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Gettin' close and gettin' nervous!
Old 07-05-2019, 10:32 AM   #1
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Gettin' close and gettin' nervous!

Hello all,

My bride and I are about to pull the ripcord and bail out of the rat race. We both turn 55 at the end of the year and will begin the next chapter.

A bit of background:



We both have relatives that have passed early and some that lived well into their 90's. We're mathing to the age of 100. Health insurance is part of my private sector pension.

We live in NJ but there is a good chance we'll move to Florida. A move would save us over 15% of our net spending. I took a buy out (paid weekly) and have essentially been retired since November 2018.

First I've run numerous scenarios through FireCalc (from nothing goes wrong to new roof, HVAC, etc) and they all come up as "100%" success. Has anyone found FireCalc was completely wrong? It shows a healthy success (even on the worst case line).

We'll begin collecting my early pension Jan 2020. It'll be about 1/3 of our yearly income (if we don't sell our house and move to a much friendlier state in the US). Since we're both young I obviously picked the 100% survivor benefit. I recently discovered I'll be getting an extra $94 a month from a 2nd pension I had no idea I was eligible for.

Currently we have an annuity through the union I've been with for 38 years. As soon as I sign the papers and make everything official we're moving it to a 401K and using a financial advisor. This person was recommended by 3 separate friends that have been using him for many years. It's with one of the larger wealth management companies. (I don't know if naming it here is appropriate). This will provide 2/3's of our post retirement income. The plan is to take the same amount for the first 5 years to avoid the 10% penalty.

At 62, we're both planning on collecting SS. My wife has had jobs in the past but raising our kids was the main one. She'll collect the 50% of what I collect. This will be used to supplement our income and allow our 401K to grow (hopefully)


I've figured our possible budgets and added 10%-15% to each. We should have a 25% of our annual income as a cash emergency fund on hand.

I know I've been vague but I'm still adjusting and pretty freakin' nervous about the future.


Cheers all and thanks for the information I've already read and will continue to read.
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Old 07-05-2019, 10:45 AM   #2
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The feeling nervous is a normal thing, but after a short time that will go away. I like your plan and to have a plan then to work that plan is the most important thing. There are many ways to skin a cat and there will be many thinking in a different direction, then what you have planned. My suggestion to you is you do what works for you, which might no be what other would do.
Glad for you to get out of the rat race.
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Old 07-05-2019, 10:59 AM   #3
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You expressed your calculations in terms of %, but there is also an absolute component. If your annual spending is $200,000 then a failure of FireCalc is probably less important than if your annual spending is $30,000. ("Our retirement was *ruined* when we had to choose between the country club membership and the timeshare in Vail".)

Otherwise, welcome to the wonderful world of combining your existential freedom with economic freedom! The realisation that what you've been doing for 30+ years straight (i.e., get up in the morning and go to w*rk) is not the only option, is quite a jump for many people. But you'll adjust real quick.
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Old 07-05-2019, 02:32 PM   #4
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Originally Posted by Harrald View Post
At 62, we're both planning on collecting SS. My wife...will collect the 50% of what I collect.
Congratulations! Sounds like you're financially set. Could you wait to 67 to collect SS to maximize your wife's spousal benefits?
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Old 07-05-2019, 04:21 PM   #5
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I would skip the financial advisor and put the money in a couple Vanguard funds. The advisor will cost you real $$. Jmho
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Old 07-05-2019, 04:27 PM   #6
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I would skip the financial advisor and put the money in a couple Vanguard funds. The advisor will cost you real $$. Jmho
Another alternative is to find a fee only advisor to critique your plan and offer advice on how to proceed. Then DIY using Vanguard or Fidelity funds to save $ on fees - which can be costly, especially if you pay an advisor for ongoing management. You can always return to the FO advisor for an annual check-up if you prefer and will still save.
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Old 07-05-2019, 04:38 PM   #7
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Originally Posted by Harrald View Post
Currently we have an annuity through the union I've been with for 38 years. As soon as I sign the papers and make everything official we're moving it to a 401K and using a financial advisor.
You are moving an annuity to a 401k?

You might wish to discuss that with the advisor first. Make sure you are out of any surrender period.

Hopefully your advisor is a fee-only fiduciary financial planner? If you don't already know, that's a bad sign.

Quote:
At 62, we're both planning on collecting SS.
Why both at 62?

This is something you'll definitely want to discuss with your advisor. Until then, experiment with https://opensocialsecurity.com/

Having both low and high earner claim at 62 is seldom optimal.

Quote:
We should have a 25% of our annual income as a cash emergency fund on hand.
Once again, talk to your advisor about this. 25% might be a bit light in my experience.

Quote:
I know I've been vague but I'm still adjusting and pretty freakin' nervous about the future.
It's a big change - it's normal to be nervous.

Good luck - talk to your new advisor before making big decisions.
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Old 07-05-2019, 04:40 PM   #8
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Congratulations! Sounds like you're financially set. Could you wait to 67 to collect SS to maximize your wife's spousal benefits?
Or wait until 70 to maximize her eventual survivor benefits.
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Old 07-06-2019, 10:36 AM   #9
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So much advice, so much information and so much to think about.



