What's more crazy? Stay or Go?

[radicalsabbatical]

Thinking of testing the waters of early retirement without jumping in with both feet.

Our situation: Married with 2 children: both out of college and working

I am 50 years old- have a COLA defined benefit plan that will pay $2500 per month once I am 55 years old. Each year I keep working, I gain approximately another $150 per month in retirement benefit at age 55.

DH-is 54, works for a major corporation and has worked for the same 20 plus years. He has vested health care rights as of now. DH position is home based, flexible in schedule and requires travel in a large geographic territory. DH makes approximately 60K per year.

We are currently living off one salary. We save the other salary plus our rental income. We own four single family residences free and clear which provides us with $ 5000 per month of rental income. We have been landlords for approximately 20 years and know the pitfalls and time factors of owning rentals. FMV of rentals real estate= $ 800,000.

Our current expenses which we have tracked for one year are approximately $4600 per month which includes our primary home which is about 5 years in on a 30 year mortgage. The mortgage amount is $1800. We have no other loans. We would plan to work and travel in an RV for an additional year or two before pulling the plug which would allow us to continue to save most if not all of our rental income. We plan to Air B&B our current primary home for a few years while we continue to save and travel in our RV. This will help to offset some of our expenses. After a few years we will then determine if we want to sell our primary or continue to hold as a rental. FMV of primary is approximately $ 625,000 and we owe approximately $225,000.


We have $150,000 in cash. Plus we have $250,000 in 401K accounts. We each have several other DB plans that will kick at full retirement age plus SS.

We have FIRE'D and have 100% success rates with various scenarios. We think that we are better able to live cheap and travel early in retirement. We plan to RV travel/ trawler for the first 5-10 years of retirement.

Please provide your thoughts, ideas and suggestions!!

 

[euro]

Thinking of testing the waters of early retirement without jumping in with both feet.

Our situation: Married with 2 children: both out of college and working

I am 50 years old- have a COLA defined benefit plan that will pay $2500 per month once I am 55 years old. Each year I keep working, I gain approximately another $150 per month in retirement benefit at age 55.

DH-is 54, works for a major corporation and has worked for the same 20 plus years. He has vested health care rights as of now. DH position is home based, flexible in schedule and requires travel in a large geographic territory. DH makes approximately 60K per year.

We are currently living off one salary. We save the other salary plus our rental income. We own four single family residences free and clear which provides us with $ 5000 per month of rental income. We have been landlords for approximately 20 years and know the pitfalls and time factors of owning rentals. FMV of rentals real estate= $ 800,000.

Our current expenses which we have tracked for one year are approximately $4600 per month which includes our primary home which is about 5 years in on a 30 year mortgage. The mortgage amount is $1800. We have no other loans. We would plan to work and travel in an RV for an additional year or two before pulling the plug which would allow us to continue to save most if not all of our rental income. We plan to Air B&B our current primary home for a few years while we continue to save and travel in our RV. This will help to offset some of our expenses. After a few years we will then determine if we want to sell our primary or continue to hold as a rental. FMV of primary is approximately $ 625,000 and we owe approximately $225,000.


We have $150,000 in cash. Plus we have $250,000 in 401K accounts. We each have several other DB plans that will kick at full retirement age plus SS.

We have FIRE'D and have 100% success rates with various scenarios. We think that we are better able to live cheap and travel early in retirement. We plan to RV travel/ trawler for the first 5-10 years of retirement.

Please provide your thoughts, ideas and suggestions!!

From what you outline, I'd say you are good to go - especially if your husband's vested heath care insurance is low cost or free (and the company is stable enough so you have a decent chance they'll keep that benefit going).

 

[radicalsabbatical]

Healthcare is the same contribution as a regular employee contribution and is subsided by the company. The company is well-known and we have every reason to believe it will be around well past our lifetime.

 

[DrRoy]

+1 I am doing the same thing regarding earlier travel. Waiting until your 60's or more will make that much more taxing.

 

[aaronc879]

Are you saying that you would like to retire while you DH continues to work a couple more years. He can work from anywhere so you would be travelling by RV while he's still working? Is the $5000 rental income gross or net? Does it factor in property management? If you are away travelling all the time you can't manage the properties yourself. You don't get the pension for 5 more years so it could be tight if your DH doesn't keep working. I would say you are good to stop but he should continue for a few more years.

 

[eastnortheast]

Healthcare is the same contribution as a regular employee contribution and is subsided by the company. The company is well-known and we have every reason to believe it will be around well past our lifetime.

The company giveth and the company taketh away. The company I work for had the same package as described above. Then, they said that they were eliminating that benefit, but would grandfather people in if they retired before date X. And just recently, they told those who were grandfathered in, "sorry, we are going to completely eliminate that benefit". And this is from a company that is stable and all indications are that they will be around for a long time. I was not aware that this benefit even available (not retired yet), but feel bad for those that retired with this benefit being the tipping point. I think you should run your calcs with a worst case scenario that there will not be company subsidized retiree health care in the future.

 

[euro]

The company giveth and the company taketh away. The company I work for had the same package as described above. Then, they said that they were eliminating that benefit, but would grandfather people in if they retired before date X. And just recently, they told those who were grandfathered in, "sorry, we are going to completely eliminate that benefit". And this is from a company that is stable and all indications are that they will be around for a long time. I was not aware that this benefit even available (not retired yet), but feel bad for those that retired with this benefit being the tipping point. I think you should run your calcs with a worst case scenario that there will not be company subsidized retiree health care in the future.

Unfortunately, you are probably right. I'm actually in exactly the same situation - for now, great retiree health benefit. However, yours is not the only example where major mega corps have turned around and said: sorry guys, benefits cancelled
So, I agree, an emergency back-up plan is important - for now, Obamcare provides some certainty that you can at least GET other insurance. However, given our political disaster in Washington, who knows what that will look like in a few years....

 

[Alvin Tostig]

Radical Sabbatical: Yes be careful.


I'm planning on retiring soon and my mega-corp company has pulled and continues to pull the same shenanigans. After a fairly recent merger, severance pay policies have been drastically reduced in several steps, and for those employees over 55 years of age and 10 years with the company, you used to be able to continue with the company health care policy (although it was on your cost). First they raised it to 60 years old. Then they eliminated it altogether! However, those grandfathered in get to keep their health care policy (for now!)