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Old 06-11-2013, 03:30 PM   #21
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RETIRE AT 40 with only $500k!!! YOU'RE WASTING YOUR LIFE.

Seriously, not enough dough.... bro.
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Old 06-11-2013, 04:01 PM   #22
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You have all the tools at your disposal to make a judgement as to whether you should do it. I ran your figures through Firecalc with the default portfolio settings and entered 500K stash, $10,800 extra income per year beginning in 2028, with annual spending of 25K for a 40 year period, and got a success rate of just 81%.

Will you be getting any SS?

Alternatively, if you can live on less, that will give you a much better success rate. For example, annual spending of 21K gives a 100% success rate. Spending less than that will give you an extra margin of comfort.

Only you can decide whether you can make it work or not.
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Old 06-11-2013, 05:04 PM   #23
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Retired @ 58 with a little over $500k. My decision was based on having 3 legs of the retirement stool producing at least $10K each (My annual mid-west living expenses are less than $26k per year). I don't plan on taking SS until 70 as that is the 4th leg on my retirement stool. Having cash rent income from 100 acres probably made my situation a little different from other responders.
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Old 06-11-2013, 05:16 PM   #24
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Well, I guess there will be many who have done it.... but like the previous poster, have other income sources...


Thinking about it, I have a sister who did.... but she gets like $60K a year in pension income.... without that she would be broke now...
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Old 06-11-2013, 05:54 PM   #25
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At 58 is a lot different than 40. I think my parents had less than $500K (+ SS, no pension AFAIK) when my dad retired at 62. They seem to be in good shape 17 years later.
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Old 06-11-2013, 06:06 PM   #26
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DW and I retired with less than 500K in investments. However, we also retired with very good pensions that more than cover our expenses. In fact, we are still saving, and our investments are still growing at this point. We will not take any distributions, until we have to. When SS comes along, we will invest that as well.
Ditto, except I'm single and my pension is a CSRS govt survivor pension with COLAs, PLUS I had a TSP 401(k) consisting of my own life savings to carry me from age 48 (my FIRE age) onward.
At age 54.5, I continue to build my portfolio through DCA.

Several posters who are much smarter at the FIREcalc thing and knowing about "how much is enough?", have given the OP some excellent advice.
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Old 06-11-2013, 07:27 PM   #27
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At 58 is a lot different than 40. I think my parents had less than $500K (+ SS, no pension AFAIK) when my dad retired at 62. They seem to be in good shape 17 years later.
My parents retired at 55 with a modest pension $750/month and just under $400K, but that was 30 years ago and my mom worked part time for another 7 or 8 years.

My friend was laid off in 2007 from a well paying IT job, he took a year off and than start looking just as the 2008 crisis. Without a degree, and rather specialized experience he was unable to find a job. In effect he retired at 52/3 with around 400K. He owned his own home, with mom living in the main house, and he living in cottage out back. He has had to make a number of sacrifice, including renting out the cottage and moving in with mom. He'll make until 62 and collect SS, but it certainly wasn't the type of retirement he was envisioning.
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Old 06-11-2013, 08:14 PM   #28
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DW and I retired (55 and 58 yrs old) with only a few thousand dollars and, now in our mid-60's, we're doing fine. Sure we have pensions, SS and a substantial portfolio of equities and fixed investments. But, we only had a few thousand bux when we pulled the switch and retired. $500k sounds like way, way too much.
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Old 06-11-2013, 08:24 PM   #29
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Thanks for the feedback!

My $900 a month pension at age 55 is COLA. The present value of the pension is $110k(based on the company's website on what I would receive if I take the lump sum option). I have not calculated my pension or the SS that I would receive at age 62 into my retirement plan since all that can change by the time I am entitled. SSI and pension would add another $3k a month at age 62(if I decided to take early pension at 55 and SS at age 62...if they don't decide to raise it to 90 by that time!!)

My plan at age 30 was to quit working at 40 and then work one year and take one year off. Of course the great recession has scared the crap out of me. I see co-workers that haven't worked in 3 years. Some of them, I interviewed and I didn't hire them. I work in a specialized field and I think if I take a year off, I probably won't be hired again.

I'm thinking of going back to school and find another line of work at age 40. I'm just scared that no one will hire some 40 years old at entry level job. I need to stop reading all these sad stories on the internet about guys in their 40's and 50's not getting any job offers after 2 years.
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Old 06-12-2013, 10:07 AM   #30
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Thanks for the feedback!

My $900 a month pension at age 55 is COLA. The present value of the pension is $110k(based on the company's website on what I would receive if I take the lump sum option). I have not calculated my pension or the SS that I would receive at age 62 into my retirement plan since all that can change by the time I am entitled. SSI and pension would add another $3k a month at age 62(if I decided to take early pension at 55 and SS at age 62...if they don't decide to raise it to 90 by that time!!)

My plan at age 30 was to quit working at 40 and then work one year and take one year off. Of course the great recession has scared the crap out of me. I see co-workers that haven't worked in 3 years. Some of them, I interviewed and I didn't hire them. I work in a specialized field and I think if I take a year off, I probably won't be hired again.

