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Looking for Aloha !
Old 04-06-2013, 11:02 AM   #1
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Looking for Aloha !

Hi Folk's ,

First time poster, long time reader of the forum which I have found to be most helpful. My Wife retired at 60 (2 years ago) and she is due to receive her first SS check this month. I turn 57 in a few weeks, FT employee and there have been significant changes in my workplace to the extent that I no longer enjoy or want to continue. I do so only because I seem to have a mental block and a profound fear of not having a job, a fear I will run out of money in our old age, all of this goes back to when I was very young and experienced a harsh life.

I was for the most part, homeless between 14 - 16 years of age, made a decision to leave HS and join the Military in the hopes that I could learn how to make a better life for myself and to that end, it worked out great. After my service, I put myself through an Allied Health School via the GI Bill, worked hard and was never unemployed. Like most of us, I made many sacrifices in my personal life working long hours in the hopes that at some point down the road I could retire and move to where I have always wanted to live, Hawaii.

I have Family on two of the Islands who have been there for a long period of time and we visit annually so we are familiar with the reality of living in a high expense State but we aren't getting any younger and it's decision time. My Wife has no fear, she is confident that we can afford to do this. Me, the fear is holding me back but as much for myself, I want to do this for my Wife who has been my rock for all these years.

Wife has a pension of $58, 969 + SS starting this month of 20, 856 annual. Her pension does not have an automatic COLA provision but my understanding is every few years there are small increases. She is 62. 100% joint survivor option.

I turn 57 this year, no pension. We have no children, zero debt, our home is paid in full and worth approx. $240K. I plan to delay SS until 70, that will give us an additional $2832 a month, and I anticipate taking the spousal benefit when I can. Until then, we live off our investments and her pension + SS.

We have a combined net worth of 2.1M, 50% of which is in her roll over IRA, the rest is in taxable MF's, bonds, and a large amount of cash which I have been holding in reserve to pay for a home in Hawaii, we figure $400K for the home so 2.1M minus 150K and our house. We use Vanguard and Fidelity, 50% of our equities are in index funds, our AA is approx. 50/50.

Health care is provided by her former employer for both and the most we can be out of pocket is approx. $5K a year, I don't anticipate the spouse benefit being dropped in the future but, that is always a possibility I suppose.

I have run the numbers through FIRECALC, Fidelity, and Vanguard Financial Engines, numerous others, and everything says "you are good to go" so I am here looking for some encouragement, words of wisdom, advice, opinions ?

Thank's in advance !

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Old 04-06-2013, 11:17 AM   #2
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Welcome to the forum, roninop, and what a wonderful example of personal achievement! I think anyone who has been through such challenging experiences early in life is likely to be very cautious. Nevertheless, your numbers look great, so why not try to think like DW, who clearly feels secure with your financial status? This is your time to enjoy. You deserve it, and it won't come back.
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Old 04-06-2013, 11:25 AM   #3
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Aloha. Between the pension and your portfolio, you sound like you are in great shape. Enjoy your ER. Welcome to the forum.
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Old 04-06-2013, 03:09 PM   #4
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Can't buy much house there for $240k. As long as your planning has included the correct amount for housing you are about to get lei'd.
"A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do" --Bob Dylan.
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Old 04-06-2013, 04:21 PM   #5
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Welcome! As others have said, if all of those calculators say you are good to go and you have a good handle on expenses, then it's time for you to take the leap. But I know how hard it is - what finally gave me the courage to do it was sitting down with a (fee based) financial advisor who reassured me that we were indeed solidly FI. So if you are still hesitant, that might be an idea for you.
Sounds like you should be hitting the Hawaii real estate boards! Good luck!
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
ER'd Oct. 2010 at 53. Life is good.
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Old 04-06-2013, 05:20 PM   #6
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Thanks for all your comments, folk's. Very nice to hear some positive feedback, I hope to keep you posted on when I finally make the decision. I'm going to be a nervous wreck when I finally submit my resignation. I think the idea of sitting down with an FA for one final check sounds like a great idea.

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Old 04-07-2013, 01:01 AM   #7
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I just completed my first week of retirement on Maui. It IS very expensive. I figure if it gets to be too much, it should be easy to find ways to cut back - move back to Montana and move into Ted Kazinski's place, perhaps. In the meantime, live like you can for as long as you can. Aloha.
In theory, there's no difference between theory and practice. In practice, there is. YB
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Old 04-07-2013, 04:54 AM   #8
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Could you turn your profession into something that is in demand for part time / temp / freelance on the islands?
Even if it costs some time, effort and money to train yourself it might give you a feeling of comfort to test the waters.
I'd define the first year as time of research. Would probably move there into some rental as small as possible or look for a place I could housekeep for an extended period till I have figured out where and how I would like to live.

