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Old 07-12-2016, 03:03 PM   #21
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Supernova, a 4% withdrawal rate with an ER age of 55 is probably doable, but a bit tight (hence the <100% success rate on FireCalc). That said, looking at your numbers my only big worry is your low savings outside of the 401K. Does this mean that you've been spending most of your income and will have to make a big adjustment to live within your ER budget? This is still doable, but may mean having to make various adaptations in your lifestyle as it all "gets real" over the next 6 months or so.

FWIW depending on your activities this may not be that hard to do. After my ER I found that I spent a lot of time cycling, which costs almost nothing (at least with my crappy old bike) and that I could live on just my unemployment payments. I had budgeted an expense level much like yours and found I was living comfortably on not much more than half of what I'd predicted. This can go both ways, though, depending on what you like to do with your time.

I guess all I'm saying is be careful and ready to adapt. Your plan looks doable, but without a whole lot of margin. The only concrete recommendation I can make is to try to save rather than spend the severance (after paying off your HELOC) to have a somewhat bigger emergency reserve fund. I'd also probably pause on making any extra mortgage payments for the moment. While it's very appealing to have a paid off mortgage in retirement I think you first want to ensure that you can live comfortably within your retirement income, then once you've settled into ER and have a better handle on expenses if you have a reasonable excess you can use it to pay down or pay off the mortgage.

I now see why you were considering the accelerated pension option and in your situation it might be the better choice after all - despite my earlier advice (particularly if your mortgage is paid off before the pension resets downward at 62). In any case, the lifetime payout differences between the standard and accelerated pension options aren't that huge. I'd still advise against taking social security early if you can avoid it. The differences there are more significant, but if the numbers work out better for you so be it.

All that said, we all only live once and in your situation I'd just ride the wave out of Megacorp (not as if either of us had much choice) and enjoy the next chapter.
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Old 07-12-2016, 03:39 PM   #22
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Originally Posted by stepford View Post
Supernova, a 4% withdrawal rate with an ER age of 55 is probably doable, but a bit tight (hence the <100% success rate on FireCalc). That said, looking at your numbers my only big worry is your low savings outside of the 401K. Does this mean that you've been spending most of your income and will have to make a big adjustment to live within your ER budget? This is still doable, but may mean having to make various adaptations in your lifestyle as it all "gets real" over the next 6 months or so.

FWIW depending on your activities this may not be that hard to do. After my ER I found that I spent a lot of time cycling, which costs almost nothing (at least with my crappy old bike) and that I could live on just my unemployment payments. I had budgeted an expense level much like yours and found I was living comfortably on not much more than half of what I'd predicted. This can go both ways, though, depending on what you like to do with your time.

I guess all I'm saying is be careful and ready to adapt. Your plan looks doable, but without a whole lot of margin. The only concrete recommendation I can make is to try to save rather than spend the severance (after paying off your HELOC) to have a somewhat bigger emergency reserve fund. I'd also probably pause on making any extra mortgage payments for the moment. While it's very appealing to have a paid off mortgage in retirement I think you first want to ensure that you can live comfortably within your retirement income, then once you've settled into ER and have a better handle on expenses if you have a reasonable excess you can use it to pay down or pay off the mortgage.

I now see why you were considering the accelerated pension option and in your situation it might be the better choice after all - despite my earlier advice (particularly if your mortgage is paid off before the pension resets downward at 62). In any case, the lifetime payout differences between the standard and accelerated pension options aren't that huge. I'd still advise against taking social security early if you can avoid it. The differences there are more significant, but if the numbers work out better for you so be it.

All that said, we all only live once and in your situation I'd just ride the wave out of Megacorp (not as if either of us had much choice) and enjoy the next chapter.
Thanks Stepford---always appreciate your perspective on this especially given how close to home it is for both of us.

On the spending I must come clean and say for 2+ yrs I was traveling like a crazy person taking 5 good sized trips during that time (it was a relationship thing). Prior to my job being surplused that also unraveled so my part of my lack on savings was due to me traveling quite a bit and going out to eat more than a "normal" person would.

So yea two big changes for me this year. I need to re-establish a better savings outside my 401k yes so good tip there.

The still having a mortgage is on my mind almost daily but nothing I read says "tap into your retirement savings and pay it off" but it's tempting.

I apply for UE the week of July 25th. Someone told me it's $664 a month here in WA state before 10% withholding. I'm doing to dust off the old bike myself. I'm a runner at heart but it's getting harder to log the miles so I've been mixing in biking once a week lately (stationary when it's crappy out).

The accelerated pension would be $3575 then drops down to $2876 at 62 yes. Lifetime is the $3125 number. Again--so tempting to help me get rolling without too much of an adjustment in lifestyle.
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Old 07-12-2016, 03:54 PM   #23
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I apply for UE the week of July 25th. Someone told me it's $664 a month here in WA state before 10% withholding.
Quick Googling says it's $664 a WEEK (compared to only $450/wk we get in California).

https://esd.wa.gov/unemployment/calculate-your-benefit
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Old 07-12-2016, 05:32 PM   #24
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Quick Googling says it's $664 a WEEK (compared to only $450/wk we get in California).

https://esd.wa.gov/unemployment/calculate-your-benefit
Thanks again! Not too shabby of a benefit.
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Old 07-22-2016, 08:37 AM   #25
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Lots of different opinions on the Mortgage in retirement thing...

If I had your pension situation, I think I would have pulled the trigger. Can always do some PT work if needed, and at such young age, is probably a good idea anyway!
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Old 07-22-2016, 09:49 AM   #26
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I can also take an accelerated pension from 55-62 adding about $5K to my annual pension of $36K. Then it drops down to a lower amount from then on which would be $31K annual. Still debating that...Cheers.
I see that the issue has been forced. Good luck. Personally, I would go with the steady payout. I think it is a mistake to take more now and less later.
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Old 07-22-2016, 11:38 AM   #27
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My concern would be that of your two income sources only one (the 4% withdrawals) increase due to inflation but the pension is fixed, so over time inflation will erode the spending power of your initial $67k of income.

OTOH, it appears that you have not considered social security. Why?

Since your mortgage will eventually end when it is paid off, a better way to look at it is that you get $36k of pension income and $23k from your savings at a 3.5% WR [(780 savings -120 mortgage)*3.5%] which gives you $59k compared to $52k of expenses excluding the mortgage.

In Firecalc, it is preferable to include your mortgage payments as off-chart spending with an offset when the mortgage is paid off.
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Old 07-22-2016, 11:40 AM   #28
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you folks do realize he's just retired and has another thread about it?
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Old 07-22-2016, 11:41 AM   #29
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I think there is a new thread anyway....
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