Retire at 55?

[RocketHead]

Hi All. My wife & I are 54 this year and considering retiring when we hit 55 next year. Just looking for comments if it looks doable. I've been studying everything I can get my hands on retiring at 55. Here's our specifics.

Small home in Connecticut paid for worth maybe $250k, no debt, 2 paid for year old cars.
No kids.
We will receive pensions of $35k gross a year at 55.
We will have $850k in 401k's and $120k in savings accounts.
No medical insurance.
Social Security at 62 will be about $38k gross a year.

We figure to spend about $45k a year on expenses and probably pay $20k a year to continue my company medical insurance (unless congress come up with something). We have several preconditions.

My 401k allows unlimited withdrawls if you leave the company in the year you turn 55.

I think we'll have to hit our 401k's harder than I'd like to make it to 62 but it seems like we have the money to do it. I've done the same exact job for 25 years and have had enough. My wife was let go last year after 35 years at the same company.


Thanks

 

[REWahoo]

Hi RocketHead, welcome to the forum. Have you run your numbers through FIRECalc to see what it says about your chances of running out of you before you run out of money?

 

[RocketHead]

Hey Thanks REWahoo, it's nice to be here. I thought I had tried every online retirement calculator but not that one. It's having some problems crashing right now but it still spit out these results:

===============================
Because you indicated a future retirement date (2010), the withdrawals won't start until that year. Your contributions will continue until then. The tested period is 1 years of preretirement plus 34 years of retirement, or 35 years.

FIRECalc looked at the 104 possible 35 year periods in the available data, starting with a portfolio of $950,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 104 cycles. The lowest and highest portfolio balance throughout your retirement was $950,000 to $4,928,500, with an average of $1,944,462. (Note: values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
===============================


I would have to say things look pretty good based on that. It shows me never even touching the principle. I guess I'll just have to spend more money. I prefer to die with my last dollar in my hand.

That's a heck of a calculator. Thanks again.

 

[W2R]

Welcome to the ER Forum, Rockethead.

Looks like you need a total of $65K/year (including health insurance).

Is your pension COLA'd? If so, then I think things are looking good.
After 62, from SS and pension you will have $73K/year.

For the years from 55-62, you have $850K+$120K to supplement your $35K/year pension.

Sounds like FIRECalc agrees that you are doing OK.

 

[RocketHead]

Thanks for the help Want2retire. No the pensions do not have cola provisions. Inflation will beat them down over the years. But it is what it is. I'd rather do with less than go into that job one more day then I have to. I was bored 10 years ago.

 

[Zoocat]

Hi Rockethead,
Does your company health insurance continue until you reach age 65? That's one area where I would be concerned,with the preconditions.
At least you're entering retirement AFTER the crash, unlike so many of us. Good luck!

 

[RocketHead]

Thanks Oldbabe. My company offered free retirement medical coverage until about 5 years ago. Now if you retire, they let you buy the insurance at their group rate. All I can say is I know a guy that has bought it for the last few years. From what I see going on at GM and elsewhere, there are no guaranties with retire medical insurance. Companies can do what they want. It's a risk I'm willing to take.

 

[ksr]

Have you evaluated alternatives for health insurance, such as high-deductible policies? You mentioned pre-existing conditions, so this will probably limit your options, but it might be good to know if any alternatives to the company policy exist.

Before I left the job, I did a lot of research on health ins. using sites like eHealthInsurance. I also learned a good bit about HSAs (Health Savings Accounts). It might give you some ideas of other options if the medical coverage provided by your company changes, gets too expensive, etc.

 

[CuppaJoe]

.... I was bored 10 years ago.

Any worries about being bored in retirement? Several people have mentioned that lately.

Your finances look good to go, but I'm no expert, and others are already addressing that.

Welcome. Is there a significance to the moniker, RocketHead?

 

[RocketHead]

ksr,

I think I've done some reasonable investigation on alternatives to my company medical insurance. Based on people that have left my company with preconditions and what I have read, it doesn't take much of a precondition to get turned down for individual plans. When I get closer to the date I'll give them a try though. If you look at prices for Connecticut's risk pools, the $20k a year for my companies group insurance is a good deal. I think I saw $25k and $35k a year for their two plans (for a couple). Should I get laid off before I get to retire, that's probably where I'll end up.

