Hi there...am I retired now???

[Poopycat]

Hello, I have been lurking for a while and have decided to take the plunge and join in on the fun.

I will be turning 50 this year , a single female who has done a pretty good job of saving and investing well and is tired of corporate life. On March 1 of this year, I calculated my assets and was sitting at a net worth of $3.6 million with zero debt. I decided that at the end of October, when my relocation agreement was up with my current company, I was going to take a chance and hang it up, sell my house (haven’t been here long but house is in a desirable neighborhood that appreciates in value), and go back to the west coast where I grew up so I could just spend my days walking by the beach and maybe find some tennis friends. The west coast is expensive, but given the precarious nature of the Affordable Care Act, I figured that it would be more likely that Blue states would continue to offer options for those with pre-existing conditions should the ACA be struck down. If I couldn’t obtain insurance, then I would either move to a state with guaranteed issue coverage or move to a country with somewhat affordable coverage until I qualified for Medicare and could return to the US if I wanted.

It’s amazing how much can change in one month! I have been notified that my position is being eliminated in a couple of weeks, and I’ve seen the value of my portfolio plunge dramatically, just like everyone else. The worst part may be that I could be stuck in this house for some time if I can’t get a quick sale; I don’t want to sell at a big loss either, so my choice may be to stay put or to rent it out until prices bounce back.

Anyway, I’m grateful that I am in a much better position than many. But the uncertainty is causing anxiety. My net worth is at approximately $3M right now, but that assumes only a $50K loss in home value. I had my heart set on a specific region of the west coast, but with the drop in value in my investments, I fear I will no longer be able to afford the area unless I can make a quick sale and their real estate market values plunge. I could search for another job and stick it out for a couple more years, as that would provide health insurance until I know how the ACA ruling turns out. And extra cash wouldn’t hurt. But I’m so eager to stop working full time.

Well, that was a long introduction! Sorry! I guess I have plenty of time to think and plan since I will be stuck at home for at least the next month or so. I’ll be sure to read the forum and ask questions so I can get advice from all the experts here

 

[Retireby45ish]

Welcome.

I know it’s tough to take a loss, but your ability to retire now might still be very possible. What kind of expenses are you estimating?

Even at a 3% rate the 3K still leaves you with 90k a year to spend, which is plenty (depending on the type of life you want to live).

As you say the ACA issue is your biggest concern. But even if you factor in a small loss on the house, if it saves you a year or two of your life it could be worth it.

Lots of great info on this site.

Certainly a difficult time for everyone, and seeing a 20-30% decline in portfolio value is certainly emotional (for me). But time marches on and we have to continue to do what will maximize our happiness in life.

Good luck to you! But you are in an incredible spot, even after the market downturn.

 

[travelover]

Welcome. The house you want on the west coast may have depreciated more than your own house in absolute dollar amount, so this could be an opportunity.

 

[copyright1997reloaded]

No, you aren't retired yet....at least as far as unemployment is concerned.

So take advantage of your states unemployment and the enhanced federal assistance.

p.s. I retired in May 2009 which also seemed like a bleak and emotionally distressful time. Looking back, it was a good time to hang it up.

 

[nvestysly]

In my mind Financial Independence all comes down to income and expenses. Cash flow. Net worth is not the indicator so much as how much can your investments generate - dividends, capitals gains, etc. Shingles don't pay for groceries... cash, dividends, capital gains - now we're talkin'!

Many on this forum will talk about Financial Independence in terms of Safe Withdrawal Rate (SWR). I like that approach. A rough rule of thumb might be at age 50 you may consider a SWR of about 3%. In your 60s the SWR may be 4%, late 60 into 70s maybe 5%. There are lots of ways to run the numbers. FIREcalc was the tool I used to tell me (DW and me) whether we were ready to retire. Retired at 52, DW was 48 and we started out at 3% and we're still around the same number nearly 9 years later.

Your house is obviously part of the story, I don't mean to dismiss that but income and expenses is more telling in my opinion.

Best wishes. There is plenty to learn on this forum.

 

[Souschef]

I retired in 2009, and moved to the Central Coast of CA. Since house prices were in the dumper, I rented my condo out, using a management company. I did this for a number of years, until the market had recovered, and sold it.
Before I retired and rented it, I took a HELOC out to buy our new home.
This might be an option for you.

