49 years old and not going back

[waiting for this day]

Hi Everyone,
Today is my 3rd day of retirement and not sure why I an feeling a tiny bit anxious.Dear wife and I have planned for this day for many years.My wife is 48 and we have been blessed with a 14 year old son who is terrific kid.
We have a small but nice home that is payed for and other than a small car payment for a couple more years(0% rate) we have no real debt.We are all in good health and try to take care of ourselves.We have 700k in financial assets mostly in retirement accounts..We are not big spenders and have allways lived below are means.My wife had wanted for me to be a stay at home dad when my son was little but I decided to stay at work and save for an early retirement.My job was okay but was dog tired at end of day and was just trying to make it to the weekend!My wife salary of 55k is enough to pay the bills and put 6% into her 401k and still have 450-500 left at the end of the month to put away for vacation or rainy day fund..We both really thought this would be an ideal arrangement.I would take over household chores(which i don't mind) and when she comes home everything would be done.I have allways enjoyed being outside whenever the weather permitted and will be home with my son for the summers ...We both golf and play tennis along with basketball..I know this is only my 3rd day but I feell like I'm somehow letting my family down by not working.Does our financial situation seem strong enough for just my wife to work?.I'm allready thinking of part time work(I tried to get part time work at my old job before I left but they don't have part time help)
and its only been 3 days.Any advise for how longs it takes to adjust to retirement?.

 

[militaryman]

Just curious, What was it you gave up as far as a job? Hard to judge whether it was worth it without that to compare against --- But if you are clearly able to live off the one salary and the alternative left you unable to be a good parent then seems like a no brainer ---
So basically your saying that the 700K is just sitting and growing currently ... you do not need those funds to live off of right?

 

[FinanceDude]

Hi Everyone,
Today is my 3rd day of retirement and not sure why I an feeling a tiny bit anxious.Dear wife and I have planned for this day for many years.My wife is 48 and we have been blessed with a 14 year old son who is terrific kid.
We have a small but nice home that is payed for and other than a small car payment for a couple more years(0% rate) we have no real debt.We are all in good health and try to take care of ourselves.We have 700k in financial assets mostly in retirement accounts..We are not big spenders and have allways lived below are means.My wife had wanted for me to be a stay at home dad when my son was little but I decided to stay at work and save for an early retirement.My job was okay but was dog tired at end of day and was just trying to make it to the weekend!My wife salary of 55k is enough to pay the bills and put 6% into her 401k and still have 450-500 left at the end of the month to put away for vacation or rainy day fund..We both really thought this would be an ideal arrangement.I would take over household chores(which i don't mind) and when she comes home everything would be done.I have allways enjoyed being outside whenever the weather permitted and will be home with my son for the summers ...We both golf and play tennis along with basketball..I know this is only my 3rd day but I feell like I'm somehow letting my family down by not working.Does our financial situation seem strong enough for just my wife to work?.I'm allready thinking of part time work(I tried to get part time work at my old job before I left but they don't have part time help)
and its only been 3 days.Any advise for how longs it takes to adjust to retirement?.

I think your plan is an excellent one. I am not retired but I know I would feel guilty the first couple of days, and then it would pass. Spruce up the house, make her a nice dinner with some flowers, send your kid to the movies with his friends, and have a nice quiet evening together..........

 

[waiting for this day]

The job I had was a 30k job in a factory-warehouse setting...Hated being inside all day long.We do not live off the 700 k as it is invested....Just thought this was a great time to leave while my health was good and we could really enjoy the time with my family....

 

[RockyMtn]

don't feel guilty, feel happy!

My only question is that if your investments are mostly tied up in retirement accounts (i'm assuming 401k's, etc) then unless your wife keeps working till 59 1/2 you are not going to be able to tap them without a penalty. If she stops working prior to that you're going to need some other form of cash flow.

 

[DblDoc]

The job I had was a 30k job in a factory-warehouse setting...Hated being inside all day long.We do not live off the 700 k as it is invested....Just thought this was a great time to leave while my health was good and we could really enjoy the time with my family....

Need more be said?

DD

 

[donheff]

don't feel guilty, feel happy!

My only question is that if your investments are mostly tied up in retirement accounts (i'm assuming 401k's, etc) then unless your wife keeps working till 59 1/2 you are not going to be able to tap them without a penalty. If she stops working prior to that you're going to need some other form of cash flow.

She can quit whenever they are FI and they can start taking 72T (or whatever the clause is) substantially equal withdrawals without penalty.

Edit: 72t doesn't apply until age 55 -- keep her working until then and enjoy

Edit/edit: looks like it can be done at any age. From the IRS FAQ:
"What is the exception in section 72(t)(2)(A)(iv)?
Section 72(t)(2)(A)(iv) provides, in part, that if distributions are part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the employee or the joint lives (or joint life expectancy) of the employee and beneficiary, the tax described in section 72(t)(1) will not be applicable. Pursuant to section 72(t)(5), in the case of distributions from an IRA, the IRA owner is substituted for the employee for purposes of applying this exception. Section 72(t)(4) provides that if the series of substantially equal periodic payments that is otherwise excepted from the 10-percent tax is subsequently modified (other than by reason of death or disability) within a 5-year period beginning on the date of the first payment, or, if later, age 59½, the exception to the 10-percent tax does not apply, and the taxpayer's tax for the year of modification shall be increased by an amount which, but for the exception, would have been imposed, plus interest for the deferral period."

