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Lady Longs to Retire ASAP
Old 06-20-2007, 09:22 PM   #1
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Lady Longs to Retire ASAP

The good news is that our company sponsored investment company confirmed that I can do so whenever I want and do not need to work. I've joined this group to better prepare for leaving as soon as feasible. I'm holding out until 55 or when I offered a "pink-slip" settlement.

Profile:
Single/No Kids, 52, earning ~$140K/annually, conservative investor, estimate needing $50K/year to live comfortably after retirement.

Objectives:
  • Retire in January 1, 2010,
  • Sell home and purchase smaller summer/winter town homes
  • Work part-time doing online or traditional college teaching
  • Do charity work
  • Use up my resources for good and leave the rest to charity
Assets: 62% Stocks, 31% Bonds, 7% Short Term
  • $350K in 401K (60:40 Stocks/Bonds)
  • $40K Cash
  • $150K Company Stock and Options
  • $5K other stock
  • $450K value house
  • $15K Timeshare
  • $42K annual pension starting at 55 yrs of age
  • Unknown value of inherited undeveloped land in one of the states where I want a town home
Debt: $60 mortgage

Plan:
  • Reduce company stock holdings via charitable donations instead of using cash
  • Move more of 401K allocation to international stock
  • Shop for first townhouse
  • Recreate resume for teaching and scope out opportunities
Concerns:
Health care - the investment company estimated $551/month out of pocket because I should prepare for the worse. I pay NOTHING now and currently of good health needing (no meds). Do I really need to prepare for that much in health care?

Unknowns - Every retirement calculator results in me dying with $1-2M. I could relax but I'm concerned that there is big "unknown" out there. What are the unplanned issues most people face after retirement?

Scams - There are a lot of folks out there who looking to cheat boomers who have worked long and hard. I currently have identity theft insurance and think I need an independent estate manager. What ways should I protect my assets?
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Old 06-20-2007, 09:34 PM   #2
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Looks very good.

Hey I said byebye at 50. A 32K cola pension with medical bennies for my wife and myself. I have been doing part time coaching, high school track and sub teaching and it looks like I will make another 20K. About 50K and we want for nothing we go and do everything we did when I was making 100 a year.
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Old 06-20-2007, 09:40 PM   #3
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Welcome, Beryl. Sounds like you're pretty thoughtful and in good shape.

My only remarks based on first impression:

Careful with the two-house thing. That can get expensive at inconvenient times, and your money can be tied up for quite a while should you choose to sell. Many here have decided to own one, and be a renter for the other before you decide to own two.

Protecting your assets: for me the key was learning enough about investing and finance to do it myself. I fired my advisor, did a ton of reading, and developed the confidence to manage my own money. You'll see a few authors popping up here as recommended reading: Clyatt, Lucia, Bernstein, Merriman and others. Get thee to the bookstore if you haven't already done so.

So, what are you looking forward to doing with all your spare time? Where are you?

Best regards,
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As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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Old 06-20-2007, 11:10 PM   #4
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Quote:
Originally Posted by Beryl View Post
The good news is that our company sponsored investment company confirmed that I can do so whenever I want and do not need to work. I've joined this group to better prepare for leaving as soon as feasible. I'm holding out until 55 or when I offered a "pink-slip" settlement.

Profile:
Plan:
  • Reduce company stock holdings via charitable donations instead of using cash
Concerns:
Health care - the investment company estimated $551/month out of pocket because I should prepare for the worse. I pay NOTHING now and currently of good health needing (no meds). Do I really need to prepare for that much in health care?

Unknowns - Every retirement calculator results in me dying with $1-2M. I could relax but I'm concerned that there is big "unknown" out there. What are the unplanned issues most people face after retirement?

Scams - There are a lot of folks out there who looking to cheat boomers who have worked long and hard. I currently have identity theft insurance and think I need an independent estate manager. What ways should I protect my assets?
I'll second the comment that you look like you're in fine shape. A few comments/questions:

1) Pension - I presume it's fixed? (doesn't get any increases/bumps from inflation or any other metric?) Is that the pension you'd get if you leave tomorrow, or if you hang out until age 55?

2) SS - What is your SS estimate? You can try the web SS calculator at the SS website (Social Security Online) to get a more exact estimate if you were to retire tomorrow. Between SS and your pension, you probably have all of your expenses covered without any part-time income or portfolio income.

3) Health Insurance - In addition to health history, WHERE you live will impact your premiums almost as much as how healthy you are. It can easily double (or even triple) depending on which state you're in. Try one or two on-line instant health insurance websites for quotes to get a feel. (blue cross/blue shield Blue Cross Blue Shield Association - Better knowledge for healthier lives or assurant health Health Insurance Plans from Assurant Health). Be careful since you're planning on spending half in one state, half in another: make sure whatever policy you have will have decent coverage in both areas, since you're almost equally likely to have a health care need in either place with a 50%/50% time distribution (and out-of-network costs can sometimes really soak you). Try a quote based in each state you're thinking of living in to compare. I'm a big fan of high deductible health care plans if you're in good health (do a forum search for a "Health Savings Account" or HSA).

4) As far as "unplanned issues" go, while this 30-year young FIREee hopeful can't comment on personal experience, just remember that once you have the basic needs (groceries, heat/A/C, basic car, insurance, taxes, home upkeep) covered, the rest is all discretionary...just like when you're working.

5) Donating your stock - one option you have for your stock is to set up a Donor-Advised Fund. It works by accepting your contribution (cash, stock, mutual funds, 50 year aged Beev3r Cheese wheels) in the current year, giving you the tax write-off in the current year, and then letting you decide how the assets are invested. You can then donate the funds to any 501(c)(3) recognized organization as you wish on your own schedule, with the funds growing in the meantime. You can also search the forum for a recent "Donor Advised Fund" or "DAF" thread or two.

