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How do you live after FIRE ?
05-19-2019, 08:07 PM
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#1
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Dryer sheet wannabe
Join Date: Nov 2018
Posts: 16
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How do you live after FIRE ?
For those with no more jobs(Not while one spouse still has PT/FT jobs), is it through dividends/interest ? Rental income ? What else ? Trying to get some idea what successful FIRE people do to live before SS.
What about health insurance(Again not if one spouse still has a job and covers insurance) before Medicare ?
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05-19-2019, 08:11 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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I have my equities broker sweep all my dividends to my checking account. I have my bond broker do it with a phone call. If I need more dough I sell equities.
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05-19-2019, 08:18 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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My wife quit work at 50, and myself at 55.
We lived off after-tax investment until 59-1/2, then started IRA withdrawal. My wife started SS at 62, while I am waiting till 70 before taking SS.
Due to the bull market, our stash grew despite the withdrawal, which was not excessive at 3.5%/year, and down to 2% now.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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05-19-2019, 08:46 PM
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#4
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Dryer sheet wannabe
Join Date: Nov 2018
Posts: 16
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Do you mean traditional IRA ? I can start withdrawing traditional IRA penalty-free at 59.5 ? What about taxes - is this withdrawal taxed at ordinary rate ?
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05-19-2019, 08:50 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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IRA withdrawal is penalty-free at 59.5, but you have to pay regular income tax.
401k may be withdrawn penalty-free at 55 under the right conditions, and taxed as above.
PS. We rolled over our larger 401k's into the traditional IRA accounts. Due to specific circumstances, we could not tap our 401k at 55 anyway. Else, it would be better to keep the 401k separate from the IRA.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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How do you live after FIRE ?
05-19-2019, 08:54 PM
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#6
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Moderator Emeritus
Join Date: Aug 2007
Location: Northern Illinois
Posts: 16,543
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How do you live after FIRE ?
I have lived on after tax investments since I retired 5 years ago. Probably going to start taking enough out of IRA to stay within 12% bracket this year - income will be half from ira and half after tax for the next 2.5 years when I will start SS at fra. DW has a pension and we are on her retirement health insurance.
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05-19-2019, 08:57 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Regarding health insurance, we initially bought our own private insurance which was possible because we were healthy with no pre-existing conditions.
With ACA, it is a lot easier to get insurance now.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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05-19-2019, 09:13 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2009
Posts: 6,679
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I live off 12 monthly bond fund dividends and 4 quarterly stock fund dividends which pay my expenses including my ACA individual health insurance policy I buy through the state marketplace. I have been living this way for most of the last 11 years after I ERed in 2008 at age 45.
These 16 dividend payments provide me with a surplus, or cushion, which allows me to cover any smaller, unforeseen expenses.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.
"I want my money working for me instead of me working for my money!"
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05-19-2019, 09:38 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Apr 2016
Location: Dutchess County
Posts: 1,599
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Pension and 401k bridge to FRA SS, healthcare provided by former employer.
Life is easy peasy.
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05-19-2019, 09:51 PM
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#10
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Full time employment: Posting here.
Join Date: Apr 2015
Posts: 575
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Almost embarrassed to say and I certainly don't bring it up in casual conversation with friends and family. Retired at 54 with a state retirement pension paying 100% of my final years pay including a 2% yearly COLA. Retirement also includes 100% paid medical and dental through employer for myself and spouse. Also, just over a million in cash and various investments.
And before you jump all over me, this retirement system no longer offers this overly generous retirement, I'm lucky I started when I did. Newer employees have a much different plan now and Yes, I know how lucky I am.
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05-19-2019, 09:59 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Apr 2016
Location: Dutchess County
Posts: 1,599
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Quote:
Originally Posted by Drake3287
Almost embarrassed to say and I certainly don't bring it up in casual conversation with friends and family. Retired at 54 with a state retirement pension paying 100% of my final years pay including a 2% yearly COLA. Retirement also includes 100% paid medical and dental through employer for myself and spouse. Also, just over a million in cash and various investments.
And before you jump all over me, this retirement system no longer offers this overly generous retirement, I'm lucky I started when I did. Newer employees have a much different plan now and Yes, I know how lucky I am.
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I worked for the wrong state.
