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Old 11-13-2014, 02:31 PM   #21
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It really depends on your own risk tolerance. We can tell you what we would do in your shoes, but thats based on our risk tolerance, not yours.

I've already decided that travel is nice, but not an ER deal breaker, to me. What IS important to me is free time to take advantage of all the low cost / no cost activities in my community. Also important is getting away from stress - I simply am more intolerant of stupidity as I get older / more FI. I would love to have an attitude of "ha ha - look at these dummies at work ! It won't bother me because I know I don't need to be here" ! I tried but kept coming back to "OMG I do NOT need to put up with this BS ! I'm done as soon as I can !!".

Most important to me was predicting my ability to sleep at night after ER. At my original 3.5% WR I was already worried. Now that I'm at 3% I'm less worried (but still wonder if I'll end up with a PT job once I leave Megacorp).

You need to decide what trade offs you are willing to make and if you will worry yourself sick if you ER in July.
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Old 11-13-2014, 02:35 PM   #22
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Originally Posted by Totoro View Post
If you were at SS age right now it would be easy (+/- 3% WR at 100k, 1.8% with reduced budget).

In line with 2B I can't square your asset distribution, care to make it a bit more explicit?

The $75k spend level also seems fine to get you until SS age (3.6% WR). Sustainability of $100k depends as you say on what the market will do.

So in essence it comes down to how willing you are to work for the luxuries on top. $170k extra for one more work year can pay for alot of travel and a nice sports car (if so inclined). Alternatively, one year extra takes you down to 100k / 2280k = 4.4%, two years to 4.1%.

Then again, you and DW statistically have 25 years that you'll both be alive (never mind healthy!). So every year of work is 4% of your time together. Averages don't apply for a specific situation, but still something to consider. It could also be 15 years.

If I were in your shoes I'd consider anything from quitting now up to maximum 2 years extra, but certainly not more.

Or more likely, I'd go hunt for painless ways to cut +/- 20k out of that 100k budget, reserve 100k for travel splurging in the first year and quit asap.

Judging from your other posts you however already know all that stuff It seems to me you are dealing with the emotional point-of-no-return kind of decision, and that's what's bothering you? There is no going back after the jump ..

It's a kind of black and white going from 100% employed & well-paid to 0%.

Maybe there is something to do done there? Make the transition feel lees abrupt. I know it helped me get out of a high pressure job early. Would have never jumped to unemployment straight away so instead shifted to lower pressure job first, then self-employed, then semi-FIRE (where I am now).
Thanks. My asset distribution is somewhat high equity wise, 80% stocks, 20% bond/liquid. Our equities are managed by an adviser, and generate ~ $60K/year in dividends. We're also trying to also put away one years worth of essential expenses outside our 2.4M portfolio to transition us to retirement smoothly. Plus my wife might want to continue working a little longer which would bring in some extra (maybe $30-40K) income (she's self employed and controls her own destiny).

I am considering a semi-FIRE alternative approach, but after 40 years in technology/IT industry and burned out I'm not sure if that's what I want to do. Looking into alternative part-time job career paths to pursue.

Right now I'm just exploring possibilities - depending on how things shake out with the new management, and what my job role will transition to in the coming year. Then I would then evaluate whether or not I can stomach OMY, or get out if I'm screwed in role by my new boss.
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Old 11-13-2014, 03:01 PM   #23
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Rob,

It continues to amaze me how similar our financial positions are - I'm just two years younger and my assets are likely right where yours were two years ago. As such I'm planning to work until I hit 55 and qualify early retirement.

You may want to consider running your numbers through cfiresim with the VPW methodology on spending. You can utilize a floor of 75K spending as you say but put a ceiling of perhaps $125K. I will bet the success percentage comes out pretty high. If not OMY fits right with my similar plan plan and would get you a very high success percentage.
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Old 11-13-2014, 03:10 PM   #24
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Originally Posted by robnplunder View Post
With target ER date, summer/2015, fast approaching, one final check with fine folks here:
  1. Ages = 53 (DW & I). Total asset = 2.1M (350k in house equity), SS in 10 years at 63 = $38k
  2. Yearly expense = $100k and room for reduction if needed, Firecalc = 100% using Bernicke spending model. Fails poorly otherwise.
  3. Parents in late 70s who may need LTC, DS (only child) - a starving artist but independent
  4. Current income = 250k/year, current yearly asset increase = $180k/year (60/40 investment portfolio, saving from income)
  5. Pressure points to quit = desire to goof off rest of my life, and my psycho boss (otherwise, my job is ideal)
  6. Conflict = 2 - 4 of OMY can add 350k - 800k to my ER fund which means I don't have to LBYM in ER, can travel the world, assist family members/relatives in financial need
I know I can RE now and maintain our lifestyle. But concern over item 3 is nagging me. It's also hard to ignore items 4 & 6 which keeps me at OMY.