If all the calculators say that you are good you might just need someone like us to "give permission to follow your dream" so that you can really believe it.
Go for it and enjoy with DW!
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Old 04-07-2013, 06:51 AM   #9
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Originally Posted by roninop View Post
and a large amount of cash which I have been holding in reserve to pay for a home in Hawaii, we figure $400K for the home so 2.1M minus 150K and our house.

It looks like you're set from a safe withdrawal rate perspective....but my only comment would be to check with a few Aloha state residents in the forum (and other forums) to see exactly what type of place and (more importantly) where you could live in a $400k home/condo.

I've never priced Hawaiian real estate, but I know it's not cheap, and the COL can be higher. Just make sure you have some fluff in the budget for additional costs.
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Old 04-07-2013, 07:58 AM   #10
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I live on Kauai and I, too, have been wondering if 400K is a big enough house budget. You don't mention your specs, but 400k won't buy much house here.
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Old 04-07-2013, 07:11 PM   #11
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Good to hear from some isle folk's, thanks for your comments. Yes, the RE is a major obstacle, we actually saw some nice homes in Kailua-Kona, it's a DR Horton planned community. The model was about 1,250 sq. feet, 3 BDR, 2 Bath, nice floor plan with an ocean view from the lanai. It was priced in the upper $300's so call it $400K, maybe a little more depending on upgrades. I have had some discussions with a realtor who told us we could do better for our price range. We plan to return in August and spend 2 weeks looking for a place.

My older brother lives on the Big Island, has been retired there now for a year and a half and he told me that $80K would be a comfortable life style with the house paid off. I set $100K annually as a budget just to give us a cushion. We did some price comparison shopping, the Kailua-Kona area has all the big box stores; COSTCO, Target, etc. so this was a big plus. My brother makes a weekly round trip (about 150 miles) from the Southern part of the BI for supplies so this meets one of our major objectives, not having to spend the extra $$ for commuting. The other big advantage was not having to be on a rain / water catchment system. Unlike Maui, Kauai, and Oahu, a large number of folk's on the BI get their water this way and we have no desire to maintain or, rely on rain for our water supply. So, yes, the RE can be very tricky on the BI and we are fortunate to have a family member who can help us out with all the in's and out's of BI living.

Working on the BI in my current profession is probably not going to happen. There is always a small possibility I could find a temp. / PRN type job, but I'm not counting on that and wouldn't make the move if that was a factor. I'm in Radiology, BTW, and the job market is very small for someone in my area of expertise. I really need to be 100% self sufficient if we are going to do this, that's just my take on the reality of living on a remote, tropical Island, especially the Big Island. Oahu is probably the better Island to be honest if work is involved but the RE is way out of our comfort zone. We looked at some very modest homes, in a not so great area, that were $500K - $600K.

It appears that the Big Island is our only option at the moment if we want to move out.
We want make this a permanent move so we are proceeding cautiously and making sure this is viable.

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Old 04-08-2013, 08:56 AM   #12
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The Big Island is one of my favorite places on the planet. Oahu and Maui are much too crowded, and Kauai, while beautiful, is a bit too remote for me. The BI is just the right mix of remoteness but still having enough to do to keep busy.

I spent a lot of time looking at real estate on the island, and I was actually surprised at how much less the homes were than the neighboring islands. If you don't need an ocean view you can get a lot of home for your money.

For me, it would be important to live near the Costco by the airport. The great thing about the Costco there is that in spite of the extra costs associated with importing things to the island, the prices there are exactly the same as they are in the mainland. As long as you are willing to buy most of your stuff there, you will be fine. If you start going to the smaller markets, prices will be shockingly high though, so you have to decide if Costco has the stuff you're wiling to use for groceries, home goods, etc.

I think your numbers look absolutely fine and you should go for it. I also think real estate will go up over the next 10 years in Kona, as more people discover what a great island it is to live on now that Maui and Oahu are so overcrowded. So my advice - go for it!
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Old 04-08-2013, 09:33 AM   #13
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Years ago my parents purchased a condo on Ena Rd. in Honolulu. It is on leasehold land, I notice that current MLS asking prices are ~$85,000 for a one bedroom.

My one caution is that if you have family on the mainland air fare can add up.
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Old 04-08-2013, 10:34 AM   #14
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Hi roninop,

Sounds like you and your DW have put considerable thought into this move and, by all calculations you have done with FIRECalc and Fidelity, you're set to go! Thankfully, there are many who comment on this site who, beyond offering encouragement, offer great insight. Speaking with a fee-only financial planner, as others have suggested, may help ease your concerns. At the end of the day, however, its your decision. Given the support and companionship of a loving DW, and having immediate family on the BI, you have right now all that really matters. I say, "Go for it!" Your proven ability to work through adversity leaves little doubt you will work through those inevitable bumps in the road, for which no amount of planning now will foresee. Life is short; enjoy it with those you love!
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Old 04-09-2013, 01:12 AM   #15
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Welcome to the forum. Congratulations.
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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