Howdy and Feedback on Plan A
My humble greetings…and a promise that all critique/input/advice will be greatly appreciated.
While I am a little premature on the “FI” part of the FIRE equation…I have decided to embrace the “RE” side of the equation as I have come to realize the fear of NOT doing this has finally exceeded the fear of doing it.
My decision is based on the two items that concern me the most about retirement--will my health and money be there when I retire. Since my crystal ball can at least fundamentally project what money I will have, it is completely blank when it comes to my health status later in life. And so enters Plan A.
The premise of Plan A is to give me an additional 10 years on the front side by using a portion of my investments to fund my daily living expenses up to my original retire date of 62. The main risk being that my remaining investments will need to grow to a sufficient level within that 10 year period to fund my full retirement at 62, if I so choose.
While the pitfalls could be numerous, I believe that if I allow this opportunity to slide by only to realize later in life that it would have worked, well…that’s something I don’t want to do. Besides, if Plan A starts to crumble I can always come back here with Plan B.
All figures are based on projected amounts on R-Day: June 6, 2014
I am single, 51, never married, with no kids, but have a longtime significant other that has her own financial means. I will be finishing up a 32 year career with one company, and I am also owner of two small LLC’s which I pursue various small ventures. My only debt is a home mortgage at $800/month and located in the south central US. My investments are as follows:
Cash or equivalent: $340,000
I am currently working additional overtime to top off my 1 year reserve fund of $30,000 and an additional $10,000 medical deductible/social security disability lawyer fund.
I have been living on expenses of $27,000 to $28,000 per year for the last 5 years, which includes items like extra gas money for extended trips and dining out a couple times a month. I also have been including $400/month for medical premiums but currently put it in savings as I have insurance through my job.
One item that my plan does not cover is vacation money. While I am basically low maintenance when it comes to getting away, as I have several “free” destinations in Texas, Alaska, and Ohio to visit and enjoy, I still would like the option to travel to different locations. And this is where I would break the sacred “retired” rule and basically “work to play”. My professional skill set is somewhat specialized and portable, so if I wanted to take a nice vacation to Hawaii, I could either work out a contract assignment there or just contract work somewhere to pay for a very nice trip.
So Plan A basically has me withdrawing $29,000-$30,000 per year (after applicable taxes) from my cash accounts for a 10 year period, with small adjustments for COL increases or decreases. I will reconfigure my remaining investments, except the trust account, to maximize their returns to double the value by age 62. In theory, if I have $1,000,000+ at 62 then I should be good to go.
Anyways, if you, the collective wisdom of FIRE can offer any feedback to this plan I would be greatly indebted.