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mrftexas 10-17-2016 12:33 PM

Thinking about it in Texas
 
I'm 56, DW is 53 and we have 2 kids, one a junior in college and the other a senior in HS (who will go to college). Over the past year or so, I've found myself increasingly tired of life at MegaCorp - maybe as I've aged, I've noticed more and more that the BS percentage of my work time is way too high.

As you'll see from the numbers below, I'm pretty sure I'm in a position to FIRE, but, being someone who is pretty conservative financially (thanks, Dad, for instilling the LBYM philosophy), I just can't seem to get all of the worst-case "what-ifs" out of my head. I'm a plan-for-the-worst kind of guy, but we all know that you can't plan for everything. I'm trying to convince myself that we have a good plan in place that will cover any reasonable future situation, but that little voice in my head keeps saying "but what about this extreme situation....?" Am I alone in my uncertainty? Deep down inside, I know that thinking this way means that I'd never retire. I guess, I want to be absolutely, positively sure that nothing will go wrong, but I know that it's impossible to know the future.

Now the numbers:

No debt, $275K house paid off

Kids college funded through Texas Tomorrow guaranteed tuition plan and $75K in other 529 accounts for room/board, books, etc. Public schools.

DW income is $25K/year and she'll continue to work, at least for a few years

Pre-tax savings (401K, etc) $1.2MM

After tax savings (mutual funds, cash) $4.4MM, probably a little conservative with 50% in equities with balance in bonds funds and cash/CDs

No pensions

Expected expenses $85K/year, which does not include college expenses (see above - those are funded separately) but includes $24K/year for health care and accruals for major items such as cars/major home repairs, etc.

We'll both (supposedly) get SS, me $2600/mo at FRA and she'll be at ~1/2 of that

FIREcalc with any reasonable assumptions shows a 100% success rate.

freedomatlast 10-17-2016 12:48 PM

Looks like with a conservative 3% draw, you'd still be good to go even if you only had half of your invested assets. Pull the plug and enjoy!

exnavynuke 10-17-2016 12:52 PM

A quick calculation tells me that you can withdraw at a 2% rate from just your after tax savings without SS and cover your expected expenses. As such, I'd say you've already worked too long :D

ziggy29 10-17-2016 01:10 PM

I'd say you are more than OK here.

RetireAge50 10-17-2016 01:21 PM

Thinking about it in Texas
 
Quote:

Originally Posted by mrftexas (Post 1791685)
I just can't seem to get all of the worst-case "what-ifs" out of my head.


Sorry to hear of your illness, hope you get well soon.

Sounds like you are all set up financially and with a great family.

Enjoy and congrats!

euro 10-17-2016 01:47 PM

Quote:

Originally Posted by mrftexas (Post 1791685)
I'm 56, DW is 53 and we have 2 kids, one a junior in college and the other a senior in HS (who will go to college). Over the past year or so, I've found myself increasingly tired of life at MegaCorp - maybe as I've aged, I've noticed more and more that the BS percentage of my work time is way too high.


Expected expenses $85K/year, which does not include college expenses (see above - those are funded separately) but includes $24K/year for health care and accruals for major items such as cars/major home repairs, etc.

We'll both (supposedly) get SS, me $2600/mo at FRA and she'll be at ~1/2 of that

FIREcalc with any reasonable assumptions shows a 100% success rate.

If those expense numbers are even reasonably firm, you are way past "good to go"!

REWahoo 10-17-2016 01:51 PM

1 Attachment(s)
Quote:

Originally Posted by mrftexas (Post 1791685)
...I just can't seem to get all of the worst-case "what-ifs" out of my head.

Be sure to include this one. :)

MuirWannabe 10-17-2016 01:59 PM

If your numbers aren't good enough then I must be crazy planning to take the leap in 6 months. Looks more than solid.


That Texas Tomorrow Fund was a good deal huh?! Absolutely the best investment decision I ever made. It was so good they shut it down and launched a newer rebranded version that was more affordable for the state. Anyway, I take credit for doing it when I did. But truth be told I was just very lucky on that one.


Muir

REWahoo 10-17-2016 02:25 PM

Quote:

Originally Posted by MuirWannabe (Post 1791715)
That Texas Tomorrow Fund was a good deal huh?! Absolutely the best investment decision I ever made. It was so good they shut it down and launched a newer rebranded version that was more affordable for the state. Anyway, I take credit for doing it when I did. But truth be told I was just very lucky on that one.

