Good time to start coasting? 2 - 3 years away from RE, maybe!

[Aiming_4_55]

It’s almost time to seriously decide on taking a break from fulltime w*rk. I think I can survive the next 2 - 3 years in my current j*b, several incentives make staying lucrative, so we will see. If I go sooner, it’s to spend time with aging parent, young kids, spouse and just relax more. Relaxing more seems to be a problem for me, but I might have to put a big effort in this area.

It's easier for me to just share a spreadsheet summary with net worth, various buckets, budgets, and future incomes (pension, social security, etc.). My current net investment real estate income ($80k) exceed my current ($65k) and proposed retirement budget ($78k), so I have other buckets to help in heavy travel years, emergencies, etc. This does not include any w*rk income.

Description	Now @ Age 47	Now @ Age 47	2016	Retired	Age 62	2 Spouse	1 Spouse
	Est Value	Annual Income	Budget	Budget		Age 67	Age 67
Real Estate* – Investments	1,100,000	80,000
Taxable Account @ 3% SWR if needed	750,000	22,500
401k* (no current need)	905,000
Roth/HSA* (no current need)	180,000
Pension (frozen/non-cola)					13,000	13,000	13,000
SS DW @ 62					7,000
SS DW @ 67						12,500
SS DH @ 67						25,000	25,000
Personal Residence - condo*	500,000
Real Estate – Parent*	300,000
College Fund**	140,000	Annual	Annual	Annual	Annual	Annual	Annual
	$3,875,000	102,500	65,000	78,000	20,000	50,500	38,000
	Net Worth	12	12	12	12	12	12
* no mortgage or planned withdraws, after expenses/taxes		$8,542	$5,417	$6,500	$1,667	$4,208	$3,167
** $150k is my target by end of 2017		Monthly	Monthly	Monthly	Monthly	Monthly	Monthly

What else do I need to consider, here's my current list:
- Research Health Insurance options, estimating $15k in Retired Budget
- Asset Allocation adjustments
- Tax implications of selling rental properties when 55 and older
- Timing of tIRA to Roth conversions

Life is good and I consider myself/family very fortunate. I see alot of people with more and less, but happy with where I am.

Personal stats: Family of 4, DW and I are 47 with 2 kids (10 and 8), living in Los Angeles area. DW is SAHM for most part.

 

[Spudd]

I would have no qualms about retiring immediately if I were you. Coast away!

 

[DrRoy]

I'm puzzled by the 2 Spouse column. My DW wouldn't go along with that.

 

[Aiming_4_55]

I'm puzzled by the 2 Spouse column. My DW wouldn't go along with that.

LoL That column was to represent 2 social security incomes vs 1. DW taking half of mines. Also, survivor benefits on the pension.

 

[Aiming_4_55]

I would have no qualms about retiring immediately if I were you. Coast away!

I'm still enjoying my routine, if ever the BS bucket exceed the reasonableness bucket, I would make a change. I think knowing my current situation, it has added a dimension of "frankness" within my attitude in the way I carry out my job. Tough topics are not as challenging, I voice what I think is right and I move on.

Any day can be the last day but I would never walk out due to emotions. Personally, I think I have an issue hanging up before the big 5 - 0 as I still have a very structured scheduled with young kids. The extra income will pad the emergency, travel fund, along with helping aging parents as needed if that ever became an issue.

 

[38Chevy454]

Nothing wrong with working because you want to. I agree that you seemingly have enough to not work and still maintain your lifestyle. My advice is keep working to maximize the benefits, while keeping the end goal in mind; and don't exceed your comfort level with amount of work or stress level.

 

[HillCountry]

I am 4 years older than you, so are my kids than yours. DW stays home, too

I would think the most important and enjoyable now is spending time with my kids. Helping guiding their future career according to their interest and ability. Attending their sports and other extra curricular events. And enjoying vacation together. 2017 will be the first year I have more vacation time than my DD1 can handle.

 

[Hermit]

There certainly is something to say for setting the example for the kids of going to work every day. The tough part is keeping the number of hours down to a reasonable level. A good option might be to limit work to 40 hours or less. Now that would be coasting.

 

[MissMolly]

Your wife cannot take SS at 62 and then switch to 50% spousal at 67. That option went away for anyone born after 01/01/1954.

 

[Aiming_4_55]

Nothing wrong with working because you want to. .... and don't exceed your comfort level with amount of work or stress level.

It is a bit of "freedom" for me, comfortable with $$, work enough but not extreme. Thanks.

 

[Aiming_4_55]

I am 4 years older than you, so are my kids than yours. DW stays home, too

I would think the most important and enjoyable now is spending time with my kids. Helping guiding their future career according to their interest and ability. Attending their sports and other extra curricular events. And enjoying vacation together. 2017 will be the first year I have more vacation time than my DD1 can handle.

Congrats on your situation and the extra vacation time.

Time with family and kids are important. My job doesn't require much travel or late hours, I'm home for most dinners and extra events. I do miss some events during the week at 3 or 4pm, but make the more important ones, so I have some control over my schedule already.

 

[Aiming_4_55]

There certainly is something to say for setting the example for the kids of going to work every day. The tough part is keeping the number of hours down to a reasonable level. A good option might be to limit work to 40 hours or less. Now that would be coasting.

I need to work on this as I tend to work 45 - 50 hours a week, but I start early by choice due to traffic/commute. I'm home for dinner most nights.

 

[Aiming_4_55]

Your wife cannot take SS at 62 and then switch to 50% spousal at 67. That option went away for anyone born after 01/01/1954.

Thanks Molly, I was not aware of the change. I'm unable to change the posted chart but will update my spreadsheet. I'm not really counting on it, but tracking.

