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Somewhat obsessed with ER
Old 10-29-2009, 09:15 AM   #1
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Somewhat obsessed with ER

Haven't posted for a while....I finally seem to have gotten hold of an immigration fella who actually gave us some good info and we were allowed to put our further applications off until this next summer.

I am now officially out of control. Can't stop thinking about ER, even though it is at least 19 months off. I am starting to infect my wife now and she is getting the shakes as well (although a good cuppa tea seems to calm her down, or maybe it's the gin)....or maybe she is just tired of me talking about it. Basically I am looking for people to shoot holes in my retirement plans.....or even agree that they are possible. I think I posted something similar a year+ ago, but I think I have a pretty good idea now of what I should have when I go bye-bye. I was starting to list where I had all my money but decided I would really just have some opinions in general at this time. My plans are we would have about $750+ when we get back to Spokane. House there already paid for. Budget is for $100K to get house fixed up, 1 compact car, etc etc. We should be under that but...... I have been dealing with a finance guy back in the Spokane area who has a bit of my money and he thinks it should work out ok if we keep our expenses to under $50,000 a year. The calculators I have used (many, Firecalc etc) seem to think it is ok. Finally put ourselves on a money spending check the last 4 months...a high of $3500 in July while doing some traveling and the last 2 month both look to come in at $2000 or less.....plan is for $4000 a month so well within that limit even with a few unexpected costs. Might also want to take a part time job just for the heck of it, but don't plan that into my thinking.....

IFFFF things go as planned (VERA early retirement, Pound/Dollar exchange)....I would have the following,
1. $320K in TSP(rather aggressively placed at this time)
2. $380K in savings
3. $50K in ROTH/mutual funds
4. Immediate pension at 54 when I go of about $16,500 per year before taxes. Planning after tax of a little over $1,000 including spousal benefit if I die. No adjustments until I hit 62
5. SS supplement of about $1000 a month from years 56-62.
6. SS at 62 of about $1500 a month for me and then a couple years later $700 a month for my wife (UK citizen- spousal SS)
7. Carry Govt health into retirement....or whatever happens in the next couple of years to the health system.
8. Should be in a lower tax bracket in retirement.

Always can be something unexpected around the bend of course.....and I know we would be taking a bit of a risk retiring that early, but we are both desperate to do something different (working in schools)....even though we are saving about $50k a year right now.

Is there something I haven't seen that will whack me upside the head? Luckily the decision won't have to be made until this summer. Time for the finance system to hopefully calm down......

Uh-oh a student just came in and gave me a halloween cupcake.....can't resist..........
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Old 10-29-2009, 09:55 AM   #2
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I don't want to shoot holes in your plan but having retired in Jan. 2008 I saw what a bad year could do to a portfolio . I would never retire without ample padding . It would just be to stressful and you do not seem to have ample padding IMO.
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Old 10-29-2009, 10:10 AM   #3
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Moemg, no problem...shoot holes like crazy....that's what I am after. Our "padding" so to speak is that we can easily spend a lot less than $50k a year, and even now are spending way under that......it's just what we are shooting for. There is a risk built into our thinking....working for a couple of more years on top of 2011 is the smarter financial thing to do, no doubt about that and I would still only be 56. At this time we are living very comfortably on around $2000 a month and could pinch it even lower for a while without crying too much.
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Old 10-29-2009, 07:12 PM   #4
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Could you explain "5. SS supplement of about $1000 a month from years 56-62."?

What SWR methodology are you using? $50K the first year and then step it up with inflation? or a fixed percentage of your portfolio?
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Old 10-29-2009, 07:57 PM   #5
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Originally Posted by F4mandolin View Post
Moemg, no problem...shoot holes like crazy....that's what I am after. Our "padding" so to speak is that we can easily spend a lot less than $50k a year, and even now are spending way under that......it's just what we are shooting for. There is a risk built into our thinking....working for a couple of more years on top of 2011 is the smarter financial thing to do, no doubt about that and I would still only be 56. At this time we are living very comfortably on around $2000 a month and could pinch it even lower for a while without crying too much.
given that your current expense level is actually only 2k/mo and you will be getting that with pension and ss supplement you look pretty good. the other 2k/mo will only require a 3.2% WR which also sounds pretty good. the only concerns i see are 1) the 2 years ($24k) prior to the ss supplement starting (not really a big deal considering your portfolio) and 2) lack of COLAs till you turn 62. that is 8 years of no COLA but then there may not be any COLAs the next couple of years anyway.

