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My dream is very close?
Old 08-25-2018, 09:11 PM   #1
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My dream is very close?

Hi All,

I have been planning toward retiring early for about 25 years now.

I am about to hit my 30th anniversary at ACME Melting and Squishing (my nickname for it). For many of those years i loved the company, but it has grown and unfortunately changed quite a lot, and i have no love for it at all anymore. It is still a good job, i make 90K, the boss is pretty decent fellow. If i did not have any money stashed away it would be a no brainer, just stay, but (DARN IT!) i do have a pretty good stash, so maybe i optimize my life a little differently than most?

So here is the money situation: I have $1.4 million in total liquid assets. $850K is in 401Ks, $480K is in an e-trade account, and i have about 85K in checking. No debts. No retirement benefits.

In years past i tended to be invested about 90% in stocks and 10% cash. Unfortunately a couple years go i became very uncomfortable and decided maybe i really could time the market, so i sold off the majority of it. Even worse, i stayed in cash ever since. So far it appears to be the biggest financial mistake of my life, and it did nothing for my stress.

Other stuff is unusually simple: Modest house and car paid off, never married, no kids, parents have passed...

I put together a crude budget. Not sure how realistic it is, but it is a start.

Monthly:
1200 pocket money (food entertainment, ocasional golf )
100 phone
100 internet
100 electric/gas
50 water

Annual:
6000 health ins
1500 Property tax
1500 house insurance
1000 car insurance

Roughly $30K - 35K a year might do?

What do you think? Can/should i convert my 30th anniversary into a retirement party?
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Old 08-25-2018, 09:17 PM   #2
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I think you need to take a look at this: http://www.early-retirement.org/foru...ire-69999.html

Oh, and stop trying to time the market
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Old 08-26-2018, 01:03 AM   #3
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Thanks for the link. Good questions on it.



Unfortunately the first one is an assignment to track my expenses for at least two years, and that i have no business to even ask until i have completed this task.





Will a moderator please delete this thread ?
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Old 08-26-2018, 02:31 AM   #4
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Don't leave! Good information, helpful people, and a supportive atmosphere here. Suggest in the near term (how about 3-6 months?) track all your spending (and I do mean all) in the Mint or EveryDollar app (both have free versions). It will give you a better lens on your actual spend. Also, where did your health care spend come from post-retirement? Does ACME Melting and Squishing offer health care as part of your retirement? My research is showing a bit higher, sadly
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Old 08-26-2018, 05:40 AM   #5
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If it were me I would retire with your stash and expenses seem to be in line. Your WR would give you 40 years plus you still have SS to receive.

In my books life is to short and you have won the game like they say here. Good Job!
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Old 08-26-2018, 06:05 AM   #6
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I'd second/third the recommendation to track every (and I mean every) dollar of your actual expenses for at least 6 months.

The expenses listed seem to be really low/missing a lot of categories and I'd suspect if you do track you'll think of many things not on that list that you probably spend $$ on.
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Old 08-26-2018, 06:52 AM   #7
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Please stay! Lots of excellent information and inspiration here.

I started tracking expenses about 10 years ago, before I found this site, because I wanted to see how much I was really spending and needed to live on. I created a simple Excel spreadsheet & pretty much just recorded my spending every day in several categories. Easy to do. It was very revealing to see the actual amounts, and reassuring to see that I was doing OK. I still do it.
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Old 08-26-2018, 06:59 AM   #8
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Right off the bat I don't see anything in your budget for home repair and upkeep and cost of owning a car besides insurance.

With the money in checking combined with the Etrade you should able to lower your HI cost to get an ACA subsidized policy. Start researching that if you

haven't already done so. The saving on that alone would likely cover house and car upkeep.Also in this day and age no one needs to pay 100 bucks a month for a cell phone...lots of options to lower that bill.
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Old 08-26-2018, 07:11 AM   #9
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Quote:
I have been planning toward retiring early for about 25 years now.
Have you been planning? Or just wondering?

