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Kid off to college, am I ready for ER?
Old 12-27-2011, 01:37 PM   #1
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Kid off to college, am I ready for ER?

We are looking to move to a more weather friendly, tax friendly state for er. I am leaning towards North Carolina or South Carolina. But first I need to see if I can afford to do it.

We are 46 and 51. We receive a $6k/month pension, and health insurance is covered as well. I thought we could live off this, and not touch our investments ($600k all in cash now - need advice on where to put this) until we are over 65. We are planning on buying a less expensive home and our current home is paid in full. We have no debt, and college is set. I think the tax savings alone will be about 10-15k year down south compared to CT.

Any advice is greatly appreciated.
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Forgot the Hi, glad to be here!
Old 12-27-2011, 07:08 PM   #2
Confused about dryer sheets
 
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Forgot the Hi, glad to be here!

I am so interested in your opinions, I forgot to say HI, I'm glad to be here among like minded individuals. I look forward to being an active member of the community.
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Old 12-27-2011, 07:34 PM   #3
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Welcome.

The short answer: Yes. With no mortgage, $72,000 in pension income and health care "covered", you can maintain a comfortable, well-funded lifestyle by most any measure.

The longer answer: It depends. Mostly on your spending, but over time also on things like future inflation, COLA's, when to take social security, whether you value leaving an inheritance and a host of other factors many folks haven't given much thought to in their working years.

A few suggestions:

Be proactive and thorough in projecting your spending. Is it consistently less than $6k a month, or more? Budgets are no fun, but it's very important to have a spending plan established that can be measured against the stream(s) of income you expect over the next 35 years or so. How will periodic big-ticket expenses (new roofs, car replacements, weddings, a medical episode) be handled? The financial rules of thumb / averages like "80% of your final salary" aren't of much practical use when applied to an individual household over a long time horizon.

Have you spent some time with Firecalc (link at the bottom of the page) or another retirement calculator that can handle multiple inputs that vary over time? Even if you find you are not wired to analyze things to the nth degree, just going through the exercise of data input and a few what-if variations will bring you insight on your future financial life during the retirement years.

The search function of the e-r.org software is your friend (near the top of the screen). The specific topics of greatest interest to you, like relocation or tax questions, have probably been covered several times. (But please don't search "pay off my mortgage?" - the server may melt down. )

Finally, don't be in a rush to make decisions on investing your nest egg in new ways. Although parked in a CD almost certainly isn't the right spot for the long term (too much risk of inflation reducing its real value), it will take some time to educate yourself on the options available and their pro's and con's. Knowing your own financial situation and objectives as well as you can is a prerequisite to knowing which pros and cons actually apply to you. (Hint: with the large majority of your retirement income from a pension, investing for the long term in a basket of stocks (via low-expense "index" mutual funds or ETF's) should be on your list to learn more about.) Read some books on investing and ask questions before you take any significant actions.
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Old 01-02-2012, 07:57 PM   #4
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Quote:
Originally Posted by 2ridgebacks
We are looking to move to a more weather friendly, tax friendly state for er. I am leaning towards North Carolina or South Carolina. But first I need to see if I can afford to do it.

We are 46 and 51. We receive a $6k/month pension, and health insurance is covered as well. I thought we could live off this, and not touch our investments ($600k all in cash now - need advice on where to put this) until we are over 65. We are planning on buying a less expensive home and our current home is paid in full. We have no debt, and college is set. I think the tax savings alone will be about 10-15k year down south compared to CT.

Any advice is greatly appreciated.
Congratulations on having put yourself in a position to be financially independent. Everyones cost and standard of living varies, so that is hard to compare. FWIW, my pension is about the same as yours and I dont have within ear shout of your assets accumulated. I still pay my mortgage, child support, and do what I want and still save a $1000 or more a month. I am 47 so, you do tend to worry about the unknown future, hence my reason to save more. If my pension ever got whacked, ya I'd have to rent out all my bedrooms for cash, but If I waited until I had a couple million in the bank, I would be dead before I saved that amount, thus my willingness to take the gamble! Having your health insurance covered is a big relief. Im on my own with a HD plan, but its so cheap it isnt really a cost at all....as long as I stay healthy.
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Old 01-15-2012, 08:25 PM   #5
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DW and I left Chicago land two years ago for the upstate of South Carolina. We have two pensions that provide us with about 72K of annual spendable income. Our investments are less than yours (though not by too much). We rolled the sale of our Chicago home into a new home here (We were very fortunate to sell before the big downturn.). We have found that we have no problem living on our pension income. Our investments will not be touched, hopefully for years. SS will be a boost, whenever we decide to take it. Taxes are significantly less in SC. Cost of living is much better for us. We are continuing to save, and fund our various investment accounts, while still having extra to enjoy life.

Have fun with your decision, it will all be good.
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Old 01-16-2012, 03:09 AM   #6
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hello - yes it seems you are all set. What are your monthly expenses ? You may wish to enter your numbers in this free online tool :

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Quote:
Originally Posted by 2ridgebacks View Post
We are 46 and 51. We receive a $6k/month pension, and health insurance is covered as well. I thought we could live off this, and not touch our investments ($600k all in cash now - need advice on where to put this) until we are over 65. We are planning on buying a less expensive home and our current home is paid in full. We have no debt, and college is set. I think the tax savings alone will be about 10-15k year down south compared to CT.

Any advice is greatly appreciated.
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Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 01-16-2012, 06:51 AM   #7
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Get a dog.
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Old 01-16-2012, 12:13 PM   #8
Confused about dryer sheets
 
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Get a dog.
I already have 2. The best investments we've ever made!
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Old 01-28-2012, 12:06 AM   #9
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I already have 2. The best investments we've ever made!
I am going to make a wild guess that they are Rhodesian Ridgebacks.
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