Can I Retire At 51 ? **Update**
This is my second post regarding retiring early. The 1st was in June of 2013
Can I Retire At 51 ?
I was having a terrible time at my job. Not only were the hours horrible, but we were going through a major transition that was not going well at all.
At that time, I just wanted out. PERIOD!
Had I left at that time, not only would I have had to wait until age 55 (2017) to begin collecting my pension, but I would have been penalized 4.8% per year that I was away from age 62.
4.8 x 7 = 33.60% penalty. Because of this, I would have had no choice but to roll my 401k into an existing IRA & begin drawing funds early using the 72(t) SEPP method.
Luckily for me, shortly after posting the original thread, things began improving @ work. The hours were/are still miserable, but with the job itself going much better, I was able stick it out & now, come June 1st, I'll be able to collect my full pension. No penalties!
I'm now 53 years old, work in the private sector (manufacturing) & have no existing medical issues.
Will retire on or around June 1st of 2015 (Pension 104.00% funded as of last report)
I'll now list my income, future income, monthly living expenses, & current assets.
I don't think I'm overlooking anything
Please reply if you think I am.
Monthly Income Starting July 1st 2015
Pension $3,000.00 Per Month
Dividends $1,100.00 ' ' *The dividends are all from my 'taxable' brokerage account at Fidelity*
Total $4,100.00 Per Month
$49,200.00 per year
Future Income 001: I'll turn 59.5 In June 2021
401-k - 240k as of today
IRA - 30k as of today
If I assume an annual return of 5.00% per year, these 2 would be worth around 361k by 2021
This would be another possible income stream. (If I Needed It At That Time)
Future Income 002: January 2022: When I turned 60, I could begin drawing a smaller pension from the original company (before we merged with my present company)
$284.00 Per Month
Future Income 003: S.S. 2024 Age 62 $1,300.00 Per Month
Total $5,684.00 Per Month
$68,208.00 per year *Without any 401k or IRA distributions*
*Also not counting any future dividend hikes*
Personal lifestyle/monthly living expenses & Misc info
Lifestyle: Very simple & inexpensive. Have plenty of things to keep me busy. Sometimes more than I care for. This will improve after retirement.
Home: Roof, Siding, Windows, Furnace & AC, all new in the last 8 years.
Healthcare: This of course, is the biggie nowadays & I am not covered after retirement: I've done a small amount of research on the 'affordable care act' AKA obamacare. Don't like what I've seen/heard …….so far
As it stands now, I've decided to purchase 'COBRA' insurance when I retire.
This is the exact same as my present coverage & includes medical, dental, & vision. There's substantial co-pays in many instances, but I can live with that.
This is available for 18 months after retirement @ a cost of approximately $650.00 per month.
So I wouldn't have to worry about dealing with obamacare until December 2016. Hopefully some of the bugs will have been worked out by then.
Monthly Cash Flow/Expense Summary:
4,100.00 - 25% Taxes ($1,025.00) *Hopefully my taxes will be less than 25% but I want to err on the high side*
3,075.00 - 650 Health Ins **On the bubble as far as being able to itemize** 15.00%
2,425.00 - 370 Car Pmt & Ins *No Car Payment At This Time* But plan on buying a used toyota sr-5 before winter
2,055.00 - 365 Groceries & eating out
1,690.00 - 300 Utilities *Electricity, City, Natural Gas, Cable TV, Internet, & Phone
1,390.00 - 200 Property Taxes & Homeowners Ins
1,190.00 - 200 Alcohol *I still frequent a favorite bar (more often after retirement ?) & have friends over, especially during football season.
990.00 - 136 Miscellaneous *B-days, Printer Ink, Stamps, Lawn Care, Co Pays, Tax Software, Snow Removal, Batteries, DVD's, Etc
854.00 - 85 Automotive = Gasoline, Antifreeze, Bulbs, Oil, Tires, Repairs, Etc
769.00 - 50 Charity
719.00 - 35 Personal Items = Haircuts, T-paste, TP, Deodorant, Shampoo, Detergent, Scotch Pads, Clothing, Dish Soap, Vitamins, Etc
684.00 - 24 Casino & Other Gambling
660.00 - 0 Big Ticket Items * Washer & Dryer, Stove, Etc*
Summary: A Surplus Of $660.00 Per Month, Or $7,920.00 Per Year
In my Fidelity brokerage account, I have a mix of dividend paying stocks, etf's, reit's, & mutual funds.
The portfolio is geared toward 'income' that I will use to supplement my pension.
The $ amount in individual holding varies from over 60k in JNJ, to only $1,732.75 in Colgate.
Apple Computer AAPL
American Water Works AWK
Bank Of America BAC
B&G Foods BGS
Cinemark Holdings CNK
Colgate Palmolive CL
Conoco Phillips COP
Consolidated Comm CNSL
Crown Holdings CCK *No Dividend*
Johnson & Johnson JNJ
Kinder Morgan Energy KMP
Kraft Foods KRFT
Eli Lilly LLY
Student Transportation STB
Wisconsin Energy WEC
iShares International Select Dividend IDV
Vanguard Dividend Appreciation VIG
Fidelity Select Medical Equip & Systems FSMEX
James Balanced Golden Rainbow Cl A GLRBX
National Health Investments NHI
Realty Income Corporation O
UBS Bloomberg CMCI Silver USV
Assets: As Of April 12th 2015
Fidelity Brokerage Account $464,782.00 *Taxable*
Vanguard 401-k $239,129.00
Home Equity $100,000.00
ESPP $87,552.00 *Employee Stock Purchase Program*
Fidelity IRA $27,948.00
I feel very fortunate to have this opportunity.
I'm going to miss my co-workers terribly, but it's something I have to do.