Last minute wake up call!

[goingtotravel]

Hello! Been lurking for a few weeks and thought it was time to dive in. We are well on our way to FIRE - DH FIRE's this year or next due to health issues and I am going out in 2021 (mid 50's). We both have immediate pensions that will cover 35%-40% of current salary (with COLA and 50% survivor benefits). DH also working towards military disability but that amount is still unknown (not $ we have ever been counting on). Enough saved in 401k accounts (pre-tax) to cover our remaining expenses for about 35 years but working on getting our spending down a bit more to prepare for RE. SS also figures in the equation eventually as well as some IRA's held outside our 401K's that should prevent us from having to spend our 401K money for several years (other than beginning to roll some of the balance over to ROTH IRA's after we FIRE to reduce taxes once we hit RMD age). Ran this all through several planning tools including FIRECALC and have gotten 96%-100% success as long as we keep spending to plan in RE and w/o counting on military disability since the amount is still unknown.

Here's the wake up call. We have been carrying credit card debt and last year looked at the numbers and realized how stupid that was so should have all debt except mortgage paid off this year. Also not really managing our cash reserves well so got a handle on that this past year also so that all our money is working for us. Little things but they added up the last 10 years or so to a number that I would have much rather invested then paid a bank. Lesson learned.

No real questions right now. Just an introduction and a thanks for all the information I've learned just lurking. Some info above is a little vague - still trying to get comfortable posting financial info on line but we do know all our numbers so what's posted above isn't fuzzy logic

 

[Dtail]

Welcome aboard.
Looking forward to your future posts.

 

[HI Bill]

Welcome! It's great that you both have pensions that pay that well, and that you'll be able to claim SS, and possibly disability. The latter, as I'm sure you know, is a big if. 35 years of expenses should put you at 100% FIRE Calc success rate (assuming reasonable assumptions). Kill the cc debt, and get into the habit of paying off the ccs monthly. I do the following: For each credit card transaction, I enter it into an electronic checkbook register (Excel spreadsheet), subtracting the transaction cost from my balance. When the bill comes due, I just 'check off' each pre-recorded transaction (actually, shading the cells), and then pay the bill in full, usually on the day or the day after the statement comes due. That way, I don't buy things I can't afford, and a $2500 cc bill doesn't shock me....I've only paid interest to a cc company for one month in the past 33 years.

 

[Red Badger]

Welcome GTT! From your description, I gather military pensions? If yes, you'll also have Tricare. For many early retirees (here and elsewhere) getting and keeping insurance is an expensive headache. Tricare and my military pension were two enablers for me to retire a fews years early.

Keep us posted.

 

[goingtotravel]

Not military retirement but we are both Feds so we can carry FEHB insurance plans into retirement (well, unless Congress messes with them). There is a good chance DH will eventually be declared 100% disabled and I think he qualifies for VA care at that point but it's so far in the future, 5 years out according to his attorney, that we haven't even started looking at that option yet.

HNL Bill - great idea on tracking charge card transactions in that manner, plan on implementing that idea immediately.

 

[mickeyd]

Welcome here GTT.


We have all made thoughtless investments and squandered cash along the way. We have learned and consider it part of the cost of our financial education. Some of us pay more than others.


You appear to be a pretty good financial shape for the future.


In the future LBYM.

 

[VanWinkle]

Welcome goingtotravel. You seem to be heading the right direction now.

Best wishes,

VW

 

[goingtotravel]

Update

Two and 1/2 years left before FIRE and staying interested in work has become a struggle. I want to continue do a good job but I am burnt out. All of the projects I am working on are due to be released just before or after my planned retirement date. Senior management is demanding more work with less resources and even the much younger employees are feeling frayed by all of it. Lost an employee last month and was told that they would not be replaced. Working to train newer employees as fast as possible but they transferred with their old workloads so it's slow going transfer others tasks to them. Do not want to move elsewhere due to perks like teleworking that are making it just bearable to stay. Cannot FIRE any earlier without losing my pension. How do you wind down a bit when the workload is actually ramping up?

 

[cnocmmz]

Hi and welcome.
So we understand, your DH is not military, (must have been prior military) to receive VA disability benefits....Correct?
With both of you having Government positions with pensions that good you should be fine once the debt is cut down. Although, not sure of your living habits and or monthly bills, so, ...As long as you do lol.
I too work for the gov and am retired mil, so my small gov pension will only pay for the beer (Plan is to retire in early 2020).
-Seems like you both have done well in your 401K's, my only concern for gov employees NOT yet retired is that (to your point) in my opinion they may reduce medical benefits and definitely raise rates. Also, the supplemental SS that gov employees get after 20 years and 56 yrs old most likely will go away as well so, I would keep a close eye on those two issues if you are counting on them?
-Lastly, spending habits may have to change depending on what you guys have in mind for retirement. Wish you the best of luck and again, welcome to the forum.

 

[goingtotravel]

Yes cnocmmz you pretty much have it right. DH was in reserves for almost 20 years and we both will retire with about 35 years of Federal service. His illness started while on active duty so that's the link to the VA benefits.

We have gone back and took a much closer look at our numbers. FERS pension plus SS supplement after taxes will cover our mortgage, real estate tax, utilities, health insurance, groceries (if we keep to a budget), gas, and household supplies (cleaning products,etc). Our TSP will cover vacations, replacement costs, dining out, going out, hobbies, and allow us to splurge on groceries, updating (vs. maintaining) the house, etc. We will also have enough outside of TSP to cover a few years of 'extra' expenses if we hit a down market and don't want to touch TSP and/or cover us from when the SS supplement ends and SS begins. Sounds so perfect when I write it out but we are nervous about pulling the plug!

