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Opinions on where I stand
Old 07-16-2019, 12:18 PM   #1
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Opinions on where I stand

I would like to retire as soon as possible. I have accounts at both Vanguard and Fidelity so I have been able to utilize the opinions of advisors at both places. Both have given me a 100% success rate. I have also ran Firecalc using several different scenarios and am getting 100% success. To further analyze I had the financial person at our credit union run our numbers. She gave me a positive outcome as well. I am looking for opinions from the members here to see if I might be able to actually pull this off. Here goes, I will try to make this as short and to the point as possible.

My wife and I are both 47 years old with no kids and zero debt. Our assets are as follows

2.8 mm in a 60/40 AA portfolio

$450K in cash

$600K in various recreational real-estate. My lake cabin is included in this figure.

Collector car collection valued at around $225K, roughly

The total of the above $4.075mm.

Currently I do own and operate a small business. I have talked to the employees and a business broker. There may be a potential sale on the horizon but I am not figuring on getting anything from it for my retirement planning.

Also our accounts receivable will eventually come in. Currently it hovers around $150-$200K but I don’t figure that in as well. It will depend on the taxes that apply that year and I always have thought of it as counting your eggs before they are hatched if I were to plan on any of it.

We will receive a combined total of about $20K annually from Social Security in 15 years.

I want to spend about 100K annually. Our current expenses including health insurance are $93K. Keep in mind our invested assets are only $2.8 mm right now. At some point I will certainly sell some of the land, cars and maybe some day the cabin. But those things are a lot of what I plan to do in retirement, for the short term at least.

I have a personal goal of getting my portfolio to $3 mm before I thought seriously about retiring. It might happen soon. I feel like a dog chasing a car, I want to know what to do when I get there!

Thoughts, ideas, criticisms?

Thanks in advance.
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Old 07-16-2019, 12:33 PM   #2
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Looks good to me.
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Old 07-16-2019, 12:39 PM   #3
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Originally Posted by 427Vette View Post
I would like to retire as soon as possible.

My wife and I are both 47 years old with no kids and zero debt.
The total of the above $4.75 mm.
Hmm, my calculator says $4.075 mm.

Quote:
We will receive a combined total of about $20K annually from Social Security in 15 years.
No idea why you would want to start Social Security in 15 years, rather than waiting until you are 70. It won't matter a huge amount for you either way though. It's still nice to maximize an inflation-protected income stream though, IMHO.

Quote:
I want to spend about 100K annually.
Thus, you can retire today.

Quote:
Our current expenses including health insurance are $93K.
Without knowing the details of your current insurance, I'd expect your healthcare costs will increase over time.

Quote:
I have a personal goal of getting my portfolio to $3 mm before I thought seriously about retiring.
Why? What's the point of this magic $3 mm number?

If you really want to retire "as soon as possible", do it today. Otherwise, do whatever makes you feel good. If you are correct about your projected spend rate, you'll be fine no matter what you do.
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Old 07-16-2019, 12:45 PM   #4
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Originally Posted by 427Vette View Post

$450K in cash

<snip>

Thoughts, ideas, criticisms?

Thanks in advance.
What yield are you getting on that much cash?
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Old 07-16-2019, 01:11 PM   #5
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What yield are you getting on that much cash?
The cash is our operating money for our business so minimal yield at this time.
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Old 07-16-2019, 01:20 PM   #6
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Hmm, my calculator says $4.075 mm.

On my balance sheet my personal home was listed along with everything I stated. I neglected to remove it from the numbers that I posted.

No idea why you would want to start Social Security in 15 years, rather than waiting until you are 70. It won't matter a huge amount for you either way though. It's still nice to maximize an inflation-protected income stream though, IMHO.

We have 15 years to decide the best way to take the SS. We will obviously make that decision closer to that time.


Thus, you can retire today.


Without knowing the details of your current insurance, I'd expect your healthcare costs will increase over time.


Why? What's the point of this magic $3 mm number?

It is just a feel good number. I see post and threads all of the time referring to “FU” money. This is apparently my FU number.