 

[DrRoy]

You might find this a good time to buy on the west coast, when we are allowed back out.

 

[Red Badger]

Good advice from others.

One other cautionary note; be careful with any expat plans unless you have experience / knowledge of a specific country (kudos if you do). Many have restrictions and limitations regarding expats. I lived abroad a total of seven years. Expat status is one of our SHTF strategies, but things would need to be very dire to invoke that plan.

As suggested, right now might be a buying opportunity for your dream location, while perhaps holding on to your current property until things "normalize" (WRT C-19).

Congrats and best!

 

[WyomingLife]

Welcome aboard! It is great to have you here. You have an impressive NW.

I used to fret a lot about the fate of the ACA as well. I don't as much anymore if only because I suspect the political winds have shifted dramatically because of the virus. My bet: we are closer to single-payer HC or Medicare for all than at any time in recent history. And I cannot fathom any politician voting against coverage for pre-existing conditions.

We perhaps could provide more thoughts on your particular situation if you provided two more pieces of information:

(1) What amount of your NW is tied up in your house?; and

(2) What is your yearly budget?

 

[Poopycat]

Thanks everyone for the warm welcomes and the already-helpful advice.

I will review every single response later on tonight when I have more time. During the day, I’m focusing on getting the house cleaned up and ready for sale and on taking long walks, doing my best to socially distance appropriately. I will say, not working has certainly allowed me to focus on my health; I’ve lost 21 pounds this month without even having access to a gym or tennis courts! Getting into great physical health prior to retirement has also been a priority.

Upon quick review of the responses, the most commonly asked questions have to do with my expenses and amount tied up in my house. I bought my house for $480K. Hopefully I will get close to that amount when I sell. Depending on where I end up, I don’t anticipate buying a place that expensive. Central coast of CA? Yes, if not more. But I don’t think I could allow myself to do that. I’d have to hope for a big drop in the CA real estate market. Or I’d bite the bullet and work for a few more years. Which I don’t want to do. Oregon may be my second choice, and I think I could buy there, after testing it out, for significantly less than $480K and could invest the difference. It’s just for me; I don’t want or need a big place. I only paid what I did in my current location because the housing market was such a challenge...houses were flying off the market last year...

Regarding expenses, I estimated my first year expenses to be $62K because I included moving expenses and a lot of traveling up and down the coast til I find “the” place. But then expenses would drop to $49K/year estimated in Oregon even if I paid $1,100/mo for health insurance premiums. I think I could live on much less, but I’m being cautious in my projections. I haven’t done CA projections because they just don’t seem realistic anymore. But I suppose I should. Maybe I’ll be surprised.

 

[brokrken]

With $2.5M liquid NW and a budget of $50K, you are golden! Even with $75k I think you are fine.

 

[Poopycat]

No, you aren't retired yet....at least as far as unemployment is concerned.

So take advantage of your states unemployment and the enhanced federal assistance.

p.s. I retired in May 2009 which also seemed like a bleak and emotionally distressful time. Looking back, it was a good time to hang it up.

Yes, based on what it looks like I might be receiving from severance, my portion of bonus payout, and enhanced unemployment I might be eligible for, I’ll be close to (if not over) what I’d have earned if I had resigned in a October. So that’s good. It’s the market downturn that stings.

 

[Poopycat]

Good advice from others.

One other cautionary note; be careful with any expat plans unless you have experience / knowledge of a specific country (kudos if you do). Many have restrictions and limitations regarding expats. I lived abroad a total of seven years. Expat status is one of our SHTF strategies, but things would need to be very dire to invoke that plan.

As suggested, right now might be a buying opportunity for your dream location, while perhaps holding on to your current property until things "normalize" (WRT C-19).

Congrats and best!

Thanks. Yes, the more I think about it, the more I prefer to stay in the US. I have been researching other countries and have a Top 5 list, but I’m hoping I can find health care options here because adjusting to a new country where I don’t know anybody and I have to adjust to a new culture and perhaps even a new language may be too much for me. I really just want a simple life, walking a dog or two by the ocean, doing some volunteer or paid part-time work, cuddling up with a couple of kitties, playing tennis, then heading to dinner. I can do that in this country. But as you say, I’ll keep the expat option as the SHTF option

 

[Bamaman]

Congratulations to what you've amassed at your tender young age. Your net worth is commendable.

