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Old 03-16-2013, 01:12 PM   #1
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New to forum, and learning a lot

Hello everyone. I've been reading your posts for a few months now but have not participated in any discussions. I have really enjoyed reading everyone's perspectives and would like to thank everyone for making this such a valuable forum.

As for me, I'm in my mid forties, and have a life partner who is a few years older than me. We live in California, so we still can not get married here. I don't think I recall seeing any acronyms for life partner, so I guess I will just refer to him as LP. We both work in careers that we've invested in for quite a while, and we've been fortunate to have some good success in each of our careers. Both of us have always practiced LBYM, and we've been able to put away some money to help us plan for a nice eventual retirement together. We've been fortunate enough to pay off our home recently as well, which has helped to reduce the monthly budget quite a bit. We've never run a balance on credit cards or taken on any other type of debt, always preferring to pay in cash if we needed something.

There are days when I love my career and think it's the best job in the world, and I can't believe they pay me to do this. Then there are other days when I'm so exhausted that I pull out my iPad and begin reading through this forum and seriously thinking about early retirement, as in next week or next month. I don't know that I'm financially ready to go there, but more significantly, I don't know that I'm emotionally ready to leave the work force either. We have no kids, and our careers have consumed much of our adult lives. Thinking about what I would spend my time doing if I was not working is a bit scary for me. I've been doing some reading to try and learn more about how people planned for this, and I've ready many of your stories in this forum.

I also give a lot of thought to my household expenses. Because I work so much, and travel much of the time, I pay very little for food and entertainment. Company perks cover a substantial amount of my expenses, leaving me with very little that I pay for out of pocket. Even without these perks, if I were to continue living the same standard of living, my expenses would be quite low. However, I suspect that only works because I'm so busy with work that I don't have time to spend much money. I don't know that I would enjoy trying to live the same life style if I had so much free time on my hands. Fortunately, I'm not a materialistic person, so I don't have a desire to buy any major purchases. I do enjoy traveling, eating out, and spending money on experience type luxuries. How much I would increase this if I was not working is still a real unknown to me.

One think I do feel I've decided after reading all of your posts is that I have no desire to work until 65. I know I want to have more years to enjoy life, and likely will not work past 55 or so, even if I do continue on in my current (or even a new) career.

I look forward to contributing to some of the ongoing discussions and just want to thank everyone again for making this such a valuable and insightful forum for me. It's really nice to be here.
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Old 03-16-2013, 01:28 PM   #2
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Welcome aboard, nice introduction. FI is one of the greatest gifts we can give ourselves, what you do after that is secondary IMO. You can make that decision anytime...while enjoying life as it comes all along the way.
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Old 03-16-2013, 01:32 PM   #3
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Welcome here Ready...if that is really your name.

Nice post. Keep it up.
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Old 03-16-2013, 02:13 PM   #4
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Welcome, Ready. That was a very good first post.
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Old 03-16-2013, 02:43 PM   #5
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Welcome! As Midpack stated so well, FI is really the goal, RE when you are (really) ready is the prize. You'll find lots of friendly like-minded folks here, so ask away when you have questions!
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Old 03-16-2013, 02:51 PM   #6
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Welcome Ready, even if you aren't ready yet! I enjoyed reading your first post. Think of this as a journey. You are in the precontemplation stage, just wondering whether, when and where to go. Time for some research! You will find a wealth of great info and helpful people here who can help you ask and answer the key questions. Just like the preparations for a trip, this can be fun! When you really are ready, you will know. But as with any trip, you get more out of it by being prepared.
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Old 03-18-2013, 05:51 PM   #7
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Welcome aboard.
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Old 03-31-2013, 12:48 PM   #8
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Hi everyone,

Thanks for the welcome notes. I have been reading the forum quite a bit lately while pondering my own situation. I'm finding myself in a position where I need to make some career decisions, and I may be leaving my position in the next few months. The stress is just not worth dealing with any more, and I want to find a path to enjoying life without constantly dealing with the aggravation anymore.

I continue to contemplate the possibility of ER for me. However, given that I'm still in my mid forties, and almost twenty years away from receiving social security, the thought of not generating income any more but living for possibly 40+ years is really scary. Our household income is currently about $600K. If I were to quit working, it would be reduced to just my partner's salary of about $200K. There is no reason for him to quit because he enjoys his job and is capable of working part time since he is paid hourly. If he cut back to part time, we could count on $100K per year. However, I don't want to count on his earnings to pay for my share of the expenses. That doesn't feel good to me, so I need to know that our savings alone can cover our expenses.