Any suggestions, advices, shared experiences?
1. Means a very long retirement likely 40+years is that part of your modeling?
2. It says you are in the Bay Area..CA?? Are you planning to stay? As we know the Bay Area is unlikely to get cheap barring a massive earthquake...How much are you prepared to reduce your spending by? 20%? 40%
3. If you are already supporting your parents can you do so for 20+years there as well. What are the odds of your son needing help?

Running some other calculators including a MC sim with your numbers (basic) gives me some substantial chances of failure (50%) over a 40 yr retirement at 100K. Obviously reducing spending helps but if you have these other potentially fixed expenses it might be tough to drop to say 60K a year for multiple years
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Old 11-13-2014, 03:17 PM   #25
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Originally Posted by omysteve View Post
Here's our situation:

Age: 60 (me), 62 (wife)

Assets (not including house): 2.4M
House (conservative estimate): 350K
Social Security: I plan on delaying to 70 (high earner relatively speaking). My wife (62) could collect $1,000/month now, $1,300 at age 66.
Debt: Still owe $40K on the house.
In direct comparison with my situation, you seem to be in a lot better situation to RE now. I am not sure why you are compelled to post your situation and in this thread. You have my blessing to RE now .
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Old 11-13-2014, 03:23 PM   #26
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Originally Posted by nuke_diver View Post
1. Means a very long retirement likely 40+years is that part of your modeling?
2. It says you are in the Bay Area..CA?? Are you planning to stay? As we know the Bay Area is unlikely to get cheap barring a massive earthquake...How much are you prepared to reduce your spending by? 20%? 40%
3. If you are already supporting your parents can you do so for 20+years there as well. What are the odds of your son needing help?

Running some other calculators including a MC sim with your numbers (basic) gives me some substantial chances of failure (50%) over a 40 yr retirement at 100K. Obviously reducing spending helps but if you have these other potentially fixed expenses it might be tough to drop to say 60K a year for multiple years
I've modeled it for 35 years, and will move out of Bay Area, CA if market runs into a prolonged downturn. I am also willing and can reduce expense up to 20%. I am assuming 10 more years of supporting my parents.

Thanks for running MC sim - much appreciate it. I've ran a few other calculators and have my own spreadsheet that I can input various scenarios. I believe I can make it work by being flexible with moving, and expense cutting as needed. There is a definite risk which I am willing to face it. But I need to think out of my box and see what others here (who have been there and done that) sees that I may not (or refuse to) see. So far, consensus seems to be I may be taking a bit too much risk and OMY is an astute thing to do.
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Old 11-13-2014, 03:34 PM   #27
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Originally Posted by woodguy00 View Post
Rob,

It continues to amaze me how similar our financial positions are - I'm just two years younger and my assets are likely right where yours were two years ago. As such I'm planning to work until I hit 55 and qualify early retirement.

You may want to consider running your numbers through cfiresim with the VPW methodology on spending. You can utilize a floor of 75K spending as you say but put a ceiling of perhaps $125K. I will bet the success percentage comes out pretty high. If not OMY fits right with my similar plan plan and would get you a very high success percentage.
Hmm. I posted my first thread a year ago - Living it up a little before retiring?. In it, I said in a nutshell that I planned to retire at 55 with 2M in asset. Well, I've got to 2M 2.5 years earlier than planned thanks to saving, housing & stock market performance. That may have given me a bit more confidence. But given all the feedback so far, I will have to reevaluate my strategy.
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Old 11-13-2014, 03:42 PM   #28
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One of my grandparents lived to be 100. What about your own LTC needs? Is that in your plan?

