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Old 06-20-2010, 08:27 AM   #21
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So, my dilemma is basically would you give up a job you love with great income in a location that really doesn't feel like home. Or would you make the move with the subsequent reduction in income.
We chose the latter and are happy with the choice. Had we stayed our income would be ~$300k/year by now, but we'd also be miserable, her in a high-stress job that was sucking the life out of her and me being highly paid working at one of the defense contractors, but loathing the traffic in the Washington, DC area.

About six months after the move to WV a couple of relatives said we were both looking more relaxed than they'd seen us in years. Can't put a price tag on that.

But we also have a DB pension with COLAs and heavily subsidized health insurance and prescription coverage so the numbers work for us. YMMV.
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Old 06-20-2010, 10:10 AM   #22
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Originally Posted by Katsmeow View Post
I'm not sure what you mean? I'm not a mathematician but I have done a lot of spreadsheets and analzyed the numbers to death.

That is a little rude isn't it? No, what I said isn't inventing the wheel. It is nonetheless true that you can't always live on your projected retirement income when you are not yet retired. Of course, that isn't true for everyone but is true for some (and was for me for a variety of reasons).
Kats, I think Dex's point was that, even if you can't change your lifestyle while still w*rking, it should be possible to estimate the work related costs, and therefore to calculate what the residual costs would be in retirement. To an extent I agree, but I also see that there would be surprises....including new costs associated with having more time to spend money!!!
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Old 06-20-2010, 10:30 AM   #23
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Kids that age with college ahead, love your job. Seems like a no brainer to me. Keep working for a while and look for a friendly neighborhood to live in.
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Old 06-20-2010, 10:57 AM   #24
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Kats, I think Dex's point was that, even if you can't change your lifestyle while still w*rking, it should be possible to estimate the work related costs, and therefore to calculate what the residual costs would be in retirement. To an extent I agree, but I also see that there would be surprises....including new costs associated with having more time to spend money!!!
Well, yes, of course. I assume we all do that. I know that I certainly did.

I was only responded to the suggestion to actually try to live on the retirement budget while working. For some people, that may indeed be possible.

For some of us we couldn't do that and would need to do as you suggest which I see as something different than actually living on the retirement budget while still working.
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Old 06-20-2010, 11:06 AM   #25
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Well, yes, of course. I assume we all do that. I know that I certainly did.

I was only responded to the suggestion to actually try to live on the retirement budget while working. For some people, that may indeed be possible.

For some of us we couldn't do that and would need to do as you suggest which I see as something different than actually living on the retirement budget while still working.
I have a unique perspective on this as I have a professional medical corporation and a small salary that I live on. I can pay for work related expenses through the corporation (although, come to think of it, I suppose I should add drycleaning of business wear!). So it is easy to estimate my current personal expenses, which are approximately $40K. The catch is that when I ER I may continue to take some of the trips that I now take for business (and some others!), and I can't deduct automobile expenses, which will increase in ER. Bottom line: the best estimate is just an estimate.
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Old 06-20-2010, 11:47 AM   #26
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NanoSour
You have a problem that many would love to have.

One thing you may want to consider is that your new life would have you as a house-husband without a j*b. This may be a difficult transition for a navy man now making beaucoup bucks in the private sector.

Answer the questions: What do you do? What does your dad do? What does you husband do? This is often more difficult than the financial apsects.

What do the kids think about this potential move?

What is your house situation?
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Old 06-20-2010, 06:08 PM   #27
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I've gone through the same kind of quantitative / qualitative issues you face. Here are some experienced based observations:
1) Like other suggested, prepare a budget. Even if it's rough, it will make you think about your finances more clearly. Is your income target REALLY going to be adequate? Have you realistically included all your Must Haves, Wants and Desires in your expenses? I will guarantee that a portion of the budget you prepare will be right on target - and, another portion won't even be close. Try to do some range estimating - run some "what ifs".
2) You have a HUGE issue coming up - college tuition. If you plan on funding or helping fund this cost, you are in for a really really big shock. I suggest you carefully define expectations about this potential cost.
3) With a $210k/ yr job you have established a life style of financial expectations that will make it difficult to drop back to ostensibly a $68k/yr income. Step changes in income of that magnitude will likely result in considerable stress.
4) In my opinion you are underfunded for early retirement. You need to be really careful about your stage in life - you are not out of the heavy cash flow years of raising & educating kids.
5) Regarding East / West coast - Take care of your family financial obligations first - the East coast will be there when you and your wife finish raising the kids.

