wstu32 said:
40 yrs old
would like to retire asap
portfolio:
950k in cash acct / ~30% stocks, 10% mutual funds, 10% cash / 50% short term bonds and muniew
200k ira 100% equities
variables:
40 yrs old
own home free and clear /dont plan to sell
live in HAWAII
no bills
worried bout medical insurance premium
have 14 year old
need about $45-$50k per year to live well
CAN IT BE DONE WITH THIS?
any thoughts would be much appreciated
by the way, i just joined this sight and absolutley love it!
lots of positive feedback and opinions...
God Bless
Well, hallelujah & welcome to the board, WSTU! We were beginning to think that we were the only ERs on this island!
It can be done with what you've listed, but you're riding the razor's edge (yee-haw). Withdrawing $50K/year is a 4.3% withdrawal rate which should work fine but doesn't leave much room for surprises like paying hurricane-insurance deductibles, rising property taxes, replacing the roof, and six decades of buying appliances & vehicles. If that amount doesn't include healthcare insurance then prepare to be surprised. If you're not tracking your spending closely and feeling extremely confident that $50K/year will cover you then you might want to dig into the numbers or raise your annual spending estimate.
We use the military's TRICARE Retired and I'm afraid I don't know squat about local plans. Two of my neighbors work for Kaiser, though, if it'd help answer your inside questions.
Another potential ER-breaker is college. Some parents feel obligated to fund their kid to a full ride, others don't. If you don't already have money set aside (separate from the assets you've listed above) or if your kid plans on you paying for more than Kapiolani CC, then that could derail your plans too. We've saved enough to pay for our kid to attend four years of UH or perhaps some Mainland schools but the rest is up to her.
There are two other considerations. One of them is Social Security. You won't have a long work history and your SS won't be a huge distribution, but you need to add it to your calculations. The SS estimate you get in the mail assumes you're working until age 62 and it's useless for ER. An accurate estimate requires the
SS website's online calculator but you'll need your paper statement (and about 20 minutes) to enter your lifetime earnings history. In my case, an earnings history of only 24 years and not that much salary, I'm looking at about $9K/year. That amount may swing the balance for you guys.
The second consideration may be part-time work. I just donated a copy of Bob Clyatt's "Work Less, Live More" to the library so it'll be about three months until the catalogue division puts it into circulation. It's the best book I've read on mixing employment with ER. P/T work includes spouses, too-- my spouse is in the Reserves and while we don't count on that gravy train running much longer, it's nice to have.
But with the prospect of additional SS (starting as early as age 62) and perhaps a part-time job or an occasional contract hire, you may be able to hold your withdrawals down to a reasonable range. Withdrawing $50K/year is pushing it (you'll want to run the numbers through FIRECalc with Social Security added) but that's only considered "pushing it" because it's unrealistic to expect a calculator to predict your spending for the next six decades. Spending $60K/year for the next 20 years until $10K/year SS kicks in may work just fine but I'd have trouble sleeping at night.
Keep searching & reading the site's old posts. Chances are pretty good that someone else has already had to deal with the issues that you have a question about.
In conclusion, the really really really important thing... is making sure that you have enough money in the budget for longboards. You probably don't need a jetski to buzz your gun over to Jaws, but it's good to be able to pick up a nice board without having to send your spouse back to work!
