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Old 07-22-2008, 02:42 PM   #1
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The Wisdom of Crowds, and your the crowd

Letís get some opinions on how others think I am doing financially. Hereís my story.

I retired in 2004, under CSRS, at the age of 51 from a federal law enforcement career. I had 30 years with the federal government and it figured out to be 70% of my three year high. I have a federal health plan and receive about $76K per year in retirement. I have been working part time doing background investigation and average about $35-$45 per hour, averaging about 20 hours a week. My wonderful spouse is still working and makes about $160K per year. Our children are grown, married daughter 27, son 24, 1st LT U.S. Army stationed in Germany and both have finished college. We live a conservative, comfortable life style, but well within our means. Our home has about $300K equity and a rental property we own has about $300K equity also. We live in the Washington, DC metro area. We have two cars, both paid off. Our current investments are:

$158K Cash ( in the best saving account until things settle down)
$350K Various stocks and mutual funds
$34K SEP IRA
$69K IRA traditional
$204K 401K
$31K 457B
$156K Thrift Saving Plan ( I think it is all in a 2015 fund)

$1002K Total

My wife plans to semi-retire in 2010 and we want to be able to take a couple of months off each year and live in different places, warm places if it is the winter. I have never sold any of the stocks or mutual funds we have purchased over the years. I know our cash is high, but with the current economy, I didnít think I should keep investing. My investing for the last few years is: to take advantage of my wifeís 401K and 457B, we were putting it in the Fidelity Freedom Fund 2015. I plan to continue with that once things settle down. Well I donít want to put too much stuff in now. Please take a look and see what you think and give me your ideas. Thanks
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Old 07-22-2008, 02:50 PM   #2
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What's your yearly budget right now? Just by looking at where you're at, it's a fortune to some and just barely enough for others.
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Old 07-22-2008, 02:55 PM   #3
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If I'm reading your numbers right, you're currently bringing home about $275k per year between your wife's income, your part-time work and your pension. Very nice household income for being semi-retired!

I think you'll need to give a bit more information so that folks can get a better idea of where you are:

Do you know what your annual expenses are currently? That's a big one. No way to know if you have enough if we don't know what you spend.
Do you plan to keep both your primary residence and your rental, or cash one or both out? Is the rental cash-flow positive?
Is your pension COLA'd?

There are lots of people here more financially savvy than me, but I'd probably look at dollar-cost averaging at least some of that cash into the market (or some higher-yield CDs or something). Most savings accounts aren't paying much in interest at the moment.

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Old 07-22-2008, 03:44 PM   #4
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Our current budget is about $76K in total yearly expenses, that includes the expenses for the rental property. And when I included the rental property expenses, I guess I need to count the $20K of rental income we get from the property. I use quicken to keep track of how we do.
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Old 07-22-2008, 03:48 PM   #5
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Quote:
Originally Posted by ProspectiveBum View Post
If I'm reading your numbers right, you're currently bringing home about $275k per year between your wife's income, your part-time work and your pension. Very nice household income for being semi-retired!

I think you'll need to give a bit more information so that folks can get a better idea of where you are:

Do you know what your annual expenses are currently? That's a big one. No way to know if you have enough if we don't know what you spend.
Do you plan to keep both your primary residence and your rental, or cash one or both out? Is the rental cash-flow positive?
Is your pension COLA'd?

There are lots of people here more financially savvy than me, but I'd probably look at dollar-cost averaging at least some of that cash into the market (or some higher-yield CDs or something). Most savings accounts aren't paying much in interest at the moment.

Welcome!
I think we will be keeping our current home and we are thinking of selling the rental property to our daughter and taking back a 2nd so they can pay use. The rental brings in a profit of about $7K a year. Yes, thank God my pension is COLAed. I also want to get an opinion on taking some of my cash and investment and paying off the current residence? Any thoughts?
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Old 07-22-2008, 03:56 PM   #6
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Quote:
Originally Posted by BillNOVA View Post
Our current budget is about $76K in total yearly expenses, that includes the expenses for the rental property. And when I included the rental property expenses, I guess I need to count the $20K of rental income we get from the property. I use quicken to keep track of how we do.

Well, then the next question would be what you think your projected expenses post-retirement would be.

Including the rental income and your pension, you're pretty close to covering current expenses.. if you're going to keep your part-time job and can scale hours as you need, then you can easily cover the rest of that nut on a few steady months. That means you could reasonably go quite a while without touching your investments at all.
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Old 07-22-2008, 03:58 PM   #7
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Given that your annual budget is covered by your COLA'd pension, it sounds like you're in really great shape. Will your DW retain healthcare coverage in semi-retirement?

Quote:
Originally Posted by BillNOVA View Post
I also want to get an opinion on taking some of my cash and investment and paying off the current residence? Any thoughts?
I personally wouldn't sell any stocks in the current market to pay off the mortgage. How much is still owed, and what's the term and rate?
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Old 07-23-2008, 09:07 AM   #8
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Quote:
Originally Posted by BillNOVA View Post
$158K Cash ( in the best saving account until things settle down)
Keep us informed of when "things settle" up. Or better yet, give an example -- over the last, say, thirty years -- when "things" were (recognized at the time as) settled down... so that I can more quickly respond the next time it happens.
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Old 07-23-2008, 09:35 AM   #9
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In addition to your mentioned yearly expenses you should disclose your mortgages and their terms before you hear any advice.

...and I agree with others that you shouldn't wait for the market to rebound because shouldn't you buy low?? Unless you have a crystal ball you'll never know when it occurs... Do some DCA'ing.
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