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Semi retired at 55
Old 07-11-2018, 10:07 AM   #1
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Semi retired at 55

It feels funny to say that. I worked for myself for my whole life. I worked in construction and not only owned my own business but did a lot of the work myself or with a partner. Hard on the lower back. At 55 I can not do the same work today. I have Deg. Arthritis in my lower back. Not enough to be on disability but enough I can not do the work any longer.

My last work was a Condo I bought at the crash in Florida. Ran it for several years and then sold it off making double my investment. Also sold our home in Florida making double our investment. We moved to Arkansas NW and with the profits we bought a home with the money made. Nothing fancy 180k home. We moved out of Florida early because of Irma. Hurricanes are horrible and disable the state. We were going to wait for 62 and move but decided it was time to go.

My wife works in the financial industry and make a bit of money but gets health care. This is more important in our age than it was when we were younger. From eye care to meds we never really went to the Dr. when younger or had health care ins.

We have saved 1.7 Million most in CDs drawing 2.5 percent and laddered in so I can reinvest them as interest hopefully goes up. Wife has a pension very small from a former company she worked for about 100 a month, I have one annuity that I can draw at 59.5 at 200 a month. 350k in Stocks IRA and the rest is in CDs we draw 2800 a month. Home paid for and not part of the 1.7. Also about 50k in Gold and sliver physical in a SD box for SHTF. I will draw half my wifes SS as working for myself I would deduct and invest into things deferred so did not pay SS in enough. Well not much I think my SS showed I would draw on my own account 250 a month. I believe half hers would be more. We are almost 56.

I see so many people dying at 58 63 ect. It makes me check my worrying about saving more. How much is enough? I know what is enough for someone else may not be for me and vise versa. I was making 60k a year on CDs but its dropped to about 35k with the drop in CD rates. I was thinking as the CDs come out of the 10 year in a year putting them into Annuities. Any advice helpful thanks.
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Old 07-11-2018, 10:47 AM   #2
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Welcome, upandrunning!

Have you run your numbers through FIREcalc (link on each page here) or any other calculators? This can be helpful to model different scenarios.

The "how much is enough" question depends completely on your spending. Members here vary all over the map from folks who live on very little (by choice or necessity) to those who live more than comfortably.
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Old 07-11-2018, 02:13 PM   #3
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No advice. I'm sure others will provide some for you. Welcome to the forum!
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Old 07-12-2018, 05:02 AM   #4
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You obviously have a very low tolerance for risk given your cash position and limited exposure to equities. Can you tell us why you have adopted such a conservative profile? Regarding the annuity option many on this board shy away from investing in a tool where neither you nor your heirs will ever receive the principal back.


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Old 07-12-2018, 06:18 AM   #5
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Hello upandrunning!

Your current assets would normally produce a safe withdrawal of 60-70K per year for 30 years with great chance of success. That rate is based on a minimum of 50% of your assets in stock funds with the rest in fixed income(CDS, bond funds, cash, money market). As you are currently more conservative than that, you can expect to run out of money sooner, or take less from your assets each year. If you can't stomach the ups and downs of the stock market, I wouldn't change a thing- just make sure your expenses are moderate and take less from your assets. Inflation will be your biggest enemy with such a conservative portfolio.

You might read "The Little Book of Common Sense Investing" by John Bogle.
It is short, easy to read, and available at your library.

Best wishes for your retirement,

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Old 07-12-2018, 06:23 AM   #6
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Welcome, and I agree with the other posters.

You will be hard pressed to find many here endorsing an approach with annuities, though I'm sure some have them for small portions of their portfolios. Your cash/cd position is large but risky, as you are not hedged for inflation. The Bogle book recommendation is a great idea, as is stuff you can find online like the Bogle "easy" portfolios.

Many of us when we say "stocksfunds" are referring to simple broad low-fee index funds, and not individual stock picking, though, there are some that do that too of course!
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Old 07-12-2018, 06:30 AM   #7
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OP, I love the pirate flag. Is it black-beard’s?

And bravo on your career! Seems you’ve worked very hard and have done well for yourself.

This site has an excellent reading list. It’s best for most folks to educate themselves; it gives you more confidence in your actions and then you’re not just following the passionate, but varied advice, from anonymous internet people.

That said, most here prefer to keep a balanced portfolio that consists of a ratio of stocks and bonds with institutions like vanguard and fidelity (many other places charge unnecessarily high fees). Real estate and a small to moderate position of cash and cd’s are also popular ingredients. My biggest concern with a large allocation of cd’s is I don’t think they’re very good protecting yourself from possible future inflation.
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Old 07-12-2018, 06:32 AM   #8
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Quote:
Originally Posted by upandrunning View Post
I see so many people dying at 58 63 ect. It makes me check my worrying about saving more. How much is enough?
IMO this is a reason for not delaying retirement after you have enough. It's a poor excuse to not have a plan to make your money last for the high end of your life expectancy. As I said in another thread recently, living like there might not be a tomorrow and spending like there might not be a tomorrow are two very different things.

You don't mention anything about your expenses so I have no idea of whether your plan would work. As has already been mentioned, you're way too heavy in CDs for me, but that's your business.
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Old 07-13-2018, 04:28 PM   #9
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Quote:
Originally Posted by VanWinkle View Post
...That rate is based on a minimum of 50% of your assets in stock funds with the rest in fixed income(CDS, bond funds, cash, money market). As you are currently more conservative than that, you can expect to run out of money sooner, or take less from your assets each year.
VW
IMHO, I believe that most people think of CDs and fixed income as conservative and safe investments. If you think this way, you are missing the point that being too much invested in these, when returns are less than inflation, actually risks your future buying power; inflation will eventually eat you alive.
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