Ready but waiting at 57

T

TWwashere

Confused about dryer sheets
Joined
Jan 16, 2014
Messages
3
Location
Chicago
I will be in the class of 2014. I just need to get over the emotional decision. Firecalc says I am 100% ready with a withdrawal rate of 2% giving me what I am living on today. It's been a good career.

Right now I am 70% stock and 30% cash. Cash because much of the portfolio came over the last two years in stock that vested from a company IPO. I have sold most of the company stock to diversify. I have not pulled the trigger on fixed income for the obvious market reason; interest rates can only go up and their value down. I'd be interested in commentary on that.

I will also be looking into a winter home in a warm climate. I have excluded current real estate (our primary home is all we have) from any retirement planning scenarios. I am wondering if the funds projected for a second home should be considered part of the portfolio or excluded as well.

Looking forward to playing golf five days a week.
 
TWwashere said:
I will be in the class of 2014. I just need to get over the emotional decision. Firecalc says I am 100% ready with a withdrawal rate of 2% giving me what I am living on today. It's been a good career.
Click to expand...
Welcome neighbor.

Reaching FI (congrats) is not a reason to retire in itself. If you still enjoy your work, you should not quit unless you have something better to do in retirement. But if you do have other activities outside work you want to get on with, sounds like you have that option. Not trying to discourage you at all, just that 'it's not enough to retire from something, you want to have something to retire to.' Most people find their way quickly and do well in retirement, but some get bored and depressed because they haven't thought about 'what will I do all day?' Going fishing or playing golf everyday alone might get old after 20-30 years.
TWwashere said:
I have not pulled the trigger on fixed income for the obvious market reason; interest rates can only go up and their value down. I'd be interested in commentary on that.
Click to expand...
True. NAVs will go down as interest rates increase, but yields will be increasing (new bonds added to the fund) offsetting somewhat - but the net return may still be poor or negative. Long duration bonds will suffer the biggest hit.

There is no one solution to the outlook for bond/funds. Most here have shortened duration of bond holdings (people have been saying interest rates will increase for 5 years now, undoubtedly true but when?), bought CD's (5 yrs has been very popular) and/or have gone to cash. Some others have swapped bond funds for good dividend paying equity funds, and some have added high yield bonds - but both those are likely adding risk. Here's a thread showing what many here are doing with their fixed income holdings http://www.early-retirement.org/forums/f28/whats-your-non-equity-portfolio-look-like-69996.html FWIW.
TWwashere said:
I will also be looking into a winter home in a warm climate. I have excluded current real estate (our primary home is all we have) from any retirement planning scenarios. I am wondering if the funds projected for a second home should be considered part of the portfolio or excluded as well.
Click to expand...
You can include whatever you like of course, but if you don't plan to sell the second home during retirement, you might want to exclude it from your retirement planning net worth. If you intend to sell it, then by all means it's part of the funds that will generate retirement income. As you may know, FIRECALC can factor in selling a second home (or any asset) with timing if you like.
 
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Congratulations, Your story reminded me of my own (except for wanting a second home). I truly believe we could retire today, but want to add one more year to the pot and not emotionally ready to call it yet. Five days of golf a week sounds like a great retirement even if only for 20-30 years. I certainly won't care in 30! You will find something else by then.
 
Reaching FI (congrats) is not a reason to retire in itself. If you still enjoy your work, you should not quit unless you have something better to do in retirement. But if you do have other activities outside work you want to get on with, sounds like you have that option. Not trying to discourage you at all, just that 'it's not enough to retire from something, you want to have something to retire to.' Most people find their way quickly and do well in retirement, but some get bored and depressed because they haven't thought about 'what will I do all day?' Going fishing or playing golf everyday alone might get old after 20-30 years.
Click to expand...
Thanks for the welcome, neighbor. Great point; retiring from/to something. I am definitely ready to leave my historical work life behind. There is no love left. Using the age old question "Would you do it if you didn't have to?" the answer is no, and now I don't have to.

That said, I don't have a concrete plan for what I will retire to. I will play golf 4 or 5 days a week to start. I understand that may get old, especially when abilities peak and my game deteriorates. I have a few years to figure it out before that happens... and I likely will well before.

I've followed a couple people close to me in their first years of retirement, both forced, but both financially ready. One slid right in, the other took a year to find his niche but he did.
 
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