Alex is here...

[Nords]

Quote:

Originally Posted by Alex I have a plan. here it is:

Well, that puts you ahead of most of us board members when we registered. Your foresight alone ensures that, whatever date & plan you choose, you'll do fine. Everything past this point is some form of cannonball-polishing.

Quote:

Originally Posted by Alex Social Security - I have been making the maximum contribution to Soc sec for more than ten years and when I visit the site - they calculate my benefits at $2700 per month if i retire at 67, but I am not counting on it and am a bit confused about how it is calculated if I dont contribute for 22 years! When I run FIRECALC I input 10K per year at age 67 - I think that is safe.

The mailed estimate assumes you're working until age 62, so that's no good. Use Social Security's detailed calculator (scroll down the web page to get to the data forms) to give yourself a more precise estimate. Essentially you'll have some zeroes in your earnings history that will reduce your maximum benefit.

Quote:

Originally Posted by Alex So based on selling the home and cashing out 400K and earning an average of 8% return on our portfolio investments, I figure that we'll have around $1,000,000 to retire on in 2-3 years. We have determined we will need $52,000 per year to live on. I have run the FIRECALC and it comes up 96.6% success rate. What do you guys and gals think??

I think that 8% is too aggressive for an all-stock portfolio, let alone an 80/20 allocation. Conservative concensus appears to be 6-7% with Dimson's "Triumph of the Optimists" going as low as 5%. If you can make this work by assuming that your portfolio returns an overall 6% (before taxes) then you're bullet-proof.

Quote:

Originally Posted by Alex Regarding Health insurance - I admit, my plan is a bit hazy here -* I do plan on purchasing a catostrophic policy with a 5Kor 10K deductable. I am hoping that gets us through until medicare kicks in.* We have been blessed with excellent health so far and we both get a fair amount of exercise., but* I still need to get a qoute and investigate more thoroughly. Thats why I am here!!

Even without further tweaking, as your plan is now you're still wearing pretty good Kevlar. Affordable health insurance will be the key.

[Alex]

Quote:

Originally Posted by Nords Well, that puts you ahead of most of us board members when we registered. Your foresight alone ensures that, whatever date & plan you choose, you'll do fine. Everything past this point is some form of cannonball-polishing. The mailed estimate assumes you're working until age 62, so that's no good. Use Social Security's detailed calculator (scroll down the web page to get to the data forms) to give yourself a more precise estimate. Essentially you'll have some zeroes in your earnings history that will reduce your maximum benefit.

That was very helpful, thanks! Now I have a soc sec estimate, actually two- 0ne is in todays dollars = $1143.00/month and one in future inflated dollars = $2411. Which number should I use for FIRECALC?? I have been using 10k/ year.

[brewer12345]

Quote:

Originally Posted by Alex That was very helpful, thanks! Now I have a soc sec estimate, actually two- 0ne is in todays dollars = $1143.00/month and one in future inflated dollars =* $2411. Which number should I use for FIRECALC?? I have been using 10k/ year.

The 1100 and 2400 figues are annual or monthly? If the former, I would just ignore SS and leave it out. I would use the future value in firecalc if it is a monthly number.

[jdw_fire]

Quote:

Originally Posted by Alex That was very helpful, thanks! Now I have a soc sec estimate, actually two- 0ne is in todays dollars = $1143.00/month and one in future inflated dollars =* $2411. Which number should I use for FIRECALC?? I have been using 10k/ year.

I thought I read in a post from Dory36 that you would use present value dollars as inputs to FIRECalc and FIRECalc will adjust for the inflation between now and when SS actually starts.

[REWahoo]

Quote:

Originally Posted by jdw_fire I thought I read in a post from Dory36 that you would use present value dollars as inputs to FIRECalc and FIRECalc will adjust for the inflation between now and when SS actually starts.

This is the way I understand it as well.

[brewer12345]

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Originally Posted by REWahoo! This is the way I understand it as well.*

I stand corrected.

[Alex]

Quote:

Originally Posted by jdw_fire I thought I read in a post from Dory36 that you would use present value dollars as inputs to FIRECalc and FIRECalc will adjust for the inflation between now and when SS actually starts.

Thanks for the clarification.
BTW the figure qouted by Soc Sec was monthly. I'll just leave it at 10K /year. You guys are all terrific!

[blanston]

alex,

I am in a similar situation. mine is, i suppose i can retire now but its the drop in pay that gets me. when i do the numbers, i can get by on the income vs expense and make it last, but, it is a big drop in income.

In your case, If you are saving 76k now and expenses are 48k- 124k total expenes- you must be making at least 150-200 thou now. What amount of income did you say you were comfortable retiring on? 52 thou? Ouch!

[Nords]

Quote:

Originally Posted by blanston mine is, i suppose i can retire now but its the drop in pay that gets me.* when i do the numbers, i can get by on the income vs expense and make it last, but, it is a big drop in income.

What's the issue with the drop in income? Ideally in ER your pay will drop to zero, and several other expenses (saving for retirement, commuting expenses, office attire) become unnecessary...

[Gumby]

..

[Alex]

Quote:

Originally Posted by blanston alex, I am in a similar situation. mine is, i suppose i can retire now but its the drop in pay that gets me. when i do the numbers, i can get by on the income vs expense and make it last, but, it is a big drop in income. In your case, If you are saving 76k now and expenses are 48k- 124k total expenes- you must be making at least 150-200 thou now. What amount of income did you say you were comfortable retiring on? 52 thou? Ouch!

my income is presently in the 250 range - but 75% of that is being spent on investments, income and property taxes, housing (in the expensive so-cal market) and job related expenses. After all is said and done, I live on about 20% of my gross now! I think you need to really look at your own numbers and get your arms around what you really need, and want you really want. Do you really need to drive a new expensive car? Or will a two year old modest sedan work? Must you have a $125.00 bottle of Opus One? Or will a nice $10.00 bottle work? If you need alot of luxuriuous perks, then you probably need to wait until the numbers support the lifestyle you want. I would rather have my free time.
I figure that worst case, I can live in Panama, Mexico , Honduras, Argentina, Thailand or Belize for a part of the year-anywhere that the cost of living is a fraction of the USA. Either way, I will not be suffering on $1,000 per week.