6) Scams - are you mainly referring to an 'adviser' taking advantage of a client, or outright theft? If you know a few basics and keep your money with a reputable firm (like Vanguard/Fidelity) and gleen a few basics from the forum, you'll have more financial knowledge than 95% of the rest of America.

If you're referring to outright fraud/theft, a good dose of (un)common sense and an awareness that there are people out there trying to get any information they can should keep you safe and sound, such as:
--Check on-line accounts frequently (once every week or once every 2 weeks)
--Don't leave paper statements lying around (better yet, do everything electronically)
--Don't use public computers for financial information
--Keep your financial information and basic information (mother's maiden name, credit card numbers, SSN, etc.) private. Don't underestimate how far your voice carries when speaking on the phone, or how easily you can glance over someone's shoulder or look at the screen next to you while someone's typing in a password, or click on that e-mail from your bank that asks you to log-in to 'verify your information'.

Who is the insurer for the 'identity theft insurance'? What does it cover?

Do you have a basic insurance policy with a General Liability umbrella ($500k up to several million)?

What services would you be looking for an 'independent estate manager' to provide?
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Old 06-21-2007, 01:16 AM   #5
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Thanks so much for the supportive comments and thoughtful advice. I'll take them all in, process, and incorporate in my plans.
Quote:
So, what are you looking forward to doing with all your spare time? Where are you?
Part-time teaching and charity work (homeless shelters, tutoring disadvantaged kids, etc.). I'm in Colorado.

Quote:
1) Pension - I presume it's fixed? (doesn't get any increases/bumps from inflation or any other metric?) Is that the pension you'd get if you leave tomorrow, or if you hang out until age 55?
Yep, it is the old-style pension that most companies don't offer anymore. There are no increases or bumps. The amount is based on hanging on until 55. I'll need my other investments in the out years.

Quote:
2) SS - What is your SS estimate?
If I retire at 55, the SS estimate is about $17,500 for the first year starting at 62. I'd love to take it earlier.

Quote:
6) Scams - are you mainly referring to an 'adviser' taking advantage of a client, or outright theft?
Who is the insurer for the 'identity theft insurance'? What does it cover?
Do you have a basic insurance policy with a General Liability umbrella ($500k up to several million)?
What services would you be looking for an 'independent estate manager' to provide?
Both actually.

My identify theft protection is currently with Pre-Paid Legal. The service is for monitoring, restoration (if necessary), and legal representation.

I just have the liability insurance associated with car & home coverage. I think there is something included with Pre-Paid Legal but I'm not sure. I'll look into it.

"Independent estate manager" - not sure I used the correct term but I want one or two resources (e.g. accountant and/or attorney) to watch over my finances in 30-40 years to ensure that I don't get cheated by scammers and younger relatives. I currently provide a second set of eyes over my mother's estate ensuring that she doesn't get robbed by my brother-in-law who she trusts. I honestly believe she would be drained dry if I wasn't around.

I do not have any relatives I trust like this.
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Old 06-21-2007, 09:25 AM   #6
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Beryl, you sound like you've got things under control to me. What's the plan for medical insurance from 55 to 65?

A good financial advisor could be a great asset. I think the trick is finding a good one.

Oh, and hi from Colorado Springs.

Coach
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Old 06-21-2007, 11:06 AM   #7
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Uh oh...I think Coach is hitting on you

Any thoughts on how you're going to handle cutting your income by 60%+ in retirement?
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Old 06-21-2007, 12:28 PM   #8
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CFB, damn right!

Coach
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Old 06-21-2007, 04:08 PM   #9
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Thanks Coach, I think that is exactly what I need. Seeing our company sponsored investment coach was the best move ever. You are right about finding a good one that isn't trying to sell you something -- like life insurance. I've been handling my own finances for so long, it is strange having someone else evaluating them.

Medical is still a question mark. I know my company has a benefit for retirees but I know I'll need to contribute. That is why the investment coach recommended planning for a high amount $551/monthly. He said that I might not need more than $50/month but I should plan for the worse case.

Quote:
Originally Posted by cute fuzzy bunny View Post
Any thoughts on how you're going to handle cutting your income by 60%+ in retirement?
These 4 things account for most of the delta:
- less income taxes
- no mortgage (~10%)
- no more saving >20%
-
no more cash to charity (use stock)

The "fun" side of me thinks I should not try too hard to live on the $50K, stop worrying about "unknowns", and enjoy using up hard-earned savings; hence the 2 properties for starters. A good financial advisor should be helpful in maintaining a prudent spending pace to last 40+ years.
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Old 06-21-2007, 06:54 PM   #10
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Lastly then, you seem very focused and organized. That going to be a problem when all your time is your own?

In other words (say it with me Nords...) Whadda ya going to do all day?
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Old 06-21-2007, 07:40 PM   #11
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LOL! This is a great problem to have after contributing to SS since 14 years of age! I definitely plan to teach parttime and do a lot more charity work. Additional ideas:
  • spend time with my out-of-state family members
  • improve my inherited undeveloped property
  • learn a couple of new languages
  • go on a cruise or two
  • open a Doggie Day Care
  • start a special school
Unlike many people I know who has retired from the same company -- I'm not returning as a subcontractor! After 25 years at one company, I'd like to do something very different for the next 25 years.
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Old 06-21-2007, 08:00 PM   #12
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Glad you've got some plans worked out. The "eye of sauron" doesnt rest easily...
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Old 06-25-2007, 02:31 AM   #13
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No one mentioned long term care insurance (or I missed it)
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