How am I looking?

[brownred]

Hello,
I am single with no debt and payed for home. I will be 60 in July and I want to retire NO LATER than 62. Ideally, I would like to retire in January of 2020 at 60 ½. If I go at 60 ½ I would do COBRA for 18 months till 62 then start SS and pay whatever I needed to pay for insurance from 62 to 65. I have been at my place of employment for 39 years last month. Even though I have a good job I hate it and I dread it every day.
Here are the vitals as of 5/9/19.

Pension $3,900 monthly

SS at 62 roughly $1,800 monthly

401 K balance $871,925
10.25% Broad Market Bond Index Fund
36.25% S&P 500 Indexed Equity Fund
8.35% Small / Mid-Cap Indexed Equity Fund
45.12% LMT Lockheed Martin Stock in 401K Brokerage TD Ameritrade SDB Securities

Individual TD Ameritrade brokerage ACCT. #1 balance $6,643
MTUM, iShares Edge MSCI USA Momentum Factor ETF, $2,474
ACB, Aurora Cannabis Stock, $2,334
CGC, Canopy Growth corporation Stock, $1227
VOO, Vanguard S&P 500 ETF, $520.46

Individual TD Ameritrade brokerage ACCT. #2 balance $87,099
VTI, Vanguard Total Stock Market ETF, $33,900
CGC, Canopy Growth corporation Stock, $7,914
ACB, Aurora Cannabis Stock, $1,183
AAPL, Apple Stock, $19,135
TRBCX, T. Rowe Price Blue Chip Growth Mutual Fund, $24,952


Roth IRA TD Ameritrade brokerage, balance $130,703
AMZN Stock, 26,656
VIOO, Vanguard S&P Small Cap 600 ETF, $9,364
VOO, Vanguard S&P 500 ETF, $36,382
VTI, Vanguard Total Stock Market ETF, $58,285

I know my risk level is high and it always has been. Luckily the market has been doing well the past 10 years.
As soon as LMT Stock reaches $350/$360 again (and I believe it will) I plan on selling it and moving my 401K to Vanguard (which I can do under my plan rules at 59 ½) and doing the normal Asset Allocation, Diversification and Rebalancing with the 2 or 3 fund portfolio.
The reason for COBRA and not the ACA is it is good insurance and I like my doctors and want to keep them.

Please give me your thoughts on what you see and about me retiring at 60 1/2 and 62.

Thank you

 

[SumDay]

What are your annual expenses? And have you asked FireCalc what it thinks?

That's a nice pension - color me jealous.

 

[rpguy4]

Hello,

Do you know what your monthly/annual expenses are ?

When does the monthly pension payment start ?

 

[pb4uski]

If you spend less than $100k a year then you're probably all set... if you spend $250k a year then you need to keep working.

I hope you get the drift... we need to know what your spending is to give you advice on how you are looking. Consider provisions for lumpy costs like periodic car replacements, roof replacements , HVAC replacements, likely medical deductible costs, etc.

The concentration in LMT is a big risk. I might consider scaling it down asap and buy some at the money or just out of the money calls if you want to make a bet on LMT to reduce your risk.

 

[brokrken]

Hi brownred. A couple of observations from my side:


1. In order to really give an opinion on if you are ready, we need to know your expenses. That's really the only way to know if you have enough money.
2. For the LMT stock, I would not wait to sell. I'd diversify as soon as possible. It represents an alarmingly high % of your net worth. Things can go bad for any company quickly.

 

[MBAustin]

Hi brownred. A couple of observations from my side:


1. In order to really give an opinion on if you are ready, we need to know your expenses. That's really the only way to know if you have enough money.
2. For the LMT stock, I would not wait to sell. I'd diversify as soon as possible. It represents an alarmingly high % of your net worth. Things can go bad for any company quickly.

+1

Tracking expenses and looking at all angles of your finances and non-financial matters are key:

Some Important Questions to Answer

 

[mh]

Hi brownred. A couple of observations from my side:


1. In order to really give an opinion on if you are ready, we need to know your expenses. That's really the only way to know if you have enough money.
2. For the LMT stock, I would not wait to sell. I'd diversify as soon as possible. It represents an alarmingly high % of your net worth. Things can go bad for any company quickly.