I'm thinking of going back to school and find another line of work at age 40. I'm just scared that no one will hire some 40 years old at entry level job. I need to stop reading all these sad stories on the internet about guys in their 40's and 50's not getting any job offers after 2 years.

It does matter which field you are in... I talked to one of my sisters who is retired... our boss was looking for someone to do some SQL reports and some web programming... this is what my sis did...

But, she said that she worked mostly with military jobs... which were normally 3 years behind... she has been out of her tech job for 3 years.... she said that is a lifetime when it comes to programming... no way could she do what is needed in today's world...


So, unless you are in a field where a year will not matter.... taking it off could be the end of your career... or at least slow it down big time....
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Old 06-12-2013, 11:25 AM   #31
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I'm thinking of going back to school and find another line of work at age 40. I'm just scared that no one will hire some 40 years old at entry level job. I need to stop reading all these sad stories on the internet about guys in their 40's and 50's not getting any job offers after 2 years.
Do you have transferrable skills that can help you get another job today ? You may find that a change of venue a tweak to the job description is enough.
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Old 06-12-2013, 11:43 AM   #32
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I think you can pull it off...but you have to make a LOT of changes in your lifestyle and be willing to do something part time that brings in money. Have you thought about starting a business providing a service such as landscaping, pet-sitting, or tutoring. In central NJ, people pay a lot of money for that kind of thing. I have done it, with 1/3 of what you have but I am semi-retired and my income helps pay half of the household expenses and our savings. If you can hold off on withdrawing any money for at least 10 years, I think you will be in great shape.
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Old 06-12-2013, 12:21 PM   #33
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OP sure you can. I did it with far less (actual NW at the time was negative). Question is CAN and WILL you do what is necessary to supplement savings if it becomes necessary.
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Old 06-12-2013, 01:04 PM   #34
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OP sure you can. I did it with far less (actual NW at the time was negative). Question is CAN and WILL you do what is necessary to supplement savings if it becomes necessary.
But, if you "supplement" savings as you describe, doesn't that mean you failed? If you FIRE with a nestegg of $X with the intention of being done "earning," and the plan doesn't work and you have to go earn some more, I think that's a "failure."

If you're able to go earn some more with a minimum of pain, great. It's not a disaster or doomsday. But it's still a failure of the original plan and makes the answer to the question "did I have enough" a resounding "NO!"
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Old 06-12-2013, 01:11 PM   #35
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I don't think it is a failure....I would call it a "re-evaluation" of the original plan. In life, many plans change and that would mean that everyone is a failure in every aspect of their life. That sounds awful!
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Old 06-12-2013, 01:21 PM   #36
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I don't think it is a failure....I would call it a "re-evaluation" of the original plan. In life, many plans change and that would mean that everyone is a failure in every aspect of their life. That sounds awful!


I guess my view on the use of the term "failure" is a bit less philosophical. In statistics and other data analysis areas, results which fall outside of the expected outcome are usually referred to as a "failure." It's not a personal thing about how a person lived their life or that sort of thing. FireCalc generally refers to an outcome where your portfolio falls to zero before the time period has expired as a "failure." It's not a personal judgment, just the way the numbers worked out and the name that's given to that result........

But, OK, call it a "re-evaluation."
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Old 06-12-2013, 01:23 PM   #37
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Have your run the FIRE calculator? I would be cautious as you can run the risk where you retire, run out of $ in 10 yrs, then try to get back into the workforce. $25K or 5% draw down rate is well beyond a safe level. Personally I work with 3.5% and figure that into my budget. That way I feel covered. I also have 5 yrs of budget in laddered CD's to allow my portfolio to ride out most economic storms.

Have you considered Health insurance? It is expensive and only going to increase. Have you thought of working part time, some places(i.e.Starbucks/UPS/Barns&Noble) offer HC to PT worker?
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Old 06-12-2013, 02:23 PM   #38
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I just ran the following scenario through Firecalc:
$25,000 per year expenses, $500K starting portfolio.
End date of 2073 (would take a 40 year old to the age of 100)
Pension of $10,800 per year in 2028 (age 55), adjusted for inflation.

It gave back an 81.5% success rate. So in my opinion, you're close, but not quite there yet. That would probably give you a cushion though, to take off a few years, see how you like it, how expenses really are, etc. But, I would do it with the expectation that if things got rough, I might have to go back to work, even if just part time.

FWIW, delaying retirement to 2014 gives an 86.4% chance of success. 2015 is 91.4%, and 2016 is 97.5%.

So, if you really can make it on $25K per year, I'd say you're close.
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Old 06-12-2013, 03:01 PM   #39
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You could make some money just from the side income ideas on places like Fatwallet - earning extra credit card points, signon bonuses, selling free after rebate stuff, etc. With a 25K expenses, a few low stress, flexible side income streams would help increase your success rate.

Also adding at least some SS income would have to be huge plus for your success rate. I would add at least 75% of expected benefits into my plan and run that through firecalc.
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Old 06-12-2013, 03:59 PM   #40
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I'm sure folks have retired with less than $500k, but I would not. At 40, you are still young enough to start a second career, if you desire.
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