Win the lottery or ten years, whichever comes first!

[BuysToys]

Hi everyone! I've been around for a bit, but haven't introduced myself yet. Figured I'd take the plunge today.

Here's our background and status: I'm 49, DH is 56. We live in a HCOL area, have a paid off home, and no debt other than a car payment (at 0% interest) for another 18 months. We have ~$225K in my IRA/401k, ~$100k in my Roth, ~$200K in a pension annuity for DH and DH will receive a non-COLA'd pension of ~$13K. The pension and annuity could be more if he stays with his union and garners some work. He is currently looking for a job, so if something else does come along we will start receiving his pension early.

The plan: Our worst case scenario is to continue plodding along here for another ten years, sell the house and another property we own, move to Texas, and spend 1/3 to 1/2 of our proceeds to purchase another home outright. Running the numbers through FIRECalc shows us at 100% success with the Bernicke spending model. (Yes, I know. Not everyone is comfortable with this model, but the numbers make sense to me when comparing them to my parents' current income.) Running our numbers through i-Orp gives me about $10K less per year than we had been making the last couple of years. That's fine as it's still higher than what I think our expenses will be.

I have tracked our budget, so do have a very clear idea of what our expenses are. My problem? How to calculate what they will be when we've moved. My family all lives in the area we will move to and I do know that my parents live comfortably on Social Security alone. With DH's pension and 75% of our current SS estimate alone, DH and I would have 150% of what my parents currently receive. DH and I have talked about retiring earlier, but I keep telling him that's not in the cards unless he can find work and we can sock away a bunch more money.

Anyway, my biggest concern really centers around medical insurance costs. I hope that 2014 will bring some clarity to those questions as the exchanges should be up and running. That will let me get some "real" numbers to crunch and see if we can pull the plug earlier.

So, that's my story in a nutshell! Nice to meet you all and thank you for having such a great site!

 

[heeyy_joe]

Way to get that first post out of the way, so glad you did it!

There are many "on the fence" right now and waiting for pricing and terms of the PPACA. We all can hope things will be much, much clearer in ten years. But probably not!

 

[JoeWras]

Welcome! Nice summary. I should try Bernicke model sometime. My Dad's spending tailed off significantly after 80. My MIL lived on nothing but a spouse SS for many years, with something like 20k in savings for any emergency. That was it, along with a paid off house. Incredible. She got entertainment from the library, newspaper, radio and chats with friends. She was a pretty happy lady. Of course, when she passed we discovered the house was in need of dire repairs.

HI has a lot of us fence-sitting, confused, worried, and doing the OMY shuffle.

 

[UserRequested]

Hope you win the lottery. As a matter of fact I hope I do too

 

[braumeister]

If you're asking for opinions, I definitely favor winning the lottery.

REWahoo will be along shortly with an impressive list of reasons NOT to move to Texas. More seriously, sounds like you're taking a most intelligent approach to this. Best of luck.

 

[obgyn65]

Nice introduction post. Welcome to the forum.

 

[BuysToys]

Thanks for the welcome everyone!

Texas is a fairly recent (last year or so) decision DH and I have made. The original plan was to build a new home on the property we own, paying cash by selling our current home and using some of our savings. DH has always lived in the greater NYC metro area and just didn't really think about moving anywhere else. He took a trip with me to Texas a couple of years ago to meet my family. Talk about an eye opening experience! On the flight home, we talked about the fact that my brother and sister both have homes about twice the size or ours, 50-60 years newer, and they pay less in property taxes than we do. When I threw in the fact that Texas has no state income tax, DH was willing to talk about relocating when we retire.

The plan was pretty much solidified when we went to Texas last August. DH realized that the heat and humidity there is no worse than what we deal with every summer here. He's also excited to have an overall lower cost of living and a more rural setting to live in. So we're starting to look at realty sites, using Google to look at various towns near my family, and doing all the research to choose the area we think will make us happiest.

 

[Grigori]

Hi BuysToys,

I live in Texas now. If you can stand August, the rest of the year has some better weather. Just remember that August isn't the only month. It's pretty hot from mid May or so until October, especially in central Texas. Winters can have lots of cool rather than cold days. Pleasant, IMO. We live in Houston, and are thinking about San Antonio as a place to live in few years - better cost of living and not such a hurried pace.

 

[militaryman]

Welcome! Having a reference of your parents income and lifestyle is a very useful tool that can lend security to your plan.
I do my parents taxes and know exactly what they make ( <$30,000/yr ) and it gives me "comfort" to know that with little savings cushion, ( but also no debt ) they have been able to live a simple yet comfortable lifestyle for 15 plus years into retirement. Taking out the big variable of health insurance has been key to their success I believe. (Dad retired as a Fed Employee and I will too so we are both covered)

I also keep coming back to the idea that if I can keep my head above 150% of what mom/dad are living on then I should be good when I take the plunge ( < 11 years from now ! )

 

[BuysToys]

Hi Grigori! We're looking east of Dallas since that is where my family is settled. DH has mentioned San Antonio, so that is also an option. There are a multitude of reasons for us to be closer to family when we move, so it's more likely we'll take trips to visit the Alamo than to live there!

Militaryman, it helps TREMENDOUSLY to have a good frame of reference to be able to check my numbers against. I have some anxiety that I can't put hard numbers against our retirement plan, but that's just how I am. LOL I always have the primary plan, the fallback plan, the fallback to the fallback, and the catastrophic plan all lined up. DH just humors me.......

