I am crazy to think I can retire at 48?

[Gunslinger]

Hi All,

This looks like a great place to get some advice, thanks in advance for all the help I think I'll find here.

The title really says (asks) it all. I'll be 48 next month and have planned to retire at the end of January with my wife who is 45. We'll both be retiring the same day. No matter who I talk to, financial planners, friends, etc. I still can't shake the feeling that it's too early. I know that's not a lot of detail at all, but did most of you who retired early feel this way before you pulled the plug?

Am I crazy?

Tony

 

[braumeister]

Plenty of people succumb to One More Year syndrome, so that's not unusual.

But your question is unanswerable without knowing your situation in some detail.

 

[Walt34]

You're not crazy as long as income exceeds expenses.

Here's an FAQ for your question, it come up a lot : http://www.early-retirement.org/for...re-asking-can-i-retire-69999.html#post1399715

And welcome to the forum!

 

[RetireAge50]

You are crazy if you only "think" about it but smart if you actually retire (assuming you have the money).

 

[David1961]

No matter who I talk to, financial planners, friends, etc. I still can't shake the feeling that it's too early. I know that's not a lot of detail at all, but did most of you who retired early feel this way before you pulled the plug?

Absolutely. And even after ER, I still sometimes felt this way.

Have you run your numbers in a tool like FireCalc?

 

[Senator]

You can retire at any age, but it is a lot easier the older you get. And the more money you have.

It depends on the lifestyle you choose, and lock yourself into when you retire.

 

[Gunslinger]

Thanks for the responses. I guess it's more of the "should I stay just a little longer" thing for me. I've been in my industry for 25 years and I guess in a way I'll miss it even though I hate it at the same time...lol It's such a huge change.


Our income will be higher that our expenses even with a substantial gross pay cut. Retiring will allow me to access my 457(b) and use part of it to pay my mortgage. We are DINKs and don't have anyone we want/need to leave an inheritance too so it's ours to spend. The point of investing in it the last 20 years or so was specifically to allow for an early retirement when we felt the time was right. In addition to our 457(b), we will have a pension of approximately 115,000.00 combined with a COLA of 1-2% per year, and be debt free, with the exception of the aforementioned mortgage. My current mortgage balance is approximately 1/2 of what we have in our 457(b) so through careful, conservative and moderate investing, we hope to pay off the mortgage with that money and enjoy the pension for other things. Ideally, we will "bounce our last check".

 

[2B]

You could always wait for a decade after you've decided you have enough to retire. I had a modest retirement funded in 2005 - age 53. I've been a OMY-er (one more year) since then for various reasons. I'll finally retire on 5 Jan 2015 with more money than I can spend as long as we don't have a total financial collapse.

 

[Gunslinger]

You could always wait for a decade after you've decided you have enough to retire. I had a modest retirement funded in 2005 - age 53. I've been a OMY-er (one more year) since then for various reasons. I'll finally retire on 5 Jan 2015 with more money than I can spend as long as we don't have a total financial collapse.

That's a concern for me too. This unstable market concerns me as far as my 457(b) is concerned. That, BTW will be rolled into an IRA after retirement. We have no plans to change our lifestyle. We want to live as we do now, no more, no less. Granted, we'll have more free time, and knowing that, we'll likely increase our spending a little bit. At 48 I'll probably find a retirement "job" anyway because I hate being bored. it will be something I enjoy, or I wont do it so it won't really be a J-O-B

 

[brewer12345]

Yes, you are crazy. We need you to keep working so you can pay taxes to support SS, Medicare and all the other crap the gubmint blows money on.

 

[travelover]

Just because you have enough to retire doesn't mean that you have to quit w*rking. It just means that you can do anything you want to and not worry about the pay. You could be a ski instructor or a porn star. Or you can volunteer or work part time. The possibilities are endless.

 

[Gunslinger]

I guess what my numbers boil down to are:


Expenses of $8,000.00
Pension 1st year of $115,000.00
1-2% COLA per year
457(b) with $640,000.00
Mortgage balance of $360,000.00
No kids, no credit cards, no car payments, etc.
Parents are financially secure


If I feel like it, I have the option of returning to my job on a part time basis at a $38.00 per hour rate, make my own schedule, up to 960 hours per year.


Within 5 years will move out of California and rid myself of some of the highest tax rates in the country while downsizing from our current home/mortgage.


Am I looking at his in too simplistic of terms? I feel like "it's too good to be true" and you know the saying.

 

[David1961]

Expenses of $8,000.00

Is this a typo?

 

[nuke_diver]

From my standpoint you aren't crazy. I wanted to retire when I was 45...and 50 and will at 55. In all cases there was a chance but my DW did not want to retire to a restrictive retirement and so that's the main reason why it was later. Also I was not keen on retiring with debt...any debt so the mortgage (which although I am also in Calif was less than yours) had to be paid off.

