FIREd in 2016

[RetiredHappy]

I retired in 2016 at the age of 53 because my husband wanted both of us to be retired. I got a little nervous about retiring young and immediately turned my IRA into term deferred annuities.

The rest of our savings continued to be managed by a wealth management company. We moved out of California to Nevada, mainly for lifestyle reason. We belong to a country club here, golf 4 to 5 days a week and travel 3 to 4 months a year. 5 years ago I was a little nervous about retirement and whether we had enough to last another 40 years. Financially it has worked out fine. We continue to live the way we lived before we retired, so life has been pretty good. Now we just have to focus on being as healthy as we can be.

 

[W2R]

Welcome to the Early Retirement Forum! I'm so glad that you are enjoying retired life (me, too!). Looking forward to your posts here.

 

[Bryan Barnfellow]

We continue to live the way we lived before we retired, so life has been pretty good. Now we just have to focus on being as healthy as we can be.

Investing in your health to help ensure a long life is sometimes overlooked while being laser focused on the plan to finance it. Good that you get this.
We retired a year before you and since then I have come to understand what getting enough sleep is all about!

Welcome!

-BB

 

[DrRoy]

Sounds good. Welcome.

 

[street]

I'm also a 2016 graduate from the work force. Welcome and happy for your success

 

[38Chevy454]

Good to hear you are now 5 years in and happy. Certainly the past 5 years of market performance has helped to give your savings a boost and provided you with better confidence in the long term.


Many on the board here are self directed and do not use a wealth mgmt company or financial advisor. Have you reviewed their total cost to you and (with potentially some self education) considered to go the self directed route yourself? Same on the annuities, most here are not big fans of them, but in your case it may be water under the bridge and you can't change that now. Investing in widely held diversified funds, at an asset allocation (AA) that meets your risk tolerance is certainly something that most anyone can do; saving those approx 1% fees of the advisor. Note that the 1% fee is typically on your total savings. The 1% fee on for example $1M total savings portfolio is $10K per year - would you rather have that $10K in your pocket or your advisor's pocket? Also consider if your total portfolio increase is 10% for a year, you really only made 9% since the 1% fee reduces that; or said another way the advisor cost you 10% of your returns. Then take out your 4% withdrawal on the 9% increase. Maybe not so bad if 10% returns, but what if the returns are only 4%? Then your net increase is 3% and after your 4% withdrawal you are negative thanks to that advisor's 1% fee. Hurts even worse if you get a negative return year when the market goes down. Point is that 1% fee makes a big difference, and having that 1% in your pocket is much better than the 1% paying for your advisor's big vacation.

 

[RetiredHappy]

@38Chevy454 I totally get your points.

With the term deferred income annuities, I bought them because we both do not have pension and see them as a way to create a steady income stream which will take care of part of our living expenses when I turn 60. I haven't found a calculator online to validate the returns, but using my own spreadsheet, the amount compounds at 5% per year through the deferred and pay out periods. Those are pretty good "guaranteed" returns.

After losing half a million in real dollars, not just paper loss, with use of margin loans during the dot come crash, I have learned that I should not be allowed to manage my own funds. My husband was a decent investor but at the end of the day, he also did not want to manage our funds. While we do pay alot in wealth management fees each year, we have not been unhappy with what they have done for us. For instance, we could see that during last year's market crash, they reduced fixed income and increased equities in our portfolio while the market was down. I don't think we would have gone that route because we tend to let our emotions take over.