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Stuck in the Gunks
Old 01-03-2016, 10:36 AM   #1
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Stuck in the Gunks

59 and burnt to a crisp! I am female and wanted to retire at 16 when I first started working full time! Everyday at work I feel like I want to scream and jump out of my own skin! I just don't think I can make it until age 65. (SS isn't until age 66+, but I figure at least I would have Medicare at 65)..

Our plan was to use that file and suspend strategy for SS, but that has just been eliminated, so not sure what the next strategy will be.

I am of a jack of all trades and master of none mindset. I like and know a little bit about a lot of things. All the retirement planning and financial planning and household planning falls on me as my husband takes no interest in it. He's not going to change at this point either. I certainly include him but I am the one doing the research and the work.

What keeps us from retiring now or at least sooner than we would like is the high school and property taxes here in Hudson Valley, NY, the health insurance issue, and the fact that I have no pension and my husband's relatively small pension was recently cut off at the knees and he isn't eligible for it anyway until he is 65. (he is currently 62).

We have a decent nest egg, though not the $2 million that I read is necessary, but I do plan on hiring a fee only financial planner within the next 2 years to take a look at where we are at and make suggestions. I worry about market crashes and all that stuff.

Also have to get an estate plan going this year at some point.

We are also embarking on year 5 of a 5 year home remodeling project to get our home in better shape. Working full-time and trying to get everything else done is so overwhelming-more so as I am getting older. Work takes up 11 hours per day of my life (with commuting, dressing, meal prep., etc) and I really don't have time or energy for much else during the week.

We are thinking we will move when we retire- maybe to New Hampshire. We have only one child, a 28 year old son who lives currently in New Hampshire. I really love Vermont, but the state taxes SS and so that is a BIG sticking point for us. At least NH has no income or sales tax, and we have joined the Free State Project with a commitment to move there with fellow libertarians, though we are actually more conservative types with a libertarian/moderate bent.

I will be trying out the FireCalc. on this site as well.

Thanks for adding me to the group and I look forward to reading everyone's posts!
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Old 01-03-2016, 10:53 AM   #2
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Welcome to the forum! $2M may or may not be necessary; things like this that you read are just general guidelines and you should figure out what YOU need for YOUR situation. Getting a real handle on your expenses, and being able to predict them in retirement is key. Some Important Questions to Answer Before Asking - Can I Retire? covers this nicely.
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Old 01-03-2016, 10:55 AM   #3
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Also, don't skip reading the introduction to FIRECalc. It can do a lot more than would appear at first. Use all the tabs.
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Old 01-03-2016, 10:57 AM   #4
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Also, don't skip reading the introduction to FIRECalc. It can do a lot more than would appear at first. Use all the tabs.
+1

And be sure to take time to read "FIRECalc: How it Works". Definitely worth the time to learn how it works.
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Old 01-03-2016, 11:03 AM   #5
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Hi Meleana, and again, welcome. It's great that you have decided to join us here on the Early Retirement Forum.

Health insurance is always a concern, especially as we age and it becomes so much more expensive. I was already on Medicare before the PPACA (Obamacare) was enacted. So, I don't have any personal experience with the latter. Medicare has been pretty nice to have, in combination with other health coverage.

The links that RunningBum and REWahoo gave you are pretty good ones, I think.
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Stuck in the Gunks
Old 01-03-2016, 11:33 AM   #6
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Stuck in the Gunks

Forget about the number $2M. It all starts with your expenses. Figure that number first, and the amount you need for retirement follows from that. Subtract your pensions and SS from that and you get the uncovered expenses. You will need a multiple of that number. If you're conservative you may pick 30 as that number. Many just pick 25 (the 4% rule), others go for 20. That's a good ballpark for how much money you will need.

Then how do you invest? If you're really scared of crashes like you mention, then there's something called "floor and ceiling" make sure that your necessities are covered by non risky assets, I.e., SS, pensions, a bond ladder and/or an annuity (SPIA only). Then u can invest the rest as you want and never lose too much sleep. Those investments will cover your discretionary.

You can also just pick an asset allocation like 60/40 or 40/60 and go with that. Many here do that and have lived through the 2008 crash and came out fine as they held on and didn't sell. That's a behavioral issue. If you're sure that you won't panic at a bottom then that might be the best way.

