Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Generic ER: *Any takers?
Old 04-04-2005, 03:41 PM   #1
Recycles dryer sheets
 
Join Date: Oct 2004
Posts: 214
Generic ER: *Any takers?

This is a composite version of some prior topics but here goes anyway...

Generic situation:

A couple, 50 years of age. "Average" house and cars paid for. No debt. A million bucks in cash (50/50 pre and post tax). Average health. No pensions other than SS.

Would you ER?
RockMiner is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Generic ER:  Any takers?
Old 04-04-2005, 05:16 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Re: Generic ER:  Any takers?

Definitely.
eridanus is offline   Reply With Quote
Re: Generic ER:  Any takers?
Old 04-04-2005, 05:18 PM   #3
Recycles dryer sheets
 
Join Date: Jan 2005
Posts: 118
Re: Generic ER:  Any takers?

Greetings-

Comes close to describing our situation. The answer is no. First reason - 11 year old son. Second reason - you don't say anything about health insurance. I am hoping for some solutions to those problems, but as a generic proposition, I would not take that ER without health insurance.

rapoole
rapoole is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-04-2005, 06:10 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
Re: Generic ER: *Any takers?

The answer is no.

We retired in 1993(age 49) - 300k financial assets plus 50k duplex giving 6k/rent. No health insurance for me then or now. She has union coverage health insurance.

History and the roll of the dice has been good - so far.

If you have to ask - the answer is no.

The stretch was messy - but we made it work, sold the duplex, 2 years temp work between us, pensions at 55 , etc., etc - plus loss of house roof and contents(no insurance on fish camps) due to a tornado and three moderately chewy hurricane hits - temp work paid for a lot of it.

Now - I understand if you are willing to go ex-pat, the life of Riley awaits.

To repeat - if you have to ask, the answer is no.

On the other hand - no guts, no glory. Warning! This poster is a left handed INTJ and lives in the Louisiane swamp - by choice! Bon Temps Rolliere - let the good times roll.

BTY - my all time best personal 'cheap SOB' budget for one year was 12k back in the 90's.
unclemick is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-04-2005, 06:51 PM   #5
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 422
Re: Generic ER: *Any takers?

Guessing that is around 1.3M+ - I would FIRE on the spot! Cheers!
preben is offline   Reply With Quote
Re: Generic ER:  Any takers?
Old 04-04-2005, 07:33 PM   #6
Recycles dryer sheets
 
Join Date: Feb 2004
Posts: 123
Re: Generic ER:  Any takers?

I'm pretty much Mr. Generic and won't be much help with a split vote, as I'm undecided right now.

I can recall a wiser and younger time when beyond the basics, incremental costs were translated into six packs of beer and pairs of jeans as the basic units of value. At the generic level of my older age my current basic incremental units are health insurance and travel. By my best estimates the generic ER includes spartan health insurance with moderate deductable, probably no LTC insurance, and modest but some travel. The longer I work and save, the more or better these basic exchange units become. And how much that is worth in terms of years worked. I think at the generic you're on the edge of saying yes, but with a gamble on your health and also with a satisfaction of a stay at home or frugal travel and car budget. These are the incremental jeans and six packs of my Mr. Generic.

At a 4% withdrawal rate everything seems ducky, but I'm starting to feel a bit more comfort with a 3% or less rate. That part for me is still an issue of consideration and study.



__________________
"He who speaks of dryer sheets has not seen the clothes line." Al B. Tross
Roger_R is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 02:35 AM   #7
Full time employment: Posting here.
 
Join Date: Mar 2005
Posts: 557
Re: Generic ER: *Any takers?

FI yes. Of course, it depends on expenditures. I know people with 7 figure assets who do not consider themselves FI because of their "must cover" expenses. I feel comfortable that 1 mil could result in 40 g's, inflation adjusted, withdrawl, and that amount could be sufficient for FI. Not risk free, but no amount is.

RE don't know. Are many other factors to consider. Kids, college, other family obligations are one. Another is the extras that you want. Most important is the relation with work. The nonsense that Brewer12345 wrote about recently with the evaluation process would cause me the scoot in a second. OTOH if work is enjoyable, maybe not.
uncledrz is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 06:29 AM   #8
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Generic ER: *Any takers?

