Money Poor Paper Rich

[LBISEARAY]

I'AM NEW TO THIS BOARD ,WRITING FOR FIRST TIME. I'AM MARRIED FOR 34 YEARS TO SAME WIFE, THREE BOYS, OUT OF COLLEGE ALL PAID FOR. WE HAVE JUST OVER 3 MIL IN BONDS 30%, STOCKS,40%, FUNDS,25% 5% CASH. HOUSE WORTH 650,000.00, BEACH HOME WORTH 1,600,000.00 ALL PAID FOR. WE DO NOT OWE ANY MONEY TO ANYONE. MY WIFE DOES NOT WORK OR NEVER DID, SHE IS 58 AND I AM 59. I WANT TO RETIRE THIS YEAR BUT NOT SURE THE MONEY WILL LAST FOR 30 YEARS. WE LIVE A VERY SIMPLE LIFE, BUT NOW I WANT TO START ENJOYING IT WHILE WE ARE IN GOOD HEALTH. (TRAVEL) FOR YEAR 2007 INTEREST,CAPITIAL GAINS,ETC, JUST OVER 200,000.00 PERSONAL INCOME 98,000.00. DON'T KNOW WHAT THE MARKET WILL BRING THIS YEAR. I FEEL THAT I NEED 120,000.00 INCOME TO PAY TAXES, FOOD, HEALTH INSURANCE, HOME REPAIRS, CARS,ETC. MY PENSION IS ONLY 1,500 A MONTH. ANY SUGGUESTION TO MAKE IT WORK. CAN ANYONE SEE IT WORKING. HAVE YOU TRIED IT YET. THANKS

 

[Martha]

If I am reading your post correctly, you have 3 million in invested assets, over and above the value in your homes. You also have a 1500 a month pension. Your 3 million at a 4% withdrawal rate yields $120,000. You might want to play with FireCalc (link at the bottom of the page) but you are looking good. What are you waiting for?

BTW, using all capital letters makes your post difficult to read and in the internet world is considered shouting.

Welcome to the board!

 

[RunningBum]

I second the suggestion to not post in all caps!

I agree that your plan looks good if the $3M does not include the houses. As a fallback, if in 10-20 years you see that you're not going to make it, you could always sell the beach house, right? You probably don't want to, and probably won't need to, but it's nice to have another big asset over and above your stock/bond investments that you could liquidate before you have to eat cat food.

Looks to me like you are in great shape! Congratulations!

 

[Puzzley]

If you truly live a simple life, then were I in your position, I would FIRE tomorrow. (FIRE=Financially independent, retired early) My wife and I plan to retire this year on significantly less than that. Hope it works well for you. Don't wait too long. Life is short.....

 

[tuixiu]

Agreed, simple life is obviously a relative term but you appear to be all set.

At the very least, think how many "caps lock" keys you could buy with all that dough.

 

[chinaco]

FIRE away

 

[ladelfina]

If this is "money poor", sign me up!

 

[Rustic23]

It may just be me, but $2.2 mil in houses and 3 Mil in the bank, living on $120,000 a year does not sound like the "simple life".

 

[OAG]

I'AM NEW TO THIS BOARD ,WRITING FOR FIRST TIME. I'AM MARRIED FOR 34 YEARS TO SAME WIFE, THREE BOYS, OUT OF COLLEGE ALL PAID FOR. WE HAVE JUST OVER 3 MIL IN BONDS 30%, STOCKS,40%, FUNDS,25% 5% CASH. HOUSE WORTH 650,000.00, BEACH HOME WORTH 1,600,000.00 ALL PAID FOR. WE DO NOT OWE ANY MONEY TO ANYONE. MY WIFE DOES NOT WORK OR NEVER DID, SHE IS 58 AND I AM 59. I WANT TO RETIRE THIS YEAR BUT NOT SURE THE MONEY WILL LAST FOR 30 YEARS. WE LIVE A VERY SIMPLE LIFE, BUT NOW I WANT TO START ENJOYING IT WHILE WE ARE IN GOOD HEALTH. (TRAVEL) FOR YEAR 2007 INTEREST,CAPITIAL GAINS,ETC, JUST OVER 200,000.00 PERSONAL INCOME 98,000.00. DON'T KNOW WHAT THE MARKET WILL BRING THIS YEAR. I FEEL THAT I NEED 120,000.00 INCOME TO PAY TAXES, FOOD, HEALTH INSURANCE, HOME REPAIRS, CARS,ETC. MY PENSION IS ONLY 1,500 A MONTH. ANY SUGGUESTION TO MAKE IT WORK. CAN ANYONE SEE IT WORKING. HAVE YOU TRIED IT YET. THANKS

