ER butterflies

[Katsmeow]

I posted way back in January that I had given notice to my boss that I was leaving around April. Since then he has convinced me to continue to work 1 day a week (assuming a couple of factors that I think will work out). DH plans to retire this summer.

Well the last week or so has made it all very real. My boss finally (!) told the rest of management that I'm leaving at the end of next week, or rather, moving to a 1 day a week schedule. DH gave formal notice at Megacorp and has a retirement date set in July.

Yet, I am suddenly full of butterflies and wondering if we are crazy.

Back last November I posted about expenses. Then I gave project retirement expenses based upon moving to a 2500 SF house:

Overall projected expenses if we moved to a 2500 square foot house near DH's work - 2 adults, 2 teenagers in house - per month

Auto Fuel - $150
Auto Main/Repair - $250
Toll Road - $50
Children/school related - $1600
Property Tax - $350
Dining out - $200
Groceries - $600
Healthcare - $550
Household supplies/repairs/maintenance/yard - $300 (total guesstimate)
Ins Auto - $400
Ins House - $100 (guesstimate)
Ins Umbrella - $100 (guesstimate)
Computers/electronic/software - $200 (computers are getting long in tooth)
Entertainment - $200 (Leisure activities)
Internet/Cable - $150
Travel - $100
mortgage - $1500 (will likely pay off at some point)
Clothing/cleaning - $100
Gifts - $250 - In addition to our 3 children, DH has 3 adult children, 9 grandchildren and 3 greatgrandchildren
Personal care - $50
Pets - $350 (this expense I understand - we have several large dogs and 2 cats)
Electricity - $300 (Guesstimate)
Garbage - $37
Phone - $200

Well things have developed since then. On a positive note we bought a 1900 sf house in March. We paid cash so there is no mortgage. The guesstimates for house insurance is fairly accurate. So far the electricity is lower as is garbage. Real estate taxes are a little less. I anticipate clothing/cleaning to be less, phone to be less, gifts to be less - we've cut that to about $100 month, expect auto to be less. Discretionary spending is, well, discretionary and can be less or more as we choose.

The only negative is that we still own our old house which is a huge financial drain. It is now on market and we hope to sell soon (we are in a mild seller's market but our house has features that will appeal to the right buyer but to others won't appeal at all so it could take awhile to sell).

I ran FireCalc and Financial Engines over and over again.

Last November, I projected a lump sum retirement for my DH at about $991,000 if he retired in November of this year. As it turns out he will get about $1,020,000 retiring this summer.

One question I was unsure about a few months ago was what would happen to my healthcare coverage when he turns 65 (he is 62). Would I still have a right to subsidized retiree healthcare coverage? Turns out that I will have the right until I am 65. So that was something else that worked out OK.

When I first posted here last August we had $345k in 401(k)s. Today it is $275k. However, we took some money out to pay cash for the house and we will owe about $30k in taxes on that money (no penalty since DH is 62).

So when the dust clears this summer after accounting for the taxes we should have roughly $1,270,000 assuming no drastic change in the 401k.

DH will get SS at about $1700 a month and our 2 children under age 18 will get about $1100 a month each which be used for their needs/college.

If I do choose to work 1 day a week that is worth about $4000 to $4500 a month (before taxes).

So it all looks good. The only debt is the mortgage on the house we are selling and I've run the numbers on that and Firecalc says we're fine so long as we sell the house in the next couple of years which seems highly likely.

Yet...as I was talking to the office administrator today (whose reaction on hearing of my semi-retirement was to congratulate me)...I had a sudden feeling of panic and wondered what I was doing and whether I was totally crazy to be doing this....

Anyone else get ER butterflies?

Apparently Not since there have been 67 views and no replies...I think I'm the only one to get butterflies....

 

[Leonidas]

Anyone else get ER butterflies?