If I was you (which clearly I am not) the mortgage would be my worry. If I had your pension I'd be a lot less concerned but even so I would want a much smaller mortgage (or would be wanting to move to a less expensive area). Are the above numbers all you have (no substantial taxable acct>). And does the 8K include mortgage which would go away in 5 years (and if so by how much). Running those numbers only above do not paint a rosy picture for retiring long term (assuming a 3% inflation rate) but if you have more it gets a lot better

 

[karen1972]

The only thing with retiring early is medical and change of what if something happens to the pension (ie the company bankrupts) and the insurance will only pay you $50K vs $115K. I assume the $8K is a type..maybe you meant $80K.. I'm more shocked you could get a pension of $115K taking it that early...but if you can, good for you, I'd retire.

as for Crazy.. I'm 42, DH 44, and I plan to resign in Jan. If we just bring in just $36K/year for the next 10 years, Firecalc says we have a 98% chance of success. Given I make $150k+ right now, its scary giving it all up. walking away from a very steady paycheck... which is driving me into an early grave. I consider myself smart. I also put together a plan for my early retirement because I have a long life ahead of me.. I have a book idea, I plan to hit the gym, I plan to learn to develop my own android apps (just for fun..maybe make a few bucks too), and take some more cooking classes. So my life will be busy without the day to day job and if something major would happen, I still have skillsets to fall back on

 

[FUEGO]

Expenses of $8,000.00
Pension 1st year of $115,000.00
1-2% COLA per year
457(b) with $640,000.00
Mortgage balance of $360,000.00
No kids, no credit cards, no car payments, etc.
Parents are financially secure


If I feel like it, I have the option of returning to my job on a part time basis at a $38.00 per hour rate, make my own schedule, up to 960 hours per year.


Within 5 years will move out of California and rid myself of some of the highest tax rates in the country while downsizing from our current home/mortgage.

Assuming that's $8,000 per month, does it include health insurance and taxes and a mortgage? If yes, then you should be fine. You'll still have $280k net of the mortgage in your 457 (not that you would pull it all out to pay off the mortgage immediately). And your pension more than covers your expenses even before the mortgage is paid off. Once it's paid off I figure you'll free up another $1500-2000/month. And moving out of CA should reduce your expenses.

 

[aim-high]

As the saying goes, "it doesn't take age to retire, it takes income."

It seems to me you have it if your pension is $115K with a 1-2% COLA.

 

[Donzo]

I got free at 49 and have been having a blast for the last 8 years. More money in the portfolio now than retirement day

I would love to have a pension like yours....as long as it is solid. $115,000 with $80,000 spending (i think)...you could continue to invest.

 

[Gunslinger]

It's a government pension so it's solid.


Expenses are actually about $7350.00 per month including my mortgage and property taxes. I try to consider worst case scenario and round up on expenses, down on income a little bit. Medical expenses are covered 100 percent for both of us for life at 25 years of employment so health care costs are not an issue., nothing out of pocket. Long term care insurance is a consideration however.

If I move right away, which is entirely possible, there is about $150,000.00 in equity which would be utilized for a down payment on what will definitely be a smaller mortgage. I do have to consider in the short term the mortgage remains the same though. There a several of those monthly expenses that will be reduced such as gasoline (currently about 500/mo due to long commutes), We both eat out daily at work which is very expensive (200-300/mo. between the two of us), etc.

I have a rental property which is owned by my parents and I. They bought the house, which currently has approximately $250,000.00 in equity as well. They collect the rent of just over $2000.00 per month. It's really a future inheritance to me and I don't consider it in the equation because losing my parents is not what I would ever want obviously, but the reality is that it exists and is mine. That's why I didn't mention it earlier I look at it as "icing on the cake" someday in the future (hopefully far into the future!)

Thanks again for all the input.

 

[FUEGO]

With this new info, I think you'll be fine and from here on out, it's a question of how much thicker do you want your security blanket to be?

 

[jim584672]

Sorry, you are much too young to retire.
Please work till 67. (someone has to pay my SS)

 

[mpeirce]

I'm in the "go for it" column.

I retired at 49 three ago and have loved not working, not having a boss, and having the time to travel, take care of family things that come up, and just do things I want to do.

Your pensions sounds excellent. The markets have run up a lot over the last four years, but a bit if a pull back shouldn't affect you too much.

Carpe diem!

 

[Lakewood90712]

Check with a good tax adviser on access of 457 funds. The 457 plan I am in, the min. age is 55 . Does your plan have provisions to early withdraw for specific uses, like primary residence, medical etc?

Keep inflation in mind, as it is very corrosive over time.

Jump off the wagon if you can.

I could have 2 years earlier than I did, and regret staying the extra 2 years.

 

[truenorth418]

I think your apprehension is natural and perhaps common. I retired 3 years ago at age 47. After an initial rush, I began to question whether I had made the right decision. Then I took a 9 month contract job which threw me back into the old corporate grind. That experience affirmed for me that I had absolutely made the right decision to retire early. When the contract job ended, so did my self doubt. Now I can't imagine not bring retired. It feels completely right for me now, and I love it.


Sent from my iPhone using Early Retirement Forum

 

[2B]

After income taxes, your pension will just barely cover your expenses. I would recommend you look at reducing your expenses before you retire. Moving out of California would free you from the high income tax but you need to consider what taxes you'll pay where you move. Texas has no income tax but our property tax is pretty high. There is no free lunch on taxes but some are less than others.