OK, 42 years old over a million ca$h, NOW WHAT? Gurus I need your help please!!

[RAMBO]

Requesting suggestion from the Federal Gurus or financial planners.

I am 41 years old and working for the Fed. I have six years military, six years non law enforcement and now law enforcement 6(c) retirement. As of today, I have a total of 13 ½ years with the Fed. I inherited a bit over a million $$ give or take. My salary will vary depending on overtime but my based is $65,000.00. I made some really bad investment like, Real Estates, business and bad girlfriends. Ohh those girlfriends!!! No kids as of now.

With the depreciation value of my properties, I lost over $130,000.00 and counting. I figure I am not much of a business person based on my business failures, so I decided to put my money in municipal bonds 6.20% AA+ tax exempt. I max out my TSP which is currently $100,000.00. No ROTH IRA for me. I am really hopping not to keep breathing pass 70. I want to wok six more years and retire to a third world (Thailand or Philippines or maybe both). Based on the advantage of the dollar in a third world country and my very humble lifestyle, I do not think I need more than $25,000.00 a year as of today unless I get a girldfriend. Oh those girldfriends!!!!

First, I am worry about the future value of the dollar. If the dollar crash I will be caught with my pants down in a third world country. So I’m trying to keep the door of my federal pension half open.

Also, my government retirement will be affected since I am getting out too early. I understand that if I get out too early I will be penalized 5% a year. My minimum retirement age will be 57.

Finally, I do not think the real estate market is going to recover for the next ten years due to the lack of inflation and others factors like the world economy is changing. I feel that my properties are just money pits and are creating a lot of distress in my life. I have no plan to pay off these properties because.

• If depreciation value keeps rising my money will eventually be wasted.
• If better to have cash on hand than to have it frozen in case you get sue or the economy keeps going bananas etc...
• I can use the properties as tax deduction.

I don’t know if I left anything behind. Feel free to ask me any questions

Any suggestion from the gurus about early retirement?

Thank you very much!!!

 

[Maurice]

You work for the Fed and you're in Seattle? They don't have a branch there.

 

[Leonidas]

You work for the Fed and you're in Seattle? They don't have a branch there.

Might not mean The Fed, as in Federal Reserve, could be slang for The Government. Most feds I worked with often referred to their employer as "The G", as in, "The G's been very good to me', their issued cars as "G Cars", etc. Maybe OP uses the term Fed in that way.

6(c) retirements are for many (but not all) federal law enforcement positions as well as firefighters. They pay in an extra half a percent but get to retire earlier, they also have an earlier mandatory retirement age.

Although, I thought 6(c) positions had to be at least 50 or 52 to retire and 6 more years would seem to leave him a little short. But like everything else federal, the details vary greatly from agency to agency and it never ever makes sense to anyone.

 

[CyclingInvestor]

I made some really bad investment like, Real Estates, business and bad girlfriends. Ohh those girlfriends!!! No kids as of now.

remember :

 

[Fantasm]

You could live in Thailand or the Philippines for $25K/year easily. If you consider just the $1M in cash, that gives you 40 years and puts you at 81 years old.

 

[RAMBO]

Fantasm, Thank for your reply. That really makes me feel good. The real purpose for my post is to look for ways to retire earlier without hurting the following scenarios:

• I do not want to throw away all my years in the federal (Fed) system. If I quit six years from today the government will take away 5% per year until my minimum retirement age (MRA). I think my minimum retirement age is 57. So I will end up with probably $0 by the time I reach the age.
• My real estates investments are depreciating more and more because I purchased during the pick years. I just can’t walk away even though it makes more sense to do so.
• The possibility of the devaluation of the dollar, maybe not now but how about ten years from now. That is why I want to leave my fed years always as a back up plan.

I have others source of income like military disability $530.00 a month and a monthly rental income. But be advice that rentals incomes are not too reliable. You may have rental income today but may not tomorrow.

A pension is almost secure, and in my opinion is the best option, since you always going to get the same amount in a fix rate percentage if you keep it low risk, unless the country goes totally bankrupt or broke.

CivlingInvestor Thanks for the wonderful pic! I really hope that girl was one of the girlfriends, but I am too humble to ride that car and the girl. Maybe if I hit the lotto I will go for that.

 

[Maurice]

Might not mean The Fed, as in Federal Reserve, could be slang for The Government.

Ok, my next guess was going to be an AIG field office...


Anyway, welcome to the board, Rambo.

 

[jdw_fire]

I do not want to throw away all my years in the federal (Fed) system. If I quit six years from today the government will take away 5% per year until my minimum retirement age (MRA). I think my minimum retirement age is 57. So I will end up with probably $0 by the time I reach the age.

if i understand your situation correctly you are talking about starting your pension (deferred pension) when you reach your MRA. since you wouldnt have 30 yrs of service you will lose 5%/yr for 5 years (62-57) or 25% of your pension value (if your additional work gets you to a total of >=20 yrs total creditable service and wait till age 60 to start your pension then there is no reduction). however there would be no increase in your high 3 from the time you leave service and start your pension so no adjustment for any inflation in that time period and the cola lite doesnt start till age 62, so lots of years of no inflation protection

btw, it is unclear what your current total asset value is. it would help to know that.

 

[Enuff2Eat]

Congrats, why worry so much As far as wealth go, you're probably the top 0.5% in Thailand or Philippines. $25k/yr in such country is like living in paradise. About your real estate, why not walk away. it will take a long time just for you to break even if it's already $130k depreciated.

 

[Notmuchlonger]

You could live in Thailand or the Philippines for $25K/year easily. If you consider just the $1M in cash, that gives you 40 years and puts you at 81 years old.

Heck yeah just watch a bunch of episodes of Anthony Bourdain.