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Retire from public service
Old 07-08-2008, 09:30 PM   #1
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Retire from public service

I am 51 with 20 years of public service experience (no social security). I want to figure out how to retire early. I want to take my professional skills public and work as a consultant (part time). I have tried to live within my means. I have 20% of my income stream independent of my earned income. I have a net worth of about 2M. To maintain my household I need, at minimum, $80,000/year.

I need help on investment advice.
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Old 07-08-2008, 10:22 PM   #2
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Welcome to the board, and congratulations on your impressive savings.

What are your plans for health insurance after retirement? Any other income streams like pensions or other defined benefit plans?

Without knowing your details, it sounds like you are indeed ready for financial independence. Check out the FAQs and other threads here to get started on learning about investing in retirement.
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As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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Old 07-10-2008, 03:53 PM   #3
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Quote:
Originally Posted by Doribe View Post
I want to figure out how to retire early. I want to take my professional skills public and work as a consultant (part time).
Before pulling the trigger on your current job, be sure that there is a real, sufficient and specific market for your services in the private sector. Do you have any clients lined up? Do you know what rates they would be prepared to pay? Do you know how much help they need (i.e., how much work they can offer you)? Etc.

Quote:
Originally Posted by Doribe View Post
I have tried to live within my means.
Have you been successful?

Quote:
Originally Posted by Doribe View Post
I have 20% of my income stream independent of my earned income.
That's good, but for the purpose of assessing your financial independence it is relatively meaningless in the absence of additional information (viz., the ratio of your total income to your total expenses).

Quote:
Originally Posted by Doribe View Post
I have a net worth of about 2M. To maintain my household I need, at minimum, $80,000/year.
It is impossible to say precisely what annual income your investments may earn in the future, but 4% is probably as valid an assumption as any. That would yield the $80,000 you say you need. The only particular concerns that I would have are as follows:

(1) You say that your net worth is $2 million. If some of that money is tied up in your residence or other non-yielding asset(s), it will not contribute to your retirement income, and your current savings are probably insufficient to yield $80,000;

(2) You say that you need "at minimum" $80,000 per year. I would not like to retire with a very thin margin: ideally, your projected investment income should slightly exceed your spending, not merely equal it. On the other hand, perhaps you can generate some additional income through part-time work (or, as Rich_in_Tampa suggests, presumably as an ex-public servant you will be entitled to a pension?).
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Old 07-10-2008, 07:45 PM   #4
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Thanks for the feedback. I see I need to figure out a few details. I will get a pension with a 3% COLA for the first 20 years; after that no COLA. I will also get to buy my medical insurance from a group with the cost and benefits the same as the employees. My pension should cover about 40% of my pre-retirement income.

I'm not 100% sure what my expenses are. I'll start to track better.

I spend a lot on travel. My thinking is that after I retire I can be more flexible and travel for somewhat less money (I'll also stop footing the bill for all the over-21 kids' vacations).
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