If you really want to retire "as soon as possible", do it today. Otherwise, do whatever makes you feel good. If you are correct about your projected spend rate, you'll be fine no matter what you do.
Thanks for your input.
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Old 07-16-2019, 01:31 PM   #7
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Originally Posted by 427Vette View Post
I would like to retire as soon as possible. I have accounts at both Vanguard and Fidelity so I have been able to utilize the opinions of advisors at both places. Both have given me a 100% success rate. I have also ran Firecalc using several different scenarios and am getting 100% success. To further analyze I had the financial person at our credit union run our numbers. She gave me a positive outcome as well. I am looking for opinions from the members here to see if I might be able to actually pull this off. Here goes, I will try to make this as short and to the point as possible.

My wife and I are both 47 years old with no kids and zero debt. Our assets are as follows

2.8 mm in a 60/40 AA portfolio

$450K in cash

$600K in various recreational real-estate. My lake cabin is included in this figure.

Collector car collection valued at around $225K, roughly

The total of the above $4.075mm.

Currently I do own and operate a small business. I have talked to the employees and a business broker. There may be a potential sale on the horizon but I am not figuring on getting anything from it for my retirement planning.

Also our accounts receivable will eventually come in. Currently it hovers around $150-$200K but I don’t figure that in as well. It will depend on the taxes that apply that year and I always have thought of it as counting your eggs before they are hatched if I were to plan on any of it.

We will receive a combined total of about $20K annually from Social Security in 15 years.

I want to spend about 100K annually. Our current expenses including health insurance are $93K. Keep in mind our invested assets are only $2.8 mm right now. At some point I will certainly sell some of the land, cars and maybe some day the cabin. But those things are a lot of what I plan to do in retirement, for the short term at least.

I have a personal goal of getting my portfolio to $3 mm before I thought seriously about retiring. It might happen soon. I feel like a dog chasing a car, I want to know what to do when I get there!

Thoughts, ideas, criticisms?

Thanks in advance.
A $3M portfolio, combined with SS, should support the $100K budget, but there's not a lot of room for error. You can expect health insurance to increase at about 3x the CPI, so it will get much more expensive as you approach your 60's and crimp your budget. Your $1M in non-portfolio assets would be a good backstop, but until you commit to converting them to portfolio assets you shouldn't count on them for support.

If you haven't seen Gumby's thread, you may find it useful. Some Important Questions to Answer Before Asking - Can I Retire?
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Old 07-16-2019, 01:35 PM   #8
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I am not sure how you structured the business, but if you sell check into QSBS, qualified small business stock. It will save you on taxes.
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Old 07-16-2019, 01:58 PM   #9
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The cash is our operating money for our business so minimal yield at this time.
OK. I was thinking that you could invest it for higher yield, but it sounds like you can't.
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Old 07-16-2019, 02:43 PM   #10
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OK. I was thinking that you could invest it for higher yield, but it sounds like you can't.
I was a little confused on that too. It sounds like the business and personal funds are sort of intertwined, but not really.
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Old 07-16-2019, 04:39 PM   #11
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A $3M portfolio, combined with SS, should support the $100K budget, but there's not a lot of room for error. You can expect health insurance to increase at about 3x the CPI, so it will get much more expensive as you approach your 60's and crimp your budget. Your $1M in non-portfolio assets would be a good backstop, but until you commit to converting them to portfolio assets you shouldn't count on them for support.

If you haven't seen Gumby's thread, you may find it useful. Some Important Questions to Answer Before Asking - Can I Retire?
With the collector car collection, and recreational real estate, not to mention the business sale potential, I don't see there being much risk. It might be sad to sell the cars, but if push came to shove, it's an easy way to get cash. I'd focus on monetizing the business and getting out, if the desire is to FIRE.
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Old 07-16-2019, 04:52 PM   #12
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2.8 mm in a 60/40 AA portfolio

$450K in cash

Thoughts, ideas, criticisms?

Keep things simple. You have $3.25 Million - You want to spend about $100K per year. 4% of $3.25 million is $130K.... You're good.. Retire. All the rest of the information is noise until you convert it to liquid Assets.


Including a Car collection in your retirement planning is confusing things... The Car Collection is an expense until you sell it. You have expenses on it. Storage, Insurance, Plates etc... and who knows what it's worth... -- Until you sell it, it's costing you.