Our current household expenses are about $50K. Part of the reason they are so low is due to company perks I receive, so I'm thinking we would need closer to $70K to live comfortably if I quit working. $70K after tax would mean needing to generate closer to $100K before taxes.

We currently have $3.25M in savings. About $1M in retirement accounts and the balance in after tax accounts. The allocation is approximately 55% equities, 30% bonds, 15% CDs. Very little is in individual stocks. Mostly index mutual funds from Vanguard and Fidelity with low expense ratios.

We currently own our home, and have no mortgage or consumer debt. Our home is worth about $2.5M.

When I run our numbers in Firecalc, I run $3.25M with a 50% equity exposure, remainder in 5 year treasury notes. I can get up to about $105K per year at 100%. If I switch to $110K, I start to get to 99% success rate. I'm not factoring in social security at this point. If we get it, I guess that will be a nice bonus for us.

Our plan is to stay in the current home we are in. I know that running Firecalc for 40 years exposes us a bit, because we could possibly live well beyond that, but I figure that if I don't include the value of our home in the calculations, and if we really run out of money in our 80's, we could possibly take a reverse mortgage to cover our remaining expenses. We have no children to leave our money to, so we have no desire to have anything remaining when we pass.

As long as my partner stays in his job, he gets full health coverage even if he only works part time. I would also get full health coverage for about $100/month. It's a profitable Fortune 500 company, so it's likely that he will not have to worry about losing his job due to a company downturn.

So, if I were to quit, I would have to be comfortable living at about the same level of expenses as I have been up until now. What worries me is that with so much free time on my hands, I would think I would want to travel more and have the freedom to spend money on some nice luxuries that I haven't had time to indulge in because I've been working so much.

I'm looking for any advice you can share with me, both in terms of whether I'm financially ready to retire, as well as what experiences anyone in a similar situation to mine have had regarding whether their expenses went up after retiring due to their desire to travel and spend money now that they have the time to do so.

I know that if I work another five years of so, the numbers would change dramatically, to where our Firecalc 100% income would increase to about $170K. At that level I clearly would be comfortable retiring. So, I'm trying to decide whether to call it quits now or find another job and keep going for another five years or so.

Thanks in advance.
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Old 03-31-2013, 01:15 PM   #9
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As a couple, the combined picture certainly looks good. But you didn't tell us what your share of the expenses was nor how much of the $3.25M was yours. We need that information in order to know whether you have enough to cover your share of the expenses.
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Old 03-31-2013, 01:27 PM   #10
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As a couple, the combined picture certainly looks good. But you didn't tell us what your share of the expenses was nor how much of the $3.25M was yours. We need that information in order to know whether you have enough to cover your share of the expenses.
Good point. Expenses are split right down the middle. We own the home 50/50. My portion of the investments is $2.325M.
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Old 03-31-2013, 01:37 PM   #11
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It all sounds good and your question about the potential rise in expenses when you have the time to enjoy yourself is an excellent one. I recently retired and have set up a budget with $8000 per annum for travel. (When my car is paid off I will increase that!).

My question (coming from risk management) is what would happen to the assets if you and your partner were to split up? I am not familiar with the relevant legal framework.
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Old 03-31-2013, 01:38 PM   #12
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So you need to generate $50K before tax with a $2.3M portfolio? Sounds very reasonable to me.

Now, you said that you worry about spending more money in retirement because of all the free time of your hands. Certainly, it's something you need to think about and you need to honestly assess what your spending could be under your ideal retirement scenario. With your partner still working, would you really travel more? With no more income coming in, would you really spend more on luxuries than when your income was $400K a year?
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Old 03-31-2013, 02:17 PM   #13
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So you need to generate $50K before tax with a $2.3M portfolio? Sounds very reasonable to me.

Now, you said that you worry about spending more money in retirement because of all the free time of your hands. Certainly, it's something you need to think about and you need to honestly assess what your spending could be under your ideal retirement scenario. With your partner still working, would you really travel more? With no more income coming in, would you really spend more on luxuries than when your income was $400K a year?
Aged mid 40s and $2.3M to generate $50k is quite reasonable. (At least I hope it is since that is close to my situation). It's less than 2.5% WR which is getting down into the perpetuity zone.

You may be surprised at how little you spend in ER. I find myself more conscious of my purchases than when I was working. Also, the fact that your partner is still working is likely to limit your spending even more since you may find yourself on your own a lot during the day which doesn't always lead to big spending. My car, food, and clothing expenses all dropped dramatically after I ER'ed.
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Old 03-31-2013, 02:40 PM   #14
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I'm finding myself in a position where I need to make some career decisions, and I may be leaving my position in the next few months. The stress is just not worth dealing with any more, and I want to find a path to enjoying life without constantly dealing with the aggravation anymore.

