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looking for advice on what to do
Old 01-10-2015, 09:19 PM   #1
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looking for advice on what to do

Hi Iam hopeing to get some advice and direction and also so younger readers might learn from my mistakes.

I am 58 divorced man,I have been a blue collar worker my whole life and never did any real retirement planning until about 99/2000 aprox. (I know!)

have lived in the same house for 30 years $49,000.00 bal@6.25 7 yrs left
worth about 120,000 maybe no other debt

Income 45-47,000.00
Retirement accounts 200,000.00
Social Security to be about 2100/mo at 66and 4 mo. if income stays the same
no 401 @this job and I put 150/mo in roth(part of the 200)

Totally burned out and want to go part time as soon as possible but it doesnt look good !
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Old 01-10-2015, 10:04 PM   #2
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I think you may have a hard time cutting back before the mortgage is paid off and you're collecting your full Social Security benefit. Save as aggressively as you can to build up your next egg and stay healthy! Also, I wonder if you could save a few bucks by refinancing to a short-term lower interest rate mortgage... might be able to get say, 2.75% 5/5 ARM. But you'd want to make payments to have the note paid off in 5-7 years.
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Old 01-10-2015, 10:21 PM   #3
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Hi, Jeff. You don't say how much you spend on a yearly basis. That will drive your retirement needs. With $200k in savings, you're looking realistically at only $8,000 per year in income. Once you get to social security eligibility age, you'll have greater income, of course. At 62, you would likely get around $18k per year from SS. So if you can live on $26k per year or less, you may be set to retire then.

In the interim, can you refinance your mortgage? 6.25% seems awfully high. You might look at a 5/1 adjustable rate. Currently, the national average for a 5/1 refi is 3.24%. Using a calculator like this Loan Calculator - The Calculator Site , if you pay as if the loan were only for 7 years (to match your current remaining term), your payments of principal and interest will be $652 per month. That may enable you to save a little more.
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Old 01-11-2015, 12:32 AM   #4
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Please detail your retirement accounts, as I have to wonder if you have good choices or bad choices within your retirement accounts.
You won't want to hear it, but you should plan on working way past 62, so you get more SS, because if you take it at 62, you will be shortchanged for the rest of your life, and you don't have the savings to make up for getting a small SS vs the normal amt, or even the bonus large amt at age 70
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Old 01-11-2015, 08:16 AM   #5
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Your mortgage at 6.25% is prime for a payoff or refi. That is a very high interest rate. Do a no-cost refi, same term, but lower rate. It will make your payments less, and not extend the payment period.

Pick up some side gigs. I am not sure what you do as a blue collar worker, but often you can do some side work for cash and make a lot of headway. Being self employed is a great way to feel like you are getting paid for what you are worth.

Keep putting money in a 401K, IRA, Roth, HSA, etc. You will likely not need near as much money in retirement, as FICA and retirement contributions no longer need to be made.
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Old 01-11-2015, 01:22 PM   #6
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Agree with the others on refinancing the mortgage to a lower rate and shorter term and pay it off before retirement. You'll be squeezed hard if you still have that retired.

Consider finding a way (that you can tolerate) of working at something to prolong the time before you take SS, to age 70 if possible. And agree on taking side gigs if you can to put that away too.
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Old 01-11-2015, 01:32 PM   #7
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Welcome, jeffd.

You've received some good advice here already. In addition, there is some excellent info in this thread Some Important Questions to Answer Before Asking - Can I Retire? and generally in the Early Retirement FAQs - Early Retirement & Financial Independence Community

Hang in there and good luck with your saving!
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Old 01-11-2015, 01:37 PM   #8
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Whether it looks good or not depends on how much you need to live, but realistically, early retirement or part time seems unlikely unless your expenses are unusually low.

But don't fret too much... you are actually in much better shape than the average American... though your late start is not helping you.

Have you run your situation through firecalc?

Would it be possible for you to change jobs or employers? A good friend of mine changed jobs in his early fifties and lucked into a new employer where he really likes the work and the people he is working with, so much so that he continues to work even though he could retire anytime he pleases. Something to think about... life is too short to spend a lot of time in a job you despise.
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Old 01-11-2015, 03:37 PM   #9
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Thanks for the replies! Yea early retirement for me won't happen,but I hope to
at least be able to retire before I expire! The jobs not terrible I am a welder
but after working in this line of work it does kinda wear on you.

as far as spending I live fairly reasonable but am looking at trimming some fat
and putting that into my roth to get to max (5500 or 6000yr?) I am only putting 150/mo now. I could probably pick up some side work as I do have welding equipment of my own,just a little burned out at the end of the day.

Take home pay 2600.00/mo on average
House 885.00 15 yr will be done when I tiurn 65 (without this I wouldn't worry)
Roth 150.00/mo (need to get this maxed)
phone/int 120.00
food 250/300

Trad Ira and Roth are with E-Jones and still 100%in stock(not sure I like this)
but trying to catch up

28,000 still in cash from last job with Schwaab
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Old 01-11-2015, 05:20 PM   #10
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Not much to add to the advice already posted. I think you've done a great job given your late start, but as others have mentioned, a lot depends on your expenses. Monitor them carefully so that you not only have a realistic estimate of what you'll need in retirement, but you may also be able to find ways to save extra. It can be surprising to see where your money leaks.

