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Old 07-28-2020, 03:08 PM   #1
Confused about dryer sheets
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Posts: 7
I'm back...

I stopped in a while back and was asked a few questions on my spending. I was guessing at what I needed, and I know that I was wasting money.



54 Single no kids

Burned out from work its more caustic now.
House is paid for, I have no debt, good heath besides Blood pressure, over weight (not too bad) from sedentary job.
House 180K in the current market.
401k 480k
Cash 98k
Stocks/Mutuals in Brokerage 750k
IRA -430k
Small pension at 65 4k year with no COLA.
Over the last 2 years I have lived and paid bills spending 40-50k without budgeting. This year I am expecting to spend about 30k covering all my bills, taxes and vacations. I am estimating $12k a year on health insurance if I pull the plug, from what I've seen. I plan to live year 1 and part of 2 off cash and probably try consulting part time and/or work winters for the first few years because I feel like I'm close, but I'm also scared to take the big step. And they probably won't let me go part time.



Any suggestions, or what I am missing? Firecalc says at 50k a year and SS at 65 along with pension I should be good til I'm 90.


Appreciate it!!
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Old 07-29-2020, 01:52 PM   #2
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Welcome! A 3.5% WR gives you $61K annually, so if that budget is solid and includes contingencies (such as replacing roofs, HVAC, cars, etc), it looks like you may be good to go. Have you gone to Health Sherpa or another website to determine actual health care costs? What if the ACA is terminated? Does your budget include any travel, hobbies, or purchases that you'd like to pursue? Once you RE, if you didn't budget for things that you really want to do, you may regret RE.

Instead of spending all cash up front, when the markets are up, I'd look at selling some of the stocks/MFs to fund ER every year, to reduce the later tax rates when you start tapping the 401(k) and have taxable pension and SS income. Best wishes!
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Old 07-29-2020, 03:44 PM   #3
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Join Date: Feb 2019
Location: Tampa Bay
Posts: 104
Quote:
Originally Posted by bigriver View Post
Over the last 2 years I have lived and paid bills spending 40-50k without budgeting. This year I am expecting to spend about 30k covering all my bills, taxes and vacations. I am estimating $12k a year on health insurance if I pull the plug

This concerns me a bit... while you have some idea how much money you spent within a 20% range, you are only now budgeting at at only 30K (it isn't clear if the $40-50K included health costs). Until you lived off 30K, I wouldn't trust an estimate lower than your prior outflow... What are you not going to spend on to the tune of $10-20K/yr?


I don't "budget" but have tracked my expenses since adulthood and so have a very good idea what I spend for my projections. For the last year and a half, I have had my pay direct deposited into my investment account and pay myself an allowance from that account. Very easy to see if my allowance will be enough to live off of when I FIRE myself/test my comfort spending at that level. You may want to try the same but if not, really scrub your expenses and read some retirement horror stories for contingencies you may have missed.


Good Luck!
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Old 07-29-2020, 04:02 PM   #4
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If you have over $1.5m in assets, plus your home, you're probably fine as a single person (assuming you're staying that way). Your HC estimate of $12k is about right also in most states, but do check healthsherpa for better ideas.

Either way if your budget is 40 or 50 you're fine with that amount, but better certainty would help. I know I could easily estimate something at 50 and then turn around and see oops no I missed a couple things it was 70.
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Old 07-31-2020, 05:05 PM   #5
Confused about dryer sheets
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Join Date: Feb 2020
Posts: 7
Thanks, I'll check out Health Sherpa.

While I haven't really budgeted, I have been aware of what I spend. I've saved and invested my whole life and spent as I needed for some luxuries but not for junk. I do a lot of nice things for family and friends and drive a 15 yo truck.
The 50k a year will include health insurance.
30k/yr will cover all the bare necessities. The other 20k cover vacation/roof/HVAC/hobbies, etc...


BTW, I've never been a FIRE person, I've just saved and invested and took a hard look at the end of 2019 and thought it seems possible to retire early.


Thanks for the feedback, I've got a little more to consider.
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