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Newbie Sitting On the Fence - ready for early retirement?
Old 03-26-2013, 11:55 AM   #1
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Newbie Sitting On the Fence - ready for early retirement?

I have the same question as many others here.

I am 57 and wife is 56. We have no debts of any kind. Our net worth is currently $2.2M. Of that, $550K is in primary residence and a rental property. Of the balance about $200K is in cash/savings (I am thinking of buying more rental property with that), $700K in IRA and 401Ks invested conservatively in mutual funds and about $750K similarly invested but in non-tax deferred accounts.

Careful review of last 2 years spending shows we spent on average $60K per year. Let's be cautious and assume $70K as base amount for future spending. I also assume no Social Security until age 67 and $2k/month (2013 dollars) from then on.

All the models I have tried show we should be safe to age 95 (again - trying to be cautious or optimistic!). Even Firecalc says 100%.

I probably would try to work at least part time but for the discussion let's assume I don't. I live in Florida and plan to stay here for quite a few years, maybe forever.

I know there's no guarantees, and that we can only estimate inflation, portfolio returns and longevity, etc., but my question is: have I missed anything obvious in trying to decide if we have enough and opt to take early retirement?

Thanks for all opinions.

On_the_fence in Florida.
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Old 03-26-2013, 12:09 PM   #2
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Health care covered?
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Old 03-26-2013, 12:38 PM   #3
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Good question. Thanks. I included $650 per month to cover health insurance in the $60K annual spend amount.

On_the_fence in Florida.
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Old 03-26-2013, 12:42 PM   #4
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Sounds to me like you should get off the fence (and out of the rate race).

Your situation is very similar to ours (except I am a year ahead of you having retired in Dec 2011) and I sleep comfortably at night.
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Old 03-26-2013, 12:49 PM   #5
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Buying future cars ?
House repairs ?
Extras for vacations, hobbies you take up after retirement, etc?
Taxes

Rental income?
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Good luck
Old 03-26-2013, 12:52 PM   #6
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Good luck

Similar situation here. I left workforce in December and she left in January. I have no regrets and full steam ahead........enjoy. You should be just fine with numbers ( at least I hope so) as they are close to mine, assets and spending.

Good luck
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Old 03-26-2013, 01:00 PM   #7
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Your rental property should generate some income, too.

You may want to look at your asset allocation. You have about $1.5 million invested 'conservatively" and $200 k in cash. Do you know the approximate breakdown of your investments by stocks, bonds, and cash?
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Old 03-26-2013, 06:07 PM   #8
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Originally Posted by Grigori View Post
Buying future cars ?
House repairs ?
Extras for vacations, hobbies you take up after retirement, etc?
Taxes

Rental income?
Thanks.

Future new cars - I don't buy them new and I maintain them myself. Costs of that are in the budget already. I probably should adda little to allow to replace them every 5 years or so.

House repairs are in that budget at $6k/year. Funds for vacations are in there too. As to hobbies, I have plenty of hobbies already and, having thought about it a lot, don't think I'll need to take up more. One of those hobbies is the car maintenance!

I am treating rental income as upside potential.

Thanks again for the suggestions.

On_The_Fence in Florida.
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Old 03-26-2013, 07:04 PM   #9
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Sounds like you have covered all the bases. Was long-term care insurance mentioned? Any history of Alzheimers or stroke in the family?
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Old 03-26-2013, 08:19 PM   #10
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Good question but no LTC premium in that budget. That's something I (and my wife) have seriously considered but can't bring ourselves to accept that it's cost-effective. Yes, we do know the logic and arguments. We both have family with good genes - no Alzheimers or strokes and long-lived parents. I am thinking the allowing for 95 year life span somewhat cushions lack of LTC Insurance?

Thanks

On_The_Fence in Florida.
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Old 03-27-2013, 07:31 AM   #11
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Originally Posted by On_the_fence View Post
Good question but no LTC premium in that budget. That's something I (and my wife) have seriously considered but can't bring ourselves to accept that it's cost-effective. Yes, we do know the logic and arguments. We both have family with good genes - no Alzheimers or strokes and long-lived parents. I am thinking the allowing for 95 year life span somewhat cushions lack of LTC Insurance?

Thanks

On_The_Fence in Florida.

That's a tough one. Who knows how your health will be later in life. A longer life span could increase the chance of eventually needing some kind of care. You may be able to handle the costs of assisted living but maybe not skilled nursing for an extended period of time. Of course, the danger is using up all the money, leaving the other spouse with Social Security and the house, which might also need to be sold. Not sure there's a good answer to this one... you're sort of in that sweet spot of not having more than enough to be able to self-insure but lots to lose. Having said all that, if it's not in the budget, it's just not.
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Old 03-27-2013, 07:34 AM   #12
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Looks like you are good to go to me. If you do work part time as you alluded to, that would be just extra icing on the cake. But your numbers look good as is.

Best of luck.
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Old 03-27-2013, 07:57 AM   #13
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Thank you, everybody, for the helpful questions and opinions. Now I have to work up the courage to act. Knowing me that will be a painful and slow process but I know which way I am leaning. I'll be on here regularly from now on. Great site.

On_The_Fence but leaning to 'time to retire' in Florida
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Old 03-27-2013, 05:47 PM   #14
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If FIREcalc says you are good to go, then you are good to go.
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Old 03-28-2013, 05:11 AM   #15
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Just curious how to determine the cost for long term care insurance. Sadly. History of alzheimers cancer and heart disease / stoke In the genetics here so planning early

I am 43. Hope About 5 years to fire if all goes to plan.
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Old 03-28-2013, 05:29 AM   #16
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There have been many threads on this topic. Please use the google function at the top of this screen. I know I started a thread a few months ago on this very topic. I did start LTCI last year. With your family history, I would consider it.
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Originally Posted by papadad111 View Post
Just curious how to determine the cost for long term care insurance. Sadly. History of alzheimers cancer and heart disease / stoke In the genetics here so planning early

I am 43. Hope About 5 years to fire if all goes to plan.
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Old 03-28-2013, 04:29 PM   #17
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OnTheFence ---- I don't know if it will be the same for you but once I came to the realization that I could retire and 'probably' not run out of money all it took was a couple of really bad days at work for me to get up the guts to say "ok folks, you're gonna lose me soon" !

Its a tough decision and very scary. Contemplate and when it feels right you'll do it. All the best to you.
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Old 03-28-2013, 04:34 PM   #18
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Time to change "on the fence" to "GET OFF MY LAWN". You are good to go. Bravo!
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Old 03-29-2013, 11:45 AM   #19
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Its a tough decision and very scary. Contemplate and when it feels right you'll do it. All the best to you.
Thanks. I'll work myself up to the point when it 'feels right' but your comment about workplace resonates with me!

On_The_Fence and tipping towards ER
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Old 03-29-2013, 11:46 AM   #20
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Time to change "on the fence" to "GET OFF MY LAWN". You are good to go. Bravo!
Feels good to know that. Thanks.

On_The_Fence and tipping towards ER
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