Great points about losing some of our benefits. One would hope some sort of grandfathering would happen if that ever passed with both of us with less than 3 years left it would be very difficult to 'make up' the difference in a short time.

 

[cnocmmz]

Yes cnocmmz you pretty much have it right. DH was in reserves for almost 20 years and we both will retire with about 35 years of Federal service. His illness started while on active duty so that's the link to the VA benefits.

We have gone back and took a much closer look at our numbers. FERS pension plus SS supplement after taxes will cover our mortgage, real estate tax, utilities, health insurance, groceries (if we keep to a budget), gas, and household supplies (cleaning products,etc). Our TSP will cover vacations, replacement costs, dining out, going out, hobbies, and allow us to splurge on groceries, updating (vs. maintaining) the house, etc. We will also have enough outside of TSP to cover a few years of 'extra' expenses if we hit a down market and don't want to touch TSP and/or cover us from when the SS supplement ends and SS begins. Sounds so perfect when I write it out but we are nervous about pulling the plug!

Great points about losing some of our benefits. One would hope some sort of grandfathering would happen if that ever passed with both of us with less than 3 years left it would be very difficult to 'make up' the difference in a short time.

-Sounds a lot like us! When you state "We will also have enough outside of TSP", are you referring to Cash?

- I would not count on the Supplemental SS all indications tell me so?, I see this going away next year, I could be wrong. Just remember, you are not grandfathered in the gov unless you are already receiving.

Again, you should be fine as long as you stick to your budget.
What are your plans when you retire in a few years?

 

[goingtotravel]

Outside of TSP meaning CD's, money market accounts, etc. Trying to build a cushion large enough to leave TSP alone if the markets tank at retirement time.

Not too worried at this point about losing the supplement but if it happens then I guess the retirement date just moves out a bit until we feel comfortable that our costs are reduced enough to handle the hit or we can save a bit more to make it up.

As to what to do after retirement? Working on that list now. That's the fun part. How about you?

 

[Milton]

Senior management is demanding more work with less resources and even the much younger employees are feeling frayed by all of it. Lost an employee last month and was told that they would not be replaced.

Wish I had a magic bullet that could alleviate the problem, but there is no easy answer. Unfortunately, the situation you’ve described is the ‘new normal’ in both the public and private sectors.

This documentary has some good information about stress. See especially 13:00-17:45 regarding how one’s position in the hierarchy dramatically affects job stress of civil servants.

 

[cnocmmz]

Outside of TSP meaning CD's, money market accounts, etc. Trying to build a cushion large enough to leave TSP alone if the markets tank at retirement time.

Not too worried at this point about losing the supplement but if it happens then I guess the retirement date just moves out a bit until we feel comfortable that our costs are reduced enough to handle the hit or we can save a bit more to make it up.

As to what to do after retirement? Working on that list now. That's the fun part. How about you?

Presently 58 years old and DW is 64. Since she is 6 yrs older, the goal is walk away from gov here prior to 60? This will give us time to at least enjoy traveling overseas and spending time with grandkids. Our income prior to my SS is more than enough even with the mortgage so we should not have to dip into investments (TSP and her 401K) for sometime. Like you, I want to keep about 60K available to supplement income in a down market. I also plan on having other buckets set up for travel and home maintenance and other types of emergencies that will inevitably come up..lol

 

[Nords]

Yes cnocmmz you pretty much have it right. DH was in reserves for almost 20 years and we both will retire with about 35 years of Federal service. His illness started while on active duty so that's the link to the VA benefits.

We have gone back and took a much closer look at our numbers. FERS pension plus SS supplement after taxes will cover our mortgage, real estate tax, utilities, health insurance, groceries (if we keep to a budget), gas, and household supplies (cleaning products,etc). Our TSP will cover vacations, replacement costs, dining out, going out, hobbies, and allow us to splurge on groceries, updating (vs. maintaining) the house, etc. We will also have enough outside of TSP to cover a few years of 'extra' expenses if we hit a down market and don't want to touch TSP and/or cover us from when the SS supplement ends and SS begins. Sounds so perfect when I write it out but we are nervous about pulling the plug!

Great points about losing some of our benefits. One would hope some sort of grandfathering would happen if that ever passed with both of us with less than 3 years left it would be very difficult to 'make up' the difference in a short time.

GTT, you've mentioned that you're scrutinizing your numbers, but in an earlier post you said that you're not necessarily counting on VA disability compensation.

Have you looked at a potential disability rating and the compensation tables?

For example, you could dive into the rater's criteria (which are complicated) and get an idea:
The Original Legal Text of the Schedule for Rating Disabilities

Many vets with significant health issues come out with a 30% rating, which seems conservative enough for a situation that's been discussed with an attorney. Here's the compensation tables:
https://www.benefits.va.gov/COMPENSATION/resources_comp01.asp

If you haven't already talked with a Veteran Service Officer, it might be worth starting that project now. It makes you a more educated vet and it helps reduce the hassle (and suspense) of the claims process. You might even want to submit a claim now just to get the symptoms on the record and establish the paperwork for a later review. This is especially important when you're the healthier spouse:
http://the-military-guide.com/file-veterans-disability-claim-not-just/

It's hypothetically possible that the VA disability compensation (or at least the service-related healthcare) would make up for your potential pension losses.

Another option would be continuing to explore transferring your civil service job somewhere else. I realize you've listed some advantages which might be hard to find in other billets, but at some point the current toxic environment outweighs the potential upside.

Much of the late-stage burnout can usually be addressed by exploring a career change (especially if a supervisor wants to motivate your retention) instead of simply gutting it out.