.... just my opinions ... and I could be wrong!
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Old 06-20-2010, 06:15 PM   #28
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Wow congrats on your success for a start, that's impressive.

And go with your heart (yeah sorry about the cliche)
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Old 06-20-2010, 07:13 PM   #29
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First off let me say thank you all for your replies. I do appreciate all your efforts to provide us with some guidance. I don't know how to use the quote feature, so I'll just try to answer some of the more pertinent questions.

Housing: currently we rent so no need to figure in home equity and the 800K is truly cash right now. Roughly 170K is in 401K/Roth IRA.

With respect to budgeting, I'm pretty much OCD when it comes to budgeting and have been pretty much my whole life. Over the past 3 years we've lived on a fairly strict 72K annual budget. This was in preparation for this big decision in our life. I always told DW that when we had 500K we would be ready to make the move and now that we've well exceeded that amount, it is still difficult to leave the security that we have at my current income level. We've been able to save 80-100K/year over the last 3 years. This provides tremendous security knowing we have that cushion. Not to mention knowing the kids college education will not be a problem.

On that subject, I'd love for the kids to attend a military academy or an ROTC program. I'm a big fan of starting out life within the structure that the service provides. I owe much of my success to taking that avenue. I know many in this community are ex-military and I'd like to send out a hearty thanks to those who are or have served our great country. Having said that, of course if we are in any position to help support our children's educational goals, we will absolutely do that with sacrifice.

Finally, I'll say that my DW struggles emotionally with the thought of us remaining here. This is very difficult for me as I try to apply logic to balancing my responsibility to our family's financial security and wanting to make her happy.

Again, thanks to all who replied and happy Father's Day to all you dads out there.

Nano
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Old 06-20-2010, 09:37 PM   #30
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On that subject, I'd love for the kids to attend a military academy or an ROTC program.
Your preferences aren't relevant!

Looking back, I think that the worst USNA classmates were the ones who'd been pressured or even coerced to join the family business. They couldn't take out their anger/frustration/angst on their parents or their chain of command, but they could sure do it to their peers. The 2nd/3rd/4th generations who wanted to be there were very good. The ones who didn't want to be there were very very bad.

The "good" news is that the ROTC and service-academy marketing machines make their programs look like a very good deal. Heck, we parents almost wanted to sign up all over again and we're supposed to know better. I think our kid also feels very comforted by the idea of having a college support network plus a ready-made job waiting for her after graduation.

We've suggested that she try it all to satisfy her "What if?" questions. It's a lot easier to drop out of those programs than to jump in later. But we'll have to check back with her in about six months, when the first semester of reality has smacked her in the face like a wet mackerel. And I'm sure that all her decisions will be questioned once again when she gets to her first ship.
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Old 06-21-2010, 09:46 AM   #31
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I had an associate that had done his 20 years, then retired to the private sector. He was working in sales at our technology company. He discovered that one of his customers (public sector) would give him full credit for his 20 years towards their DB pension plan (yea this was the 70s). So he worked there for 10 years and then retired with two pensions.

(Ten years later, I retired with half a DB pension.)
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Old 06-21-2010, 10:07 AM   #32
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Not sure how you can love your well paid job and still be dreaming about ER? At your young age and family situation (three fairly young kids) I certainly would keep working. When the job becomes a pain (and it will) then think about ER. More assets will broaden your choices once you do retire.
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Old 06-22-2010, 10:44 AM   #33
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I think OP has a commitment to his wife to move to the east coast as soon as they can swing it financially.
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Old 06-22-2010, 10:54 AM   #34
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Very few West Coast cities where you might find a $210,000 salary are not capable of giving more pleasure than most humans could stand.

And, it is way easier to raise teenagers coming from a position of strength and prestige. You love your job, you have a great wife, you make good money-this is a no brainer. You can always make frequent visits east if family is the draw, likewise if it museums or some such. If it's weather, I have no suggestions.
+1 on this post...