So, I'm trying to decide whether to call it quits now or find another job and keep going for another five years or so.
So I take it you have something else you'd rather be doing in retirement, and/or another career isn't appealing to you? "They" say it's not enough to retire from something, you have to have something (better) to retire to, and I think it's true. New activities in retirement come quite naturally to some, but not to everybody. Some people actually become bored and depressed in retirement (Google if you care to) - though I am not suggesting it's likely or common.

I retired early but much later than you're contemplating, and I would welcome another career in a completely different field. It's an option, YMMV.
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Old 03-31-2013, 04:00 PM   #15
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It all sounds good and your question about the potential rise in expenses when you have the time to enjoy yourself is an excellent one. I recently retired and have set up a budget with $8000 per annum for travel. (When my car is paid off I will increase that!).

My question (coming from risk management) is what would happen to the assets if you and your partner were to split up? I am not familiar with the relevant legal framework.
Good question. Our assets are in individual accounts, so the only joint asset is our home. We would have to sell it, and then we would each end up with about $1M after taxes and fees, but we would each have to find another place to live. I suspect neither of us would want to live in a very expensive home if that happened, so I think it would be fine. We've been together almost 20 years, but i suppose anything can happen.

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So you need to generate $50K before tax with a $2.3M portfolio? Sounds very reasonable to me.

Now, you said that you worry about spending more money in retirement because of all the free time of your hands. Certainly, it's something you need to think about and you need to honestly assess what your spending could be under your ideal retirement scenario. With your partner still working, would you really travel more? With no more income coming in, would you really spend more on luxuries than when your income was $400K a year?
He could work 8 days per month and have 22 days off, and still get five full weeks of vacation per year, so I do think we could do some extensive travels even while he continues to work. However, we are pretty good at traveling on a budget and could probably contain the expenses reasonably well.

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So I take it you have something else you'd rather be doing in retirement, and/or another career isn't appealing to you? "They" say it's not enough to retire from something, you have to have something (better) to retire to, and I think it's true. New activities in retirement come quite naturally to some, but not to everybody. Some people actually become bored and depressed in retirement (Google if you care to) - though I am not suggesting it's likely or common.

I retired early but much later than you're contemplating, and I would welcome another career in a completely different field. It's an option, YMMV.
That's my biggest concern - retire to what? But I know myself, and if I don't quit my current job, I'll never figure out what's next. Trying to do so while I'm working full time has never been something I do well. I quit my last career having no idea what I would do next, but it all worked out really well for me. I might try another career, or I might get involved in volunteer work, or just try a bit of leisure while I try and figure it all out.

Thanks again for all the input. It really is helpful!
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Old 03-31-2013, 04:51 PM   #16
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That's my biggest concern - retire to what? But I know myself, and if I don't quit my current job, I'll never figure out what's next. Trying to do so while I'm working full time has never been something I do well. I quit my last career having no idea what I would do next, but it all worked out really well for me. I might try another career, or I might get involved in volunteer work, or just try a bit of leisure while I try and figure it all out.
Hi Ready,

I've been thinking alot about the same question, though I'm nowhere near as financially 'ready' as you are, still have 15 years to go. But I downloaded this book today that has been recommended here before: How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won't Get from Your Financial Advisor: Ernie J. Zelinski: 9780969419495: Amazon.com: Books

The reviews are good, but I just downloaded it today so have not started it myself.

Good luck!
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Old 03-31-2013, 04:57 PM   #17
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Hi Ready,

I've been thinking alot about the same question, though I'm nowhere near as financially 'ready' as you are, still have 15 years to go. But I downloaded this book today that has been recommended here before: How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won't Get from Your Financial Advisor: Ernie J. Zelinski: 9780969419495: Amazon.com: Books

The reviews are good, but I just downloaded it today so have not started it myself.

Good luck!
+1. I read it before I retired, your local library may have it. If nothing else, I think you may find the Get-A-Life Tree exercise in the book helpful, it certainly helped me before I retired. Best of luck...
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Old 03-31-2013, 10:00 PM   #18
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Welcome aboard to you and your LP.

Based on what you shared in your OP, I bet when you go on "vacation" you are still plugged into the job. I think maybe you just need some serious down time right now. An uninterrupted vacation. A sabbatical. You should check these things out first. Best, Joe
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