Quote:
Originally Posted by Spiff View Post
So here is the money situation: I have $1.4 million in total liquid assets. $850K is in 401Ks, $480K is in an e-trade account, and i have about 85K in checking. No debts. No retirement benefits.

I put together a crude budget. Not sure how realistic it is, but it is a start.
Roughly $30K - 35K a year might do?

What do you think? Can/should i convert my 30th anniversary into a retirement party?
You certainly need to be very realistic before making such a decision. Time to roll up the sleeves and dig in.

Will you be receiving social security benefits at some point?

You might benefit from a few hours time with a fee-only fiduciary financial adviser. An adviser would ask you some probing questions about your goals and expectations about retirement beyond "I want to stop working" and help you find ways to get there.

You would learn how to create a more detailed retirement budget. You could discuss social security claiming strategies. And you could discuss a more appropriate asset allocation. You could talk about estate planning, insurance, a will, etc, etc.

You could decide how much of this financial work you wish to do on your own, and how much you are willing to pay to be done for you.
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Old 08-26-2018, 07:43 AM   #10
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Stay on, you will have many supporters here.
Expenses - need to plan for large unexpected expenses such a new roof, new car. Please check out healthsherpa.com for medical coverage plans and you can look into potential ACA subsidies.
So the big question is when/will you get back into the market? There are other posters here who are out of the market, although some have real estate investments and others have fairly low WR%.
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Old 08-26-2018, 09:38 AM   #11
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You can look at your bank statements to determine how much you have spent in the past year. Then you will know how much you need on a yearly basis.
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Old 08-26-2018, 02:00 PM   #12
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Thanks folks. Most of you say I am not ready to ask if i am ready. I accept that. I also need to get my investing back on track, learn the life changing magic contained in recycled drier sheets. Plenty of reasons to stop by here for information or a chat.

I will have a closer look at my bank statements. Still, much of what i do and spend has been quite variable over the course of my life so far. When i was in college, lifestyle was set by a financial hard stop, i worked for not much over minimum wage, it placed a very firm grip on housing, food, entertainment, transportation... which means; room mate to split rent, rahmen noodles, or whatever we could come up with to throw on the stove,, the car was replaced by an old bicycle, and i shopped at the thrift store... In spite of poverty we still had some good times.

Fast forward to more recently, i do whatever i want. On a whim i bought a couple new motorcycles, both the same year, trips to visit old friends, eat out almost every day. sometimes it is just a burger no fries, no drink, a couple days a week it is Korean BBQ and 4 Moscow mules and a good tip for the bartender. Oddly i still shop at the thrift store, and still sometimes have the cheap noodles.

I will look into the bank statements. Find out what current expenses are, and sort out what i can live without. If my rough idea of a livable budget seems unreasonable, fine, i need to know what the minimum to comfortable budget range should look like for me. Maybe in bull years, i can go up to this number, for bear years i can pull back as far as this number... ? how do you guys approach that situation?

If i pull the trigger now, and i am considering it, i have 4 years till i turn 62 where Social security kicks in to help. I visited an advisor at fidelity who ran the scenario on his computer, he said i was over 150% of plan, but like you guys, he questioned my budget expectations a bit too.
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Old 08-26-2018, 03:31 PM   #13
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Considering you are single, not married, I don't think it's necessary to create a budget. If you are a person who LBYM (and based on your investable assets, I guess you are) it's easier to work backwards from your end of year balances, W2 income, take home pay and determine how much you saved and how much you spent. Deduct some of your motorcycle purchases and assume you'll spend the same retired as working.


The biggest unknown is your medical insurance cost after retirement. Research your ACA limit and available subsidies from the government. This topic is brought up frequently on this forum - just search for it.
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Old 08-26-2018, 03:38 PM   #14
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You may well have enough to retire, but only if you get a realistic handle on your spending -- what you're actually spending now and how much you'll be able to spend each year in the future to make your money last. With no paycheck coming in, no pension and no growth in your assets, are you prepared to change your mind-set permanently from doing "whatever I want" to following a budget?