BTW are you getting an early out? 54 is a strange age to be retiring from fed service.
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Old 10-29-2009, 08:08 PM   #6
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Originally Posted by F4mandolin View Post
... I am now officially out of control. Can't stop thinking about ER, even though it is at least 19 months off...
I can't tell you whether you are financially OK or not. I myself still have some part-time income, else would be a lot more scared than I want to admit to.

But I just want to say I sympathize with your obsession about ER. I don't know how younger folks who frequent this forum can handle it. I would go insane reading about these "geezers" and "geezerettes" goofing off or sleep in late during weekdays.

I do know a way to cool the envy of people who know my wife has retired and I am working part-time. I just remind them of the recent market drop. That sure scares them back to work.
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Old 10-30-2009, 02:36 AM   #7
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Thanks folks. It does sound like it can be done, although we won't have a ton of money. We still have to make a yearly trip to the UK to visit my wife relatives but for the first time in my life I will be able to do it off-season so the tickets won't be bad....and few if any hotel bills.
JDW- same concerns I have. 2 years without the extra supplement. But I will be living real close to a middle school and high school so if I get bored or just want some extra cash I can always sub teach during the winter when I won't have a lot of my hobbies to do. No COLA was a big one...8 years is a long time and I wouldn't doubt that 1/3 of the value will go away. Part of me still hopes I can just work one more year if I can get myself to do it....but teaching is getting weirder and weirder every year. As a school teacher I am not making the money most Govt workers are getting, but with the VERA it makes it possible. Without VERA (No guarantee there, damn...but they have been offering it every year trying to get rid of teachers) NO CHANCE to quit till I hit at least 56. That extra money coming in pays all our bills plus some.
Walkinwood- SS supplement I would be eligible for if I get VERA (early retirement). I would get an immediate pension without penalty (No COLA is pretty harsh though) From the age of 56 to 62 you get a strange formula that represents part of you SS.....not sure why they came up with the formula they did, but it should get me about 2/3 of what my SS will be at 62. Without all the "little things" like the supplement the early retirement would NOT be possible for me. The only SWR I am using is that we "can" spend up to $50k a year without panic.....I am pretty sure most years we will not be over $45k...and very likely $40k unless a big expense comes up. I think the first few years we are likely to bump the top end until we get done doing a lot of local touristing things (Yellowstone etc).
NW-bound- I was fine....wasn't doing more than the usual drooling over retirement that most people do until about 1 1/2 years ago. I was planning on retiring here in the UK with my wife but knew I would have to work more years. Then I mentioned to my wife that we could go a few years earlier if we go back to Spokane.....she didn't hesitate very long in saying "what the hell, let's go". Once the end was really in sight...I was a gonner. When it was 5+ years off it just didn't bother me. I think that is normal for most people...when it gets closer you start the shakes.... I still keep asking my wife if she is sure about the move, I would be fine living here.... and the immigration process would sure be easier....but she is actually looking forward to the "adventure". The recent market drop was a shock of course, but what I have never understood is why people who don't have a lot of money (and we won't) won't just stop spending money. I like this skit with Steve Martin about Americans out of control spending on "stuff".
Steve Martin sketch: Stop Buying Stuff - red2black
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Old 10-30-2009, 07:37 AM   #8
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Just to be clear, your age 56-62 SS supplement is a UK social services supplement and has nothing to do with US social security, right?
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Old 10-30-2009, 08:15 AM   #9
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I think he is going to be a retired US federal employee under FERS. FERS folks get lower pension annuity percentages than their CSRS counterparts but do get unreduced SS benefits and a Supplement that "carries" the FERS retiree until SS kicks in at 62.
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Old 10-30-2009, 10:16 PM   #10
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Originally Posted by F4mandolin View Post
... Then I mentioned to my wife that we could go a few years earlier if we go back to Spokane.....she didn't hesitate very long in saying "what the hell, let's go". Once the end was really in sight...I was a gonner. When it was 5+ years off it just didn't bother me. I think that is normal for most people...when it gets closer you start the shakes.... I still keep asking my wife if she is sure about the move, I would be fine living here.... and the immigration process would sure be easier....but she is actually looking forward to the "adventure". The recent market drop was a shock of course, but what I have never understood is why people who don't have a lot of money (and we won't) won't just stop spending money. I like this skit with Steve Martin about Americans out of control spending on "stuff".
Steve Martin sketch: Stop Buying Stuff - red2black
Of course your wife got excited. Who wouldn't be? A different country, a new environment, even though we speak the same language. Well, almost. I am happy for you both.

