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I want to retire at 46...
Old 10-22-2020, 10:26 AM   #1
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I want to retire at 46...

Hello friends,

Here's my scenario, all feedback welcome and appreciated! I am looking to retire in a few years, if possible of course. I would be retiring with:

$60,000 a year government pension, dont qualify for social security

No mortgage, no kids, probably no spouse, but you never know, def no kids

Around $1,100,000 in 401/roth, but most of it is 401, around mabye 100,000 is roth

Looking for to do 3 or so big trips a year ($3-5k) and three small (under 1k), or just live abroad a few months if cheaper in places that are cheaper than where I live (Arizona), I can also rent out my house in this time period for minimum $2k a month, possibly more if I did airbnb style.

I drive a modest car, and am not into toys or big purchases other than travel. But I definitely blow money on dining/eating out.

My concerns are health care, which I plan to heavily explore in this forum. I can move to Italy for free health care under dual citizenship and have some much cheaper towns available if I go that way.

I am not concerned about boredom, hobbies, projects etc will never be done.


I am not against PART TIME work, but honestly don't have a great skills set, I imagine I could make $20 to $30 an hour tops in the real world. I also would not be against working for $1 an hour if it was part time just to get medical benefits.

Any advice, would you leave work in this scenario? Any I wish I knew this before I left you can give me?

Thanks for this forum, I look forward to learning and posting more, and hopefully one day helping others here as well.
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Old 10-22-2020, 10:45 AM   #2
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You're fine - enjoy the retirement.
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Old 10-22-2020, 10:46 AM   #3
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Spending - need all the data on how much you spend per year. Others have retired with less, but you need to know what works for YOU.
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Old 10-22-2020, 11:12 AM   #4
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Government pension but no medical?
What kind of pension? How concrete is it? Does it match inflation?

What liquid assets/emergency funds do you have? If none, build some.

Build a budget including medical insurance if you don't have one already.
Live on $50K/year and keep building your investments as long as possible and enjoy retirement.
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Old 10-22-2020, 11:29 AM   #5
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how far is to 46?

Do you have currently healthcare issue or not?

Is your home a high demand location for airbnb? Who is gonna manage while you are gone? And can you rely on the income while vacated?

I am looking for HI info too. I will keep checking your post.

Welcome!
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Old 10-22-2020, 02:26 PM   #6
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My monthly budget is currently at $800, no car payments no mortgage, this is insurance, property tax, essential bills.

Yes government pension but no medical. The fund is pretty solid but of course as w anything who knows what can happen.

Around $20k in emergency funds

I'm 6 years away from being able to leave.

No health issues. Workout daily. Eat good etc

I'd have.to have a friend or management company if I went the Airbnb route. The area is extremely high demand in March and April w the same house one of my friends got 10k each month. But I have a fear of airbnb getting saturated or regulated. So instead I safely know I can get $2500 a month for the rental.... But 10 to 15 would be much better!

I think I answered all
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Old 10-22-2020, 02:50 PM   #7
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You can collect your pension at 46? That's unusual. Are you fire, law enforcement or some other type of emergency service where you can retire at a younger age and collect immediately?
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Old 10-22-2020, 03:43 PM   #8
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Inflation is a particularly big risk when retiring as young as the OP is contemplating. So the big question is whether that $60K pension is COLA'd. If so I'd be inclined to risk it (and would have if I'd had that kind of opportunity at that age). If not, I'd want to run some through some pretty detailed scenarios to make sure everything holds together over a (potentially) 50 year retirement.

Just as an example: 24 years of 3% inflation roughly halves the purchasing power of that pension by the time the OP is 70. 70 years old, no SS and a $30K/yr pension doesn't sound nearly as good as the OP's original scenario to me. Prudent investing of the OP's other $1.1M in assets probably still makes this workable, but again, a detailed analysis is required - not just a bunch of forum members waving their hands around.
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Old 10-22-2020, 05:05 PM   #9
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Golden sunsets yes.

There are colas but they are based on CPI and in no way guaranteed.
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Old 10-23-2020, 08:49 AM   #10
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I'd say you are fine. $60k to carry you until Medicare... 4% of 1.1mil (plus gains) for your travel @59.5... Build up your taxable account monies over the next 6 years for the transition fund needed. Also doing a Roth conversion ladder will help.

No debt makes a lot of the difference in level of success...
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Old 10-23-2020, 09:39 AM   #11
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Quote:
Originally Posted by stepford View Post
Inflation is a particularly big risk when retiring as young as the OP is contemplating. So the big question is whether that $60K pension is COLA'd. If so I'd be inclined to risk it (and would have if I'd had that kind of opportunity at that age). If not, I'd want to run some through some pretty detailed scenarios to make sure everything holds together over a (potentially) 50 year retirement.

Just as an example: 24 years of 3% inflation roughly halves the purchasing power of that pension by the time the OP is 70. 70 years old, no SS and a $30K/yr pension doesn't sound nearly as good as the OP's original scenario to me. Prudent investing of the OP's other $1.1M in assets probably still makes this workable, but again, a detailed analysis is required - not just a bunch of forum members waving their hands around.
+1

Agreed that a very large question here, that should be easy to answer, is whether the pension is inflation-adjusted or not.

-gauss
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Old 10-23-2020, 11:40 AM   #12
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I've thought about not touching the 401/roth for 10 years. W no extra contribution at 7 percent investment gains it would be around 2 million. But of course it's the unknowns w healthcare, my roof falling off etc on if I'd be able to live off just pension for 10 years.
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Old 10-23-2020, 12:27 PM   #13
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Quote:
Originally Posted by Golden sunsets View Post
You can collect your pension at 46? That's unusual. Are you fire, law enforcement or some other type of emergency service where you can retire at a younger age and collect immediately?
Thought the same thing, must be related to safety (police, fire), for example 3% at 50 25 years of service is 75%, at $80k/yr is $60k.

Cola, is the big question.
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Old 10-23-2020, 01:44 PM   #14
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You should be able to retire but I would use the next 6 years to build up a taxable savings account. Contribute only enough to the 401K to get the match if you even have one. Then save after tax as much as you can. In retirement you can live off the pension for your regular expenses and use the savings for large purchases like a new car, roof, furnace/AC... Once you reach 59.5 then you start taking withdrawals from your 401K and if your pension is COLA'd you will be living large and if it's not then you will still be plenty well off.
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