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Insane Emergency RE strategy
Old 11-19-2008, 02:47 PM   #1
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Insane Emergency RE strategy

So basically the wife and I waited *way* too late before we started doing all the serious, hard thinking about our retirement years. Add a couple of really bad investment decisions to the mix and a Chapter 7 and soon desperation is required. So here's our crazy plan.

First, I've run the FIRE calc before and by the time we could possibly become FIRE we'll be in our 80's. Unfortunately we've decided that we would like to do a lot of traveling before we're too old to enjoy it. Enter the crazy part.

I've worked up a fairly complicated spreadsheet that indicates a month-by-month dollar amount that would be required for us to live in a foreign country (frugally) from now until my wife's pension fund kicks in. The point at which our savings will reach critical mass is only a few years off. However, this plan presumes we will then turn around and spend it all between when we retire from our civil service jobs and when the pension money starts. And THEN - well, we keep traveling. Or not, maybe we settle down. Either way, our main strategy is savings + very LBYM frugal living + reliance on government pension money. A few years later our SS and my own pension money kicks in. (we get 250% matching)

In addition, I will be working on various aggressive investment strategies. If they work, great, if not, we'll at least have the savings. I even charted out what difference it would make if we walked away from our home and started renting. Answer, not enough to bother with it.

Worst case scenario? If the savings dissipate, if disaster strikes, if we overspend, if we undersaved or miscalculated.......well, then we go back to work. Disappointing but we're working now, so not a horrible change. So, there it is.
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Old 11-19-2008, 03:09 PM   #2
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Your plan as presented was just a bit confusing to me. Just to clarify, the plan is as follows:??

  • In a few years you will have saved enough that you can quit your jobs and go live frugally off those savings in a foreign country until age 62.
  • At age 62 the savings money may be gone, but your civil service pensions & SS will kick in.
  • In the meantime you will make high risk investments with some other monies you have (besides the aforementioned "savings" you are going to live off) in hopes of a big payoff.
Is that correct?

(Note: Just an observation, but you don't necessarily have to go to a foreign country to live frugally.)
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Old 11-19-2008, 03:11 PM   #3
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Do you have health insurance if you both leave your jobs now? Is your wife on board with this plan?

IMHO worst case scenario goes beyond what you are stating--worst case scenario is you cannot find jobs if you've miscalculated....
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Old 11-19-2008, 03:41 PM   #4
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Your plan as presented was just a bit confusing to me. Just to clarify, the plan is as follows:??

  • In a few years you will have saved enough that you can quit your jobs and go live frugally off those savings in a foreign country until age 62.
The formula for my wife's pension withdrawal date is 75 - age - years of service. When the result is zero, she can withdraw. Currently the number is 14. Each year she is employed it drops by two. After early retirement it only drops by 1 for each passing year. Thus, the need for the spreadsheet. Age 61 is the current estimate.

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  • At age 62 the savings money may be gone, but your civil service pensions & SS will kick in.
  • In the meantime you will make high risk investments with some other monies you have (besides the aforementioned "savings" you are going to live off) in hopes of a big payoff.
Is that correct?

(Note: Just an observation, but you don't necessarily have to go to a foreign country to live frugally.)
Not necessarily high risk, just aggressive. Options, but using spreads, etc.

We live fairly frugally now, but overseas = travel experience + lower cost of living. We're talking remote Mexico, Argentina and Chiang Mai, etc., not the French Riviera.
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Old 11-19-2008, 03:53 PM   #5
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Do you have health insurance if you both leave your jobs now? Is your wife on board with this plan?

IMHO worst case scenario goes beyond what you are stating--worst case scenario is you cannot find jobs if you've miscalculated....
My wife is *driving* this plan. LOL

Insurance is something we're still pondering and researching. We can keep it as retirees (a bit expensive) but we might also do something through a foreign country's system or an independent agency. Plus we voted for Obama. *heh*

I have to disagree with your assessment about jobs though. We're mobile, highly technical and flexible. But we're also not above Wal-Mart, house-sitting, etc. It's not like we will need our old jobs back in order to survive.
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Old 11-19-2008, 03:56 PM   #6
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Worst case scenario? If the savings dissipate, if disaster strikes, if we overspend, if we undersaved or miscalculated.......well, then we go back to work. Disappointing but we're working now, so not a horrible change. So, there it is.
Worse case scenario /tin-foil-hat-on "there is no work to go back to" /tin-foil-hat-off
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Old 11-19-2008, 04:31 PM   #7
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Worse case scenario /tin-foil-hat-on "there is no work to go back to" /tin-foil-hat-off
Key word - 'back' - I wouldn't be opposed to applying for my old job, but my job market is the world. There's work to be found out there somewhere. If not then there's always welfare and food stamps.
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Old 11-19-2008, 05:00 PM   #8
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I noticed an older post from you--did you sell your house yet? Does that factor into your thinking?

