to semi-retire at 45.

 

[ESRwannabe]

I guess I'll also add that I've currently got about $170k in investments and have been adding an additional $1,500 to $2,000 a month. In addition I am vested in a state government pension which appears to be sound.

It is getting pretty exciting as the money piles up, as the investment returns are now playing a larger roll. Up until recently it has all been brute force savings doing the work. My money is spread out globally. So, as long as some part of the world is doing ok, hopefully my returns will end up being ok.

I am really looking forward to reaching a point where investment returns are larger than my contributions.

 

[ESRwannabe]

Hey, thanks to both of you for welcoming me. I'm a lurker by habit but maybe I will break out of that.

 

[Uncle Drew]

And the similarites continue...I am also vested in a state government pension. It's like I'm talking with myself three years ago.

 

[ESRwannabe]

I just wanted to make an update to this first post that I made almost a decade ago, on this beautiful July 4th morning.

I'm 43, and still working for the same employer. Still tentatively planning to ER, ESR, or some variation in two years at age 45. Although, its also likely I will work another year or more to pad the investments. The worst case scenario is that I work until age 55 at which point I can start withdrawing from my pension.

I have $541,632 in stocks/bonds. Around $100k of that is in my 401k and Roth IRA, and the rest is in taxable. The 401k is invested in a balanced index fund essentially, and the Roth IRA is in Vanguard's Managed Payout fund. My taxable investments are in Vanguard's High Dividend Yield Index.

Whenever I do ER/ESR I plan to spend the dividend income from the taxable investments and leave everything else alone for age 60+. My goal is to reach $18k per year in dividend income by 45. That would be enough to start expating in Mexico, Thailand, etc. and the income would continue to grow so that by the time I am sick of expating/traveling I could come back to the US.

I also have 17+ years vested in a well funded/managed state pension plan. Its hard to figure out what the value of the pension is, but I think it is worth around $500k-$600k right now. I found some formula one could use to come up with a guesstimate and using that I had a figure of around $520k a year ago.

 

[38Chevy454]

You can use the annuity calculators to back into the value of your pension in terms of cash value. Just use your numbers and play around with the calculators to figure out what buying an equivalent annuity would cost. How you treat that cash value as far as AA is your choice. Some consider it as part of their fixed income, so they carry a higher equities percentage in their investment accounts. Others do not use it in their AA and keep their investments according to their desired AA percentages. It's your choice how to consider the pension money.

 

[cooch96]

Hey, this is a real long-term thread now! Bravo on staying the course with your original timeline.

 

[ESRwannabe]

38Chevy454, thanks for the tip. I do need to look into that as I would really like to put a good estimate on the pension value. The way I have been thinking about it is that my pension takes care of age 60+, and my taxable savings are for ER/ESR. So instead of saving for an unknown amount of time, I only need to be able to cover 17 years or less, depending on when I stop working full time.

cooch96, thanks for the comment. I'm surprised that my timing has worked out so well. I think it just goes to show the value of setting a goal at the beginning. That way you have motivation to save more in years when your investments are going nowhere or down. I'm guessing that is what has kept me on track.