Me: 54yo left MegaCorp in June this year after the latest round of layoffs, but am being paid severance through year end. Prior plan was to ER next year, so close enough.
DH: 53yo plans to leave MegaCorp job at year end. The contract he was working on was cancelled, and he is mentally/emotionally "done" with the rat race, especially since I am now ER. He will also be paid through year end. He can play hooky on the "bench" for the rest of this year, as he is requesting no reassignment.
No kids. House is on the market for $500k (no mortgage). We have decluttered, downsized and given away what feels like tons of "stuff" over the summer. It was like shedding a ball and chain with each carload to Goodwill.
Expenses: After maxing out 401k, ESOP, HSA and taxes, etc., we netted about $10k/mo. We threw $4.5k a month at the mortgage until it was paid off in mid 2013, and then saved about that same amount afterwards to shore up our cash reserves. We have been living on about $5.5 net/mo. for a few years.
Investments: We currently have $1,360,000 in 401ks, IRAs, savings and bonds. The vast majority is in 401ks and IRAs, which are all being consolidated into our IRAs at Vanguard. Investment mix is about 60/30/10 right now, and will be about 60/40 in Wellington after we get everything consolidated at Vanguard.
Our plan for years has been to retire early and travel the world (on a budget), and then decide when we are done (in however many years) where to settle down. No house or house expenses until then. We are good with budget travel so long as our room and private bath is clean, and a/c in the tropics. Billy and Akaisha have been our heroes for years, if that helps. I have been reading this forum for a long time and we have been using all of the calculators as well (FIRE, RIP, Financial Engines, plus DH's custom spreadsheet). They all indicate we are good to go now at $6k/month counting taking SS at 62 ($1,600/mo and $1,700/mo), and small pension at 65 ($15k/yr). We plan to try for a lower budget, but $6k would be our top end.
Here is our current financial plan, and we would appreciate any opinions and advice from the wise and experienced FIRE community.
We plan to add about $50k of house money to our $60k in online savings now earning 1% (1.5 yr max budget in cash) so that we do not panic if the markets go nuts. The rest of the house money will be in Wellesley and will continue to backfill the online savings as we use it every quarter. This generates very low income for a few years (only the online savings interest and Wellesley income as taxable income). This should result in little or no income tax and generous ACA subsidy. This will allow us to leave our retirement amounts to grow tax free until I am over 591/2 and can draw from them without penalty, so no need for a 72t plan. We plan to consolidate all of our retirement accounts in Wellington as a "set and forget" plan and let it ride until I am about 60. Any other opinions on that choice? We are seeking simplicity.
Insurance: We plan to establish residency in a no income tax state that has expanded Obamacare before we travel. We will buy international travel insurance while we are traveling.
SS: We do plan to take SS at 62 for a variety of reasons, and realize that we will likely be paying taxes on it as we will be drawing from our IRAs by then.
The current plan is to set aside our bonds (about $55k) for a downpayment on another house in the no tax state once we settle back down after traveling (no house or house expenses until then). We will rent or do long term stay suites when we come back, or stay with family. One thought we have now is to take out a mortgage if rates are still fairly reasonable when we are ready to buy again rather than taking out from our IRAs and incurring a big tax bill that year. We would probably be happy in a $250k or so house in today's dollars, so about $200k mortgage after our downpayment. Any thoughts on this? I know, it sounds kinda nuts to work so hard paying off our house only to sell it and then get a mortgage later on our retirement house. We decided to pay off our house asap during the horrible recession when we were very concerned one of us would lose our jobs, and it did give us great comfort. In retirement, we know the money will be there to pay it off in our retirement accounts, but we think we might be better to let it ride and keep compounding. Of course, that equation changes if mortgage rates skyrocket to something crazy.
