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Ready, but too paranoid?
Old 04-26-2012, 04:57 PM   #1
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Ready, but too paranoid?

Hi All,
Turned 60 (married with non-working spouse) and decided that's it this year. Sick of the rat race and office politics. Here are my stats. Does it seem reasonable? I'm always paranoid and fear I missed something.

Funds:
1.2m (savings - 401k, stocks, IRA, bank accounts)
19.5k (FERS annual pension starting now)
29.5k (social security at 62)

Expenses:
$0 (mortgage)
$0 (credit cards)
$0 (car payments)
$7k (annual real estate tax)
0 (kids)
0 (debts)

Health care - FEHB govt (subtracted already from pension)

Firecalc says ok to spend 80k/year to age 95. Typically spend 30k or less total per year - modest lifestyle.
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Old 04-26-2012, 05:11 PM   #2
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Looks pretty good to me, at first glance, at least. Your relatively low expenses are terrific and will help a great deal.

I retired two years ago at 61, and I am SO GLAD that I did. These first two years of retirement have been the best of my life.
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Old 04-26-2012, 05:20 PM   #3
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Looks pretty good to me, at first glance, at least. Your relatively low expenses are terrific and will help a great deal.

I retired two years ago at 61, and I am SO GLAD that I did. These first two years of retirement have been the best of my life.
Thanks for your thoughts about my situation. Helps me feel more relieved.

I'm glad to hear that at a similar age you're happy you took the big step and have no regrets. It seems to me working all one's life can make us robotic in thinking, causing this fear to leave the work force. As if the world will fall apart, but maybe that's what the system would like us to think.
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Old 04-26-2012, 05:26 PM   #4
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I retired on FERS too, although I will be getting much less from them and from SS then you will. You may want to doublecheck the amount that you expect. According to this table on the social security website,
http://www.ssa.gov/oact/COLA/examplemax.html
the maximum possible at age 62 would be $1855/month, or $22,260/year. Doublecheck your FERS estimate, too. Your agency will provide you with an estimate which may be helpful.

What helped me was to determine how much I was getting in dividends from my nestegg.

Something that you might want to watch out for, is that there is a long delay before FERS retirement (or CSRS) is finalized these days. So, you may have to go 6-8 months or more without anything from FERS. However, with that big nestegg you will be fine (and they do pay the full amount owed from the date of retirement, once the payments start). The health insurance is seamless, with no delay in paying your medical bills even during the time while your FERS deposits are not showing up.
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Old 04-26-2012, 05:36 PM   #5
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I'm glad you mentioned the delay. I had heard about it vaguely, but didn't realize it could be that long. Will brace for that with funding fom savings and plan accordingly. Thanks so much for the heads up.

I assume you have FEHB medical with your FERS pension, as I will. One thing good about that compared to a private corporation's retiree health coverage, it's pretty much guranteed.
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Old 04-26-2012, 05:39 PM   #6
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I'm glad you mentioned the delay. I had heard about it vaguely, but didn't realize it could be that long. Will brace for that with funding fom savings and plan accordingly. Thanks so much for the heads up.

I assume you have FEHB medical with your FERS pension, as I will. One thing good about that compared to a private corporation's retiree health coverage, it's pretty much guranteed.
Yes, the retiree FEHB is the main reason I went into federal service to begin with. It's a big part of our compensation package.

The delay may be less, but the last I heard (on the federalsoup.com message board) I believe most were experiencing around 5-6 months. If you are prepared for a longer delay, then it will feel great if you find out yours is shorter.

These long delays did not exist until about two years ago. When I retired, the delay was less. Mine was only 3 months. Still, I found that to be very unnerving because I hadn't even heard anything from OPM saying that I was a retiree. Like you, I was feeling a little scared and the lack of any communication from OPM made it worse. I was afraid that maybe I had messed up and was just considered to have quit instead of being retired. What a relief it was when I got my retirement finalization paperwork in the mail.
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Old 04-26-2012, 05:49 PM   #7
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You've already checked FIRECALC and undoubtedly other sources, so you're eyes wide open! Beyond that, we all pass thru some paranoia/misgivings, nothing unusual. Some people can go at 5% WR and others shoot for 2% WR. Some need more than 100% probability of success, others accept much less. None are right or wrong, just whatever's enough for each of us to sleep at night and enjoy retirement. You'll get there, and you'll know when, though it may not be a sudden epiphany...or it may be. And your odds of success with stated portfolio, income streams and expenses are very solid compared to some I've seen here if that helps.
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Old 04-26-2012, 07:50 PM   #8
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I think you are good to go as well.

However, to optimize your wealth, you may want to consider whether it makes sense for you to delay SS from 62 to FRA or age 70 (depending on your health, spouses age and health, family longevity, and other factors - see various threads on these board for more details).

You may want to consider Roth conversions between retirement and SS to take advantage of lower tax rates and to reduce RMDs after age 70.
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Old 04-26-2012, 08:12 PM   #9
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I think you are good to go as well.

However, to optimize your wealth, you may want to consider whether it makes sense for you to delay SS from 62 to FRA or age 70 (depending on your health, spouses age and health, family longevity, and other factors - see various threads on these board for more details).

You may want to consider Roth conversions between retirement and SS to take advantage of lower tax rates and to reduce RMDs after age 70.
Thanks for your comments and great point. Firecalc was a lot more generous when SS was inputed with a starting age of 66 rather than 62. I think this is a point to emphasize for everyone... if you can afford to wait to 66, in most cases it's worth it.

Will also look into Roth conversions to reduce tax liability. Thanks so much.
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Old 04-26-2012, 08:15 PM   #10
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You've already checked FIRECALC and undoubtedly other sources, so you're eyes wide open! Beyond that, we all pass thru some paranoia/misgivings, nothing unusual. Some people can go at 5% WR and others shoot for 2% WR. Some need more than 100% probability of success, others accept much less. None are right or wrong, just whatever's enough for each of us to sleep at night and enjoy retirement. You'll get there, and you'll know when, though it may not be a sudden epiphany...or it may be. And your odds of success with stated portfolio, income streams and expenses are very solid compared to some I've seen here if that helps.
Thanks for the encouraging comments. WR is a big question these days, and I'm not sure the 4% WR as default asssumption always works for everyone.
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Old 04-27-2012, 03:18 AM   #11
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Welcome. IMO you are good to go also.
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