ER - Am I ready?

[Dry Socks]

Whatever decision you make, I hope it will be your decision, and not overly influenced by a forum that, in the final analysis, has not a whole lot in common with your situation.

Well said.

 

[SteveR]

household = people living together as one economic unit.  The average household size was 2.59 people per household in 2000.  Per capita incomes are less than the household income.  That 2.59 might include one or more parents, and children or fifty-nine one hundredths of a child.

Also, robls, I believe you 100% re: living good on $15k/yr.  Health care will be an increasing expense, but there are ways to save.  Don't be discouraged by those here who think it is impossible to live on that much.  Just because they live on $50-100k/yr (for two people) doesn't mean you can't do it for much less.  Look at the bottom rung of our social ladder.  Somehow they're making ends meet on $15k per year (or less).

SteveR,
I don't want to be trite, but you're citing the average individual income for a working male or female, the average of which is $35k (ballpark).  That isn't household data.  The average working household (that would have greater than one and less than two income earners, on average) would combine incomes from both income earners (if applicable) to arrive at the household income.  In this case though, we ought to discuss individual income levels, since robls is a household of one person. 

In the case of robls, it is relevant.  He is the head of his household of one so the figure would be appropriate for him in this case.  We are discussing his individual income as a household of one.  A little flexibility might be appropriate here.  

 

[Andre1969]

Ooh, that's something else I just thought of...water!  I forget about that bill, because it only comes every quarter.  And when I lived in my condo for years, it was in the condo fee.  The water bill usually isn't too bad, but I did have it break $100 once, when I had a toilet that kept running.  It's amazing how much water a little run can waste!

 

[robls]

Whatever decision you make, I hope it will be your decision, and not overly influenced by a forum that, in the final analysis, has not a whole lot in common with your situation.

Good luck, Jarhead

Thanks, Jarhead.

I was just throwing out the question in general. There are so many variables involved in a decision like this, that it truly comes down to the individual making his or her own decision. Not looking for approval. Just input from others on the board. Thanks to everyone who has responded.

Rob

 

[robls]

How about food, water, sewer, phone, insurance, medical, Rx, car repairs, home repairs, entertainment, gas (for car), taxes, other?  Also, when your boss stops your broadband are you going to get it on your own?

Not trying to be a pain the rear here...just trying to focus on the true cost of living.  

I already wrote that I would not give out a detailed budget. Just gave a few lines from my budget.

Rob

 

[haha]

I already wrote that I would not give out a detailed budget. Just gave a few lines from my budget.

Rob

Rob, I've read what the others had to say, and your responses, and I want to change my former perhaps overly cautious stance. Obviously you are in good shape and have things well in hand.

You are the guy who knows best what is best for you.

Ha

 

[SteveR]

I already wrote that I would not give out a detailed budget. Just gave a few lines from my budget.

Rob

I was not asking you to give out details of your budget; only to consider all expenses in your long term plans. I understand not wanting to give up personal information in a public forum.

 

[justin]

A little flexibility might be appropriate here.

Steve, sorry if it seemed like I was being a troll. Not my intent! I'll leave that for other esteemed members of this board.

I think I was arguing over semantics.

 

[SteveR]

Justin,

No foul, no harm. Sometimes in our zeal to participate in an exchange of information and opinion, we become too focused on finding fault that we forget about context.

 

[justin]

Justin,

No foul, no harm. Sometimes in our zeal to participate in an exchange of information and opinion, we become too focused on finding fault that we forget about context.

True enough. It is nearly impossible for a stranger to tell one's intent in a short one paragraph statement. No emotion, no context, no chance to say, "yeah, that's what I meant".

And we all know more than everyone else and our egos are huge

 

[acg]

acg:  First off, if you think you can come to this, (or any other forum), and expect to have "approval" from all posters, on your situation or any other situation, that's not going to happen.

Whatever decision you make, I hope it will be your decision, and not overly influenced by a forum that, in the final analysis, has not a whole lot in common with your situation.

Good luck, Jarhead...

Thanks Jarhead,

Much too old myself for the approval thing...and been
contemplating major life changes for some time, definitely nothing to be taken lightly.

A wise ('ole) man once said to me, "Work as hard as you can, make as much money as you can the first half of your life...and for the second half, give it all away!"  It's all relative.

I just want to be certain I am the one who will making the decisions on where it goes!!! Not just sure yet what to do with it.

That is why I thought it appropriate to join the forum. In the final analysis, who cares? We all live with our choices and decisions thru out life.

A lot of wisdom and real life experience here.

 

[HFWR]

Ooh, that's something else I just thought of...water!  I forget about that bill, because it only comes every quarter.  And when I lived in my condo for years, it was in the condo fee.  The water bill usually isn't too bad, but I did have it break $100 once, when I had a toilet that kept running.  It's amazing how much water a little run can waste!

That wasn't a small leak... I water my lawn in the summer for less than that!

In the end, many people live on $15000yr; that's lower than I'd like, but it could be done.

 

[GTM]

What do you think about my chances on ER'ing now?

50-year old, single male
$400,000 in IRA/401k accounts
$70,000 in savings
No mortgage-own home free and clear
Property taxes are $1,600 per year
No car payment-2003 Toyota Highlander paid off early
No credit card debt-I only have one card that I pay off each month
Currently live on about $15,000 per year. Probably can cut this down considerably.
But with paying my own health insurance it will be about the same.
Am I missing anything?

Thanks.