And any extra money you can bring in, whether from your main job or some side job, can also go right to savings.
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Old 01-11-2015, 05:51 PM   #11
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Jeff, you probably know already that there's a shortage of welders in the gulf coast, and as a result wages are rising now for welders in oil and gas and petrochemical construction. You might be able to take advantage of your hot market skills and bank some serious cash in the next few years if you are willing to relocate and work some construction jobs.
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Old 01-11-2015, 05:54 PM   #12
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Agree, a simple refi on your mortgage could help save you $100-200/mo. Then use that extra to bump up the Roth savings. Any side work would also go straight to savings. The $28K in Schwab, get that into something other than cash account. A simple stock index type fund would be a good choice, or a selection of 2-3 to get some diversity.

Starting late you do not get the benefit of the compounding over 30 years, but you can still work on savings to help build up the nestegg. You are better off than many your age, believe it or not. Maybe not what you would like to be, but in comparison you are doing good. Keep working on the savings.
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Old 01-11-2015, 08:00 PM   #13
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Your story rings true... much the same as our own situation at the time of our retirement... Dollars a little different, but looking at the future, for us was a matter of matching lifestyle to available $$$... A choice of living within a plan, versus continuing to work and save more for a shorter but less thrifty retirement.
It worked for us. Part luck, but a lot of planning... digging into the details of expenses and protections, and doing a realistic, detailed analysis of the actual dollars and not just someone else's idea of what's right.
I wish I had the wisdom of the ER members at the time we made the decision. Lots of mistakes, but overall we're very happy that we decided to retire with less than the financial advisor recommended. a matter of 5 or 6 years bonus to his plan.
Am not good at advice, but have left a little record here, of our retirement over 25 years.
Sharing 23 years of Frugal Retirement
Wish you well, and think you have a good attitude and a good start.
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Old 01-11-2015, 08:31 PM   #14
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I'd probably use the cash you have and paydown the mortgage now. You would likely have it paid off in three years by shifting from increasing roth contribution to paying the mortgage off. After the mortgage is gone, you can max out savings until you pull the plug on work. You just aren't gonna save enough in interest on the balance you have left to make paying for a refi worth it.
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Old 01-11-2015, 10:16 PM   #15
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IMO, your issue is with being burned out, and the fact that you either want to go part-time or retire from something (your job) as opposed retiring to something (i.e, a new life, leisure, etc). Shortages are beginning to develop in a number of blue collar fields, particularly transportation and construction. See this:

csen, The Biggest Looming Source of Inflation:...


Have you thought of looking into other fields?

Research has shown that the peak earning years for males is in their 50's. I would recommend approaching this issue with an abundance of caution, as retiring early at the age of 58 is a decision that is hard to come back from. Most people who retire early spend an enormous amount of time planning in advance, as can be seen by most postings on this site. Think carefully, research, and most importantly create a plan. The fact that you found this board puts you way ahead of most.

Best of luck to you.
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Old 01-11-2015, 10:24 PM   #16
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Do you have a credit union where you could refi with low costs You should be able to cut that payment down by $80 per month (give or take)...

If not, go to box home loans and see what rate you can get at that low of a balance.... it is kinda hard to refi with such a low balance which is why I suggest a credit union... they will do things that banks/brokers will not...

Just looked at box... not good news.... it will cost you a lot to get a refi done....
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Old 01-12-2015, 07:47 AM   #17
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My gut instinct when I read your post was to refinance the loan, but as others have pointed out with only seven years left on your mortgage there's not that much interest left on the loan, so that is not as great of an option.

What I would do, is to keep things simple...
Use some of your $28,000 in cash to maximize your 2014 Roth IRA.
Set aside $5000 in cash for emergencies.
Apply the remainder of the cash to pay down your mortgage.

Hopefully this gets you a couple years closer to having it paid off allowing you to retire at that point if you have amassed enough savings.
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Old 01-12-2015, 08:52 AM   #18
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Just one recommendation. Roll your retirement accounts out of E-Jones to Fidelity, Schwab, or Vanguard and into a diversified portfolio (ETFs or mutual funds). Leave the individual stocks alone
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Old 01-12-2015, 02:45 PM   #19
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Originally Posted by robertf57 View Post
Just one recommendation. Roll your retirement accounts out of E-Jones to Fidelity, Schwab, or Vanguard and into a diversified portfolio (ETFs or mutual funds). Leave the individual stocks alone
+1 EJ is not your friend as their high fees can eat up a lot of your retirement stash. If nothing else, move into a Vanguard Target date fund of about the year you plan to retire.
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Old 01-12-2015, 02:59 PM   #20
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+1 EJ is not your friend as their high fees can eat up a lot of your retirement stash. If nothing else, move into a Vanguard Target date fund of about the year you plan to retire.
+2 on that. Fees make a huge difference over time. See The Millionaire Teacher by Andrew Hallam. If the local library doesn't have it ask about getting it via inter-library loan. If you have to, buy it, the book is worth it.
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