Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Square peg looking fwd to ER with kids
Old 03-28-2006, 01:02 PM   #1
Dryer sheet wannabe
 
Join Date: Mar 2006
Posts: 14
Square peg looking fwd to ER with kids

Was going to put this in the "children" thread below; but my situation is a bit of a twist (very late parenthood + very early retirement). I'm 50, and retiring this August after 25 yrs gov't service, including 22 federal law enforcement (civil service pension with COLA). We have 3 kids, last born when I was 47; now aged 3, 6 & 9. We're invested pretty well with rental property (4 3-family and 1 single family, almost all paid off); our own home (70K home equity note only remaining) and about 400K in TSP, IRA, UGMA accts.)

Although I gave it a good try in the last couple of years "tracking" expenses I have to say my financial planning came to this: "Net pay seems to cover things, though I can't quite figure out what they all are; and when they stop deducting TSP, TSP catch up, retirement, state tax the net of my pension check will be pretty close.....so....OK!" (I also say a prayer of thanks to my late Uncle John for urging me to take the civil service test.)

However I realize that leaves out some big expenses in future (kid's school and possibly elder - that would be us - health related expenses). I am taking the view this is not worth working til mandatory retirement at age 57 to pile up more money for.

I have a few nagging questions, like, can I do 70K worth of 72(t) "substantially equal" TSP withdrawal from 50 - 59.5 then stop (let rest of money sit in TSP) and avoid early w/d tax penalty? (and would it be a good idea - I would be doing it to pay off 70K remaining on residence). Also, how much to ramp up life insurance to compensate for taking a lesser spousal benefit, and for how long? Also, is it worth trying to shift some $ to Roth IRAs? Long term health are...arggh...scratch that question, don't even want to think about it now, seems too evolving, lack of clarity everywhere.

My larger general question is just seeking some advice, comment, encouragement on the joy () of displacing -- I mean supplementing -- the "at home" spouse; parenting 3 youngish kids; and time/money to enjoy it all. My mother suggested taking the kids out of school and living on a sail boat for a year. I reminded her I hadn't been fond of sailing since I tipped a boat over at age 10 at the town summer rec program. But I would be open to something out of the ordinary for a family experience. (Another reason to retire now, I keep hearing "they won't want to do anything with you soon.")

Jean
(yes, we have a reverse role marriage in that I've been the worker for pay since our first was born and my husband quit to be the "at home" parent)

Green Jeans 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 Early-Retirement.org 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!

Re: Square peg looking fwd to ER with kids
Old 03-28-2006, 05:13 PM   #2
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Re: Square peg looking fwd to ER with kids

Welcome to the board, Jean.

Quote:
Originally Posted by zaniew
We're invested pretty well with rental property (4 3-family and 1 single family, almost all paid off); our own home (70K home equity note only remaining) and about 400K in TSP, IRA, UGMA accts.)*
However I realize that leaves out some big expenses in future (kid's school and possibly elder - that would be us - health related expenses).* *I am taking the view this is not worth working til mandatory retirement at age 57 to pile up more money for.*
Are you keeping the properties? Do they provide cashflow to supplement your pension? This would be a good time to look into the cash-on-cash yield and whether it's time to raise the rent or start considering where you want to have your equity.

The board is split on ER vs subsidizing a kid's college, but the concensus appears to be that kids get more out of the experience when they're paying for it. I certainly wouldn't go back to work to give my kid a free ride.

One of the nice things about ER is that you have all that quality family time to devote toward improving your health. They're like little built-in aerobics machines.

Quote:
Originally Posted by zaniew
I have a few nagging questions, like, can I do 70K worth of 72(t) "substantially equal" TSP withdrawal from 50 - 59.5 then stop (let rest of money sit in TSP) and avoid early w/d tax penalty? (and would it be a good idea - I would be doing it to pay off 70K remaining on residence).
I believe the first answer is "yes". I haven't actually done so but John Greany has a great tutorial on the subject.

The second answer is "maybe". You'll have to read the 2163 threads on this board over whether to pay off the mortgage or keep it, but if you're paying less than 6% you may be able to make more money in a small-cap value mutual fund. OTOH if this issue is only for 10 years, not 30, then you might do better getting rid of the debt and sleeping better at night without having to worry about a short-term hit.

Quote:
Originally Posted by zaniew
Also, how much to ramp up life insurance to compensate for taking a lesser spousal benefit, and for how long?
Good question. I guess the answer is based on figuring how much your family would need to replace you and then finding a low-cost term insurance policy. But the guy who really knows the answer to that is Brewer. In the meantime you have to convince your family that you're worth more alive than dead. For that reason many ERs do not carry any insurance-- their pensions stop when they do.