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05-19-2019, 10:10 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Dec 2018
Location: DuPage County IL
Posts: 2,697
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both retired at 55, both took SS at 62. until SS we lived on our pensions and a small inheritance. we had minor PT jobs that amounted to pocket money. wife had no-premium health coverage from employer. i had employer health coverage but had to pay single premium (~$550 p/m). zero debt at retirement.
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How do you live after FIRE ?
05-19-2019, 10:11 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Feb 2011
Location: central California
Posts: 1,134
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How do you live after FIRE ?
No pension or retiree health benefits. All investment earnings go into my checking account. Additional funds come from liquidating equities or bond funds or money market funds to bring my asset allocation back to 60:35:5, while keeping withdrawals to 3-3.5%. Upon reaching 70.5, begin required minimum withdrawals from IRAs and social security. First 12 months, paid for COBRA health insurance $2,100/month for 2. Currently paying $545/month for subsidized ACA ppo plan.
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05-19-2019, 10:17 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Jul 2015
Posts: 1,103
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DW and I retired without pensions or retiree healthcare. We are burning taxable savings (equity and bond index funds as well as cash) and managing income for ACA health insurance. We're recently started tapping an IRA, but slowly to minimize impact on ACA subsidy. Our withdrawal rate has been 4-4.5% over the last several years. We plan to pull early SS, although may hold off if the economy remains strong. Even with SS, our IRA's will fund most of our expenses. With SS online, we hope to get our withdrawal rate down to about 3.5% given that we have 36+ year planning horizon.
As a practical matter, we sell bonds or equities in our taxable accounts roughly twice a year, with some effort to time for market peaks. We hold 1-2 years in cash, in part to wait for these peaks, but mainly to sleep better at night. Most of the cash is with an online savings bank yielding 2%+, with monthly transfers to a brick & sticks checking account for bill pay.
__________________
Living the dream...
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05-20-2019, 04:04 AM
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#15
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Michigan
Posts: 4,939
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Small pension, interest and dividends, sell off a little as needed. No SS for 10 more years.
__________________
"The mountains are calling, and I must go." John Muir
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05-20-2019, 04:48 AM
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#16
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Moderator Emeritus
Join Date: May 2007
Posts: 12,890
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At the moment, I live on interests and eating through my capital.
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05-20-2019, 05:37 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2012
Posts: 6,098
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We currently live on pension + cash. We set enough enough cash so that we are not forced to sell equities before we choose to take SS.
My pension hits our checking account the first of the month. All bills are paid with a day or two of that event. This shows up how much we may have to withdraw from cash for our planned expenditures for the month. It looks like we will only spend about 30% of the cash we thought we would for this first year of FIRE. We are still reinvesting most of our dividends and capital gains
For health insurance we have cheap COBRA through the end of this year. My pensions makes us ineligible for any ACA subsidy. We are willing to pay a little more for retiree insurance through Megacorp than any ACA plan, as we will not have to change our current doctors. Included in our cash is roughly $100K in anticipation of health insurance/expenses for the 3 years before we are eligible for Medicare (it likely will come it less than that, we will see once we know what our premiums are for next year).
__________________
FIREd date: June 26, 2018 - "This Happy Feeling, Going Round and Round!" (GQ)
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05-20-2019, 05:48 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,654
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Cash. withdraw as needed.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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05-20-2019, 06:25 AM
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#19
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Recycles dryer sheets
Join Date: Feb 2017
Posts: 180
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I call myself 70% retired my DW says I am 95% retired. She's probably right and usually is. She still works 3 days a week and we run a small home based business we started 21 years ago. I doesn't make a ton of money, but gives us good write offs. We live mainly on dividends from investments. Next year I can start withdrawing from my Keogh and IRA as I turn 59-1/2. I may let it ride since we don't really need the extra income.
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05-20-2019, 06:29 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Nov 2015
Posts: 2,690
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Quote:
Originally Posted by Drake3287
Almost embarrassed to say and I certainly don't bring it up in casual conversation with friends and family. Retired at 54 with a state retirement pension paying 100% of my final years pay including a 2% yearly COLA. Retirement also includes 100% paid medical and dental through employer for myself and spouse. Also, just over a million in cash and various investments.
And before you jump all over me, this retirement system no longer offers this overly generous retirement, I'm lucky I started when I did. Newer employees have a much different plan now and Yes, I know how lucky I am.
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Wow.... Must be from IL... saying this as they have a big pension mess on their hands.
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