A couple of answers/notes

No country club or place in Vail for us. So no hardship deciding which one to keep.


We have a few years to decide on the SS. These are our initial thoughts



I know financial advisors aren't well liked here. We're willing to pay the cost for a set it and forget it retirement. 4 meetings a year to keep us apprised of how everything is going is enough for us.


The ability to change from annuity to 401K happens when I sign the papers, without a surrender fee.


My wife isn't eligible for SS based on her work history. Housewife doesn't show up in work history. It should but...


25% of my annual net income has always been our safety net. I would have thought not having to worry that our income could go away because of loss of work would make planning easier. Easy enough to try and bump that number up.


We've been using our FA for a while. He's looked at my annuity and re-balanced it. I really have no knowledge of money management other than running a home and budgeting a department/projects. If at sometime I decide to start learning more, I may try and run it myself. As it stands now, I'm a dope and would rather pay for peace of mind.


Cheers all
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Old 07-06-2019, 10:58 AM   #10
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Quote:
Originally Posted by Harrald View Post
So much advice, so much information and so much to think about.



A couple of answers/notes

No country club or place in Vail for us. So no hardship deciding which one to keep.


We have a few years to decide on the SS. These are our initial thoughts



I know financial advisors aren't well liked here. We're willing to pay the cost for a set it and forget it retirement. 4 meetings a year to keep us apprised of how everything is going is enough for us.


The ability to change from annuity to 401K happens when I sign the papers, without a surrender fee.


My wife isn't eligible for SS based on her work history. Housewife doesn't show up in work history. It should but...


25% of my annual net income has always been our safety net. I would have thought not having to worry that our income could go away because of loss of work would make planning easier. Easy enough to try and bump that number up.


We've been using our FA for a while. He's looked at my annuity and re-balanced it. I really have no knowledge of money management other than running a home and budgeting a department/projects. If at sometime I decide to start learning more, I may try and run it myself. As it stands now, I'm a dope and would rather pay for peace of mind.


Cheers all
Well in case you change your mind, there are many knowledgeable folks on this site who can assist in making you feel comfortable about managing your own investments.
Many folks on this site were not in Finance or Investment type departments.
There are also investment type books to read if so inclined.
Up to you of course; just throwing it out there.
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Old 07-06-2019, 11:08 AM   #11
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Welcome. Sounds like you have plan you are comfortable with. I have learned so much here and continue to do so, however, we meet with a fee only FA occasionally also. Nothing wrong with that, do what works for you.
Hope to hear more from you!
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Old 07-06-2019, 12:29 PM   #12
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We've been using our FA for a while. He's looked at my annuity and re-balanced it. I really have no knowledge of money management other than running a home and budgeting a department/projects. If at sometime I decide to start learning more, I may try and run it myself. As it stands now, I'm a dope and would rather pay for peace of mind.
I get the peace of mind concept, believe me. I'm going to play devil's advocate for a minute. I'm doing this, because people on this board helped me when I was struggling with similar issues.

What are you paying your FA, annually? 1%? What are the fees in the investments you're in? In our case, that 1% and those high investment fees would pay for a REALLY nice vacation for us each year.

When we were shopping for an advisor, someone here suggested a fee-only planner which I found through NAPFA. Our very first visit was ~$1500. I walked out of there with explicit instructions for moving everything to Vanguard, where our fees are low, low, low. Whenever I have a question, we do a 'tune up' which is $400. We've done about three of those over the years, just for some hand holding when DH was offered a lump sum, the first time I rebalanced, or making sure we were ready to retire.

We established the asset allocation we were comfortable with, and she gave us suggested funds. Set it & forget it. I've become confident enough to rebalance without her help. And, we're saving 90% over what someone who wanted to "manage" our money would charge us. As someone here says, "no one cares about your money as much as you do".

Some people just aren't interested in getting comfortable with doing it themselves, and that's certainly their prerogative. You've got to do what helps you sleep at night, obviously. A good relationship with a trusted adviser may be more valuable to you than the cost. <stepping off my soapbox>

Good luck on the next chapter of your lives!
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Old 07-06-2019, 12:30 PM   #13
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SIf at sometime I decide to start learning more, I may try and run it myself. As it stands now, I'm a dope and would rather pay for peace of mind.
Choosing to pay someone more knowledgeable to help out, rather than relying on yourself or random internet strangers (with a wide range of opinions) doesn't make you a dope. It makes you wise.
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Old 07-06-2019, 09:58 PM   #14
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Sounds like your plan will support you very well. Don't be nervous, all will be fine! You've got enough, you've budgeted, you've thought through all the big issues, now go and enjoy some freedom!
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Updates and corrections
Old 12-27-2019, 07:49 PM   #15
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Updates and corrections

Hello again all,


We are 5 days away from the official day.

I was incorrect about the 401K. I'll be rolling our annuity into an IRA. This past year was very good to our retirement fund.