You should ask yourself :

“ would I buy the amount of LMT stock that I have now if I didn’t already own it ( and I had the cash value instead ) ? “

I’m guessing the answer is probably no. If that’s true then you should sell it. No reason to keep it otherwise

 

[kjpliny]

Agree with the others...your portfolio + pension + SS should accommodate a spending level of $100k/year including taxes. The LMT stock pays a decent dividend (2.6%) but could be risky to hold (with such a high percentage of your net worth). I'd be more comfortable with a broader mix of stock/bond funds.

 

[HI Bill]

LMT is near an all-time high as of market close today. This represents 35% of your invested assets. I agree with others, diversity as soon as possible. You never know what headline will adversely affect the share value. Waiting could cost you your plan.

Dump all your single stock, and invest in ETFs (IMHO). Reallocate per your plan.

Once that's done, evaluate your spending in retirement. If you're eligible for your pension now, have divested your LMT stock, checked FIRECALC to verify that your success rate is close to 100% with your anticipated budget, have some reserves, and will have enough income to do what you want in retirement, then retire now or in January (assuming spending is at/below $100K as projected by others). Enjoy!

 

[Bamaman]

39 years? They've taken enough of your life.

Since you're not having a good time at work, say "Adios!" You'll wonder why you didn't do it earlier.

And watch the performance of that Martin Marietta stock closely.

 

[W2R]

Hi, brownred.

Like you, I am single with no debts and a paid off home. I retired at age 61.5, about ten years ago. Your assets look quite sufficient to me, of course depending on what you want to spend. But gee, given the fact that you hate your job, I'd think that retiring soon could be an excellent idea.

I'd suggest plugging your numbers into FIRECalc, our free retirement calculator, to get an initial ballpark estimate.

I'll join the chorus of those urging you to get rid of that Lockheed Martin stock now. That said, my boyfriend has a bunch of it too, and I haven't been able to persuade him to sell it (yet). But hey, it's his decision. If we were married his reluctance to sell would drive me crazy.

 

[pb4uski]

.... As soon as LMT Stock reaches $350/$360 again (and I believe it will) I plan on selling it and moving my 401K to Vanguard (which I can do under my plan rules at 59 ½) and doing the normal Asset Allocation, Diversification and Rebalancing with the 2 or 3 fund portfolio. ....

Pigs get fat, hogs get slaughtered.... its around $340 now... get while the getting is good. It may be a great investment... or it might now.... are you willing to take the risk 1/3 of your life savings?

Derisk while you can and if you want to make a bet on the company buy a call.

 

[Sunset]

OP - You look pretty good to go now, depending upon your spending.

Like others, I join the chorus to say since LMT is at 95% of it's high point for the past 5 years , trade it for a broad based ETF like VTI (which is also not quite at it's high point), so you are not really losing anything.

That is such a huge risk factor, but perhaps you have never owned a great company stock that went up a lot, everyone loved, and the future was bright, to only have it fall fast and hard due to CEO screwups and I mean fall to ZERO... but of course people hung on waiting for it to bounce back up.. so sad

You could check into Health Insurance on the open market , might be cheaper than cobra and you could retire today.

 

[street]

OP - You look pretty good to go now, depending upon your spending.

Like others, I join the chorus to say since LMT is at 95% of it's high point for the past 5 years , trade it for a broad based ETF like VTI (which is also not quite at it's high point), so you are not really losing anything.

That is such a huge risk factor, but perhaps you have never owned a great company stock that went up a lot, everyone loved, and the future was bright, to only have it fall fast and hard due to CEO screwups and I mean fall to ZERO... but of course people hung on waiting for it to bounce back up.. so sad

You could check into Health Insurance on the open market , might be cheaper than cobra and you could retire today.

This

and what pb4uski said, you will need to spend right at 100K a year and then you should be fine.

 

[brownred]

First of all I want to thank everyone for there responses.

I don’t track my expenses but will start doing that now. $100,000 a year? Good lord…who spends $100,000 a year. I don’t even make that much per year!

My pension starts when I retire. I will receive $100.00 per year of service.

I did sell half of the Lockheed stock yesterday and will sell the rest next week. Its close enough to my $350/$360 mark.

I can’t do Calls because I really can’t quite get a grasp on that.

Also. I have no kids so there isn’t anyone that I really want to leave an inheritance to. I don’t want to die with a lot of money sitting in the table and the men in my family die right at the 70 mark.

 

[joeea]

I don’t want to die with a lot of money sitting in the table and the men in my family die right at the 70 mark.

If you really feel you have 10 years to live, you should retire yesterday. Why wait until January?
You clearly have 10 years of expenses saved.