Stepping out from shadows to say hi

[ShadowBloom]

Just wanted to say Hi and Thank you for all the knowledge I've gotten from you in the past and expect to get from you in the future. I've been reading the forum for at least 10 years, probably longer. I'm no longer a Young Dreamer; I'm trying to figure out if I'm FIRE.

It's been a lousy year, with the loss of both my parents and my job. The job loss isn't that upsetting; I've disliked my job for a long time and I'd been anticipating quitting next year-- I was trying to hold on to qualify for retiree medical. Fortunately, company policies have a kind of grace period for laid off employees and I think I'll still get it in a few months.

Now I'm trying to figure out if my savings will actually let me retire or if I need to work. I've tracked spending for years so I have a good sense of how much I need. Online calculators give mixed results. Financial Engines tells me I'm fine; it actually tells me I can spend more than I need. Firecalc gives success around 90%. Fidelity RIP and basic.esplanner.com say no way. I'm pretty sure I entered unreasonable assumptions into esplanner, at least.

I'm also considering moving as one of my options. I live in an expensive metro area and I can trim expenses significantly by moving, even nearby.

I've never used a financial advisor before but I'm thinking about paying for a one-time consultation now, just to have someone else look over my numbers and do an assessment not colored by wishful thinking.

Anyway, that's it for now. I have to go put my laundry in the dryer (I understand all about dryer sheets) and right now I just love the idea that I can do laundry on a Wednesday morning!

 

[freedomatlast]

Welcome. This is a great place to seek advice and let others give feedback on your situation if you don't mind providing more specific details.

 

[2B]

Welcome to the forum.

As a long time lurker, you know that if you post your assets you'll get lots of comments and suggestions. If you've been a regular lurker and have done some of the recommended reading, you probably already know more than half the people that call themselves "financial advisors."

Run your numbers through FIRECalc. Let us know what it looks like.

 

[Nodak]

Welcome

 

[Golden sunsets]

Sorry for the loss of both parents in a 12 month timespan. That in itself can really color your life view. The job loss, you indicate is less of a burden by comparison which is certainly understandable, however when combined with the loss of your parents places a pretty heavy burden on your coping skills. Can you give us some details on your age and job prospects? Most professional advisors would council a person who has experienced a major loss such as yours to not make major decisions for at least a year. Some counseling may help unless your support system is strong.

Good luck to you.

 

[Walt34]

I've never used a financial advisor before but I'm thinking about paying for a one-time consultation now, just to have someone else look over my numbers and do an assessment not colored by wishful thinking.

I did that too just to make sure I'd dotted all the "i"s and crossed all the "t"s. He was someone I'd worked with for 20 years but his wife was the brains of the outfit so she's who I talked to.

 

[38Chevy454]

I'll add my welcome to the forum. It sounds like a tough past 12 months for you, and things may get a bit darker on the job front before they get better.

you have a lot of info on your expenses, now just figure out what income to meet that with your current assets. You might be good enough to go with a severance package and not need to work more.

I agree it never hurts to have an independent look at your situation and best case is you get a good checkup and stay the course. or might make some small changes and improvements to ensure long term success.

 

[ShadowBloom]

Thanks for the welcome

Thanks for the kind words and welcome.

Here is some more info about my situation-- if you have more wisdom to share, I'm listening!

I'm 50, single, no kids. Total investable assets about 1.9M, almost equally split between retirement accounts and taxable accounts. It will be close to 2.1M after all expected payments are received. I don't have any outstanding debt other than my credit card which is paid in full each month. No mortgage, but I don't own, I rent (my biggest expense). Besides my savings I will have two small non-COLA pensions from former employers once I turn 65; they should amount to around $20,000 for whatever that's worth then. I will also have social security, assuming it's still available. As of right now I think I'd claim it at 62, since actuarially it's supposed to be equivalent and I don't have any spousal benefits to worry about impacting. I expect to reconsider that regularly as my situation changes.

My future job prospects are uncertain. I worked in technology management and no longer enjoyed it; even if my age and lack of interviewing skills wouldn't hinder getting a new job in that field I'm not sure I'd want to. At the same time, I'm no longer technically current enough to get a hands-on role (and not sure I'd want that, either). I have made a very small amount of hobby income from some writing in the past. I know I can easily earn a few hundred per month through some content sites, but I don't think there's any way I'd realistically earn a solid income from freelancing.

