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Nothing new here but please indulge me
Old 05-04-2010, 07:48 PM   #1
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Nothing new here but please indulge me

Thank you in advance for your opinions.
Like soo many who write here for advice,I too am on the fence. In july i ll be 49 and my daughter will be 2. I ve thought about retiring at about 50 for at least 10 yrs. I think about it alot. I have about 1.05 mil and can sell my business for about 200k. Financial experts,my accountant and practically everything i read states i wont have enough but if i dont have enough neither does 99% of the population. What do you think? Can i make it work?
Work is a big part of my social life and is also somewhat intellectually stimulating but that is also because work takes up most of my time and has been my main focus for 25 years. However,I truly believe it is negatively affecting my health.Just dont have time to take care of my body as I wish.
One is told that you should have many hobbies and prepare for er but i think the lack of time and energy limits that pre er too. I think i could be bored for awhile but that i will develop new interests. I think our lives become habitual,,what we think and do and that without free time it s hard to develop a new lifestyle. With free time I would think i would have much more energy. Plus taking care of my child will occupy plenty of time too.
None of this maybe new hear but I appreciate your thoughts,
J
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Old 05-04-2010, 07:52 PM   #2
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Welcome Jakester. In order to determine whether you have enough, you need to know how much in the way of yearly expenses you need to cover with your $1.2 million. If it is less than $48k, you might have enough. Try a few runs of Firecalc to see for yourself (link at bottom of page).
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Old 05-04-2010, 07:57 PM   #3
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Using safe withdrawal rates you could generate maybe $48k/year safely.
perhaps using somewhat more aggressive (and less safe) withdrawal rates you could take maybe $60k/year. And then throttle it back some when Social security kicks in. If that kind of income works for you then go for it.

Don't forget health care and probably increased inflation and taxation risk.

It seems a little slim to me and I personally would suggest working and accumulating a bit longer to fund a safer and perhaps more lucrative retirement.
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Old 05-04-2010, 08:16 PM   #4
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Around age 50, I switched to half-time. Since you have your own business, it seems to me that you could figure out a way to go part-time as well. Of course, I expect a little push back from this suggestion, but please give it serious thought and consideration.
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Old 05-04-2010, 08:17 PM   #5
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I dont know if that would be enough or not - it seems a little light for the timeframe you are looking at. I would also be more cautious given you have a 2 year old. Kids are expensive to raise, as is healthcare in general.

Another option might be to work part-time at something you enjoy? That way, you wouldn't be withdrawing as much, leaving yourself a little extra room.
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Old 05-04-2010, 08:25 PM   #6
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Need more information.

What are your expenses? What can you cut your expenses to be? What is your basic have to have expenses? What is discretionary but you want to have it? That is, I have some expenses that I have to pay while others are more discretionary and could be reduced or eliminated if necessary.

Are you a single parent or is there a spouse who contributes (or uses) household income?

What about health insurance?

What about options for part time work to bridge gap between 50 and SS?

What about housing? Do you have a paid for (or almost paid for) house?
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Old 05-04-2010, 08:29 PM   #7
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jakester, I do not know if your asset pile is quite enough. However, we are always testing portfolios and withdrawals vs. the absolute worst case scenarios even though they occur rarely in history. If you are burning out and need to escape without quite enough cash, one possibility is to sell the business and take a 6 to1 month sabbatical. Rest up, recover, spend some time remebering or rediscovering who you are. At the end of that time, you can revisit things. If your asset pile has grwon sufficiently, perhaps you are done for good. If not, you will need to find a way to generate an income. But it just has to cover expenses while the pile grows and it can be something low stress or in a different line of work.

