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Mental barrier
Old 03-10-2017, 12:09 PM   #1
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Mental barrier

Hello all, I'm teetering on the edge of FIRE, but despite things looking OK financially I have enormous anxiety and indecision. It's like skydiving, where the chute has been checked and doublechecked, checklist complete, its all good ... but just can't make that last step from 10,000 feet. In fact (this is pathetic) I gave notice, but two weeks later changed my mind, so still at work and not too happy. Bosses are glad since I'm highly valued here.

Just can't wrap my head around living off savings til we are dead; so many years (knock on wood), and no more paycheck. Normally I am the model of a rational thinker but not in this case. It's all feelings. Especially nervous about next 10 years before our SS kicks in fully. Expect SS at 70 for both of us.

FYI, here's financials in a nutshell.

Savings 2.5 million
own our house, 1.0 million
tiny pension, 6k
SS 15.6k for DW in 4 years, SS 41.4k for me in 10 years
Ages 60/64 for me and DW.
Target income 100k

Withdrawal rates: 3.8% for 6 years, 3.1% next 4 years, 1.5% thereafter.

I wonder if others on this forum would consider FIRE in this situation? I get the sense lots of folks here have aces in the hole like big pensions, 4M savings, etc.

OK enough whining from me
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Old 03-10-2017, 12:10 PM   #2
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I would have been gone five years ago...
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Old 03-10-2017, 12:37 PM   #3
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You gotta be kidding, right?

Just raw calculation says $2.5M at 2% interest will pay out your $100K annual for 34 years. If you earn even 4% interest, you'll cover the inflation 'spread' over that time period. Throw in SS and your pension and home equity for a buffer and there ya go!

Look, nothing is a fur-sur thing in this world. At age 60 (guessing here) you probably are already starting to feel the effects of aging. Isn't living life a little more important than further padding an already plush nest egg? There are worse things than having to cut back on expenses if it came to that and working is near the top of that list.
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Old 03-10-2017, 12:48 PM   #4
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Age is the mental safety net for significantly early retirement. Worst case scenario is going back to w*rk full or part time. Not as easy at 65 as it is at 55.
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Old 03-10-2017, 12:56 PM   #5
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Originally Posted by JeffInSeattle View Post
I get the sense lots of folks here have aces in the hole like big pensions, 4M savings, etc.
Uh, no?

What I DO HAVE is a very good idea of what I spend each year. Also, I have a paid off home that is worth maybe 1/4 of what your home is worth.
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Old 03-10-2017, 01:02 PM   #6
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+1 on the "I'd be retired already" in your situation sentiment. In fact, where you're at now, I'd be retiring AND looking to spend a bit more than you have currently planned. Maybe some extra/nicer travel in your retirement?
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Old 03-10-2017, 01:51 PM   #7
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Quote:
Withdrawal rates: 3.8% for 6 years, 3.1% next 4 years, 1.5% thereafter.
If the 3.8% is bothering you, why not take SS earlier? Hey, I'm a big fan of delaying SS to age 70 for the 'longevity insurance' benefit (not based on any 'break even' analysis), but you acknowledged this is emotional, not rational.

With SS earlier, you could flatten those rates, and maybe they would not look as scary to you? I think most here would consider a 3.0% WR to be in very safe territory, and 2.5% or lower is getting to the point that if that isn't going to work, we all have worse things to worry about. You could run the numbers, but eyeballing it, it seems with some SS early, you could get all phases to 3.0% and probably < 2.5% long term, since you would be at 1.5% long term under your plan.

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Old 03-10-2017, 01:57 PM   #8
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I want to say thank you for all your kind, thoughtful replies. It really helps. What a great community!
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Old 03-10-2017, 01:58 PM   #9
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SS at 41.4k per year, I did not even know that much was possible.

You are probably being overly cautious, pull the string!
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Old 03-10-2017, 02:02 PM   #10
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Good by me.
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Old 03-10-2017, 02:03 PM   #11
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Originally Posted by moneyviking View Post
SS at 41.4k per year, I did not even know that much was possible.

You are probably being overly cautious, pull the string!

Made me look!

https://www.fool.com/retirement/2017...017-and-b.aspx

Quote:
Their benefits will rise for every month they delay Social Security, up until age 70, when their monthly check will max out at $3,538 per month.
3538 ⋅ 12
= 42456

-ERD50
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Old 03-10-2017, 02:37 PM   #12
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When we are younger, life seems infinite. As you start getting into the last quarter, you start thinking seriously about how you want to spend the remaining years. For some of us, spending that time at work is not our first choice, once we have an option. What is your first choice of how to spend your time?
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Old 03-10-2017, 02:43 PM   #13
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Originally Posted by W2R View Post
Uh, no?