Being a little apprehensive is natural. You guys are casting yourselves loose from the support system that has held you unto its bosom for so long. The paychecks stop coming, you no longer have a reason to get up, shower, dress and go somewhere (unless you want to).

At least you're pulling the trigger and going for it. Too many folks who can retire find it too easy to succumb to that old devil, "just one more year".

It gets better. Much better. But it is different and you'll have to figure out your path on going forward as you seize control of what MegaCorp left you of your life.

Check back in a year or so, if you're still freaking out then - it's time to go see a psyhrink, or drink more or something.

On a different note, as in adding to the list of stuff I didn't have a clue about, I didn't know that under-18 dependents of SS retirees (i.e., the living and not-disabled) get SS benefits along with the parents. That was an interesting find that I am still digesting.

 

[audreyh1]

That's pretty nice pay for 1 day a week. At least it can help out until you get the big house sold. And without DH working, your taxes will be a lot lower.

And great news about the health care - that is a big deal.

Congratulations!

Audrey

P.S. Me too about SS for underage dependents! I guess there aren't that many folks at SS age that have underage dependents.

 

[jebmke]

You're pretty organized. I'm sure there will be a couple nights from time to time you are awake in the middle of the night staring at the numbers but this will fade after a while. My guess is that during the period the house isn't sold you will also naturally cut back a bit on discretionary spending to be cautious.

The big challenge for me was to get the flywheel to stop spinning in my head. That took about a year.

 

[KB]

I did get butterflies too. Since my income was going to be from an irregular source for the first 5 years, I waited until I had 3 years expenses in the bank and an 100K HELOC from my paid off house I could tap if needed.

It's been 5 years now and I just tapped into my pensions and closed the HELOC without touching it. I still have 5 years to early SS but so far so good.

 

[ksr]

Butterflies would have been an understatement for me. I was *very* nervous, but determined to do it. I didn't want to become another victim of the "one more year syndrome", so I gave my employer about 2 months notice then figured there was no backing out. It's a good thing I didn't know then that the market was going to start tanking a month after my ER!

The important thing is that I've come to appreciate more than ever, that if we remain determined and somewhat flexible, everything will work out. You sound very organized and prepared.

 

[cardude]

Wow, $4000/month for one day a week sounds pretty juicy to me. I want a part time job like that!

What do you do?

 

[billin]

Just a question. Why are the kids getting $1,100 each a month?

 

[walkinwood]

.... wondering if we are crazy.

Why of course, you're crazy! But then, the best always are - at least a little bit.

btw, you should be worried if you don't have butterflies in your stomach at this point.

 

[Katsmeow]

To answer a couple of questions:

I am an attorney.

The kids get roughly $1100 a month because they are under 18 and my husband will be drawing Social Security. They receive 1/2 of his full retirement age benefit (subject to a family maximum that is about $4k a month).

 

[W2R]

I remember the thread on your monthly expenses, and if I had those expenses (plus an additional house now) I'd have butterflies too! This is why I didn't answer this thread initially - - it is hard for me to imagine retiring before you sell the other house and lose the mortgage obligation. But you know, we all lead different lifestyles.

You are sure that your income in ER can cover your expenses or you wouldn't have decided to "pull the trigger". It doesn't really matter what the rest of us think about your financial readiness or posted on that thread - - you have read what we think and you have decided you are financially ready. You are mathematically literate, intelligent, and you know more about your finances than any of us do so your assessment is probably correct, right? I think so.

In addition to being financially ready, you have the part time work and a realistic option of working more if you need to do so. I'd say you are very ready to ER.

It's a little unnerving to step off that cliff, so to speak, and no longer have a regular paycheck. It is only natural to think, "Am I nuts?" But there comes a time when one is sure of one's financial readiness for ER, and I think you are there. The butterflies go away as you begin to receive regular income as planned and you realize that you will be fine. I felt a *lot* better when I got my first pension check, for example, as small as it is. Also, when you do step off that cliff, it is incredibly liberating. I wish you the very best!

