Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Retire early in declining industry with average wages
Old 02-21-2013, 09:45 AM   #1
Confused about dryer sheets
Join Date: Feb 2013
Location: Chicago
Posts: 4
Retire early in declining industry with average wages

Hello All,

My wife and I are both employed at the same business in a declining industry(work for family business). My wife also holds a night job several nights per week. I am 43, wife is 41. House is paid off. We live in the land of incarcerated governors(illinois), so our property taxes are quite high for a very average house. We bring in around $90k + about $20k from her second job. Net worth is about 1.1million with about 650k in retirement assets...the rest is house, cars, etc. We have no kids.

We would like to retire by 55. The business is on shaky ground as is the industry(printing). We are hoping to hold on for another 15 years which is pretty optimistic for the industry and highly optimistic for our family business. We both put in about 10k each in our 401 and another 5k each in a roth ira.

Investing wise, we are about 90%+ in stock mutual funds with a quite high % in overseas/emerging markets.

My questions are as follows...we have nearly nothing saved in non-retirement accounts...can start working on this as our house has just been paid off. We need some repairs at this point...maybe 20k worth. Would it be worth taking out a loan or should we get on a cash only plan now?
I had also thought about getting a loan for about 100k and investing what we don't need for repairs...wife hates this plan.

Is my investing plan and current savings schedule going to work? My wife is diabetic, so insurance between retirement and medicare frighten me.

Been lurking this site for a while now, thanks for taking time to read my post!

Blux is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-21-2013, 10:09 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
Join Date: Jan 2008
Location: Chicagoland
Posts: 10,663
Welcome to the forum. Have you tried out FIRECalc: A different kind of retirement calculator?

Just to get you started, I entered...
  • Portfolio $650K (home, cars, etc. excluded)
  • Added Savings $30K/yr, increasing with inflation (401k & Roth)
  • Retiring 2026
  • Plan to age 95
  • Portfolio 90% equity:10% fixed income
  • I did not attempt to estimate Soc Sec, presumably you'd have that to work with in addition
...and solved for spending level before taxes (see below), shows results for various success rates.

As for taking out a loan for home repairs, I wouldn't if I could avoid it, but it used to be common practice. And re: taking out a loan to invest, I'd side with your wife. YMMV

Best of luck with the business.
Attached Images
File Type: png FC.png (459.8 KB, 32 views)

No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 02-21-2013, 10:22 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 13,195
If you retire at 55, you need to think through what sources you would have to fund living expenses from when you retire until you can withdraw penalty-free from tax deferred plans. Many 401ks allow penalty free withdrawals for participants who leave company service after age 55 - check to see if yours does - if not, since you are in the family business you may be able to amend it so it does. You could also dip into Roth contributions, but having taxable funds is probably netter than Roth withdrawals.

If you intend to stay in your house for some time and and enjoy the benefit of the "repairs", I would go ahead with them now. It might be easier to have them all done at once, even if you need a short term loan rather than string them out over several years.

On the other loan to provide investment funds, you'll see a lot on this site on whether or not to take or payoff a mortgage. While in many cases it makes sense financially if your investment earnings exceed the interest you pay, many people are more comfortable not having a mortgage. To me it comes down to personal preference. If your wife hates that plan I wouldn't push it. Even if you earn a spread of 3% and begin at $80k, on average you would only benefit $100 a month ($40k average balance * 3%/12 months).

As to whether it will all work, check out Quicken Lifetime Planner (included in Quicken Deluxe and higher). Plug in your details and it should give you a good sense as to whether your plan "works" and you can see the impact of different paths on your nestegg using their "what-if" analysis.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
pb4uski is offline   Reply With Quote
Old 02-23-2013, 09:52 AM   #4
Thinks s/he gets paid by the post
obgyn65's Avatar
Join Date: Sep 2010
Location: midwestern city
Posts: 4,062
I would do the same.
Originally Posted by Midpack View Post

And re: taking out a loan to invest, I'd side with your wife. YMMV
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


All times are GMT -6. The time now is 07:32 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.