I would not. Your best earnings years are usually in your 50s. Re: compounded growth, the most powerful factor is time. It takes exponentially more money to retire for every year you chop off the end. cutting out 50-60 cuts out where the real growth occurs.

Every person is different, but i'm looking for a happy medium. My target age is a health 58. You can wait too long and end up working till you die. But you can also stop too soon and never really see the real power of compounded growth.

Azanon
azanon is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 06:52 AM   #9
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 422
Re: Generic ER: *Any takers?

Azanon have a good point but on the other hand one might not live to see 58... :P

I chose the middle of the road; by having an initial w/r of only 2% I will STILL see compounded growth + a potential parttime hobby might also add a bit.

For the mentioned generic couple it depends on many variables but if one has a net worth of 1.3M and STILL fear not being able to FIRE then it is time to look at ones expenditures... (disclaimer; since we do not know what country couple LIVE I could imagine that health care if in the USA is the biggest shaddow...).

Cheers!


Quote:
I would not. *Your best earnings years are usually in your 50s. *Re: compounded growth, the most powerful factor is time. * It takes exponentially more money to retire for every year you chop off the end. *cutting out 50-60 cuts out where the real growth occurs.

Every person is different, but i'm looking for a happy medium. *My target age is a health 58. *You can wait too long and end up working till you die. *But you can also stop too soon and never really see the real power of compounded growth.

Azanon
preben is offline   Reply With Quote
Re: Generic ER:  Any takers?
Old 04-05-2005, 06:54 AM   #10
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
Re: Generic ER:  Any takers?

The thing is you could FIRE, pero por que? If it's just to say, "hey, I'm retired!" well, if that's good enough for you, great! But what do you want to do that you can't do while working a job? Have you mentally prepared yourself for the change, have you cultivated some hobbies/passions? This board tends to focus on the money side of the equation, which is great, but it's only part of what's needed to retire successfully. So I understand it's a hypothetical, but unless you have a plan, a vision, I say keep working at least a couple more years and make that plan, maybe a slow transition to retirement, meanwhile keep raking in that dough. But if you have something you really want to do, don't hesitate, like it's been said, you'll regret more of what you didn't do than what you did.

Health care, big variable there that's left out.
laurence is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 07:18 AM   #11
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 188
Re: Generic ER: *Any takers?

Rok -- I was in your generic situation at 50 and chose to not retire.

My wife and I perceived the need to enrichen the savings (the future is too uncertain), plus get some kids through college. That ends in two years (when I will be 60). In the meantime, I've cut the stress level dramatically by leaving corporate America for the nonprofit world (although I still dabble in corporate stuff).

Cutting stress goes a long way toward mitigating having to continue working.

playaman is offline   Reply With Quote
Re: Generic ER:  Any takers?
Old 04-05-2005, 09:01 AM   #12
Thinks s/he gets paid by the post
Eagle43's Avatar
 
Join Date: Jan 2005
Location: DFW
Posts: 2,016
Re: Generic ER:  Any takers?

I retired from military at 38; retired from Mega-Corp at 60. I would never have retired in 40s or 50s. I've been poor, and don't wanna go there, anymore. Now, with the pensions, social security for DW and me, IRAs, and most importantly, TRICARE for health, being poor should be out of the question. If it all vanishes tomorrow, however, I'll just go back to work.

Recommendation: Retire TO something, not FROM something. If you can't define the TO, then keep working until you can.
__________________
Resist much. Obey Little. . . . Ed Abbey

Disclaimer: My Posts are for my amusement only.
Eagle43 is offline   Reply With Quote
Re: Generic ER:  Any takers?
Old 04-05-2005, 09:17 AM   #13
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
Re: Generic ER:  Any takers?

Eagle, you said it much more succinctly than I ever could have.
laurence is offline   Reply With Quote
Re: Generic ER:  Any takers?
Old 04-05-2005, 09:30 AM   #14
Recycles dryer sheets
 
Join Date: Oct 2004
Posts: 214
Re: Generic ER:  Any takers?

There are lots of interesting responses here. This generic situation was intended to be somewhat "edgy". Also, I didn't want any variables like kid's education cost to complicate the decision process (should have said so).