I am getting closer and closer to burnout myself, albeit at a substantially younger age. My asset pile will likely be on the skinny side when I hit my limit, so I expect to do something much as I describe above.
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Old 05-04-2010, 09:49 PM   #8
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thanks for the replies.
If my investmenst earned nothing ,the money should last 20 yrs? it seems 4% swr is designed so that your money never runs out ,but we do. Am i wrong here? It seems there is a trememdous concern regarding the last few years of life.Sorry if that sounds morbid or is it just ignorant of the facts?
Regarding burnout. I agree. However,I also think i would be physically healthier if i didnt work. This is something i ve read from a few at this site. I think physical health supercedes all other values. Someone told me recently that " we spend our health to have money and then we spend our money to have our health" . Again,perhaps i worry to much but i ve been thinking that at 50 if i dont take better care of my physical health it may affect the remaining ( god willing) decades of my life. But if i can stop working and really focus on my health ( yoga,daily walks,workouts,meditation,etc) i can with a little luck too have better health the rest of my life. Does anyone have thoughts on this? I personally see many very healthy people in their 70 s and 80 s and many who dont,,,and sometimes it s genes but often they have put the effort to being healthy. I would rather live w less money and be healthy then have more money and be less healthy.
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Old 05-04-2010, 09:53 PM   #9
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i live in a townhome,i have no debt,,cost of living on east coast is about 3000 a month not including varying costs in daycare
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Old 05-04-2010, 10:21 PM   #10
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Quote:
Originally Posted by jakester View Post
I would rather live w less money and be healthy then have more money and be less healthy.
Yes, many of us here, including myself of course, struggle to find a balanced answer to this question. Some days, it feels like we got it. Some other days, the nagging doubt comes back to make us wonder if we made the right move.

I do not have any new idea to offer, but would like to welcome you to the forum.
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Old 05-04-2010, 10:57 PM   #11
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Quote:
Originally Posted by jakester View Post
Thank you in advance for your opinions.
Like soo many who write here for advice,I too am on the fence. In july i ll be 49 and my daughter will be 2. I ve thought about retiring at about 50 for at least 10 yrs. I think about it alot. I have about 1.05 mil and can sell my business for about 200k. Financial experts,my accountant and practically everything i read states i wont have enough but if i dont have enough neither does 99% of the population. What do you think? Can i make it work?
Work is a big part of my social life and is also somewhat intellectually stimulating but that is also because work takes up most of my time and has been my main focus for 25 years. However,I truly believe it is negatively affecting my health.Just dont have time to take care of my body as I wish.
One is told that you should have many hobbies and prepare for er but i think the lack of time and energy limits that pre er too. I think i could be bored for awhile but that i will develop new interests. I think our lives become habitual,,what we think and do and that without free time it s hard to develop a new lifestyle. With free time I would think i would have much more energy. Plus taking care of my child will occupy plenty of time too.
None of this maybe new hear but I appreciate your thoughts,
J
Are you married or a single parent? I assume you own a suitable house free and clear?

In either case, I would not wish to retire, single or married, with a 2 year old and roughly $1.2mm. What does your wife think about a tight budget? Remember if it doesn't appeal to her several bad things could happen to you. If you have a two year old I assume your wife or ex-wife is youger than you are?

Ha
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Old 05-05-2010, 07:42 AM   #12
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single man,,,,thanks for the welcome. I dont comprehend that one cannot retire on an amount of money that 99% of the pop will never have. I m missing something.
I like nw bound s answer that life s choices are sometimes vague,there are soo many factor. Money,health,social,being an example to my child vs spending more time w her,,on and on. I feel it like a see saw,,,on one side is time w her and better health for me,,,on the other side is standard of living ,utilizing some of my talents at work and something to do w my time.
Regarding something to do w my time,,i like watching the wheels go round and round meaning,i m one who can spend alot of time just relaxing,appreciating nature,thinking,reading,etc. That I would think is something for an er too.
Also,isnt some part of this about security way way into the unknown future, i have enough for at least 20 years and i m making decisions about my life from 75 on right now.Or do I have that wrong.
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Old 05-05-2010, 08:13 AM   #13
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QUOTE: I dont comprehend that one cannot retire on an amount of money that 99% of the pop will never have. I m missing something. END QUOTE

Let me try to help a little here: First, 99% of the population will NOT be retiring early. Certainly not at 50. Many will work until they can't, and then live on SS and any pension income they have, or rely on their kids to help them. People with lower incomes rely much more on SS to fund their retirements than the people on this forum.

People retiring at 65 or later with little saved will also rely on Medicare and then Medicaid for their health care. I am no expert on those, but I don't think anyone on this forum hopes to ever need Medicaid. At 50, you have 15 years of self-insuring to pay for before Medicare kicks in.

Add that to the fact that 99% of the "regular" population will NOT be retiring with kids still in school, and you knock off more big expenses that early retirees like you will face.

If you asked if you could retire with $1.2M at age 70, we would all say yes. But retiring early is a whole different ballgame, and not one that 99% of the population can even think about playing (I am just using 99% because you did - I don't know actual numbers).

