6 years to go hopefully

[LazyErik]

Hi ER,
Ive been lurking for about six months. Thought I'd register and say hello. I'm in my late 30s, looking to retire at 45 (class of 2019. . . hopefully I don't get held back). DW and I have been saving almost 55% of our income for 12 plus years. I also had a nice inheritance while in High School and since I didn't know what to do with it, I just indexed it. It actually has done quite well and it makes up almost 35% of our net worth. (I thank my uncle every time I see him for teaching me about index funds when I was 17 and thought I knew everything.)

We have been maxing out all of our 401k options, 403 b accounts, Roth IRAs (on years they are available), etc. My big push right now in the next six years is to save enough cash to supplement our dividend income for our years from 45-60. We live very inexpensively, so our dividends currently cover almost 75% of what we need for our yearly expenses.

FIREcalc says we can easily make it right now, but I always worry about that sort of thing. I have a good job I like, nice fellow employees, and the work stress is manageable without copious amounts of alcohol. My wife works at a University and loves her job, but she said she would probably be ready to quit when she hits 45. Our biggest fear is what would we do after ER?

Thanks for all the wonderful information on this forum. I hope to be a good contributing member.

 

[citrine]

Welcome and congratulations on the stash! As for what to do after ER....do some reading on the subject, think about what you liked to do as a child, try out some classes at the local school/college such as cooking, yoga, art, woodworking, etc.

 

[LazyErik]

Thanks for the reply. I'm already starting more surf classes with a private coach, just to prep me for retirement. Two masters and one JD under my belt already, so I don't want anymore formal education (I just got an extra masters to stay ahead of my wife in the post grad education category. . . .can't have her looking down on me and trading me in for better younger model).
I spend a lot of time trail running and biking, so I figure I will just do more of that. I also want something to do with my hands, so I have been looking at some small engine repair and diesel repair courses. I've always been secretly fascinated with what makes things go.

 

[obgyn65]

Welcome aboard.

 

[Midpack]

FIREcalc says we can easily make it right now, but I always worry about that sort of thing. I have a good job I like, nice fellow employees, and the work stress is manageable without copious amounts of alcohol. My wife works at a University and loves her job, but she said she would probably be ready to quit when she hits 45. Our biggest fear is what would we do after ER?

Reaching FI is a worthy goal for everyone, and you will be well served working towards it as aggresively as you can. Too many people focus too much on the now, and not enough on their financial future (FI) - finding a balance between the now and FI is not easy.

But reaching the FI milestone gives you all sorts of options, early retirement is but one choice. If you enjoy your work, unless you have something much better to do in retirement, it would be a mistake to retire just because you can afford to IMO. Satisfying work is a noble activity too...though sadly many people don't find themselves engaged in satisfying work.

 

[scrabbler1]

As someone who retired at 45 back in 2008, I can tell you that I split my ER plan into two parts - the first part was from age 45 to age ~60 which required me to live off only my taxable (non-retirement) accounts. The second part was after that, the easier part, which included my "reinforcements" consisting of unfettered access to my rollover IRA, my frozen company pernsion, and Social Security. Before I ERed, I had about 2/3 of my investments in the retirement accounts so I needed to adjust that a lot so I could generate enough current investment income to cover my bills. It looks like you are most of the way there (75%?) but if you have to contribute less to the retirement accounts in order to better fund your taxable accounts then that may be worthwhile. In my last 18 months of working, I became ineligible for company match in the 401k so I decided to stop contributing to it so I could save more.

Another big issue for us early retirees is health insurance. The PPACA (Affordable Care Act) will make this a lot easier for us with the subsidies, and there are several threads in this forum which address this important issue.

Another thing many of early retirees do is volunteer work. I worked part-time for 7 years prior to my ER so I had already been doing some volunteer work. Being fully ERed made this easier to do without those pesky and annoying work conflicts and I was able to expand on it as well as some hobbies I had resurrected when I first switched to working part-time. Looks like you have the hobby part already taken care of.

I hope you can ER at 45 like I did.

 

[LazyErik]

Thanks for your insight! This is exactly what I have been trying to do. My DW and I have been saving cash from our paycheck deductions, and we have been investing in long term stocks in our 403s, 401k, Roths, Roth 401ks and all off the other alphabet soup that we can possible hit. I plan on cold hard cash from 45 years old 'till 60ish when I can start hitting the real retirement. I don't want to do a 72(t). We are trying to deposit mostly cash in conjunction with our regular accounts...we max them out (see line 3&4).
The "master plan".....(hm sounds very contrived by a young person that knows it all) is to depend on cash and a portion of the dividends until we can pull down legitimately in our tax protected accounts.

And remember, my Opa always said eat desert first, because you never know when your die.

Lazy