Unfortunately, we lost the life time medical benefit a couple of years ago when they increased the quarters of work requirement for DH's union. The plus to that was that there is no longer a reduction for the spousal benefit on his pension. That's why my primary consideration of when we pull the plug hinges on our ability to maintain medical coverage.

 

[Koolau]

<SNIP>

Militaryman, it helps TREMENDOUSLY to have a good frame of reference to be able to check my numbers against. I have some anxiety that I can't put hard numbers against our retirement plan, but that's just how I am. LOL I always have the primary plan, the fallback plan, the fallback to the fallback, and the catastrophic plan all lined up. DH just humors me.......

Sounds like me. I've always wanted "belt, suspenders AND elastic waist band" when it comes to my back-up plans. DW is also amused, but appreciates that we are not likely to starve if something should go wrong.

I agree that health care is the single most vexing issue facing ER types. Maybe it's just my "Murphy was an optimist" point of view, but I am not convinced that 2014 will bring clarity. Maybe the "rules" will all kick in, but the costs are something else. I've always said "You can't fool mother nature". Saying "everyone will have health care - much of it 'free'" - is whistling past the grave yard, IMHO. Still, some clarity is better than none. I hope it all works out for you. Welcome to the forum. Be sure to post often and let us know how the plan (and backups) are progressing. YMMV

 

[BuysToys]

Thought I'd post an update to this thread....

Some significant events over the past few weeks have changed our plan. As soon as our property and house are sold, we are moving to Texas. After crunching numbers in FireCalc and i-Orp, it looks like we will have the same amount of money we are currently living on. That's a little tighter than we wanted to be, but we also probably aren't going to completely retire once we've moved. DH wants to work a few more years and is planning on finding (at the least) a part-time job to offset medical insurance costs. My folks will be living with us and mom has insisted on paying "rent".

We've been looking at houses in Texas and it looks like we'll be able to buy something outright with the money we should get from selling our empty lot. That will leave us a nice investment amount from the sale of our house, which will help out a lot. DH and I are now starting to play around with whether we should take out a mortgage for the new house or just pay cash for it. That's a decision we're not likely going to make until we're ready to purchase.

I'm a touch anxious, but this is the best decision for us right now. Worst case scenario looks like we have to tighten the belt a little bit until we start collecting SS. Wish us luck!

 

[MBAustin]

Good luck with all of the changes in your lives - remember that change is stressful and there will be things that don't go as planned, so try to relax and chill when that happens - it will all work out. Keep us posted!

 

[Koolau]

My folks will be living with us and mom has insisted on paying "rent".

Maybe I'm reading too much into your statement, but are you feeling "guilty" for accepting rent? Don't! If mom and dad can afford it (and you still feel a little guilty) consider silently setting that money aside (in a fund - maybe something super safe - whatever that is). If the time comes mom and dad need assistance, use out of the fund. If they don't need it, consider it part of your inheritance.

Don't recall your extended family situation (brothers/sisters). If they don't help carry the mom/dad burden, rent could help equalize the disparity in what you do for mom and dad vs what they don't do for mom and dad. Honestly, when the "will" is read, you and they will get what is says, not what you all deserve. So, take it now (for services rendered). This arrangement may lessen any resentment you could otherwise build up. When my mom died, I was on her checking acct. The small remainder (less than 3k) came to me directly. It was the only inheritance and I did NOT feel guilty taking it all (no sharing with siblings). I had done all the mom/dad stuff while siblings rarely even visited. Keeping the small remainder somehow felt like an "equalizer".

One thing to check on (legally) is how to deal with potential Medicade issues should mom/dad ever need to go on it. The legal issue is the "look-back". If mom/dad "hired" someone to help them or actually rented a place, there would be no issue. But, if mom/dad give you a check, the gummint may contend that they "gifted" that money to you - even though it was actually rent. Someone more educated than I (also smarter and savvy) may be needed to help with such issues.

By the way, I know nothing about this subject (any of it) except that I had a mom/dad who needed much assistance at their end of life. (I wouldn't give up a day of that time they were granted by their creator.) So... DO YOUR OWN RESEARCH on all issues involved with assisting mom/dad. Suggest you also research your proposed adoptive state (e.g., taxes is a biggie - how to structure investments/real estate, etc.). Texophiles will probably tell you everything you need to know here.

Oh, Good luck! And YMMV.

 

[BuysToys]

MBAustin, thank you for the wishes of luck! DH and I are both ready for things to NOT go as planned. lol I'm just hopeful that the big pieces will fall into place quickly. The little stuff can all be worked out.

Koolau, yes, there's a small amount of guilt there for taking rent from my parents. My siblings both live in the area my folks are in and have been the ones carrying the burden of helping mom with dad's disability care. Both siblings have children, so living with them is not really an option for my parents. My mom and I are very, very close, so living with DH and me is an easier solution to swallow. It's not what my parents want to do, but what needs to be done to extend the time before dad requires full time nursing care. Mom just can't keep up with it much longer on her own.

I'm not too concerned about the look back as we'll set up a lease agreement and set an amount for the rent that will work for mom when she's living with us on her own. It just feels a bit unfair to take money from my parents when my siblings have helped them for so many years. DH keeps reminding me that we can always save or invest the money and share it later if it still bothers me. I know if I asked the siblings about it, they would both say that it was the right thing to do as I'll have the extra housing to buy, taxes to pay, increased bills, etc. I just need to have mom agree to a nominal amount that won't stretch her too thin once dad isn't in the home with us.