New Old Member Back and Ready to GO!

[Jane_Doe]

Hi, all!

I go by “Jane Doe” and actually found this forum back around 2005 and had to quit in 2008 or so due to almost financial ruin from being stupid enough to open a pub in the summer of 2007 right before the economy tanked. **

So, when we lost all our life savings, it was just too depressing to be on here, as I am sure others as well as my husband and I have dealt with. It’s a really long story and it’s been a long haul but thanks to me going to work for a local company with great bennies and good pay, thanks partially to two properties sold, my husband’s great juggling and budget skills, we paid off our debts slowly and dug out of a big hole. Ended up okay.

So, happily I am back on the forum and wish to get advice from the wonderful sage members of this forum. I think many of the old crew are no longer active, but I fondly remember reading advice from Uncle Mick (probably my favorite), Nords, Mikey, REwahoo, Ted and many that I can't recall names plus a grumpy old John Holt -
some may have changed handles, so hello to new and old friends!

Starting with background:
Happily married 40 years. We have two wonderful grown, married daughters who live too far away for our wishes, so our life must include travel for visits… we are east coast and one dd is in nw Pennsylvania and one is south Louisiana. So this puts a bit of a cramp in our style haha.

We also enjoy traveling and like Caribbean Costa Rica and Florida*

Some stats/info:
Husband, 67 semi-retired - collecting Soc Sec since age 62
We had a construction company for about 28 years worked together. He retired from that, but still is doing property management on a small strip center type commercial
property we developed, built and have owned for 30 years - this keeps him busier than we’d like, as he is very handy and tries to do as much as makes sense financially as well as physically. We want to sell when value makes sense/markets go up and people start buying in commercial market. Until then we are married to this property and it limits our mobility to travel and visit family. Don’t want to pay a management company unless becomes absolutely necessary as we age.

Best case scenario is we sell it within a year or two. Would love to see 0 capital gains tax that would be fantastic. Hoping to net 800k - 1.2m but can’t count on this as markets have been flat and now this corona mess….. blah! We have a really decent cash flow and almost always fully rented and great tenants and great location, can live off this income fairly well.

**We have had four other side businesses over the years as well (including the Pub/bar/restaurant which I don’t recommend! - long story). We are a savvy business
couple with the exception of the pub which timing caused as much as inexperience in the field.

We have also bought and sold a couple single family rentals and land that we have always had good profits on throughout the years. Again, hands on. Real Estate has been very good to us.
*(Florida upper east coast poss future winter hiatus spot for 2 or 3 months rental or possibly do fixer-upper and resell at some point when older)

I, myself, just got permanent layoff from my office job so collecting unemployment.

As to the retirement, need to sell property in order to fully retire for both of us. Hope to be able to live off our portfolio, figuring 4-5% draws. Due to self employment and lack of faith in the SS system we both paid in minimal SS and both qualify for Medicare. DH Soc Sec is about 1100 per month and mine will probably be
About $500 when I hit 62 three years from now. So there’s not a ton there to supplement. Luckily for us both of our kids married very good men and all four of them are making quite decent money and are financially comfortably settled.

Trying to do a small portfolio now and see how it does, then follow similar if/when we cash out on our commercial property.

I will post the portfolio plan in a thread in the FIRE and Money section

Since I am unemployed I hope to be more active on here this time around.

Best regards to all, "Jane"

[REWahoo]

Welcome back, Jane. Sounds like you've done a great job of making the best of a bad situation and landing on your feet.

[MichaelB]

Quote:

Originally Posted by Jane_Doe So, happily I am back on the forum and wish to get advice from the wonderful sage members of this forum. I think many of the old crew are no longer active, but I fondly remember reading advice from Uncle Mick (probably my favorite), Nords, Mikey, REwahoo, Ted and many that I can't recall names plus a grumpy old John Holt - some may have changed handles, so hello to new and old friends!

Welcome back, Jane. Uncle Mick still stops by, as do Nords and Mikey. Not sure about Ted and John Holt. As for that REWahoo guy, well, we can’t get rid of him.

[Jane_Doe]

Thanks, guys! This forum has always been so fun and friendly!

Looking forward to getting back up to snuff.....

Jane

[Vincenzo Corleone]

Quote:

Originally Posted by Jane_Doe ...due to almost financial ruin from being stupid enough to open a pub in the summer of 2007 right before the economy tanked...

You weren't stupid. You were unlucky. Judging from you post, you don't sound stupid to me.

[Dtail]

Welcome back. Looking forward to your posts.

[Golden sunsets]

4-5% draws is higher than most here would advise for long term withdrawal rates, unless you intend for that high a rate to be of short duration, you may need to rethink your plan.

[HI Bill]

Welcome back! Also, you may be eligible for spousal SS benefits (1/2 of DH's amount). Just check to see which option gives you the greatest benefits. 4-5% draws is slightly risky, and may endanger your finances ~15-18 years out. You don't mention a budget, but it would be good to create one. Cheers!

[Jane_Doe]

I am rusty on using the forum so please bear with me!