About the video teaching one not to spend money he does not have, how do we get our local and federal gummint to view it?
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Old 10-31-2009, 07:33 AM   #11
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Just to be clear, your age 56-62 SS supplement is a UK social services supplement and has nothing to do with US social security, right?
Don't panic, many retirement plans (back in the good old days when we
had retirement plans) used to up your pensions early in retirement then
reduce them after SS kicks in, hence giving you a flat annuity like income.
TJ
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Old 10-31-2009, 07:56 AM   #12
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Your financial situation is looking good, to me.

It's completely normal to feel somewhat obsessed by ER, as you draw closer to it. Like me, you probably feel obliged to check, and doublecheck, your anticipated income sources to make sure they will suffice. And then there is so much excitement and anticipation that increases as you near ER.

After using up much of my vacation time, I am back at work. I only have to work four days next week, and then half the following Monday and that's it. Still, I almost wonder if I will ever make it! Each day at work seems interminable, and I can hardly sleep at night. How exciting it is to be drawing close to a goal that I have been working towards for so long. On my last day I am tempted to shout "I DID IT!!" on my way out the door.
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Old 10-31-2009, 09:02 AM   #13
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On my last day I am tempted to shout "I DID IT!!" on my way out the door.

Yeah!!!

DO IT!!!

ta,
mew,
sill w*orking, 'snif
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Old 10-31-2009, 09:50 AM   #14
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FERS retirees get the SS supplement if they retire at 60 with 30 years. 59 won't do, and 29 won't do. The supplement stops at 62.

W2R, I'm curious why you aren't leaving at the beginning of the following month ? Presumably you are pre-FERS.
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Old 10-31-2009, 09:54 AM   #15
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OOPS - 60 yrs old with TWENTY yrs svc or more, not 30, and who retire under an immediate, unreduced retirement.
Not payable to MRA + 10 people (like yours truly).

mea culpa.
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Old 10-31-2009, 01:10 PM   #16
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W2R, I'm curious why you aren't leaving at the beginning of the following month ? Presumably you are pre-FERS.
Oh, I know it is perplexing but I chose this date just because I didn't want to wait any longer! I have read all the articles about the "best" day to retire, based on priorities such as when the first pension check will arrive and the maximum annual leave that can be accumulated and cashed out and so on, but I really don't care very much about these priorities. To sum up, the day I selected was just a matter of personal preference.

If that seems weird, how about this? I just used up almost ALL of my annual leave instead of keeping it to cash out, and I am not even a little bit sorry that I did. Now that is a very non-standard thing to do, as well. I am just a very non-standard person with non-standard priorities.

9 more days (4.5 more work days) and I am DONE, finis, history, outtathere.
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Old 10-31-2009, 01:42 PM   #17
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Oh, I know it is perplexing but I chose this date just because I didn't want to wait any longer!

If that seems weird, how about this? I just used up almost ALL of my annual leave instead of keeping it to cash out, and I am not even a little bit sorry that I did. Now that is a very non-standard thing to do, as well. I am just a very non-standard person with non-standard priorities.

9 more days (4.5 more work days) and I am DONE, finis, history, outtathere.
Using leave makes more sense, actually - increases time in service...
You KNOW I'm jealous! - congratulations on reaching SHORT-timer status!
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Old 10-31-2009, 01:46 PM   #18
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9 more days (4.5 more work days) and I am DONE, finis, history, outtathere.
Uh, just counted my fingers.... enjoy your last week, and a very happy Friday.
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Old 10-31-2009, 01:46 PM   #19
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Can I be a pain? I am new to this board and would like to understand the abbreviations:

TSP
ROTH
COLA
WR and
VERA

Thanks
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Old 10-31-2009, 01:50 PM   #20
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FERS retirees get the SS supplement if they retire at 60 with 30 years. 59 won't do, and 29 won't do. The supplement stops at 62.

W2R, I'm curious why you aren't leaving at the beginning of the following month ? Presumably you are pre-FERS.
actually it is MRA with 30 years of service or 60 with 20years.
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