Your advice and opinions are most welcome! Thanks so much to all of the "regulars" for years of sharing great knowledge, advice and inspiration! I think we will be in the Class of 2016! I still can't quite believe it. I have not missed work one day, and DH was ready about a year ago! SO excited we are joining the FIRE club, but will be even more excited if you think we are indeed FI to complete our RE
DH: 53yo plans to leave MegaCorp job at year end. The contract he was working on was cancelled, and he is mentally/emotionally "done" with the rat race, especially since I am now ER. He will also be paid through year end. He can play hooky on the "bench" for the rest of this year, as he is requesting no reassignment.
No kids. House is on the market for $500k (no mortgage). We have decluttered, downsized and given away what feels like tons of "stuff" over the summer. It was like shedding a ball and chain with each carload to Goodwill.
Expenses: After maxing out 401k, ESOP, HSA and taxes, etc., we netted about $10k/mo. We threw $4.5k a month at the mortgage until it was paid off in mid 2013, and then saved about that same amount afterwards to shore up our cash reserves. We have been living on about $5.5 net/mo. for a few years.
Investments: We currently have $1,360,000 in 401ks, IRAs, savings and bonds. The vast majority is in 401ks and IRAs, which are all being consolidated into our IRAs at Vanguard. Investment mix is about 60/30/10 right now, and will be about 60/40 in Wellington after we get everything consolidated at Vanguard.
Our plan for years has been to retire early and travel the world (on a budget), and then decide when we are done (in however many years) where to settle down. No house or house expenses until then. We are good with budget travel so long as our room and private bath is clean, and a/c in the tropics. Billy and Akaisha have been our heroes for years, if that helps. I have been reading this forum for a long time and we have been using all of the calculators as well (FIRE, RIP, Financial Engines, plus DH's custom spreadsheet). They all indicate we are good to go now at $6k/month counting taking SS at 62 ($1,600/mo and $1,700/mo), and small pension at 65 ($15k/yr). We plan to try for a lower budget, but $6k would be our top end.
Here is our current financial plan, and we would appreciate any opinions and advice from the wise and experienced FIRE community.
We plan to add about $50k of house money to our $60k in online savings now earning 1% (1.5 yr max budget in cash) so that we do not panic if the markets go nuts. The rest of the house money will be in Wellesley and will continue to backfill the online savings as we use it every quarter. This generates very low income for a few years (only the online savings interest and Wellesley income as taxable income). This should result in little or no income tax and generous ACA subsidy. This will allow us to leave our retirement amounts to grow tax free until I am over 591/2 and can draw from them without penalty, so no need for a 72t plan. We plan to consolidate all of our retirement accounts in Wellington as a "set and forget" plan and let it ride until I am about 60. Any other opinions on that choice? We are seeking simplicity.
Insurance: We plan to establish residency in a no income tax state that has expanded Obamacare before we travel. We will buy international travel insurance while we are traveling.
SS: We do plan to take SS at 62 for a variety of reasons, and realize that we will likely be paying taxes on it as we will be drawing from our IRAs by then.
The current plan is to set aside our bonds (about $55k) for a downpayment on another house in the no tax state once we settle back down after traveling (no house or house expenses until then). We will rent or do long term stay suites when we come back, or stay with family. One thought we have now is to take out a mortgage if rates are still fairly reasonable when we are ready to buy again rather than taking out from our IRAs and incurring a big tax bill that year. We would probably be happy in a $250k or so house in today's dollars, so about $200k mortgage after our downpayment. Any thoughts on this? I know, it sounds kinda nuts to work so hard paying off our house only to sell it and then get a mortgage later on our retirement house. We decided to pay off our house asap during the horrible recession when we were very concerned one of us would lose our jobs, and it did give us great comfort. In retirement, we know the money will be there to pay it off in our retirement accounts, but we think we might be better to let it ride and keep compounding. Of course, that equation changes if mortgage rates skyrocket to something crazy.
Your advice and opinions are most welcome! Thanks so much to all of the "regulars" for years of sharing great knowledge, advice and inspiration! I think we will be in the Class of 2016! I still can't quite believe it. I have not missed work one day, and DH was ready about a year ago! SO excited we are joining the FIRE club, but will be even more excited if you think we are indeed FI to complete our RE