I sent ty replies but they aren't showing in the thread and seems like I should reply publicly here...

so, thanks for the welcomes and I do hope to be able to contribute here and there.

I actually am aware of the 4% being a high percentage. I should have a good amount of flexibility and we need to sell our property before I can even implement my plan (portfolio allocation is in FIRE and Money section) meanwhile I am investing 100,000 in a trial portfolio. and in both scenarios I am planning a additional 20,000 now (or 20% of portfolio later) in cash/certs over and above portfolio and draw from that, so it's got room for down markets no draw down. Make sense?

on soc security -- yes, I will check out spousal amounts. main thing for us is for me to have medicare coverage.

exciting stuff but such a bummer that market is so whack-a-doodle right now.

Jane

[ut2sua]

Quote:

Originally Posted by Vincenzo Corleone You weren't stupid. You were unlucky. Judging from you post, you don't sound stupid to me.

+1
Everyone gets unlucky some time in life. Sometimes calculated risk doesn't work out. Great to hear OP is making a great comeback. Welcome back.

[Time2]

Quote:

Due to self employment and lack of faith in the SS system we both paid in minimal SS and both qualify for Medicare.

Just kinda curious, how does lack of faith in the SS system allow you to pay in minimal SS?

[Retch The Grate]

Quote:

Originally Posted by Time2 Just kinda curious, how does lack of faith in the SS system allow you to pay in minimal SS?

depending on how they structured their businesses they may be taking their earnings in formats other than salary.

[Jane_Doe]

I did not pay myself ran the home office raised kids, husband took salary but also profit thru s corp and real estate income plus depreciation from llc

[Jane_Doe]

Correct Retch. Learned the hard way back in beginning (1982 with super high interest rates as well). young newlyweds - Weren't incorporated, built a spec house, sold for profit of about 10k on top of other income and at tax time accountant called and told me to sit down and pour a drink. 10k gone to income taxes - a good portion of which was paying additional money for FICA - self employed get to pay the whole 15.3% since it showed as income, not profit.

Great accountant got us set up and incorporated - profits came thru s-corp thereafter. He retired a couple years ago and I miss him!

Jane

[pacergal]

Welcome back. This remains a great forum, one of my favorite places to be. Hope to hear more from you.

[pb4uski]

WADR, avoiding SS is short sighted in that return is pretty good. If I look at my SS retirement benefits in relation to my career contributions from me and my employer match, I get a 4-6% average annual return, depending on what assumptions one cares to use... within range of the 5.3% average annual return on bonds from 1926 to 2018. YMMV.

[Katiek]

Welcome back. I wasn't here when you were here before, but I find this forum to still be a welcoming, positive place. Sounds like you've worked hard and established a good foundation for your future. Congratulations.

[Jane_Doe]

Quote:

Originally Posted by pb4uski WADR, avoiding SS is short sighted in that return is pretty good. If I look at my SS retirement benefits in relation to my career contributions from me and my employer match, I get a 4-6% average annual return, depending on what assumptions one cares to use... within range of the 5.3% average annual return on bonds from 1926 to 2018. YMMV.

Yes, PB for most people I would NOT recommend avoiding paying into the SS system.
Reasons we chose not to do more than minimum include the fact that being self employed paying 15.3% (employer and employee contributions),
Plus we were young and trusted more in our own ability to cover our own retirements
(NOTE we lost at least $600,000 from owning, running, investing in our pub back in 2007-12)
If the big recession had not hit I believe we would have ER'd as would I am sure many others on here.
We also bought and sold property over the years. As you said YMMV -I think ours did.
No regrets, except the darned pub. Marriage and family survived and that's what matters most.

Anyway, I do agree most normal folks should pay into the system. We are not the norm!

Jane

[BeachOrCity]

Quote:

Originally Posted by pb4uski WADR, avoiding SS is short sighted in that return is pretty good. If I look at my SS retirement benefits in relation to my career contributions from me and my employer match, I get a 4-6% average annual return, depending on what assumptions one cares to use... within range of the 5.3% average annual return on bonds from 1926 to 2018. YMMV.

The calculation of return is heavily dependent on the “bend points”. SS does have a Great return before the first bend point and a Decent return between the first and second bend point. After the 2nd Bend point the return is kind of sucky.

The inflation adjusted bend points for income are $960 and $5785 monthly.

One gets a 90 percent benefit below the 1st and a 30% benefit below the 2nd. After the second Bend point it is just 15%. So that’s 15 cents on the dollar annually for what you paid in for 35 years (plus inflation) past the 2nd point.

If I was an S Corp I would try to target my 35 year average to be just below 5785 inflation adjusted

[Jane_Doe]

Beach,
Thanks, again, I am not saying for other people to follow our example.
We are getting the minimum for soc sec and paid min in. We are fine with that.
We both qualify for Medicare which is huge. For me bothering to wait for for 70 years old or 67 etc, I am looking at a few hundred dollars monthly benefit so the annual increase if I wait is not substantial. Soc sec income will be gravy not the meat of our retirement income.

Sorry for delay in responding. Have family incl grand baby visiting. Priorities!
Being a grandma is the best thing ever!

Jane