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Planning early retirement at 38
Old 11-06-2007, 06:27 PM   #1
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Planning early retirement at 38

Hello All,
Thought I would take a few minutes and introduce myself.

DW and I are both 38 with 2 girls. We plan to ER whenever it makes sense. I am a perpetual planner and need to have all the pieces in place before making the jump. I am hoping that the magic time is before 50, but may need to wait until 50 to be able to join the group plan at MegaCorp. The last piece of my puzzle is really health insurance because DW has Multiple sclerosis. She is in great shape and can do anything now. This is one of major reasons behind my "let's do it while we can" attitude. Who knows what will happen in the future with MS. There's my dilema.

Finances (very rough).
$340k CD's
$50k bonds
$710k in stocks/mutual funds
$370k in realestate (A cabin the woods, a lot on the river of a famouse river, and a 5 acre piece. Cannot sale because we are in love with our properties).

I am currently on an overseas assignment to allow us to travel in SE Asia and make some money at the same time.
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Old 11-06-2007, 06:37 PM   #2
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Welcome,

It sounds like you have all of the issues well thought out. Health insurance will be a big issue, even if your wife keeps the mild version (we can all hope). The finances are in great shape. Since health concerns make long term planning more difficult, balance is also an urgent and critical piece of this puzzle.
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Old 11-07-2007, 11:14 AM   #3
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Originally Posted by qkayak View Post
Hello All,
Finances (very rough).
$340k CD's
$50k bonds
$710k in stocks/mutual funds
$370k in realestate (A cabin the woods, a lot on the river of a famouse river, and a 5 acre piece. Cannot sale because we are in love with our properties).
Hi and welcome to the boards! You will find a lot of good information and advice here.

Some comments/questions for you

1) Don't get too caught up in home equity especially since you stated you won't be selling the properties as part of a retirement strategy. While they may be a part of your net worth, unless you wish to sell them for retirement, they should not come into any of your models.

2) While its impossible to gauge how you are doing with out you mentioning what you expect your expenses to be in retirement, I do have a question about having ~30% of your portfolio in CD's. What growth model are you trying to achieve? (of course to answer that you will need to think about expenses too)


Maldini
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Old 11-07-2007, 11:25 AM   #4
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2) While its impossible to gauge how you are doing with out you mentioning what you expect your expenses to be in retirement, I do have a question about having ~30% of your portfolio in CD's. What growth model are you trying to achieve? (of course to answer that you will need to think about expenses too)

Maldini
I agree with this also. Since it sounds like you have between 7-12 years for retirement, that seems like a large percentage of your portfolio to be in bonds/CDs.
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Old 11-07-2007, 02:02 PM   #5
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Wow, nice portfolio for your age. Looks like you know what you are doing. Keep up the good work.

Welcome to the forum.
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Old 11-07-2007, 05:40 PM   #6
Confused about dryer sheets
 
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Maldini/HornedToad10,
I thought I might get some questions about the CD's. When I moved overseas earlier this year, I sold my house and had a big chunk of cash to put away for when I return in 3 years. This is a shorterm investment until I decide what to do with it. I can use some of it as downpayment or I can buy a house without a loan. I've done a million calculations and the results always shows it is better to buy than rent. After 15 years of home ownership, I am still not sure (taxes, maintenance, interest payments, insurance, etc.).

In addition to about $85k(current balance) in 529 plans. I bought the 5 acre piece as an investment for my children's college. So I can't count that piece for sure in retirement. If they don't need the money, then I can at least pass it on to them for retirement planning or their children's college.

As for my retirement income needs, I calculated that I will need somewhere between $60-75k income(today's $) if I retire before 50. As I mentioned, medical insurance is the biggest unknown. The crazy thing is that the longer I work, the lower the retirement income need. ie, at 50 both kids will be in college, no more saving into the 529 plan, I will be able to join group insurance at megacorp(this is still up in the air).
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Old 11-07-2007, 06:54 PM   #7
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Given the way MegaCorps are making wholesale, major changes in their employee/retiree health care plans (been there, done that, had the rug pulled out from under me), anything can happen in the next 12 years. So, if that's the key piece holding you back, you might want to run the numbers under a number of assumptions (including one where you have to assume full cost of the health insurance.) Of course, we are all hoping that the fed govt will do something to address the national health care mess...hopefully sooner rather than later!

Sounds like you're off to a very good financial start! Congrats.
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Old 11-07-2007, 09:18 PM   #8
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Welcome to the forums qkayak. Glad you found us and have decided to post. As you can see we have a number of financial "experts" here who will be happy to pick apart your portfolio; each with their own spin on things. We each have to make our own decisons about where to put our money. Safety needs to be balanced with beating inflation. Time is on your side. Live below your means, save the excess, invest in a variety of low cost index funds, save some in bonds and you should do well enough to retire when you want.

As a Megacorp escapee too....watch you back and don't count on anything. I have about 2500 fellow (former co-workers) that lost their defined benefit plan, stock options, and retiree health insurance when they were spun off. The company was one that has been around for well over a hundred years so there are no sure things anymore. The best thing is to fund your own retirement including health insurance and if your company keeps its' word you are way ahead of the game and can live well.

MS is nasty. I have some close friends with it and know first hand the effects of the disease. Hang in there and enjoy your time now as much as you can. There is a lot of research going on and progress is being made (although slowly). One of my friends lived well into her 70's and actually died from lung cancer (long time smoker) and managed to run a store and keep a farm running most of her life while raising two great kids.

Take a look around. Ask advice but do your own research too. What ever you do make sure you can sleep at night with your decisions.
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