Where did he go?

 

[theloneranger]

So what are the taxes, insurance, upkeep and utilities on all this valuable real estate? $120,000 before income taxes might not be sufficient.

 

[Cattusbabe]

Maybe I should start this as a new thread but how does one define a "simple life"? It is such a relative term. What does it mean?

 

[ladelfina]

What does it mean.. and will it star Paris Hilton!?

I have an idea of "a simple life" but it would require changes that paradoxically would take time and money to implement. I wish I'd had the perspective 10 years ago that I have now.

 

[oma]

Sounds like a prank post, but you never know. With your assets, you don't need help from this board, you need a CFP for a checkup. If you acquired your wealth on your own, you're doing something right -

Welcome to the board.

 

[LBISEARAY]

taxes on both homes, 23,00.00 ,insurance, 2,700.00, utilities, 7,000.00, upkeep cheap, do most of the work myself. I made most of my money working 7 days a week as a carpenter on homes that i bought cheap , than sold at a big profit when homes were going up in price as i hammed each nail into a piece of wood. I was very luckey at the time. It won't happen again for years to come. I also made money in the stock market. A simple life is being happy. Don't try to keep up with the jones.

 

[junopens]

It sounds like your basics are covered. It is good to see cash flow when inflation and market up/down is considered.

 

[Rambler]

taxes on both homes, 23,00.00 ,insurance, 2,700.00, utilities, 7,000.00, upkeep cheap, do most of the work myself. I made most of my money working 7 days a week as a carpenter on homes that i bought cheap , than sold at a big profit when homes were going up in price as i hammed each nail into a piece of wood. I was very luckey at the time. It won't happen again for years to come. I also made money in the stock market. A simple life is being happy. Don't try to keep up with the jones.

You've done well for yourself...I kind of figured the prop taxes, insurance and utils were eating a large chunk of the 120k. We are younger than you, live relatively simply, but still will requireabout the same 120k due to prop tax, ins and utils, plus while I'm handy, I have not been able to develop those skills as much as I would like.

Folks have mentioned the 4% rule. If you invert that, you find that your pension is worth about 720k, giving you an invested equivalent of 3.72 M, plus 2.25M worth of personal use real estate, total net worth of 6M...pretty enviable! So on the 3.72M you can collect an income/dispersement of 148.8k. If you sold one or the other of the homes it could be much more. If you sold both and traded down to a 400k home in a less expensive area of the country you could have income/disbursements of 224k.

But the bottom line here is that you don't mention what you want to DO when you retire. Do you want to stay put or move? What activities do you now enjoy and anticipate continuing in retirement? What new activities are you thinking of picking up? Do you have the equipment for these activities already or need to acquire (for example if you are thinking about RVing, but have never done it and don't have one, jumping in will cost anywhere from $10k for a good tent trailer to a cool million for the highest end of the highest end in RV luxury...scratch that, it doesn't fit the simple profile...).

At the end of the day, I think you are already pretty well prepared financially if you, as you say, need 120k pre-tax for expenses (check again if that is a post tax figure). But you may need to think about how you are going to spend those glorious FIRE days and how the whole plan fits together.

R