My anticipated expenses are around $80k pre-tax. I'm not sure exactly how much tax I'd owe, but before 401k withdrawals most income would come from sale of fund shares so would be untaxed principal and long-term gains. There's a considerable amount of slack in that spending. It includes a large amount for rent, which I can easily reduce by moving to a nearby town, as well as $10k for travel, which is completely discretionary.

I've followed a lot of your experiences with the ACA signup and had looked into the exchange plans here. They would be about 1/2 of what I'd pay for insurance off the exchange, but the plans seem terrible to me-- none of my doctors, higher out of pocket max, etc. I thought only the same plans were offered off exchange, but it looks like I was wrong about that and I would at least be able to get a plan with my doctors, if that's more important to me than the subsidy (which it is). Right now I plan on cobra and switching to the retiree medical plan when/if it becomes available to me.

I am in good health right now but one concern is that my mother had a condition which left her blind. I don't have it now, but am monitored closely for changes. If it developed, I would need some form of daily assistance, which is not budgeted. I do not have LTC insurance as it is very expensive and from what I see untrustworthy.

Thanks for reading this far!

 

[2B]

Here is some more info about my situation-- if you have more wisdom to share, I'm listening!

You didn't say if you ran FireCalc. I suggest you do with your anticipated SS and pension.

I also wasn't sure if your $80K in expenses included the higher cost medical coverage you'll probably have after COBRA. I suspect it doesn't.

I suspect FireCalc will give you a 95% success rate for a withdrawl rate of around 80K but then you will lose about $10K in Federal income taxes. You have such a long time before SS and your pensions kick in that you need to be extra conservative. I wouldn't worry about them in your budget right now.

Bottom line, I think you either need to get a paying position of some kind (you could work part time), reduce expenses or both.

 

[pb4uski]

You can get a good idea on your future tax cost by doing a hypothetical tax return without your wage income and making any other appropriate adjustments.

 

[WannabeRetired]

This might be useful.

TurboTax Estimator (2013)
https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

 

[ShadowBloom]

Thanks for the input. Lots to think about!

 

[Katsmeow]

You have a lot of money. But, expenses of $80k a year for someone single with no kids is a lot.

I think you said FireCalc gave 90% (of course, I don't know what assumptions you used in FireCalc). But, assuming that 90% is based upon realistic assumptions, then I really think you have a choice. I suspect you could get to 95% or 100% pretty easily by making some reductions in spending.

I think you have to decide whether you would rather retire early, but reduce your spending some or try to earn some more money for awhile and spend more later.

 

[MBAustin]

Welcome! It does sound like moving to a less expensive area would give you more financial breathing room, but with all of the changes you've been through in the past year, seems to me you should wait a year or so before making any voluntary changes.

If you want one-time fee-only advice, I'd suggest checking out NAPFA to find one. In particular, I'd want my asset allocation to be reviewed, as well as withdrawal strategies.

I also was in technology management, and like you, got to a point where my technical skills were dated (especially after I had an assignment with virtually no technical content for nearly 2 years). If you want to try your hand at some freelance writing or editing, try http://elance.com. It takes awhile to get started and build up a reputation, but DD is getting pretty steady gigs there (graphic design and copy editing).

Good luck!

 

[ShadowBloom]

Thanks, MBAustin. I have nearly a year left on my current lease so I won't be moving soon. My plan is to take the summer to recover and figure out what I want to do next. I suspect I would rather reduce expenses than resume a career I dislike, but every now and then I browse job boards and there are some that sound interesting to me-- so I'm still undecided. If I do move, it would probably be fairly local, to a nearby community where I lived for 10 years before moving to the big city, so it wouldn't be another major shock. I'd been thinking about that even before the "events" of the past year, because I don't see staying where I am, with ever-increasing rent, as sustainable in any retirement scenario-- early, on-time, or late. Rents in the smaller town are much lower, so moving there and possibly eliminating some travel should get me to a full belts-and-suspenders safe withdrawal rate.