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Enough Waffling, Already!
Old 06-21-2010, 11:54 PM   #1
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Enough Waffling, Already!

I'm picking an ER date—or at least an ER month, of May 2013. At that time I'll be eligible for a pension of about $43,975 a year, of which $28,585 is COLA'd. FIRECalc says, a cash stash of $40K should be enough (in 100% of the historical return series) to fill in the difference between my pension and estimated living expenses of $42,195 (equivalent to $36,000 in 2009 dollars) until I'm eligible for full Social Security benefits (about $1970/mo) at age 66+4 months.

After age 66+4, the COLA'd part of the pension plus half of my Social Security, is only about $2000/year short of my estimated expenses, and those two incomes combined should keep up with inflation. Even at a very conservative 2% WR, there's more than enough in my 457 account now to produce that $2K a year. The other half of Social Security, plus any pension remaining in addition to the COLA'd amount, plus any of the cash stash that's left over, plus my Roth IRA, plus whatever growth there is in my 457 between then and now are a big fat safety factor. I'm sure I must have underestimated or forgotten something in my budget, but with that much of a cushion it should all come out OK in the end.

Why May? Because my birthday is in mid-January, so retirement in mid-May puts me an even number of years out from Social Security eligibility. Besides, I'll need to sell my house, and spring is a lot better time to put it on the market than the middle of winter. If my house drops in value as much again over the next few years as it has since 2006, it would evaporate the cash stash, and possibly cause a re-think on the date—unless portfolio growth made up for it.

So...35 more months and then bye-bye!
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Old 06-22-2010, 12:06 AM   #2
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Your numbers look good to me. Congrats!

I am a bit confused about the sales of your house. Is it in order to move and buy another house, and you plan for that to be a somewhat even exchange?
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Old 06-22-2010, 12:14 AM   #3
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Your numbers look good to me. Congrats!

I am a bit confused about the sales of your house. Is it in order to move and buy another house, and you plan for that to be a somewhat even exchange?
It's to move into a somewhat less expensive house, and have $40K left over for the cash stash. If this house drops too much more, there won't be enough left over for the cash stash.

Oh, and didn't I see on the "% of net worth in house" thread that you are planning to buy on the Olympic Peninsula? I'm planning to head in the same general direction—Grays Harbor County.
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Old 06-22-2010, 12:32 AM   #4
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Congratulations on choosing a retirement month!! Those 35 months will speed by quickly.
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Old 06-22-2010, 12:39 AM   #5
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I did often talk of moving to the Puget Sound, but not recently. Are you sure you don't confuse me with Westernskies, my alternate self who is ENTP (Myers-Briggs and early retirement - the spinoff). I am INTJ.

Westernskies and I both live in the Phoenix metropolitan. We both own a 2nd home on the Mogollon Rim. And we both aspire to live somewhere in the Puget Sound. And we both signed on to this forum roughly the same time in 2008. Other than that, well, I drink Cognac, and I am not sure what his favorite spirit is.

PS. Other differences: he is American born, I am a naturalized citizen. He works full-time, I part-time. He likes to invest in RE, I like stocks.
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Old 06-22-2010, 12:47 AM   #6
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I did often talk of moving to the Puget Sound, but not recently. Are you sure you don't confuse me with Westernskies, my alternate self who is ENTP (Myers-Briggs and early retirement - the spinoff). I am INTJ.

Westernskies and I both live in the Phoenix metropolitan. We both own a 2nd home on the Mogollon Rim. And we both aspire to live somewhere in the Puget Sound. And we both signed on to this forum roughly the same time in 2008. Other than that, well, I drink Cognac, and I am not sure what his favorite spirit is.
It's entirely possible I got the two of you switched, as I was going by memory, and I've also been following the Myers-Briggs thread so I could have seen the comment. Also I had to be at W@rk an hour earlier than usual this morning so I am not at my most lucid just at the moment.
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Old 06-22-2010, 12:50 AM   #7
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Congratulations on choosing a retirement month!! Those 35 months will speed by quickly.
I hope so, 'cos I'm getting real antsy!
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Old 06-22-2010, 12:52 AM   #8
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Well, with my screen name loudly proclaiming my love for the PNW, it is not difficult to imagine that I want to live there, which I do. Still have to persuade DW though.
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Old 06-22-2010, 09:08 AM   #9
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Originally Posted by kyounge1956 View Post
FIRECalc says, a cash stash of $40K should be enough (in 100% of the historical return series) to fill in the difference between my pension and estimated living expenses of $42,195 (equivalent to $36,000 in 2009 dollars) until I'm eligible for full Social Security benefits (about $1970/mo) at age 66+4 months.
...

So...35 more months and then bye-bye!
Congratulations! and remember to enjoy each of those 35 months too.

Would you explain what you mean by a "cash stash". Is that your investment portfolio or is that different?
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Old 06-22-2010, 09:42 AM   #10
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Congratulations! and remember to enjoy each of those 35 months too.

Would you explain what you mean by a "cash stash". Is that your investment portfolio or is that different?
I guess you could call it an "earmark". It's a sum of money set aside for filling the gap between pension and expenses, prior to SS eligibility, and would be in something like a CD ladder or a money market fund, rather than my ordinary asset allocation, so I won't lose it if there's another stock market plunge during that time. Leaving that amount in my tax-deferred account at work in the Stable Value fund is another possibility.

If I don't need all of it for that purpose (and FIRECalc says I probably won't) I'll probably keep some of it in similar investments as an emergency fund and put the rest into my portfolio.
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Old 06-22-2010, 10:01 AM   #11
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Congratulations!

We can watch your countdown like we did W2R's.
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Old 06-22-2010, 10:12 AM   #12
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By the way, many of us here spend a lot of time to crunch numbers to make sure that we have enough. But as long as we have some sufficient margins for safety, and are flexible enough to downgrade our lifestyle some during tough economic times, we will have to take the jump at some point. If one wants to be absolutely sure, one might just have to work until dropping dead.
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