Quote:
Originally Posted by zaniew
Also, is it worth trying to shift some $ to Roth IRAs?
It can be. You have to believe that later your tax bracket will be lower than or the same as it is now, that RMDs would make your Social Security taxable, and that they're a better deal than a non-deductible IRA contribution. You can also play with IRA calculators at Fairmark.com and read a library copy of Ed Slott's book "The Retirement Savings Time Bomb".

Quote:
Originally Posted by zaniew
My larger general question is just seeking some advice, comment, encouragement on the joy () of displacing -- I mean supplementing -- the "at home" spouse; parenting 3 youngish kids; and time/money to enjoy it all.
With three kids to share in the childcare, I don't think you'll have to worry about him feeling displaced... and while it may not all be enjoyable, it all beats working for a paycheck!
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Re: Square peg looking fwd to ER with kids
Old 03-29-2006, 06:21 AM   #3
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
Re: Square peg looking fwd to ER with kids

My bil and sil are both 50 and have 5 children, all still at home. Their youngest are twin boys who are 5 years old. Boy is their house wild! My bil who was a financial planner essentially retired when the twins were born. Mom is still working--a pediatrician. I can't imagine that whole family living on a boat for a year.

One of the things my bil did with his many sons was buy them all dirt bikes and make a track around their property. Now he and the sons that are a little older go riding a lot together. He enjoys taking the boys on adventures.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Square peg looking fwd to ER with kids
Old 03-29-2006, 06:30 AM   #4
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
Re: Square peg looking fwd to ER with kids

Quote:
Originally Posted by Queen Martha
My bil and sil are both 50 and have 5 children, all still at home. Their youngest are twin boys who are 5 years old. Boy is their house wild!... I can't imagine that whole family living on a boat for a year.
When I read this my mind flashed to a beautiful sailboat underway in the Caribbean...with the kids lashed to the mast (for their own protection, of course :)

__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Re: Square peg looking fwd to ER with kids
Old 03-31-2006, 07:54 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
Re: Square peg looking fwd to ER with kids

Dont you need bumpers or something hanging off the sides of those boats, in case of a collision?

Welcome to the wacky world of being retired early with kids. In a year or less you'll utter the words "How in the heck did I fit a job into this schedule?!?"

While living on a boat might not thrill, consider that you can now live anywhere in the world that you'd like. Quite an experience for most kids, to spend a year or two living in italy or thailand.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Square peg looking fwd to ER with kids
Old 04-01-2006, 12:05 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 3,341
Re: Square peg looking fwd to ER with kids

I'm at the end of my civil service career and still have one son at home in high school. My wife is retiring in 1 1/2 months. I expect to retire in Nov 07 with 34 years in. One reason for working this long is wanting to get a clearer picture of younger son's college prospects. So, like you, I have some of the unknowns (pension, medical coverage) covered but have a couple open including sons college and mother & MIL that may need support in the next 5-10 years. For me and I think for a lot of people its these kinds of "unknowns" that actually or psychologically block ER and other life decisions like relocating.

But it can be said that once the numbers look good then its a psychological decision and the track record appears to be that if the numbers support it things tend to work themselves out at least as well as staying at work.

Living on a boat (I have a half dream/half plan to live on a canal boat in England for a year) with kids could be good for them. One thing to consider is the temperament of your kids in the process. My older boy could travel & sleep anywhere but younger son is a real homebody and doesn't take change and discomfort well. Now he is firmly grounded in a school schedule, band activities and a circle of friends that I would not pull him out of lightly.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Re: Square peg looking fwd to ER with kids
Old 04-08-2006, 03:56 PM   #7
Full time employment: Posting here.
old woman's Avatar
 
Join Date: Dec 2005
Posts: 567
Re: Square peg looking fwd to ER with kids

Quote:
Originally Posted by REWahoo!
When I read this my mind flashed to a beautiful sailboat underway in the Caribbean...with the kids lashed to the mast (for their own protection, of course* :)

They could ride in the mother in law boat. That is the small boat being towed by the big boat and the more she talks the more rope you let out.
old woman is offline   Reply With Quote
Reply


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


Similar Threads
Thread Thread Starter Forum Replies Last Post
Kids & College Empty Pockets Other topics 73 02-17-2007 09:49 AM
Cost of kids accountingsucks Young Dreamers 24 06-21-2006 06:37 AM
Good Schools for Early Retirees Kids thinkingaboutit Life after FIRE 24 03-05-2006 03:07 PM
Overweight kids in Australia... Lancelot Other topics 18 12-16-2005 07:47 AM
Live by the kids? Risky Investment. BUM FIRE and Money 30 11-29-2005 10:50 PM

» Quick Links

 
All times are GMT -6. The time now is 07:26 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.