45 years old - 2.5% SWR - retire or not?

[tomc5179]

A quick poll - I'm 45 years old and figuring all expenses (basic living, health insurance, 10K replacement / repair fund) I'd have a 2.5% SWR on my 55/45 portfolio. Darned sick of my own business that I've been in for 25 years and would likely take a year or two or maybe more off and then either go to work part time for someone or start my own one man business.

My quick question - Do it or don't?

 

[tomc5179]

I forgot to add that everything is paid off - there is no debt

 

[FUEGO]

Who manages your investments? If you have an adviser that sucks 1%+ off your portfolio every year, I may have to change my vote to "DON'T DO IT!!!!!!!".

Otherwise you are pretty golden.

 

[audreyh1]

" and would likely take a year or two or maybe more off and then either go to work part time for someone or start my own one man business. "

This, along with your very low SWR, means you have so much flexibility that your chances of success are very high.

You certainly can afford to take a nice break right now.

Edited to add: Oh Yeah - FUEGO gives a key caveat.

Audrey

 

[bbbamI]

I agree with the others...especially if you have funds you can get to without having to pay a penalty.

 

[scrabbler1]

A quick poll - I'm 45 years old and figuring all expenses (basic living, health insurance, 10K replacement / repair fund) I'd have a 2.5% SWR on my 55/45 portfolio. Darned sick of my own business that I've been in for 25 years and would likely take a year or two or maybe more off and then either go to work part time for someone or start my own one man business.

My quick question - Do it or don't?

I think you can do it, too. And that is because my SWR when I was 45 2 years ago was also 2.5%. And my AA was 55/45 at the time (but has changed in order to provide me with more income).

So if it was good enough for me to retire on very comfortably, it should be good enough for you, too!

 

[Onward]

My quick question - Do it or don't?

I'd have done it at 3%.

 

[Bestwifeever]

Do it.

 

[Delawaredave5]

Numbers look great - assuming your budget allows you to accomplish what you want - if the 2.5% SWR equates to a $10,000 annual spending budget - then that may be a low SWR - but no way I'd want to live...

 

[MichaelB]

If you need a poll you're not ready. If your portfolio can sustain you with a 2.5% withdrawal rate and you're still not sure, perhaps you should think about your goals a bit more.

 

[haha]

You need a third choice.

"I don't give a ****"

Ha

 

[Dawg52]

You need a third choice.

"I don't give a ****"

Ha

Stock market was up! You should be in a good mood.

 

[traineeinvestor]

A 2.5% WR suggests you are financially ready to retire (even without factoring in your plans to resume working in one form or another after a couple of years).

As Delawaredave5 said, this assumes that your WR is based on an appropriate and relalistic level of estimated expenses. Have you tracked historical expenses accurately and done a budget - I ended up revising my "number" upwards after doing that exercise.

 

[haha]

Stock market was up! You should be in a good mood.

You are absolutely correct. I should have said, Sir, do as you wish, Sir, as it is your money and your life.

If somebody says "I have $400,000 and I need $30,000 a year and I am 22", I have an opinion. But when someone says my WR is 2.5% and asks if he can retire I suspect OAP. It is just too absurd to discuss.

BTW, I miss OAP. He had some nice sidewalk-life shots

Ha

 

[Dawg52]

You are absolutely correct. I should have said, Sir, do as you wish, Sir, as it is your money and your life.

If somebody says "I have $400,000 and I need $30,000 a year and I am 22", I have an opinion. But when someone says my WR is 2.5% and asks if he can retire I suspect OAP. It is just too absurd to discuss.

BTW, I miss OAP. He had some nice sidewalk-life shots

Ha

He had a blog for awhile. Moved from one city to the next, experiencing different cultures. Lost track of him though.

 

[CuppaJoe]

Tomc, are you stlll single? In '05 you were planning to marry; that could change your numbers.

 

[tomc5179]

Tomc, are you stlll single? In '05 you were planning to marry; that could change your numbers.

Correct - I am single now (but have been living together with fiancee for the past 5 years) and will be getting married in October of this year. I have been following all my expenses daily for the last five years. I pay 100% on prop tax, utilites, etc. She pays a small part on groceries. I am happy with this and also have a thorough pre-nup that has been executed.

What can I expect marriage to do to my taxes?

Also, Fuego wondered if I had any high cost brokers handling my money - I do have about a third of it from a long time ago at Wells Fargo. I know I need to get that moved. Anybody had any experiance with calling Vanguard and having them move accounts?

 

[donheff]

Correct - I am single now (but have been living together with fiancee for the past 5 years) and will be getting married in October of this year. I have been following all my expenses daily for the last five years. I pay 100% on prop tax, utilites, etc. She pays a small part on groceries. I am happy with this and also have a thorough pre-nup that has been executed.

You say you are 45. What about her? Kids on the way could change everything.

 

[tomc5179]

You say you are 45. What about her? Kids on the way could change everything.

She's 46 and has been "fixed". Neither one of us have any desire to have kids.

 

[MichaelB]

You are absolutely correct. I should have said, Sir, do as you wish, Sir, as it is your money and your life.

I thought you said it better the first time

 

[MichaelB]

She's 46 and has been "fixed".

What was broken?

 

[teejayevans]

I would assume inflation rate on health Insurance of at least 10%, then redo your
numbers.

 

[Koolau]

RE: Vanguard and help moving funds. If you plan to move 100K or more, they will "hand hold" you up to a point using a single VG person. You still do most of the "work", but they'll help you know "what" to do. I found them helpful and friendly. Still, if you feel totally clueless about the process, you may have to keep calling or emailing your particular (forget what they call him/her) "personal guide?" for more help. Most of the folks on this forum (besides me) wouldn't need any help, but I'm not proud. If I need help, I'll ask.

I do think VG is a good choice because of their low cost and reasonably good customer service. Still, YMMV, so make your own choices on this one.

Good luck and I'd vote to go for it.

 

[obgyn65]

Hi Tom - I am also 45. There seems to be a consensus that 2.5% SWR is OK. The real question is: are you ready to quit your job (that what I ask myself every morning).

A quick poll - I'm 45 years old and figuring all expenses (basic living, health insurance, 10K replacement / repair fund) I'd have a 2.5% SWR on my 55/45 portfolio. Darned sick of my own business that I've been in for 25 years and would likely take a year or two or maybe more off and then either go to work part time for someone or start my own one man business.

My quick question - Do it or don't?

 

[chinaco]

A quick poll - I'm 45 years old and figuring all expenses (basic living, health insurance, 10K replacement / repair fund) I'd have a 2.5% SWR on my 55/45 portfolio. Darned sick of my own business that I've been in for 25 years and would likely take a year or two or maybe more off and then either go to work part time for someone or start my own one man business.

My quick question - Do it or don't?

I would recommend that you carefully study your expense needs (i.e., projections). Make sure you did not miss any major items. IOW will 2.5% cover it for the next 40+ years.


Depending on my mood over the years... I toyed with the idea of going earlier... but to do it I would balance the equation by adjusting lifestyle assumptions..... Bad days at w*rk.... do I really need that much? Good days at w*rk... I want to make sure we maintain lifestyle!


Frustrations aside.... I intend to maintain our lifestyle. We are not spendthrifts.... but I don't want to venture into possible "cat food" territory either...