I'd run the numbers in the Fido RIP with a reserve for your own LTC. (I do use lower medical costs than they do.) And see how much your maximum expenses could be with money left for LTC and living to a ripe old age for you, the wife and the folks you are supporting. I like to hope for the best and plan for the worst. I noticed the managers who were more optimistic than me at work frequently had their projects come in late and/or were rushed disasters, and many each year were fired or demoted, because they didn't allow enough pad for vacations, overhead, training, department meetings and all the Murphy's Law kinds of stuff that always cropped up. I'm sticking with conservative estimates with our ER plan since I've seen up close and personal all the disasters that happened from overly rosy estimating. My job used to be turnaround manager and taking over these disaster projects and I don't want my retirement to end in financial disaster like so many of those projects did initially.

I talk to older retirees in some of our clubs and boomerang adult kids, gray divorces, boomerang divorced adult kids with grandkids, LTC needs, parents needing financial help, serious illness, disabled grandkids, etc. - all kinds of financial adversities seem to happen for many over decades of retirement.
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Old 11-13-2014, 03:57 PM   #29
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In direct comparison with my situation, you seem to be in a lot better situation to RE now. I am not sure why you are compelled to post your situation and in this thread. You have my blessing to RE now .
Sorry, didn't mean to hijack your thread/situation. Have the same concerns as you do about aging/broke parents we are helping out, and 24 yo daughter who just moved back home for nth time. But we've tried to factor those elements into our "essential" monthly expenses now, and to the extent we can predict what it will be in the future.
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Old 11-13-2014, 04:00 PM   #30
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Quote:
Originally Posted by robnplunder View Post
With target ER date, summer/2015, fast approaching, one final check with fine folks here:


Ages = 53 (DW & I). Total asset = 2.1M (350k in house equity), SS in 10 years at 63 = $38k

Yearly expense = $100k and room for reduction if needed, Firecalc = 100% using Bernicke spending model. Fails poorly otherwise....

Any suggestions, advices, shared experiences?
I dunno Rob. I have more in assets, both investable and real estate, and about the same in future SS. Yet, I am older (58), hence closer to SS and Medicare, do not live in expensive SF, and my original plan called for spending lower than $100K.

Yet, two years after quitting my part-time work, I have found my expenses in the last 12 months creeping into the 6 figure. Surely, my recent life-threatening health problem and then big home repair work (I own two homes) added much to the unexpected expenses, but things have a way of happening.

If it were not for my health problem, I am sure I would have 2nd thought about stopping my part-time work, which gave me earned income of around $100K/yr. As it is now, I am hopeful that my next year expenses will return back to my projection, but if it does not, I am still below what FIRECalc says is safe. Remember that I am older and have more in assets.

You really don't want to cut too close. If you really hate your job or have health problems and do not mind giving up discretionary expenses or moving, then you should not stick it out and suffer. But I do not have the feeling that your job is that bad, and that you are ready to reduce spending.


PS. What I was saying was that if things do not work out and you have to cut back or move, will you regret leaving your well-paid job? In my case, the health problem that occurred after I quit sealed the deal. I could even resume the work, but no way in hell I would now.
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Old 11-13-2014, 04:29 PM   #31
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Sorry, didn't mean to hijack your thread/situation. Have the same concerns as you do about aging/broke parents we are helping out, and 24 yo daughter who just moved back home for nth time. But we've tried to factor those elements into our "essential" monthly expenses now, and to the extent we can predict what it will be in the future.
No big deal and I think you have enough to retire. But if you have doubts and can use critical feedback, you ought to start your own thread.

daylatedollarshort - I have decided to self fund my LTC. I get what you said about unexpected things which can happen. Perhaps, I have been too optimistic about things that can derail my ER plan. I sure don't want to be dollar short in RE.

NW-Bound - the big negative thing about my job is my boss. He is truly a psychopath. Otherwise, the job is enjoyable. I need to grin and bear it if I decide to work a few more years. Several years ago, I whined about my job to my cancer fighting brother (RIP). I still remember his exact words. He said, "I wish I have your problem." Perhaps, working for a psychopath is not that bad. Grin and bear, grin and bear, grin and bear ...
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Old 11-13-2014, 05:21 PM   #32
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.... I have decided to self fund my LTC. I get what you said about unexpected things which can happen. Perhaps, I have been too optimistic about things that can derail my ER plan. I sure don't want to be dollar short in RE....
When you say self fund your LTC, exactly where is the $300,000 avg cost of that because its not in your existing savings you have stated.
Meaning you cannot count the same 300K for LTC and retirement spending as your DW/you will need the 300K for retirement while the other is in LTC.