But, hey, go for it--sounds like you think your plan will work. And if all else fails, we'll wave to you at Walmart!
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Old 11-19-2008, 06:39 PM   #9
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I noticed an older post from you--did you sell your house yet? Does that factor into your thinking?

But, hey, go for it--sounds like you think your plan will work. And if all else fails, we'll wave to you at Walmart!
LOL - thanks for the wave.

One reason I did the spreadsheet was to compare the impact of walking away from our mortgage now vs. staying until prices return to something near what we owe on the house. Renting would save us around $800/mo. While $800 a month isn't peanuts it would not significantly impact when we could retire early. Maybe 3 months sooner. So we decided to stay in the house and wait out the current market slump. Right now 2000 sq. ft. in our neighborhood is selling for $125,000. We owe $170,000.
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Old 11-19-2008, 08:32 PM   #10
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If not then there's always welfare and food stamps.
Boy are you out of touch. Welfare for childless people is meals at a soup kitchen and a cardboard box to keep out the chill from the pavement.

Ha
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Old 11-19-2008, 08:50 PM   #11
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Boy are you out of touch. Welfare for childless people is meals at a soup kitchen and a cardboard box to keep out the chill from the pavement.

Ha
Boy are you out of touch. How hard is is to pop out a kid or two for sum guvmit money. Plus the local paper reported most panhandlers clear $50K a year. Just stay off the dope and yer good.

Have a kid, go to jail!
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Old 11-19-2008, 09:05 PM   #12
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Glen , Your plan is totally insane but today's market is totally insane so go for it !
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Old 11-19-2008, 09:24 PM   #13
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Boy are you out of touch. Welfare for childless people is meals at a soup kitchen and a cardboard box to keep out the chill from the pavement.

Ha
Maybe if you steal the box from some fat cat on welfare with kids.

And this is assuming Medicare and social security hasn't taken down welfare with it when it becomes insolvent.
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Old 11-20-2008, 10:02 AM   #14
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I think you are certifiably crazy but that's only my opinion. If you think you can do some wizardry with options good luck, you might be the first person I know who actually made money NET.........
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Old 11-20-2008, 05:04 PM   #15
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.... Plus the local paper reported most panhandlers clear $50K a year. ....
That's one plan I've considered for bringing in some extra tax free bucks when I semi-er.

Head out to a busy freeway exit ramp every afternoon for an hour wearing my old army field jacket & with somebody else's kid in tow (who I'm getting paid to watch for after-school care) and a cardboard sign that says "out of work".

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Old 11-20-2008, 05:13 PM   #16
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I do not believe most panhandlers clear $50K a year.
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Old 11-20-2008, 10:40 PM   #17
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Boy are you out of touch. How hard is is to pop out a kid or two for sum guvmit money. Plus the local paper reported most panhandlers clear $50K a year. Just stay off the dope and yer good.

Have a kid, go to jail!
Could you send the link to the article. I would like to see it. Or at least the name of the newspaper that would print that as a fact. Do you really believe MOST panhandlers make 50K a year? By the way, it is quite difficult to have "a kid or two", be poor and live on the street. As a matter of fact that population makes up the majority of the poor.
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Old 11-21-2008, 07:32 AM   #18
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LOL - thanks for the wave.
Renting would save us around $800/mo. While $800 a month isn't peanuts it would not significantly impact when we could retire early. Maybe 3 months sooner.
You can rent a nice modest home in downtown PV MX for that. Think outside the USA and you might be able to do it. Health insurance is $350/yr each. Most basic food items are 80% cheaper. Just avoid processed/packaged items. Meats are about 50% cheaper.
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Old 11-24-2008, 12:02 PM   #19
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How hard is is to pop out a kid or two for sum guvmit money.
For most 60yr old couples it's pretty hard.

One of the paradoxes of panhandling is that some clever/agressive/husler panhandlers (that could be doing something better) are able to do pretty well, while the truely desparate get virtually nothing.
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Old 11-24-2008, 01:33 PM   #20
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For most 60yr old couples it's pretty hard.

One of the paradoxes of panhandling is that some clever/agressive/husler panhandlers (that could be doing something better) are able to do pretty well, while the truely desparate get virtually nothing.
Hey, party pooper! Hono lives in an alternate universe where real estate goes up 10% per year, panhandlers wear Armani suits and octagenarians have twins.

And why shouldn't they? Men have babies now.

Ha
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