 

[Katsmeow]

This is why I didn't answer this thread initially - - it is hard for me to imagine retiring before you sell the other house and lose the mortgage obligation. But you know, we all lead different lifestyles.

It is hard for me to imagine as well. I've been lurking here for almost a year (lurked for months before registering and posting) so I've read lots of your posts and am pretty sure you are even more risk averse than I am.

That said, I initially took it as an article of faith that I couldn't retire without selling the other house first. Several things converged and impacted this.

Mid-year this year is the optimum time for DH to retire from an economic point of view. He maximizes his lump sum doing that.

Of course he could retire without me retiring. And we considered that. Part of the timing for me was that if I didn't retire now I was going to get sucked into a project at work that would be extremely stressful and a lot of work. I had just gotten off one like that which had about done me in. I couldn't face the thought of doing it again. And I ran the numbers and realized that if the house sells within 2 years we are fine. Even if it doesn't we could manage (although I would not like what it would do to discretionary spending).

As for the projected spending, one thing I had to come to grips with is that it is largely an ideal wishlist. Our actual obligated expenses are much, much longer (leaving aside the house we are selling). We could cut a great deal of that and that gives me some comfort.

I do have an invitation to return to full time status at work so that is a factor as well. And of course the part time status covers much of the expense of the house we need to sell.

So, I think we are ready but was nonetheless surprised by the sudden butterflies.

 

[W2R]

It is hard for me to imagine as well. I've been lurking here for almost a year (lurked for months before registering and posting) so I've read lots of your posts and am pretty sure you are even more risk averse than I am.

I just might be the most risk averse person on the face of the earth!

That said, I initially took it as an article of faith that I couldn't retire without selling the other house first. Several things converged and impacted this.

Mid-year this year is the optimum time for DH to retire from an economic point of view. He maximizes his lump sum doing that.

Of course he could retire without me retiring. And we considered that. Part of the timing for me was that if I didn't retire now I was going to get sucked into a project at work that would be extremely stressful and a lot of work. I had just gotten off one like that which had about done me in. I couldn't face the thought of doing it again. And I ran the numbers and realized that if the house sells within 2 years we are fine. Even if it doesn't we could manage (although I would like what it would do to discretionary spending).

As for the projected spending, one thing I had to come to grips with is that it is largely an ideal wishlist. Our actual obligated expenses are much, much longer (leaving aside the house we are selling). We could cut a great deal of that and that gives me some comfort.

I do have an invitation to return to full time status at work so that is a factor as well. And of course the part time status covers much of the expense of the house we need to sell.

So, I think we are ready but was nonetheless surprised by the sudden butterflies.

I knew you must have thought through it. It is apparent in your posts that you are a logical, intelligent woman. I think you are going to be fine.

The day that I retired, and they took my badge and parking hangtag away from me, I felt really odd for a few minutes - - as though part of myself had been ripped away. Jobs in my specialty with decent pay and benefits are almost non-existent, and I had one of the best in the country. I couldn't help but think, "What am I doing? Am I crazy?" That must be what skydiving feels like.

It all worked out, though. Just have faith in yourself and your planning and soon the butterflies will fly away.

 

[rescueme]

My DW/me made the decision in our mid-50's to retire at the same time (we're the same age), at age 59.

That was three years ago. I retired (yes, very happy. thanks for asking), while my DW still remains employed.

It's not only a financial decision, but also an emotional decision.

While we were both ready from a financial point of view, she was not ready emotionally.

That's OK. When she's ready, so be it....

 

[audreyh1]

I must say, I'm really impressed by how far Katsmeow and her DH have come! Two well paid professionals who really could have been trapped on the treadmill of earning high $$ forever to maintain high spending levels. Instead, you guys have carefully gone through your priorities and taken big steps to free yourselves and studied the financial ramifications carefully.