+1

We purchased two years of the TTF for three of our five grandchildren. Our other two showed up too late to take advantage of what appears to be a once in a lifetime good deal. Had to go with 529 plans and the cost to fund two years for them will be double - if not more - what the TTF plans cost us.

mrftexas 10-17-2016 02:28 PM

Quote:

Originally Posted by MuirWannabe (Post 1791715)
If your numbers aren't good enough then I must be crazy planning to take the leap in 6 months. Looks more than solid.


That Texas Tomorrow Fund was a good deal huh?! Absolutely the best investment decision I ever made. It was so good they shut it down and launched a newer rebranded version that was more affordable for the state. Anyway, I take credit for doing it when I did. But truth be told I was just very lucky on that one.


Muir

I've made some bad investing decisions over the years, but getting into Texas Tomorrow was not one of them. Cost me about $11K per kid for 128 hours of college, but the benefits will be ~$50K per kid over the 4 years of college. And with zero risk. Like you, I feel lucky I got in when I did. I smile when I see the bill for tuition and fees and see a big fat $0. Still got to pay for housing/food/books, though.

NavAir 10-19-2016 05:10 PM

Like others have said, TTF was a great deal. We bought the 4 year public option for both kids 23 and 19 years ago. First one went to A&M and is finishing up at UTSA (cybersecurity), the younger one is a freshman at A&M in Business. That was the best feeling knowing their college was paid for no matter when I decided to retire.

I have two months to go now, can't wait...

brucethebroker 10-20-2016 06:00 AM

My kids have been out of college for 12+ years. If I had it to do over again, I would have purchased a two unit rental house near a public college campus (walking/biking distance). I would have made the down payment, and paid the mortgage while they were in school (about the same cost as room/board X 2 kids). At graduation, I would have turned it over to them as their own, as long as they made payments. They could live there, or rent their own unit out (if they took a job out of state). Would have provided nice deductions for me, and a head start for them.

Just an idea.

MBAustin 10-20-2016 09:40 AM

Welcome mrftexas! If you haven't seen them yet, this list of questions may help reassure you that you're ready to take the leap:

http://www.early-retirement.org/foru...ire-69999.html

And you can always search for "OMY" (one more year) here and find lots of examples of folks who had the same struggle you are facing.

Remember that you've already won the game - you are FI so you can RE on your own terms. Most of us would tell you that sooner rather than later is best ;)

StuckinCT 10-20-2016 08:12 PM

Okay, at a 2.5% yield and and a 15% tax rate, you can live on at least $120k through any financial crisis etc. There is a big difference between living on pure portfolio income which does not require selling securities at inopportune times and living on dividends and interest. If you park your money in munis and and a total market index fund you will never have to look at a statement again at $85k spend level. In fact, I think it might be good to go do something that you have not allowed yourself to do. I'm not sure what you are into and does not sound like you are extravagant but whatever it is, do it would be my advice.

mrftexas 11-30-2016 03:22 PM

Well, after running more calcs over the last month and stewing on the (always present) uncertainties around health insurance, we've decided to take the plunge.

I'm letting my employer know tomorrow, assuming I don't chicken out.

I haven't been this nervous in a long, long time. My heart says it's the right time, but I guess my analytical brain will always instill a little doubt.

exnavynuke 11-30-2016 03:51 PM

Quote:

Originally Posted by mrftexas (Post 1806364)
Well, after running more calcs over the last month and stewing on the (always present) uncertainties around health insurance, we've decided to take the plunge.

I'm letting my employer know tomorrow, assuming I don't chicken out.

I haven't been this nervous in a long, long time. My heart says it's the right time, but I guess my analytical brain will always instill a little doubt.

:dance:

ugeauxgirl 12-01-2016 05:13 PM

Congrats- let us know how it went!

cnocmmz 12-02-2016 06:44 AM

Nice, you seem to be sitting well... especially for Texas :-)

mrftexas 12-02-2016 09:14 AM

Company asked me to consider working from home part time, still get medical benefits, with the ability to take up to 10 weeks off per year (w/o pay) to do the travel, etc that me and DW want to do.

Told them DW and I would think about it over the weekend. It's a big decision and figured I owed it to myself to at least consider it.

pjigar 12-02-2016 10:31 AM

Howdy fellow Texan. As others said, numbers look more than enough as long as you "know" your annual expense. If you don't have 3 years of history on your expenses then then I say track your "real" expanses for at least a year before pulling the plug. But if your expenses are accurate then I would not consider part-time offer because you will still be "tied" by rope and your mental state of mind will always be different. I say this from my perspective because I have ore than enough hobbies that I wouldn't want to pursue with part-time work.


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