Hey CuppaJoe. Great name. I'm drinking some right now. mmm Yep, I have to admit to worrying about what to do with myself once I'm not working. I have some hobbies but not sure if they will fill the void. I think the thought of being with my wife 24/7 has me more worried. ha ha I saw that 25 years ago when my parents retired. It took them a good 2 years to come to terms. Regardless, I rather deal with that than my boss. My wife is still my best friend after all these years.

No sorry, RocketHead just popped out of no where. I do work at a company that has a rocket division though. And I am in aerospace manufacturing.

 

[HFWR]

Hi All. My wife & I are 54 this year and considering retiring when we hit 55 next year...


Thanks

Sounds good to me!

HFWR
age 54yrs, 11 mos.

 

[WB52]

Rockethead,
You are in the driver's seat. You have your FI already. Now it is up to you to decide if you will be more fulfilled at w*rk or to RE. Much of that decision depends on the nature of your j*b versus your future plans, once you retire. Since it sounds like you are not being fulfilled in your current position, then it is likley that it is only the fear of the unknown that is holding you back. Some folks here struggle with the change because their j*b provides fulfillment that they fear they won't be able to find in retirement. That does not seem to be your case. In any event, the decision to RE is important, but not a life or death decision.
In my opinion, it is time for you to rejoice. Go ahead, pull the chute and begin your new freedom! You have earned it! Enjoy.

 

[RocketHead]

That was inspirational Worker Bee. Thanks so much. You put a smile on my face. Yeah, if my finances are sound enough, I am outta there! Lol Sadly, I was born late in the year so it's going to be a long year next year. But I can already see the light at the end of the tunnel so I think I'll be fine.

 

[BUM]

Welcome Rockethead!
The only thing better than retiring at 55 is retiring at 54.

 

[RocketHead]

Thanks BUM! You dog, you got me beat ha ha.

You know I was thinking how lucky me and my wife are. I don't know about the rest of you, but we did not have a life long plan to retire at 55. I did not even think about it until my wife got laid off last year. That caused a serious review of our finances with half our income gone. But I really had no idea we were in such decent shape financially. Our 401k's were on auto pilot(yes, stable value funds :/). My wife and I both agree we probably would have kept working right along until we hit at least 62 if the recession had n't come along and downsized her. We were mortified at the time, but it turns out to be the best thing that ever happened to us. It woke us up from that zombie like state called working for a living. Life is funny.

 

[DallasFH]

Wish I was a zombie! At my age and knowing that there is a way out, make it really annoying that I cannot get out fast enough.

Thanks BUM! You dog, you got me beat ha ha.

You know I was thinking how lucky me and my wife are. I don't know about the rest of you, but we did not have a life long plan to retire at 55. I did not even think about it until my wife got laid off last year. That caused a serious review of our finances with half our income gone. But I really had no idea we were in such decent shape financially. Our 401k's were on auto pilot(yes, stable value funds :/). My wife and I both agree we probably would have kept working right along until we hit at least 62 if the recession had n't come along and downsized her. We were mortified at the time, but it turns out to be the best thing that ever happened to us. It woke us up from that zombie like state called working for a living. Life is funny.

 

[Helen]

Thanks BUM! You dog, you got me beat ha ha.

You know I was thinking how lucky me and my wife are. I don't know about the rest of you, but we did not have a life long plan to retire at 55. I did not even think about it until my wife got laid off last year. That caused a serious review of our finances with half our income gone. But I really had no idea we were in such decent shape financially. Our 401k's were on auto pilot(yes, stable value funds :/). My wife and I both agree we probably would have kept working right along until we hit at least 62 if the recession had n't come along and downsized her. We were mortified at the time, but it turns out to be the best thing that ever happened to us. It woke us up from that zombie like state called working for a living. Life is funny.

RocketHead, you are blessed to have not known you were able to retire so soon. That's even better than finding out it's a three day weekend!

One of the problems I've had with retirement planning has been the fixation on my goal. I'd rather have gone your path where we just saved then realized at the end we could retire early.

I still have four years to go.... As they say in prison - you shouldn't count, just do your time.

Best of luck to you and I hope you stick around!

 

[RocketHead]

Thanks Helen. Nice to meet you. Well like I said earlier, I don't turn 55 till next year. Ever since I realized I could possibly retire early, I've been completely obsessed with it. Every payday I recalculate everything and just stare at the numbers. I check my "Days Until" countdown program on my iPod every day. The effect of time speeding up as you get older has now stopped. And I can tell my wife is humoring me. So I feel some of your pain.