Lots of choices in between the two above.

Good luck 😀


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Old 01-03-2016, 11:48 AM   #7
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Welcome meleana.

The size of the nest egg required is entirely dependent on the amount you spend. (Be aware - this is the all-in spend- including taxes, health insurance, etc.) You need to have a fairly accurate idea of how much you spend now (and how that changes in retirement). You can do a bottoms up budget or top down. Also understand how changing factors can change your budget (paying off the mortgage, dropping to one car, etc.)

I retired a year and a half ago with less than $2M. That said - we have other income sources (rental income and DH's SS.) It's a good idea to model things. With firecalc you can use the "investigate" tab to see what the maximum budget (not withdrawal rate) is for the size of your nest egg.

Once I had that lightbulb moment that spending was the key to retirement - I started looking for low hanging fruit to reduce my recurring spending... little stuff like changing my cell phone carrier (cut the bill in half), switching my landline to magic jack, renegotiating my cable/internet bill, cutting back on eating out (but cooking more gourmet food at home).... We brought our budget down by several thousand with painless changes.

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Old 01-03-2016, 01:26 PM   #8
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Meleana: I had to chuckle when I read your line "wanted to retire at 16 when I first started working full time!". I joined the Early Retirement Forums yesterday, and in my intro, pointed out that I started thinking ER on my first day on the job at age 14.
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Old 01-03-2016, 01:54 PM   #9
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Meleana: I had to chuckle when I read your line "wanted to retire at 16 when I first started working full time!". I joined the Early Retirement Forums yesterday, and in my intro, pointed out that I started thinking ER on my first day on the job at age 14.
I've often said that the only reason I started work in the first place was so that I could quit.
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Old 01-03-2016, 02:03 PM   #10
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I also appreciated the thread title, because it brought back a lot of good memories.

In my youth, I lived in NYC and spent many, many weekends traveling up to the Gunks to go rock climbing.

Most posters here probably never heard of it.

https://en.wikipedia.org/wiki/Shawangunk_Ridge
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Old 01-03-2016, 02:18 PM   #11
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I also appreciated the thread title, because it brought back a lot of good memories.

In my youth, I lived in NYC and spent many, many weekends traveling up to the Gunks to go rock climbing.

Most posters here probably never heard of it.

https://en.wikipedia.org/wiki/Shawangunk_Ridge

LOL! So you got it! It's really a beautiful area. We are right near Sam's Point and Ice Caves. Too bad the taxes are so high. I do prefer New England, though. Of course, the property/school taxes there can be almost as bad.
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Old 01-03-2016, 02:20 PM   #12
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Meleana: I had to chuckle when I read your line "wanted to retire at 16 when I first started working full time!". I joined the Early Retirement Forums yesterday, and in my intro, pointed out that I started thinking ER on my first day on the job at age 14.

I always say work gets in the way of my life! I really have no time to work! Hence- my stress levels are always up!
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Old 01-03-2016, 02:36 PM   #13
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I am actually using my financial company's retirement calculator as part of their services to their clients. I assume these are similar to FireCalc? I also keep a spread sheet of all our investments and also our household budget.

The calculator said we are on target for a retirement at 65 and 66, with a 98% chance of the money lasting to age 90. Unfortunately, I want to hear we can retire yesterday! I have to run some more scenarios, but the reality is health insurance is a big issue. We are not big spenders, though we have our moments. We do want to do some traveling- maybe to Italy for the first time and maybe to some National Parks. Other than that, we are happy with our timeshares in New England.

The one thing that makes me nuts is that my portfolio always shows on the website as having a low return from inception- like 2%. I suspect this is because of buying and selling (I made some big changes on an inheritance resulting in changing over the mutual funds back in 2011) and having to take RMD's on the inheritance every year, which I do reinvest in a taxable account. Yes- back in 2008 I panicked at the lowest point and sold off. Realize the big mistake I made doing that. The funds themselves are decent and show good general returns in the published stats. I have some zero coupon bond funds and had no control when they liquidated this past Sept. at a loss. I took the money and put it in CD's and I plan to do that with the rest of them as they come due.

Besides cash, I also invest monthly in I Bonds for safety.

I have a 40/40 stock bond mix with the rest in "other" type investments, like currencies, gold silver, natural resources. I have 3 years cash to meet expenses- working on building to 5 years.