Rob

With the numbers you are providing you can do it.

If your investments can return 2% more than inflation.

$470,000 in cash minus a $1500 per year penalty for early IRA withdrawal for a few years will provide income for 48 years.
You will go broke at age 98.

 

[Mr._johngalt]

Here's an angle. Rob has more now than I ever had
(as a single or a couple) and spend more than he does,
obviously.

I have not worked in a long time and will/can not any more.

I believe the largest safety net I/we have is the ability to cut
way back even from the relatively low spending level we
occupy now. Or look at it this way, compared to what we know we
could adjust to (I have taken into account the age factor)
we are living pretty high on the hog spending 25K per year.
It really is all relative.

JG

 

[dex]

What do you think about my chances on ER'ing now?
Am I missing anything?
I think you are missing a lot.
First, RE should be about enjoying life (in my opinion) can you enjoy life on 15K a year or are you just existing?
Second, Financially you are in good shape if you continue working. But you have 12+ years until Social security. You will need to spend down your 70K after tax savings and then eat into your retirment savings. You retirement savins will most likely be hit with a early withdrawl penity if you withdraw before 59 1/2.

I'm guessing your house is worth apx 100K so you have a net worth of $570K but no mention of a pension or other income streams.

Others have mentioned that they figured a minimum of $20K for their annual expenses and still others will chime in that they RE'd with less than you.

Rob,
I've changed my mind - go for it and let us know how you do.

Giving advice is sometimes only showing our wisdom at the expense of others.--Anthony Shaftesbury

It is an easy thing for one whose foot
is on the outside of calamity
to give advice and to rebuke the sufferer.--Aeschylus (Prometheus Bound)

 

[Martha]

The difference between retiring with a portfolio that yields $15,000 a year and being low income and earning $15,000 a year is that the one with the portfolio has more to lose if something goes wrong. And if you have to dip into your portfolio too much to meet an emergency then it might not yield $15,000 a year anymore.

You should know what state you live in to know what is exempt from creditors if things go wrong. Does your state have a small homestead exemption or large? Does you state exempt IRAs or limit the exemption? It would be good for you to know when evaluating risk.

We know a guy who got laid off from a university teaching position when he was about 40. Now he is in his early sixties. He has lived for more than 20 years, on less than $10,000 a year. He works handiman jobs. He grows his own food. Sometimes has a car, sometimes doesn't. Is very healthy and has no insurance. Last summer he took a 2000 mile canoe trip with his dog from Wisconsin to Montana, most of it UP the Missouri river. Amazing guy.

 

[maddythebeagle]

I am surprised that Unclemick hasnt responded to this thread. I think he was forced into retirement with 400k or so and made it work with simply living.

 

[wildcat]

UM2 will only chime in if we start talkin' dividends and Norwegian widows

 

[unclemick]

Ok Ok

Will toss in the old curve ball (from the old forum).

Psst - Wellesley - current yield about 4%.

Having lived on both sides of the 15k number - the North side is better. We were in the LA swamp in a paid up fish and I carried no health insurance(not recommended).

Post Katrina - restarting from scratch with a mortgage in the burbs - ? best guess - maybe 30 - 40k living pretty high on the hog. Don't know how to expense rebuying everything from scratch( capitalize over expected life).

Anywise - having an emergency reserve of 40k was extremely beneficial - to put it mildy.

Yes - you can do it on 15k - but working the nuts and bolts of expenses - and what you are invested in - makes all the difference.

Heh heh heh - the devil is in the details.

 

[dex]

Post Katrina - restarting from scratch with a mortgage in the burbs - ? best guess - maybe 30 - 40k living pretty high on the hog. Don't know how to expense rebuying everything from scratch( capitalize over expected life).

Excuse the dumb question: They give a mortage to a person without a job? How does that work?

 

[Martha]

Excuse the dumb question: They give a mortage to a person without a job? How does that work?

Have a high enough net worth and you don't need earned income.

 

[Mr._johngalt]

Have a high enough net worth and you don't need earned income. 

I have no job and thus no earned income. Yet, because I have
an above average net worth, good credit and no debt
(other than reinvested CC money). people want to shower me with
$. It would be interesting to see how much I could borrow.
I suspect it would be almost unlimited if I wanted to work at it.

JG

 

[wildcat]

It would be interesting to see how much I could borrow.
I suspect it would be almost unlimited if I wanted to work at it.

Well, I imagine at some point the bank would disagree

 

[Mr._johngalt]

Well, I imagine at some point the bank would disagree 

Well, I wouldn't be working with ONE lender. Here is the deal.
I am in the best financial shape of my life and I was always able to borrow all the money I wanted, whenever I wanted it. Don't see any reason that it would be any different now.

JG

 

[Nords]

Excuse the dumb question: They give a mortage to a person without a job?  How does that work?

The lender exhaustively analyzes your pension & future SS income, goes over your retirement portfolio with a fine-toothed comb to verify it'll survive repaying the mortgage, checks your medical history under a microscope to ensure you'd be able to return to the workforce if necessary to avoid declaring bankruptcy, and estimates your remaining lifespan to ensure you don't die before payoff. The mortgage company figures they can take your fees as their income, repackage your loan with a bunch of other subprime mortgages, and sell the whole mess to pension funds & CDO investors.

The mortgage companies earn a penny off each transaction but they do a million of them a day.

The weasels executives who developed this plan will all cash in their options and be working at other firms before the mortgage company goes bankrupt.