Don't be surprised at the butterflies. It's a huge life change. Everyone gets them (if they are conscious/sane). The same as you get before a major exam or major performance no matter how well prepared.

And it's pretty clear you are well prepared. You also have flexibility in the future. The plan can be tweaked if necessary. In the meantime you all can enjoy having a lot more time to yourselves and your family.

Audrey

 

[LOL!]

Just a note: No ER butterflies for me because I am doing it in stages. First stage: going to half-time. It's been that way now for a couple of years. Next stage, maybe doing on-call consulting. After that, full retirement. Also, both of us work, so we will not both be in the same stage at the same time until the we are both in the "full retirement" stage.

 

[walkinwood]

Just a note: No ER butterflies for me because I am doing it in stages. First stage: going to half-time. It's been that way now for a couple of years. Next stage, maybe doing on-call consulting. After that, full retirement. Also, both of us work, so we will not both be in the same stage at the same time until the we are both in the "full retirement" stage.

Maybe, just maybe, your butterflies are still caterpillars?

 

[LOL!]

That's a nice way to put it.

 

[Bestwifeever]

You will feel a lot more settled when your big house sells, KM. I do think you came on here already knowing what you wanted to do, but I'm also sure you'll be fine even if the big house doesn't sell--you will figure out how to adapt. Keep us posted about your last day as a full timer!

 

[Moemg]

I must say, I'm really impressed by how far Katsmeow and her DH have come! Two well paid professionals who really could have been trapped on the treadmill of earning high $$ forever to maintain high spending levels. Instead, you guys have carefully gone through your priorities and taken big steps to free yourselves and studied the financial ramifications carefully.

Don't be surprised at the butterflies. It's a huge life change. Everyone gets them (if they are conscious/sane). The same as you get before a major exam or major performance no matter how well prepared.

And it's pretty clear you are well prepared. You also have flexibility in the future. The plan can be tweaked if necessary. In the meantime you all can enjoy having a lot more time to yourselves and your family.



Audrey

I was thinking about what to say and Audrey said it and much better than I would have so . Good Luck ! It is a life change but a really nice one !

 

[Katsmeow]

Today the word was out to staff that I was retiring. It looking more firm that I will keep working one day a week. It is interesting to see the different reactions. So far it has all been positive. A few people today were envious. All of that is starting to make it real as more people know.

 

[Bikerdude]

If you can "eat" two years of expenses on the old house why not reduce the price by one year of carry costs to help move it along?

 

[Katsmeow]

It just got listed this week so is just now on the market. That said, we would reduce price quite quickly if it doesn't move quickly.

The real issue with the house that can cause it to take a while to sell isn't the price (it is attractively priced) but the fact that some people just won't want the amenities that it has. It has a guest house, pool, two double garages on 2 acres with extensive fencing including the front yard with a gate. If someone wants those features then the house could sell very quickly priced as it is. But, someone who doesn't want them won't want the house regardless of the price.

In the acreage houses near where I live even with the market was relatively hot it could take a year for a competitively priced house to sell simply because each one was so individual that it really depending on the right buyer coming along.

However when we bought this house it was exactly what we wanted and we put it under contract within 2 weeks of it being listed. So, we'll see.

 

[JacqJolie]

Congratulations Katsmeow!

I retired for a whopping 2 months and 3 days before picking up another part-time contract job at about the same daily rate as you. The market was giving me the butterflies in my stomach more than anything and I think I was so used to being in the accumulating phase I couldn't stomach the thought of actually withdrawing any money from the nest egg. And the golden handcuffs weren't chafing enough, I guess.

I would be willing to place a bet that you don't last past a year part-time or as soon as you sell your house. At least I hope so.

Your expenses seem quite low in some categories like travel, entertainment etc. considering the size of your family. I found the freedom and celebration made mine go up and it turns out I worried for nothing as the investments were > expenses after all. Does your dh have plans for what he's going to do all day?

 

[Danmar]

Congrats. What are your non-financial retirement plans?