 

[pb4uski]

Your wife cannot take SS at 62 and then switch to 50% spousal at 67. That option went away for anyone born after 01/01/1954.

OP may want to run his situation through SSAnalyze - Bedrock Capital Management

 

[Aiming_4_55]

OP may want to run his situation through SSAnalyze - Bedrock Capital Management

Info for SS Analyze: Now both age 47 with full retirement age of 67, age 50 to stop working, no gov't pension, and default for life expectancy (83 and 89). It did not ask about high or low earner.

Recommended Solution
Based on the data above, the following plan of action is recommended:
DH will file for his own benefit to start on 1/1/2038, the month he turns 69 and receive 115.97% of his full retirement age benefit.
DW will file for her own benefit to start on 1/1/2039, the month she turns 70 and receive 123.88% of her full retirement age benefit.
The optimal filing solution results in a net-present-value of $35,227

In contrast, if the client filed at 62 and the spouse filed at 62 the net-present-value of their combined benefit would be $29,945

Personal note: At age 50, I will have about 30 years of significant SS contributions. I played with the detailed SS calculator before with adding zeros for certain years for my rough estimate in personal spreadsheet. I may contract or consult part time age 51 - 55? but not sure. Firecalc and other tools give 100% success rate without considering income from SS.

 

[rodi]

You're in a great spot... Keep working while you enjoy it - but you don't need to financially.

I retired when my son's were 11 and 13 (they just turned 14 and 16 this past week). It is great to have the time to be "in their business".... keeping tabs on them. They've both made some stupid teenage choices... that would have been worse if I weren't paying attention. I'm convinced that being involved when kids are teens is the right choice for our family.

 

[Aiming_4_55]

You're in a great spot... Keep working while you enjoy it - but you don't need to financially.

I retired when my son's were 11 and 13 (they just turned 14 and 16 this past week). It is great to have the time to be "in their business".... keeping tabs on them. They've both made some stupid teenage choices... that would have been worse if I weren't paying attention. I'm convinced that being involved when kids are teens is the right choice for our family.

Thanks Rodi - I agree, I'm in a great spot and extra attention to kids during teenage years could be good ;-) I'll be around to get "in their business" more. During the drive home today, I had a chat with a college buddy about his teenager that was just "arrested" in school. We moved onto cell phone calls/text/data, various free texting apps, tracking, and texting backups. Not looking forward to this but we'll just take a day at a time.

 

[Aiming_4_55]

Update after 461 days of original post, still coasting

Recovering from the flu and updating numbers today. Still coasting a few more years, turn 49 this year, so maybe ER age 50, 51, or 52 will be it for me. This is mainly due to young kids at home and figuring out what next. We will probably up spending on experiences like 3 week international trip next year to celebrate us turning 50.

Upped the FIRE budget from $78k to 84k.

At age 62, pension and dual SS covers 56% of budget; delay to 67, 73% of budget covered. With pension and single SS income, 43% and 54% budget covered with no reduction of budget. Healthcare and food would reduce for sure.

Description	Now Age 48	Now @ Age 48	Retired	Age 62	SS DH & DW	SS DH & DW
	Est Value	Annual Income	Budget	Pension	Age 62	Age 67
Real Estate* – Investments	1,100,000	80,000
Taxable Account @ 3% SWR if needed	1,150,000	34,500
401k (no current need) @ 3% SWR if needed	1,050,000	31,500
Roth/HSA (no current need) @ 3% SWR if needed	200,000	6,000
Pension (frozen/non-cola)				13,000	13,000	13,000
SS DW					11,400	16,200
SS DH					22,800	32,400
Personal Residence - condo*	500,000
Real Estate – parent*	300,000
College Fund (2 kids @ 100k each)	200,000	Annual	Annual	Annual	Annual	Annual
	$4,500,000	152,000	84,000	13,000	47,200	61,600
	Net Worth	Monthly	Monthly	Monthly	Monthly	Monthly
* no mortgage or planned withdraws, after expenses/taxes		$12,667	$7,000	$1,083	$3,933	$5,133

 

[exnavynuke]

Might wanna keep upping that FIRE budget unless you really want to be leaving a large legacy behind when you go...

 

[Aiming_4_55]

Might wanna keep upping that FIRE budget unless you really want to be leaving a large legacy behind when you go...

Thanks ExNavyNuke - a very true comment. I'm happy and content while trying to just live life. We value kids activity during the school year (not always expensive) and taking 3 - 5 trips a year. Some are roadtrips, others are cruises, etc. We try to be balanced.

We had an interesting challenge (aka expensive) with childbearing and kids development, so keeping a structure and maintaining the $$ were my priorities. I'm sure I can second guess my actions, but I was heads down making things happen while supporting the family which allowed DW to be at home to take care of our #1 priorities. Money is not my #1 priority, but I was somewhat faced with a "what-if" situation if a child could not be independent, as a parent what are you willing to do. My short answer, I need $$ to provide lifetime assistance/care. All is good now, but we had a 6 - 8 year span where it was a bit questionable.

I have been fortunate where my employment did not require much travel compared to my peers and flexible work outside of core hours was possible. I just didn't sleep much to get things done. My employer has rewarded me well over the last few years. I'm home for family dinner/homework most nights which is an important gauge for me.

Now, I just enjoy what I do and enjoying the ride. There is a slight chance of a company buyout within the next few years, which might be very nice.

I'm almost convinced I will lease vs buy my next car(s) for added flexibility and spend some dough! Based on my review, a fairly priced lease for a Camry or standard sedan is just about the same as buying for me.