 

[chris2008]

Great story, enjoy your ER!
You are not letting anybody down for sure. I believe you did the right thing.
Make sure that your wife also enjoys benefits from your arrangement.
As you plan to take over the house chores, make sure you really do, come rain or shine.

And work on the next step, which might be ER for DW, too.

 

[Trawler]

Sounds like a solid plan to me for now. You have your expenses covered and a nice nest egg but most importantly you are spending time with your son and not going to a job you disliked. In my humble opinion spending time with your son is what may be best for your family.
I cannot offer any insight with the ER adjustment as I am not ER yet. Would look at your projected assets and expenses and income at the time your wife want to retire. If need be do the part time work later after your son has flown the coup.

 

[waiting for this day]

We have about 150 k outside of retirement accounts accounts..We both have 401k's .We can tap the 401ks at 55 without penalty I think?

 

[Aiming_4_55]

If your still saving with one income...DW's job, you are set!

Thoughts: emergency fund in good shape, DW's risk of job loss, college funds for son, any upcoming major expenses, etc. If you are comfortable, run with ER. If not come up with a plan to address.

Enjoy your time.

 

[travelover]

Look at it this way. If you were working and your wife was at home, there wouldn't even be a discussion. Enjoy!

 

[skyvue]

She can quit whenever they are FI and they can start taking 72T (or whatever the clause is) substantially equal withdrawals without penalty.

Edit: 72t doesn't apply until age 55 -- keep her working until then and enjoy

You sure about that? I thought you could use 72t to tap 401k's at any age?

 

[donheff]

You sure about that? I thought you could use 72t to tap 401k's at any age?

I believe you are right. I initially looked it up and saw someone paraphrasing it with 55 thrown in. But the IRS fact sheet doesn't state a limit. Maybe someone with more time will look at the full text of the provision to verify.

 

[Dave J]

We have about 150 k outside of retirement accounts accounts..We both have 401k's .We can tap the 401ks at 55 without penalty I think?

I "think" you can tap 401k at 55 if you are still working, but maybe not if you are not still working, but I'm not 100% sure.You can always do the equal payments thing and avoid the penality, so not a big deal.

I did similar as you at age 47.
My SO was forced retired 2 1/2 years later, with health insurance.
My first concern for you is health insurance cost.
Second is I assume you are not planning on helping your child with college.
Third is what region of the country you live.
I think you can swing it easily if you live below your means and your wife keeps working.

 

[RockyMtn]

Actually I think we are talking about two different situations. I beleive a 72t is related to an IRA not a 401k. If you quit working prior to 59 1/2 and rolled your 401k into an IRA you can utilize a 72t to begin withdrawls at anytime without penalty. However you must withdraw a set amount for a period of at least five years or or until your are 59 1/2....whichever date is later. The amount that can be withdrawn is based on life expectancy and the calculations can be quite daunting.

Now if you are 55, and have a 401k, are fired, retire or quit, you can begin tapping that 401k immediately without penalty and without the 72t machinations. However, you may only tap your last employer's 401k, not any that you may have with former employers.

 

[Darryl]

Focus on the family time and enjoy.

When your son leaves for college if you still have unmet financial goals (college funding, retirement for DW etc...) you can always get another j#b you would only be 53.

 

[Rambler]

Have you decided what to do with your time? I'm thinking that if it was me, I'd probably take a (very) part time job, maybe 10-20 hours a week, just to keep me busy, but still able to be home when the youngster gets home from school and also leave enough time to take car of the home chores so DW has no burden with that. And, I would take summers off and take the kid camping, fishing, bike riding, etc. He'll want to start a part time job himself when he is 16 or so, so you'd better take advantage of these last two summers to enjoy that. In terms of finances, it sounds as if you'll do fine so long as DW stays with her job until you have enough to cover your expenses at a 4% SWR.

Good luck, and enjoy!

R

 

[Sossy]

Best of luck on your ER! You may experience some of the same things self-employed people go through. Cabin fever, a sense of wondering whether you're using your time constructively, and a need to define your self-image in a new way. We so often identify ourselves through our careers.

Since you have the time & freedom (and your job was stressful) try to just detox for a while. You may even need counseling for PTSD (you don't have to have been on a battlefield to feel youve been in a war zone). It may even take a few years. Supposedly, it takes at least two years to recover from a bad divorce. Bad jobs (stressful) can be the same. Take care of yourself, and you will ultimately know what you want to do with the next era of your life. But give it some time!

Sossy

 

[Sirka]

Actually I think we are talking about two different situations. I beleive a 72t is related to an IRA not a 401k. If you quit working prior to 59 1/2 and rolled your 401k into an IRA you can utilize a 72t to begin withdrawls at anytime without penalty. However you must withdraw a set amount for a period of at least five years or or until your are 59 1/2....whichever date is later. The amount that can be withdrawn is based on life expectancy and the calculations can be quite daunting.

Now if you are 55, and have a 401k, are fired, retire or quit, you can begin tapping that 401k immediately without penalty and without the 72t machinations. However, you may only tap your last employer's 401k, not any that you may have with former employers.

ITA if you are 55, you can start withdrawing immediately without penalty, if your previous employer allows it. In my case I had to take it ALL or leave it.

 

[njonge01]

I see several comments about SEPP. This vehicle can be used anytime before 59 1/2, but once started, must continue for 5 years or until age 59 1/2, whichever is greater. Its good to have more than one IRA... one that will be used for the SEPP and the other for any emergency withdrawals. if you take a withdrawal from an active SEPP or do anything else to violate SEPP rules, then you're at risk of a penalty for all SEPP distributions.