I would much prefer the weather no the west coast than the east... but that is your decision..

As far as the rest... I am with Ha here.. it seems to be a no brainer for YOU.. not sure what the wife thinks...

Also... you can spend a year or two doing some travel back and forth.. I worked in NY for 1 1/2 years on the companies dime... and flew back about once a month to visit... it was great... now, flying 5 people might not be in the cards... but how often do you really get with family? And remember... Skype can get you videos... so you can feel like you are there...
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Old 06-24-2010, 05:15 PM   #35
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You are very lucky to have "a job that you love with great income". Unless you (or your wife) really hate where you live, or there are family reasons (dying parent, etc.) making a move back east imperative, you might as well stay put for at least a few years.

Home is wherever you are. There are pros and cons to just about anywhere, and barring unusual circumstances your current location will likely grow on you, your wife and your children.

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I'd love for the kids to attend a military academy or an ROTC program. I'm a big fan of starting out life within the structure that the service provides. I owe much of my success to taking that avenue. I know many in this community are ex-military.
I'm with Nords on this one. While I enjoyed (most) of my time in the navy, I know very well that it is not for everyone.

Your kids should be free to make their own decisions regarding their future, without dad emphasizing the importance of "structure".
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Old 06-26-2010, 11:14 PM   #36
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with that kind of salary I'd work another 5-8 years and bank every penny possible. then it would be 'adios'!
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Old 06-27-2010, 12:03 PM   #37
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with that kind of salary I'd work another 5-8 years and bank every penny possible. then it would be 'adios'!


Lots of great points made by everyone.

Questions I still have are:

1) How has the families lifestyle / budget been up to now and will it be reduced by ER?

2) If it is the case that the budget will shrink, how would your family (other than yourself) feel about that?

3) (I think someone else brought it up also) Do you know what you want to do in ER? Unless you have it somewhat planned out, the mind tends to wander and it's usually towards activities that cost money that wouldn't be happening if one was at work.

4) This is an odd one, but I'll throw it out there because it surprised me after I pulled the plug early and because you say you love your job. Are you ready not to have a "safe excuse" when you don't when you get invited to do things during your new spare time? I had a job that I loved and am fortunate to still do it as I please even though there is no reason to other than the fact that I love it. I didn't realize how convenient of an excuse it was to get me out of things that I didn't want to do. Friends and family seem to respect and accept "Sorry, I've got to work" or "Sorry, I have to get up early / stay late for work" much more than "Sorry, I just don't want to see you at that time because I would rather horse around at home doing the things that I love during the time that I have created for myself by having a plan and being financially responsible."

5) How are your children being raised as far as financial responsibility goes? Do they understand savings, budgeting and investing? I hadn't thought about it until I recently read a few books and saw a father painstakingly and patiently explaining to his toddler son why he didn't have enough money to buy the $9 toy he wanted because the allowance was only $5. I stuck around mesmerized as he went on to say that they could come back the week after to buy it then if the child wanted.

That's it for now since I could go on forever. I suppose a good summary of my thoughts has to do with the non-financial aspects of FIRE since they are the ones that I was the most unprepared for.
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Old 06-27-2010, 09:48 PM   #38
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From my understanding of reading the thread it looks like you have enough money to move back East and retire and be comfortable/ok (although it still looks like you'd be pushing it since you're looking at a 35-40 year retirement).

However you don't have enough money to fund your kids college education and be retired right now and you don't consider that your obligation.

Personally, as someone in their 20s I was very happy/grateful that my parents helped pay for college and came out of it with a reasonable amount of loans. My friends that came out with 40-90k in student loans were really behind the 8-ball and the loans will be a drag on their finances for many many years. I know it's easy to say the kids can handle college just like you did, but college expenses have went up much more than inflation/wages have grown and they'd be looking at substantial debt to put themselves through college wheras 15-25 years ago it was not nearly as bad.

You could consider working 3 more years (1 per kid) and save an extra ~150-180k for college expenses and they would be able to start their life from a much stronger financial position. Since you have a job you love that would be tempting... If you hated your job then maybe it would be a different story.