What's the question? - Can you retire and spend $100K? - Easily... Retire already!
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Old 07-16-2019, 05:24 PM   #13
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I think it sounds reasonable. I just turned 48 this week and in my opinion a 3.33% withdrawal rate at our age is what I would call conservative; I am still not comfortable with 4%, though I think the evidence is compelling, especially after 50 with a 30 year time period.

I would point out three caveats: #1 healthcare- very expensive even when you get to Medicare age- I budget $25k annually in my assumptions #2 taxes, when I plug my number into firecalc, I add the taxes. #3 legacy, I still think if legacy is important 3.33% is fine, but at 4% it eats into legacy.

I think the biggest X factor is healthcare and long term care. Medicare doesn't even cover everything and the ACA is on borrowed time IMHO.
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Old 07-16-2019, 06:18 PM   #14
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Why? What's the point of this magic $3 mm number?

It is just a feel good number. I see post and threads all of the time referring to “FU” money. This is apparently my FU number.
But you are the business owner, right? So are you planning to look in the mirror when you say "FU"?

If it makes you feel good, then that's great. Good is a nice way to feel.
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Old 07-16-2019, 06:51 PM   #15
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But you are the business owner, right? So are you planning to look in the mirror when you say "FU"?

If it makes you feel good, then that's great. Good is a nice way to feel.
I am thinking about firing my lazy a$$!
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Old 07-16-2019, 06:56 PM   #16
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While you have the funds to keep doing what you are doing for the rest of your life, think a bit more about what retirement is going to be like. You have a thing for collector cars, will you get more cars?

If you are not involved in your business, what will you be doing every day?

Are you going to travel? Will you do volunteer work? How about family, charity, and legacy needs?

Rather than the focus on financials, focus on your dreams...then figure out how much those dreams may cost you...I am guessing it may be more than your current $93K. Whatever that NEW number is, compare that to your nestegg to confirm everything is still OK.
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Old 07-16-2019, 07:02 PM   #17
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[QUOTE=Cut-Throat;2267801


Including a Car collection in your retirement planning is confusing things... The Car Collection is an expense until you sell it. You have expenses on it. Storage, Insurance, Plates etc... and who knows what it's worth... -- Until you sell it, it's costing you.


I simply took a picture of my financial picture today. I used today's value of my portfolio, cars and extra land. The only reason I mentioned them at all is to show that at some point they are all assets that will be converted to invested money. This should help my finances in two ways. It will lower my expenses (plates, insurance, etc) and raise my invested assets. Don't we all have expenses on our portfolios? Expense ratios, management fees etc? I thought it was kind of the same.
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Old 07-16-2019, 07:14 PM   #18
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As Cut-Throat said, assuming that cash is really available to you if you retire/sell/liquidate, you are good to go with $3.25M liquid. You are looking at a 3.1% withdrawal rate without even considering SS and your "reinforcements" of less-liquid asset sales. That is better than SWR and can be considered a perpetual withdrawal rate. Your heirs will thank you.
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Old 07-16-2019, 09:08 PM   #19
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Can you tell us more about your business? For example, is it what made you financially independent ? Have you had it appraised or tried to sell t ?


Jist interested. It may have an impact on your ER. In a good wayl
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Old 07-16-2019, 09:32 PM   #20
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Can you tell us more about your business? For example, is it what made you financially independent ? Have you had it appraised or tried to sell t ?


Jist interested. It may have an impact on your ER. In a good wayl
Our Business played the major role in creating the wealth. It is an electric contracting business. We have two employees, my wife and I. I worked almost non stop for quite a few years to make sure I had a good chance to succeed. I have had the business valued by a business broker recently. In a thread that I started a few months back one of the posters replied something to the fact that I should get the valuation from a business broker rather then an appraiser because a broker will give me the value that an actual person might pay for it. I have not listed it yet. I was waiting on reaching my $3mm number that I mentioned earlier. Also wanted to slowly begin to present the idea to our guys to see if there was any interest. I do feel that the value that the business broker came up with is really high. It makes me think that I may have to look for someone with a great big checkbook who isn't that smart and has completely lost their mind. The other contributing factor for the FI was being smart with spending, obviously, and not only making educated purchases but the timing of them as well.

Is that enough info? What kind of ideas do you have?
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