But remember to discount your finances substantially if you choose to live in California. There are many, many other states with very nice coastal cities that have a substantially lower cost of living.

 

[targatom2019]

Congrats !!
Look for Temecula or Murrieta area in Socal, they both rank one of the safest cities ins Socal. Temecula is a beautiful town with many wineries and the weather is very nice.

 

[brokrken]

I have been researching other countries and have a Top 5 list

Just curious. What's your top 5?

 

[Poopycat]

Congratulations to what you've amassed at your tender young age. Your net worth is commendable.

But remember to discount your finances substantially if you choose to live in California. There are many, many other states with very nice coastal cities that have a substantially lower cost of living.

Do you have recommendations? I have been to all states except two (which are not coastal), and for me, nothing surpasses the beauty of the west coast. But maybe I have missed an area worth considering. My family is on the west coast as well, which is another consideration, since I’m a solo female. I also have a phobia of lightning, which also makes western states more attractive.

I recognize the high cost of CA, which is why OR and perhaps WA are also under consideration.

 

[Poopycat]

1. Portugal
2. Spain
3. Panama
4. Costa Rica
5. Ecuador

Mexico could bump one of these countries off the list, but waiting to see what happens with their replacement to Seguro Popular. I fear that Spain may be a pipe dream; getting private health insurance that covers pre-existing conditions is very challenging (I’ve heard that Portugal is slightly less challenging but things can change so quickly).

 

[WyomingLife]

1. Portugal
2. Spain
3. Panama
4. Costa Rica
5. Ecuador

Mexico could bump one of these countries off the list, but waiting to see what happens with their replacement to Seguro Popular. I fear that Spain may be a pipe dream; getting private health insurance that covers pre-existing conditions is very challenging (I’ve heard that Portugal is slightly less challenging but things can change so quickly).

Do you have recommendations? I have been to all states except two (which are not coastal), and for me, nothing surpasses the beauty of the west coast. But maybe I have missed an area worth considering. My family is on the west coast as well, which is another consideration, since I’m a solo female. I also have a phobia of lightning, which also makes western states more attractive.

I recognize the high cost of CA, which is why OR and perhaps WA are also under consideration.

Doesn't sound like you have a lot to fret about. First World problems. Stay safe, good luck and best wishes to you.

 

[WyomingLife]

Doesn't sound like you have a lot to fret about. First World problems. Stay safe, good luck and best wishes to you.

Here's what it looks like in one landlocked village in fly-over country on the way to the West Coast. No income taxes here. Also no corporate income taxes. It's a hard life here. No beauty, no taxes. Suffering abounds. It is a lot more challenging here than Portugal, too. Or maybe that was Spain, or Mexico.

 

[Poopycat]

Here's what it looks like in one landlocked village in fly-over country on the way to the West Coast. No income taxes here. Also no corporate income taxes. It's a hard life here. No beauty, no taxes. Suffering abounds. It is a lot more challenging here than Portugal, too. Or maybe that was Spain, or Mexico.

Very pretty.

 

[Retired Expat]

Thanks. Yes, the more I think about it, the more I prefer to stay in the US. I have been researching other countries and have a Top 5 list, but I’m hoping I can find health care options here because adjusting to a new country where I don’t know anybody and I have to adjust to a new culture and perhaps even a new language may be too much for me. I really just want a simple life, walking a dog or two by the ocean, doing some volunteer or paid part-time work, cuddling up with a couple of kitties, playing tennis, then heading to dinner. I can do that in this country. But as you say, I’ll keep the expat option as the SHTF option

As one who chose the Expat option in my early 50’sit was the best possible choice! It allowed for a seriously cheaper but my healthier lifestyle. Had to learn another language and that gets harder every year as well as how another culture and society works.

Btw; the beach is 2 blocks away, my Expat insurance is far less than my share of employer program, medications are same price as what my copay was in the US. During this crazy time, it is not crazy here! Restrictions but far less and far safer than in the US right now.

So don’t be so quick to throw out the Expat option. If that is something you want to experience in your life, if not now, when? Or soon once planes are flying.