Of course, instead of retirement you could still move East and find a different job that you like and you'd at least be East to make your wife happy and able to conserve your portfolio and still save money for college.
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Old 06-28-2010, 07:22 AM   #39
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From my understanding of reading the thread it looks like you have enough money to move back East and retire and be comfortable/ok (although it still looks like you'd be pushing it since you're looking at a 35-40 year retirement).

However you don't have enough money to fund your kids college education and be retired right now and you don't consider that your obligation.

Personally, as someone in their 20s I was very happy/grateful that my parents helped pay for college and came out of it with a reasonable amount of loans. My friends that came out with 40-90k in student loans were really behind the 8-ball and the loans will be a drag on their finances for many many years. I know it's easy to say the kids can handle college just like you did, but college expenses have went up much more than inflation/wages have grown and they'd be looking at substantial debt to put themselves through college wheras 15-25 years ago it was not nearly as bad.

You could consider working 3 more years (1 per kid) and save an extra ~150-180k for college expenses and they would be able to start their life from a much stronger financial position. Since you have a job you love that would be tempting... If you hated your job then maybe it would be a different story.

Of course, instead of retirement you could still move East and find a different job that you like and you'd at least be East to make your wife happy and able to conserve your portfolio and still save money for college.
The statement that I don't consider it my obligation is not entirely correct. We certainly will help our children with college and I believe on 72K a year we ought to be able to provide considerable help. Maybe not at an Ivy League school, but certainly most good state universities. Also, I agree with your thoughts of getting a job back east when/if the need arises. It won't be a high paying, high stress job, but just something to help with their college expenses.

Nano
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Old 06-28-2010, 07:33 AM   #40
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Lots of great points made by everyone.

Questions I still have are:

1) How has the families lifestyle / budget been up to now and will it be reduced by ER?

2) If it is the case that the budget will shrink, how would your family (other than yourself) feel about that?

3) (I think someone else brought it up also) Do you know what you want to do in ER? Unless you have it somewhat planned out, the mind tends to wander and it's usually towards activities that cost money that wouldn't be happening if one was at work.

4) This is an odd one, but I'll throw it out there because it surprised me after I pulled the plug early and because you say you love your job. Are you ready not to have a "safe excuse" when you don't when you get invited to do things during your new spare time? I had a job that I loved and am fortunate to still do it as I please even though there is no reason to other than the fact that I love it. I didn't realize how convenient of an excuse it was to get me out of things that I didn't want to do. Friends and family seem to respect and accept "Sorry, I've got to work" or "Sorry, I have to get up early / stay late for work" much more than "Sorry, I just don't want to see you at that time because I would rather horse around at home doing the things that I love during the time that I have created for myself by having a plan and being financially responsible."

5) How are your children being raised as far as financial responsibility goes? Do they understand savings, budgeting and investing? I hadn't thought about it until I recently read a few books and saw a father painstakingly and patiently explaining to his toddler son why he didn't have enough money to buy the $9 toy he wanted because the allowance was only $5. I stuck around mesmerized as he went on to say that they could come back the week after to buy it then if the child wanted.

That's it for now since I could go on forever. I suppose a good summary of my thoughts has to do with the non-financial aspects of FIRE since they are the ones that I was the most unprepared for.
Thanks for the response. I'll try to answer your questions.

1. We've been living on a 72K/year budget for the last 3 years in preparation for this decision. We've done just fine on this and are content with our standard of living. Hopefully, family should have no problem adjusting financially.

3. My plan is to be more involved in the kids sports and school activities, and volunteering with the parks and recreation helping to keep the community parks a place where people love to hang out. Gets me outdoors and a little exercise as well. Also, like many here, I enjoy managing my own portfolio and have never had a FA.

4. My DW says this won't be a problem for me. I'll take her word for it...I guess

5. This is difficult for most parents, but we have giving our children $5/week since they were 5 years old and we make them buy most of the small (sometimes big) items that they want. I subscribe to the position that allowance is not for doing chores, but rather as a teaching tool on how to manage money. Only time will tell if that methodology will work with our children.

Thanks....Nano
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