We're selling our home in 5 weeks to our son and his young family and found a number that works for everyone. My bride and I will stay in the house and pay the bills till we find/close on our new home. We'll be using the proceeds to buy a house in Florida, furnish it and buy a golf cart. We'll have a mortgage but not the ridicules NJ property taxes.

We've bumped our emergency cash fund to 6 months living expenses. Depending on the house we buy, it go as high as a one year emergency fund.

Social security @62 is still part of the plan. If the market runs hot for the next few years, we will push SS off for a bit. Our grandson will be 8 when we hit 62 and it would be great to be able to take him on holiday using SS as the "Fun Fund". We would love to spoil him rotten and then send him home to his parents . Also we can take less from our IRA and put some money into a 529 for his education.

Our plan is to really enjoy retirement, pay off our new home and leave it and a pile of cash for our son and his family.


Now on to "Nervous". I ain't nervous no-more. Other than the normal day to day getting a house ready to sell, looking for a new home and preparing to move. The living without having to go to W*rk anymore is freakin' fantastic! My yard looks great, the interior of the house has been painted, doors have been removed and replaced with walls . Basically everything I had no time to do is getting done. I've taken over the laundry and vacuuming chores. It's been 14 months and I am happier than I've been in many years.


Cheers all and thanks for all the great advice, stories and support.
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Old 05-17-2021, 03:54 PM   #16
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After the past 17 months of being a man of leisure, I thought it time to update.


Life is freakin' great! We sold our home, bought a very nice home in Central Florida and are living the dream.


Last year was a wild ride. Losing 20% of our retirement fund scared the crap outa us. But the market recovered and we have more now than the day we were set free.



Every month 3 nice people put money in our account. We replaced the HVAC, landscaping, bought all new furniture (my son sat me down and insisted that I stop being an ass and let his mother start from scratch), and re-painted the inside of the house.



I still use a calendar but that's because Every Day Is Saturday! Except Saturday, that's really Saturday.



It was tough to get anything done, with the world on lockdown but we made it. We found that not only is Central Florida not only great for taxes but the cost of living is about 65% of our old COL.


Again I would like to thank the kind people here that were generous with their advice and life experiences. Now I think I'll take a shower, fix a cocktail and head out to dinner.


Cheers,
Harrald (17 months removed from the rat race)
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Old 05-17-2021, 04:03 PM   #17
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After the past 17 months of being a man of leisure, I thought it time to update.


Life is freakin' great! We sold our home, bought a very nice home in Central Florida and are living the dream.


Last year was a wild ride. Losing 20% of our retirement fund scared the crap outa us. But the market recovered and we have more now than the day we were set free.



Every month 3 nice people put money in our account. We replaced the HVAC, landscaping, bought all new furniture (my son sat me down and insisted that I stop being an ass and let his mother start from scratch), and re-painted the inside of the house.



I still use a calendar but that's because Every Day Is Saturday! Except Saturday, that's really Saturday.



It was tough to get anything done, with the world on lockdown but we made it. We found that not only is Central Florida not only great for taxes but the cost of living is about 65% of our old COL.


Again I would like to thank the kind people here that were generous with their advice and life experiences. Now I think I'll take a shower, fix a cocktail and head out to dinner.


Cheers,
Harrald (17 months removed from the rat race)


Glowing updates like this could mean more people leave the rat race and there is less tax revenue to take care of things. Never mind. I forgot about MMT. Lol.

Congrats on enjoying your freedom!
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Old 05-17-2021, 04:17 PM   #18
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Just curious. Did you file for SS at 62? (You said in an earlier post that uou'd hold off if the markets were kind, which they certainly have been.)
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Old 05-18-2021, 12:47 PM   #19
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We're only 56. We have a few more years to think about it. But...We will most likely file @62. Living off outside money whilst letting our IRA grow sounds lovely. I would like to make my grandson a Trust fund kid.



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Just curious. Did you file for SS at 62?<<SNIP>>
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Old 12-15-2022, 11:52 AM   #20
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Another update....

It's been (just 2 weeks away) 3 years of official and 4 years of unofficial retirement. Life is still pretty groovy.

Inflation has hurt a bit but it's not killing us. I know a lot of folks that insist it's killing them but they still go out to eat, play golf and pay their bills. Our IRA has taken a beating but it's still very well funded.

We're both 58 now and have only reduced spending a slight bit because of inflation. We've used about 20% of our savings for some unexpected bills/costs. The savings only needs to last until we're 59 1/2. I think we'll be fine for another 18 months.

We'll have some major bills coming up. Automobile brake and tires, golf cart batteries and tires and a home water heater. I still have about 5% more than necessary taken in federal taxes and will use the return for these costs. Again, I know some people feel it's a waste to let the government hold that money, but we've doing this since we were married and it's forced savings that doesn't hurt to spend.

4 years and we're still happy. We've made new friends and have plans most days. I've started looking forward to days with no plans. This being social is exhausting.

This forum has been a great help. I've recommended it to my friends that are closer than they think...

Cheers all,
A happily retired dude
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