The consensus answer looks to be NO, but with consideration given to intangibles such as work stress, and reasons for retirement.

Lack of paid health care is by far the biggest issue, no shock there. Oddly, no one attempted to factor in eventual Social Security benefits. Does that mean they are discounted as being too uncertain to rely upon? Finally, the obvious question: if a million isn't enough, what is?

Rok
RockMiner is offline   Reply With Quote
Re: Generic ER:  Any takers?
Old 04-05-2005, 09:40 AM   #15
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
Re: Generic ER:  Any takers?

Well, actually my plan is to retire between 45 and 48 with what will be about a million dollars in today's dollars, and house paid off. So I would say that it can be enough, depending on the circumstance. The x factor is health insurance, we plan on high deductible insurance, self insure the little things - we are active and in good health, I run 15 miles a week, my wife did a half marathon while pregnant. As far as SS, I went to their website and caclulated the difference in payments for me if I retired at 45 and 62, and the difference was not enough to make an impact, not even close.
laurence is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 10:57 AM   #16
Full time employment: Posting here.
 
Join Date: Mar 2005
Location: Punta Gorda, FL
Posts: 828
Re: Generic ER: *Any takers?

Insurance is the kicker. The wife and I will have more because of her pension, and can continue with her health plan at the going group rate. My wife has some existing conditions, heart and back, that would not enable her to get insurance at a resonable price.

If health care was included I'd be out with a million and no debt in a heartbeat. But without health care Id be afraid of losing everything when I wouldn't be able to recoup.
dm is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 11:33 AM   #17
Recycles dryer sheets
 
Join Date: Jan 2005
Posts: 118
Re: Generic ER: *Any takers?

"Finally, the obvious question: if a million isn't enough, what is?"

My personal answer is I could see living on 4% of $1 million, and future Social Security benefits would help when they kick in 12 to 17 years hence. However, without insurance, you risk having medical costs take it all away. So to me, $1 million + health benefits makes ER conceivable at 50.

rapoole
rapoole is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 12:20 PM   #18
Thinks s/he gets paid by the post
Sheryl's Avatar
 
Join Date: Apr 2004
Posts: 1,463
Re: Generic ER: *Any takers?

One question: How did some posters get from "million in cash" to assumptions of $1.3 million?

I can certainly see it's feasible, but not my choice. I'm 44, and my S.O. is 49. We've set our FIRE goal at $1.5M.

We will have to fund our own catastrophic health care policy out of that. One house will be paid for and lived in, the other may be rented out or sold to get to the $1.5.

For us it's a matter of balancing:

(a) not wanting to miss out on peak earnings
("Golden Handcuffs")

(b) being young enough to enjoy the travel and active sports we love, and

(c) being comfortable that we won't have to scrimp. Plus,

(d) getting his son thru trade school, out of the house and self-supporting.

We've just recently started outlining what we would actually DO during a typical year of ER - how much travel, at what cost, etc., in order to feel comfortable with our target budget.
Sheryl is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 03:57 PM   #19
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 422
Re: Generic ER: *Any takers?

Sheryl was the 1M liquid + house+cars paid that led to the 1.3M+ estimate of total net worth. One could sell and rent/travel and live of the 1.3M. Cheers!
preben is offline   Reply With Quote
Re: Generic ER: *Any takers?
Old 04-05-2005, 04:52 PM   #20
Thinks s/he gets paid by the post
gayl's Avatar
 
Join Date: Jun 2004
Location: Diablo Valley (SF Bay Area)
Posts: 2,705
Re: Generic ER: *Any takers?

Walked out at 52 with a hell of alot less than you have, but I have HC insurance. 51 yo sister just bought it for her family for 200 / m. So it depends on what you want to do in retirement.

BTW: my investments [not inc paid off house] are worth more now than when I retired in Feb 2004, and my debts are lower [just have 1 kid's college bills to go and he is paying those off]
gayl is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Generic Retiree Medical Question OldAgePensioner Other topics 6 06-09-2006 10:30 AM
any takers? dory36 Other topics 19 03-22-2005 06:44 PM
Hi! <insert generic rest of subject here> random Hi, I am... 21 08-19-2004 04:13 PM

» Quick Links

 
All times are GMT -6. The time now is 07:19 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.