I share your trepidation about investing in stocks. My AA is conservative - 40% in stocks, I don't think I can handle more - & I'm often tempted to pull out. But I like the growth & can weather a bear market. Every month you stay on the sidelines waiting for the decline, you're missing out on potential gains. You could start slowly with modest monthly contributions to an index fund. If the correction comes soon, you won't have lost much, & if it doesn't, you've made a good start.

$85K in a checking account? Why?? That amount could be earning $1500 a year in an online savings account with Barclays or American Express.
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Old 08-26-2018, 04:02 PM   #15
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Welcome to the forum. I don't know your age, but assuming early to mid-fifties and that you will receive SS, you can probably spend $50k to $55k gross per year in retirement. You can likely spend a little more when SS kicks in. That's just a rough +3.5% of your investable assets. Most of the models for safe withdrawal rates include at least 50% stocks. You really need to set an AA and forget about it.

ETA - In a later post, I see you are 58.
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Old 08-26-2018, 04:47 PM   #16
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Originally Posted by Spiff View Post
If i pull the trigger now, and i am considering it, i have 4 years till i turn 62 where Social security kicks in to help. I visited an advisor at fidelity who ran the scenario on his computer, he said i was over 150% of plan, but like you guys, he questioned my budget expectations a bit too.
Did this adviser recommend that you start your social security benefits at 62 because you need "help"?

Take his questioning of your budget to heart. Spend the time and dig in to find out what you really need to sustain you in your retirement before you take the leap.
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Old 08-26-2018, 05:54 PM   #17
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For some people what they spent will be their take home pay less contributions to savings for the year.... presumably the difference is spent somewhere.
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Old 08-26-2018, 07:21 PM   #18
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Originally Posted by Spiff View Post
$850K is in 401Ks, $480K is in an e-trade account, and i have about 85K in checking.
How's your asset allocation? Do you own individual stocks in either of your accounts? For me, one of the last steps prior to FIRE next year is tidying up my accounts, and trying to meet my asset allocation goal (which has only 6% bonds).

I'm not a firm believer in tracking spending down to the $0.01. I simply take my take-home pay, and subtract my savings (= spending). I've found that in recent years, my spending has varied a lot.

My future budgets include actual average costs for general categories. I have 'hold back' amounts for purchasing a new car every 15 years, and other regular purchases like new underwater cameras. I also included escalation (inflation) in the health insurance costs.
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Old 08-26-2018, 10:04 PM   #19
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Originally Posted by Dtail View Post



So the big question is when/will you get back into the market? There are other posters here who are out of the market.




That has been on my mind a lot. Bailing out has been by far the biggest financial mistake i have ever made. The debt, free fed money, P/E ratios are a bit unnerving and some articles i read were predicting increasing chance of bears coming out to play or recession, and the reasoning seemed sound enough. Trouble is there are plenty of articles saying the opposite, but their reasoning seemed less sound to me. I acted on it, and it felt good at the time, but it has been about 2 years... I need to get that engine restarted.



Thanks for the heath ins link.
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Old 08-26-2018, 11:04 PM   #20
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Originally Posted by lucky penny View Post
You may well have enough to retire, but only if you get a realistic handle on your spending -- what you're actually spending now and how much you'll be able to spend each year in the future to make your money last. With no paycheck coming in, no pension and no growth in your assets, are you prepared to change your mind-set permanently from doing "whatever I want" to following a budget?

I share your trepidation about investing in stocks. My AA is conservative - 40% in stocks, I don't think I can handle more - & I'm often tempted to pull out. But I like the growth & can weather a bear market. Every month you stay on the sidelines waiting for the decline, you're missing out on potential gains. You could start slowly with modest monthly contributions to an index fund. If the correction comes soon, you won't have lost much, & if it doesn't, you've made a good start.

$85K in a checking account? Why?? That amount could be earning $1500 a year in an online savings account with Barclays or American Express.

Ive never truly had a budget, so that may be a significant challenge.

I like the idea of phasing in a little at time, good way to end this paralysis.

Unfortunately it is not just checking that is being eaten up by inflation, i did it to my e trade and some of the 401K too. Dohh!
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