I think you have not tried to save enough, unless you recently started making 250k/year, your savings of 1.75MM is very low.

The market is at a peak right now, so everyone's assets look great, I think this is leading many people to over-confidence in their asset base.

You say you want to stay in the Bay area, but will move if market runs into a prolonged downturn, however, if that happens your value of your house will also probably fall by 10%-20%, the worst time to sell is when you need to sell.

Obviously I vote for you to work 2 or more years AND right now start living on your retirement amount, see if its truly possible instead of splurging before retirement.

This splurging thing suggests to me, you feel retirement is a punishment spending level, instead of an easy transition.
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Old 11-13-2014, 06:26 PM   #33
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You say you want to stay in the Bay area, but will move if market runs into a prolonged downturn, however, if that happens your value of your house will also probably fall by 10%-20%, the worst time to sell is when you need to sell.
This is certainly true and given your comments of your house equity you either still have a mortgage or you don't live in Palo Alto .

You might make it but you might find it very tight so it all depends on your comfort level. The thing we all have to consider is can we return to work if the situation changes. Seems like you think you could not so do you want to risk having to be a greeter at Walmart?

Quote:
The market is at a peak right now, so everyone's assets look great, I think this is leading many people to over-confidence in their asset base.
This is also something to consider...what if there is a 30% decline the year after you retire?

While none of us know what will happen (if we did this would be a piece of cake) I would factor in as much good (long life) and bad (bad markets, higher than expected expenses) without going to unreasonable. If it still looks good then you should be fine barring the zombie apocalypse (my biggest fear ). Without going into details I can say that I have more resources, fewer expenses (no kids no parents to support) and at 55 now feel confident that I can ride out anything so will be calling it mid next year just about at 56. And I can still generate scenarios that fail, but those seem to be such outliers that a lot of folks will be in much worse shape (kind of the zombie apocalypse situation)
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Old 11-13-2014, 07:14 PM   #34
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sunset, nuke_dive:

Good points, thanks. I was going to RE as early as next month if work situation is just too unbearable. That plan is now scratched, burnt, gone, bye bye. I will assess the situation again in 6 months and decide. But it looks like 1 - 2 OMYs is a prudent thing to do if I can stand my job/boss.
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Old 11-13-2014, 07:44 PM   #35
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Retire today. Get rid of all overhead requiring lots of money. Live on a beach before you get too wrinkly.


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Old 11-13-2014, 08:15 PM   #36
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I am not sure how much of you budget is trimmable or goes to parental support, but cutting your expenses might give you the most bang for you buck at your age. Trimming $25K a year over a fifty year potential retirement means needing $1.25M less in total retirement funding. What helped us the most was cutting costs on things we didn't miss, like raising the insurance deductibles, getting rid of the landline, not renting our cable modem and just a couple hundred different changes, some very small, but they all added up.

If the weather warms up, play tennis this weekend or go on a hike and take a picnic lunch in the Redwoods and ask yourself if you'd rather do that every day or work longer to support more expensive hobbies. There is no right or wrong answer. You have to do what works for you.
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Old 11-13-2014, 08:31 PM   #37
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Retire today. Get rid of all overhead requiring lots of money. Live on a beach before you get too wrinkly.
I remember 10 years ago when my mother retired at 62 with just about $200K in the bank and $1200 a month in SS.

She's still doing fine.

I kept that in mind this past summer when I pulled the plug 8 years earlier than she did but with a much larger portfolio. I figured if I could spend as much as Firecalc said I could 95% of the time, I could set roughly half that amount aside for the other 5% of those times.

Go for it.
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Old 11-14-2014, 08:37 AM   #38
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the big negative thing about my job is my boss. He is truly a psychopath. Otherwise, the job is enjoyable.
I have worked for my share of psycho bosses - I've outlasted all of them . Bosses change.
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Old 11-14-2014, 09:12 AM   #39
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Financial considerations aside, if you like your job, OMY probably makes sense, but if not and you are stressed out, maybe it doesn't.
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Old 11-14-2014, 10:11 AM   #40
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Hi all -
I moved omysteve's post over to the fire and money board.

Please review my plan (split from another thread)
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