What I DO HAVE is a very good idea of what I spend each year. Also, I have a paid off home that is worth maybe 1/4 of what your home is worth.
Exactly. I wonder what is the real issue, if any?
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Old 03-10-2017, 02:46 PM   #14
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Originally Posted by JeffInSeattle View Post
I get the sense lots of folks here have aces in the hole like big pensions, 4M savings, etc.

OK enough whining from me
I will trade you my pension with survivor payment for your 2.5m.
Let me know when you want my "Ace in the hole"
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Old 03-10-2017, 02:49 PM   #15
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Originally Posted by REWahoo View Post
I would have been gone five years ago...
Funny you should say that... out numbers are broadly similar to the OP's and I retired 5 years ago.

OP, IMO you're good to go... but you already knew that. Change is hard.

While I think you should just go cold turkey... if for some reason you can't find the courage could you talk them into a change to 1/2 time.... 50% of pay, 50% of benefits except for health insurance same as a FTE.. that what I did for many years before I quit.
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Old 03-10-2017, 03:09 PM   #16
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I will trade you my pension with survivor payment for your 2.5m.
Let me know when you want my "Ace in the hole"
Me too!
I got a $65K pension w/100% survivor benefit and an annual 5% COLA cap, about half a million in IRA and a SS benefit of $50K a year for me and DW combined. I won't need to touch my IRA until they make me at 70 1/2. What I'll do with it I don't know as I can't rightly find ways to spend the $115K I'm bringing in now.

Actually, You'll be surprised how much your spending will be in retirement. I sure was. After the house was paid off, I average $6,000 a month with maybe $3200 of that as expenses that keeps me and DW 'happy'. The rest we use for gifting, extra stuff like trips, etc.
My FA at Fidelity says I'm pretty much 'can't fail' to make it to death at this rate.

If you haven't yet, meet with an estate planner as well. You got a lot of asset there to pass along when your time's up.

If you are not already tracking your spending, get busy doing so with something like Quicken. It can turn into a fun hobby if you let it, and it certainly can give you the peace-of-mind you are looking for.
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Old 03-10-2017, 03:41 PM   #17
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Originally Posted by JeffInSeattle View Post
so many years (knock on wood), and no more paycheck
How many, exactly?
The way I look at it is, it's too few years, not too many...
You want to wait until there are even fewer left?
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Old 03-10-2017, 03:48 PM   #18
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I guess I will play devils advocate a little.

Here's the thing and I see this a lot on here. You have a net worth (assuming your home is paid off and you have no other debt) of $3.5 M with your home consisting of 30% of your NW. You want to generate $100k from the $2.5 M of investable assets.

After taxes how much is left of the $100K?

What are property taxes and maintenance costs on a million dollar home?

Your wife will be eligible for MEdicare in a year. You will have 5 years before MEdicare kicks in so the cost of a medical plan needs to be factored in. These costs are on top of food, utilities, cars, home repairs, travel, etc.

What is the AA of the $2.5 M? If half is invested in stocks and we see a major correction and the $2.5 M becomes $1.75M will you cut back or do you have a cash bucket to carry you a number of months/years?

Again, not saying things won't work out. Just make sure you have all the bases covered. Good luck.
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Old 03-10-2017, 04:34 PM   #19
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Originally Posted by JeffInSeattle View Post
I wonder if others on this forum would consider FIRE in this situation? I get the sense lots of folks here have aces in the hole like big pensions, 4M savings, etc.

OK enough whining from me
You have to know we all come into RE with different situations. I RE 2 years ago at 53 after having a pacemaker installed at 51. I don't have a million $ house... not even 1/4th of that. No pensions other than SS eventually (hopefully). Some of us my look at your case as having the ace in the hole.

As long as your expense estimates include healthcare and some LTC, then you look good.

I'm sure there are some that are better prepared than you and some less prepared that I am. That really doesn't matter. What matters is that we are prepared.
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Old 03-10-2017, 05:19 PM   #20
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Your target income looks suspiciously like a round number guess.

If I were you, I'd track actual expenses for 6 months to a year (or go back and reconstruct those records for the past six months or year). Maybe you find that you're actually spending $80K or $120K. If it's $80K, I'd be retired before the end of the day. If it is $120K, you may want to work a little longer or find ways to cut back.

Downsizing your $1M home is also a possibility; that would reduce home maintenance costs and free up capital to add to your investments.

Good luck!
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