[blanston]

Alex-

Isn't it fun to make 250k?

Isn;'t it fun to have the extra money to invest? watch it grow, or whatever.

Isn't it nice to have the income and security to be able to buy the best stuff? cars, wine, whatever?

Wouldn't you be really "RICH', if you invested like that for another 8 to 10 years? Wouldn't it be nice?

[califdreamer]

Congratulations Alex on closing in on your ER dream. Looks solid to me.

I'm in a somewhat similar situation... although I'm a couple of years older at 46, my income is lower than yours and I'm on the real estate route (predominately) rather than the stock/bond/etc. route.

I think I could go today if I sold my home in San Diego and relocated to AZ... and I've been thinking about it a lot lately. A lot of the regulars are rolling their eyes right now since I've brought this up plenty in the past. But I wanted to get your insight on the idea of relocating, which, of course, could be permanent. I like warm sunny weather but wonder if I need that much warmth and sun. Are you considering a higher elevation locale or Phoenix/Tucson? Do you have social or family connections that make it an even more attractive move? Are you looking for a lifestyle change (eg moving to a golf area on the outskirts of a metro area)? Do you doubt you'd have any desire to move back to So Cal?

Just curious as I'm looking at this idea for my own ER.

[Alex]

Quote:

Originally Posted by califdreamer Congratulations Alex on closing in on your ER dream. Looks solid to me. I'm in a somewhat similar situation... although I'm a couple of years older at 46, my income is lower than yours and I'm on the real estate route (predominately) rather than the stock/bond/etc. route. I think I could go today if I sold my home in San Diego and relocated to AZ... and I've been thinking about it a lot lately. A lot of the regulars are rolling their eyes right now since I've brought this up plenty in the past. But I wanted to get your insight on the idea of relocating, which, of course, could be permanent. I like warm sunny weather but wonder if I need that much warmth and sun. Are you considering a higher elevation locale or Phoenix/Tucson? Do you have social or family connections that make it an even more attractive move? Are you looking for a lifestyle change (eg moving to a golf area on the outskirts of a metro area)? Do you doubt you'd have any desire to move back to So Cal? Just curious as I'm looking at this idea for my own ER.

I lived in Scottsdale for a few years about ten years ago so I am familiar with the weather, culture etc.. and I like the area. I am looking at Phx, Tuscon and Sedona as possiblities. I have never been to Flagstaff, but we are going to check it out too. We don't have any family in AZ but I do know quite a few people. I have never had trouble making friends anyway. I plan on buying a house in the 250-300k range near golf courses and having a small mortgage. Once I leave Ca, I do not plan on coming back unless I am visiting. Don't get me wrong, I love it here, but after 20 years of gridlock traffic and high taxes I am ready for a change. We figure when it is brutally hot in the summer in AZ,we can rent a beach house in Panama, or Belize or wherever! I say- Go for it. Life is too unpredictable. Sell that house, cash in your chips and throw away your work clothes....

[Alex]

Quote:

Originally Posted by blanston Alex- Isn't it fun to make 250k? Isn;'t it fun to have the extra money to invest? watch it grow, or whatever. Isn't it nice to have the income and security to be able to buy the best stuff? cars, wine, whatever? Wouldn't you be really "RICH', if you invested like that for another 8 to 10 years? Wouldn't it be nice?

Yes to all. BUT it would be nice to get in touch with what is really important in my life. Ya know, the things that no amount of money can buy. Yeah, I'd like to have more $$$, but I'll always want more!! I have the luxury of being able to decide how much is enough (to a point). I work on straight commission, so my income is in no way gauranteed (nor is it capped!) . I work hard and I play hard. Now, I am getting to the point where I would rather play more and work far far far far far less, if at all. As I get closer to FIRE I will look at things closer. A few more years may be in order....I am flexible.

[califdreamer]

Thanks Alex. *I had ex-girlfriend who had parents in Scottsdale, always enjoyed it very much when we went over there. *I think the weather there is great for 9 months of the year. *I don't mind 100 and dry, it's the monsoon season I dislike. *Then I started thinking of getting a humble second place to escape monsoon season but that just adds to taxes, insurance, headaches, what's the point? *Maybe you've got just the right idea with an inexpensive beach getaway for a few months. *One requirement for me would be a pool in the backyard.

Thanks for your input.... you've got me thinking again.

[Alex]

Quote:

Originally Posted by califdreamer Thanks Alex. I had ex-girlfriend who had parents in Scottsdale, always enjoyed it very much when we went over there. I think the weather there is great for 9 months of the year. I don't mind 100 and dry, it's the monsoon season I dislike. Then I started thinking of getting a humble second place to escape monsoon season but that just adds to taxes, insurance, headaches, what's the point? Maybe you've got just the right idea with an inexpensive beach getaway for a few months. One requirement for me would be a pool in the backyard. Thanks for your input.... you've got me thinking again.

yep, you've gotta have a pool in AZ. I lived there part time. I had my home and wife in Ca, but the company I was working for had me on temporary assingment in PHX. The 'temporary assignement' ended up lasting about 2 years. I came home on weekends and holidays, but really found that AZ was a nice place with friendly people. When we FIRE we don't plan on buying a second home near the beach - just renting one for the summer. I have rented a great house in Ensenada - oceanfront for $1500 per month.