Hope that helps a little,
kaudrey
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Old 05-05-2010, 08:27 AM   #14
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Originally Posted by jakester View Post
Also,isnt some part of this about security way way into the unknown future, i have enough for at least 20 years and i m making decisions about my life from 75 on right now.Or do I have that wrong.
I wouldn't say you have this wrong - but that IS how you have to look at it. It is very hard. I am 41 and will retire in my mid 50s. It wouldn't be enough for me to be able to say "I have enough for 20 years". Females have longevity in my family (knock on wood). What if I live to be 100? Do I want to have to rely on the gov't or my nieces to take care of me? Personally, no. But maybe it wouldn't bother you if you had to rely on your kid 30 years from now. My calculations and spreadsheets go out to 95 and I don't plan to run out of money.

God-willing, I will live a long time. But if I die "early", my heirs will say "what was she saving all this money for?" Time of death is the biggest unknown among the many unknowns in planning for early retirement.

So, you say you have enough for 20 years. You would be 70. Then what? You'll just sit around and do nothing because you'll only have SS to pay all of your bills and you can no longer afford to do anything? What about your wife? How old will she be in 20 years? Is she OK living like a pauper on SS? This might be an extreme example, but it is just to make the point...that YES, you do need to look out past the 20 years.

Yes, lots of people do live on SS and small pensions (if they have them), because that's all they can do. Would it be their choice?
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Old 05-05-2010, 08:43 AM   #15
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Work is a big part of my social life and is also somewhat intellectually stimulating but that is also because work takes up most of my time and has been my main focus for 25 years.
Alarm bells went off in my head when I read this. As I found out, it is a HUGE jump going from a stimulating, active work environment to an environment in retirement where you have to come up with things to do. What are you going to do with your 2 year old all day? Seriously.

If you have concrete plans for what you are going to do in retirement then it's not such a problem. However, if you are just sick of work and feel like you are missing out on "life" working all day then I would suggest you reschedule your work environment to a part time basis or something like that first before you go cold turkey and totally quit.

I'm all for ER, but you need a real plan for what you are going to do in ER (not just projects around the house), and you also need enough money to enjoy ER (not sure you really do).

Background: I shut down my business because I was sick of it and I've been ERed for a little over a year now. I didn't have concrete plans (or realistic plans), and as a result I have "what to do?" crises from time to time (just had one in fact!), so take some time with this and be careful is all I'm sayin.
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Old 05-05-2010, 09:21 AM   #16
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I think a 14 month period of time to plan your retirement to July of 2011 should be a good period to contemplate your retirement. If your expenses can be maintained at $3,000 per month plus daycare which I am assuming would go away with your retirement? You'll need to figure what your taxes will be. As long as you are under $4,000 per month pretax withdrawls I don't see where there should be a problem.

My brother in-law felt the same way and retired at 48 with a paid off house, $400K in savings and a inflation indexed pension of 24K per year (though it is from the State of Illinois) retired to Arizona to a beautiful paid off house with a lovely pool and hikes every day the local mountains and is doing very well. 7 years later he is still doing very well.

If you believe your health is effected by your job, it most certainly will be. Over the next 14 months you should be budgeting and planning what you will be doing to verify the course you are inherently drawn to is correct or not. You should list what the most important part of you life is and can be and whether you will be able to follow that course of action.
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Old 05-05-2010, 09:23 AM   #17
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great name! I understand but see it this way. Our lives our habitual,we have physical and mental routines,,our work lives that comprimise the majority of our awake time are routines of decades,,and that suddenly stops. Our work routine was something that evolved over time. Our free time routine will take time too. Just to stop all the same thoughts will take time. I think it would be okay to not feel good about it for a couple of years. It s a transition. I ve seen people completely change when they retire.
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Old 05-05-2010, 09:49 AM   #18
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Your brother in law s lifestyle sounds wonderful. I love taking very long walks and hikes.
Every night i drive home from work i pass a park where lots of people are walking, in the past I wouldn t think much of it,now I get a little envious.
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Old 05-05-2010, 09:59 AM   #19
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hi Jakester, I share many of your sentiments. although i was pushed out, our financial position is somewhat similar and while intellectually I understand it's "just math", it sure FEELS like I should have enough money.....but I probably don't. my next stop is working part-time/consulting to get a decent work/life balance.

good luck!
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Old 05-05-2010, 10:07 AM   #20
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makes sense,,some of the happiest retires i know work part time,,,but very limited hours,,,like 2 days a week
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