One more thin- we are currently living on a bit less than my husband's income, which is about $77,000 before taxes. My whole pay check ($50,000 before taxes) and some of his goes into savings and things like our vacations and home improvement projects.Our mortgage was aid off long ago. So I am factoring in living on just about $80,000 in retirement. We want to try to hold off taking SS as long as possible- considering it to be the annuity. We want to take my husband's pension as a lump sum when he is 65 - or 66 and invest it as we see fit if his company still allows it when the time comes. I am totally against annuities. To me, SS is enough of an annuity to have. If we can't wait until age 70 to take SS, then so be it. But we will definitely wait until full retirement age to take it, even if it means living off our savings totally for a year or so before we do.
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Old 01-03-2016, 03:01 PM   #14
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I am actually using my financial company's retirement calculator as part of their services to their clients. I assume these are similar to FireCalc?
Probably not. That's why we encourage you to read how FIRECalc works and understand what it will - and won't - tell you.
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Old 01-03-2016, 03:04 PM   #15
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I would suggest you actually evaluate the hubby's pension choices analytically at the time. If I "cash out" my pension next year when I plan on taking my payments, I would leave the better part of a million dollars NPV on the table!😱. And stop drinking the Kool-aid that annuity is synonymous with bad. SPIA and many Defined Benefit pension plans, particularly government pensions, can be a great part of a well thought out retirement financial plan.


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Old 01-03-2016, 04:12 PM   #16
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I would suggest you actually evaluate the hubby's pension choices analytically at the time. If I "cash out" my pension next year when I plan on taking my payments, I would leave the better part of a million dollars NPV on the table!��. And stop drinking the Kool-aid that annuity is synonymous with bad. SPIA and many Defined Benefit pension plans, particularly government pensions, can be a great part of a well thought out retirement financial plan.


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I get what you are saying, but this is a small pension from a national insurance company (hubby has been there about 17 years) and they have already messed with it twice- for the bad! I wouldn't trust them after they have already hurt him and other employees.

Plus I would rather have the money in case we needed it for a major expense and also if we don't need it we could leave it to our son. No way am I leaving it with an insurance company! He worked hard for it. Annuities benefit insurance companies otherwise they wouldn't offer them. The odds are in their favor.
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Old 01-03-2016, 06:04 PM   #17
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Meleana,

Welcome to the forum.

I would just add one small note of caution about planning to retire to a location where an adult child is currently residing. At 28, your son (and presumably any significant other in his life?) is in the early stages of a career. It is quite possible that he will move more than once during his working life. If his residing in NH is just one of many reasons you are considering retiring there, that is one thing. Just give some thought to whether you and your DH would be happy living there even if your son moved away for career-related (or other) reasons.

Best of luck to you in your retirement planning.
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Old 01-03-2016, 06:27 PM   #18
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Meleana,

Welcome to the forum.

I would just add one small note of caution about planning to retire to a location where an adult child is currently residing. At 28, your son (and presumably any significant other in his life?) is in the early stages of a career. It is quite possible that he will move more than once during his working life. If his residing in NH is just one of many reasons you are considering retiring there, that is one thing. Just give some thought to whether you and your DH would be happy living there even if your son moved away for career-related (or other) reasons.

Best of luck to you in your retirement planning.
Yes, thanks. We do realize that. It is one of several reasons we like the idea of moving there. No significant other as of yet. He could move- in fact he would have much better opportunities as my brother has contacts for better employment in other states- yet he chooses to remain in NH. He hates change and is insecure.

I admit I do not want to go into old age without a a single family member nearby. But would never hold our son back. If he moves, we would have to be ok in NH or wherever we end up.
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Old 01-03-2016, 06:27 PM   #19
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Do you have an expense breakdown, some of your spending should change in retirement. You also need to know what you consider discretionary and or work related expense. Try to figure out what you really want after retirement....travel budgets can very wildly. Sounds as though you have money in timeshares as well.Maybe swapping timeshare weeks will reduce travel costs to new areas.

Where will your 80K budget for retirement go, that's the big question.
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Old 01-03-2016, 07:38 PM   #20
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I admit I do not want to go into old age without a a single family member nearby.
Please consider adopting my BIL, who also lives in New Hamster.
We certainly don't want him.
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