Inspired and Ready to Make it Happen

[LeaveItBetter]

Hello ER community,

I've been reading your words of wisdom for some time and you've inspired me to start a concrete plan for my own ER. I've worked pretty hard at various megacorps for 22 years - in mostly fun jobs, thankfully. But in that time, I've become a virtual stranger to nature, and since moving to a new city for work more than a decade ago, I don't get to spend enough time with my extended family. Then there's the bucket list... Anyway, you get the point. I have so much to do!

I'm currently 45 YO and contemplating ER as early as July 2018. DP is 49 and playing catch up on savings. With two pensions (1 state, 1 fed), she will be in great shape to retire in 8 years when she hits her next major tenure milestone for federal pension. We currently manage most expenses jointly, contributing a percentage of our incomes to household, but retirement saving has been separate since we came together well into our careers. (And frankly, she didn't start saving until we met.) That said, since my salary is considerably more than hers, I've upped my contribution to household so she can max out TSP and Roth catch-up without being stretched.

I recently tipped 2M in assets, currently invested moderately aggressively: 1.2M taxable (75 equities/25 fixed), 650k tax-deferred (80/20), 150k in RE. Separately, house is valued at 580k with a 250k mortgage (interest rate is so low, I'm not rushing to pay it down in this market). I have a pension that will pay 16k/yr, starting at age 65 (no COLA); SS estimate is 27k/yr at full age of 67. LTC policy is locked in at $90/mo. I plan to sock away an additional 70k between now and next July.

Finally, I have about 100k in deferred comp that will be paid out over the 2 calendar years following my departure from work, so I'll have some income (at a lower tax rate, yay!) in my first 24 mos. of ER.

All-in annual expenses are 72k. I expect expenses to remain level. I'll maintain my current level of contribution to HH so that DP can continue to catch up and maybe knock a couple years off of her own plan.

The big unknown is healthcare. I'm curious to understand how others are planning for healthcare, given all the uncertainty with the ACA, when there is significant time before Medicare kicks in. (There is the possibility of going on DP benefits, but we're not married for now, so I'd like to factor separately.)

Otherwise, what am I missing? Both the FIRE calc and my advisor put my scenario above a 90% success rate. What do you think?

Thanks for the inspiration!

 

[bigcmagor]

Interesting household financial dynamics. It seems your SS estimate may be high based on a decade without contributions. Not sure it matters though because it seems you have it covered without that income.


As for health care, who knows. I think all you can do is throw a big number in for anticipated expenses (say $15,000) and understand you'll just have to figure that one out as options become clearer. You can always get married in order to get coverage if the alternatives are a worse overall option. It seems that the household finances will improve once your DP throws their financial assets into account too.


The best advice I've come away with from this community is to recognize that you can't plan for everything and reaching for more safety will only prolong your working years . There is too much that is unknowable.


You have done a nice job of accumulating and have adequate resources to throw in the towel. It should be quite comforting to be able to do this with potentially half of your life left.

 

[MBAustin]

Welcome LeaveItBetter! Since you're contemplating sooner than later to make the leap, you may want to check this out:

Some Important Questions to Answer

Overall, it looks like you have a good approach, particularly if you are willing to either cut back on expenses or take on some part-time w*rk if you happen to retire into a severe market downturn. You may want to re-evaluate your asset allocation for that reason as well.

Glad to have you join us - keep us posted!

 

[LeaveItBetter]

@bigcmagor - Thanks. Good advice on a SWAG for healthcare. I'll plug that in.

And thanks for the direct feedback about not being able to plan for everything. I think that will be my biggest challenge - being so conscious of how things stack up during all these years of planning, and then having that degree of uncertainty as I take the leap. My hunch is that others have had this same challenge. ... Fodder for another post.

 

[LeaveItBetter]

@MBAustin - Thanks for the link.

Definitely willing to take on part time work - hopeful even, that something will pique my interest.

I'll have to assess spending levels. About half of my personal expense right now is charitable donations. One of my goals is to maintain my current level of support for causes that are important to me. But I'm sure, in a rough patch, I could manage to trim somehow. I'll be in a position to give my time rather than money, for instance.

I've started talking with my advisor about laying groundwork, so we'll be working through a tax strategy and pulling back on risk in the next year.

Thanks for the welcome. I am excited to join you and look forward to being part of the conversation.