Been lurrking..can I FIRE?

[DektolMan]

I've been lurking on this board for a few months and want to say thank you for the wealth of information I have received.

I'm 51 and DW is 50. We own a small business which we plan on selling or downsizing and working it part time. The type of business we own is hard to find a buyer for.

Our assets are as follows:

Retirement accounts tax deferred $800k

Taxable accounts $105k

Money Market fund $160k

House value $300k with no mortgage.

We have no debt at all, are in good health and do not have any kids to send to college etc. We live in CT. which has high property taxes. We LBYM and do not need a lot of material things to make us happy. I haven't crunched all the numbers yet but I am thinking we can live on $45k a year. If we do not sell our business we can scale it down anda make 30k easily. The only other thing is health care costs tghat will continue to increase.

It is hard for us to slow down as we started with nothing and because of our work ethic have succeeded. You feel that you have to keep going because that's what you have been doing all these years. We lost our closest friend to cancer this year and it has really made me step back and take a look at my life.

I think it's time to stop and smell the roses.
Thanks for listening and thanks agin for this great group.

Digital Guy

 

[astromeria]

Welcome, digital guy.

Congratulations on your business success and LBYM lifestyle. Early retirement looks good on the surface--have you tried running your portfolio through FIREcalc? You might spend a few months tracking your expenses carefully--I've found that my guesses tend to underestimate things bought occasionally like gifts, entertainment, and home and landscaping expenses such as termite bond, new plants, soil amendments, and so forth.

Is your business "portable"--could you move to a lower cost of living state and continue business activities? Many businesses these days are run over the phone, fax, and email, and ship products/services via the internet or FedEx. That would give you flexibility in lowering expenses. Or perhaps you like the autumn leaves and icy roads of the northeast We certainly find it cheaper to live in SC than we did in CA or MA. One of my brothers moved his business from NJ to SC, which enabled him to double his annual retirement savings. (Now if I could only convince him to invest a little less aggressively! :)

Since you've been buying individual health insurance (I presume), the sticker shock is already part of your budget. Remember that insurance will no longer be tax deductible after full retirement (hopefully that will be remedied in the future!). If you and spouse are in excellent health, you could consider using one of the high-deductible plans or one of the very new plans that sends patients offshore for pre-planned expensive procedures.

 

[Cut-Throat]

How much would the business sell for?

Without selling the business you have about $1 Million. The safe withdrawal on this is about $40K per year. That would be for everything! - Taxes, Medical insurance etc.

So this would be borderline, and a bit too early to retire with Social Security at least 12 years down the road.

Unless the business is worth a pile, I'd keep working a bit longer, unless you really pare down expenses.

 

[Nords]

Welcome to the board, Guy. Sounds like you're halfway through the transition process already.

It looks like you have the numbers but do what Astro says-- track your expenses and plug the numbers into FIRECalc. If you're interested in working part-time then the extra money just makes it that much easier. Bob Clyatt's "Work Less, Live More" has more about that and a slightly different version of SWRs.

Your biggest challenge between now & Medicare will probably be health insurance.

As for the business, several posters have experience with brokering businesses and a couple have recently sold their own. If you decide to sell, it'll get done. The nice thing about the business is that you don't need to get a gazillion dollars for it to support your lifestyle...

 

[DektolMan]

Thank you for all your comments.  Our business is not really portable so moving it is out of the question. There is a company that I do business with now that wants to hire me part time as a consultant if I retire early. I'm sure I can make 15-20k and they will pick up health care. If this works out I would not have to take the full 4% widthdrawal rate and my portfolio will continue to grow.

I did pick up Bob Clyatt's book which I think is great and is giving me a lot of good ideas.

Thanks again for all the ideas.

Digital Guy

 

[Mach1]

Thank you for all your comments.  Our business is not really portable so moving it is out of the question. There is a company that I do business with now that wants to hire me part time as a consultant if I retire early. I'm sure I can make 15-20k and they will pick up health care. If this works out I would not have to take the full 4% widthdrawal rate and my portfolio will continue to grow.

I did pick up Bob Clyatt's book which I think is great and is giving me a lot of good ideas.

Thanks again for all the ideas.

Digital Guy

Sounds like you are in technology of some sort and your company asset is You, so doing part time consulting for your existing client is an ideal situation. Just don't let the same w*rk drives you. I think it alot have to do with our attitude when we think we are semi ER. Good luck.