 

[Walt34]

I think the thought of being with my wife 24/7 has me more worried. ha ha I saw that 25 years ago when my parents retired. It took them a good 2 years to come to terms. Regardless, I rather deal with that than my boss. My wife is still my best friend after all these years.

We found that retirement can be great for a marriage. It was like being on a "marriage retreat" or second honeymoon without all the distractions of earning a living, keeping a schedule, and all that bother.

That said, I did elect to get a job five years later, but it's temporary until I develop a sufficiently bad attitude or someone there annoys me.

 

[johnvreaves]

Frippin

Rockethead, I will be 54 late this year and have finally realized that now is the time to do what I want to do, not what I have to do. My wife and I have two homes with minimal debt( worth 1.1 M) and decent health. We don't have pensions but we have saved about 600k in guaranteed annuities and have about 250k in savings. I'm trying to hang them up in the next 4-6 months and my wife in 6-8 months.

My only fear is the unknown and all that I talk too say that a monkey will get off the back and you will feel alive again. You heard that from others.

Frippin

 

[shermoid]

do it, even if it means scrimping a little

hi rockethead,

welcome! YES, you can retire at 55 - i did it at 50, with far fewer means than you've stated in your posts. it just depends what you want to do in retirement, and how much that will cost you.

like you, i was bored with my job, and disliked it too. i couldn't wait to get out of there. i have not been bored one single second since leaving work, and should have done it years before i did. i stayed working until literally i had saved what i needed to last me the rest of my life. i gave notice the very day i had sufficient savings accrued.

i've never been happier, and hope that holds up for you too! but, i'd encourage you to get out from under a crummy job, and begin living your life more like you dreamed about ...

-sherm

 

[johnvreaves]

Sherm, thanks for writing back, how long did it take you to decompress? I've had a stressfull job as a NSM, moving 19 times in 27 years. I have lived coast to coast and want to settle in South Carolina which is where my family is from. I do have to sell my homes but they are in desireable locations and we have enough cash to last a couple of years before any sale occurs. The reason this site interests me is to hear some sound advice on early retirees on how they felt, if they had no insurance what site did they go after, how did they fill their time etc. Thanks again for posting and hope to hear more from you and others. JRFRIPPIN

 

[Livefree]

I work for a large outsourcing Technology firm, and found out last week that we're all getting large salary cuts starting next month on top of freezing the 401k since April. This may be the last straw for me..I only wish I had affordable heath care lined up. I'm 54 now, and would really like to work 3 days a week for a few years before hanging it up..unfortunately that's not going to happen with these companies..has anyone out there convinced their employer to let them work part time?

 

[shermoid]

Sherm, thanks for writing back, how long did it take you to decompress? I've had a stressfull job as a NSM, moving 19 times in 27 years. I have lived coast to coast and want to settle in South Carolina which is where my family is from. I do have to sell my homes but they are in desireable locations and we have enough cash to last a couple of years before any sale occurs. The reason this site interests me is to hear some sound advice on early retirees on how they felt, if they had no insurance what site did they go after, how did they fill their time etc. Thanks again for posting and hope to hear more from you and others. JRFRIPPIN

hi john,

oh, i got used to being retired (decompressed) in about 3 seconds. no, wait - 1 second. i think i was just born to lounge.

19 moves in 27 years!?!? that sounds like me as a student. i ended up moving every 6 months on average, and what a pain in the butt. it'll be good when you can settle down. i have friends in north carolina, and they love it there. i imagine south carolina is just as beautiful.

you've hit on the big one - insurance for the individual person, not a corporate employee. i am currently using kaiser permanente under COBRA, and have about 16 months more. after that, i'll be able to buy an individual policy like the one i have, but it's going to cost me about $600, $650 a month. that'll jump to close to $1,000 a month once i turn 60, and i'll only get relief when i hit 65, and go on medicare (assuming it's still there).

if you don't have a policy currently, you may be stuck with something like blue cross/blue shield. they're crummy policies, with high deductibles. but, they're available and way better than nothing. if you can join any trade group or association in your profession, they may have insurance available as part of the deal.

diane just suggested AARP, or AAA. both of these groups can recommend insurance for age 50 and over, so maybe you can find a company and get a quote.

i hope this helps! get out of the workforce as fast as you can!

-sherm

 

[Sarah in SC]

Sherm, thanks for writing back, how long did it take you to decompress? I've had a stressfull job as a NSM, moving 19 times in 27 years. I have lived coast to coast and want to settle in South Carolina which is where my family is from. I do have to sell my homes but they are in desireable locations and we have enough cash to last a couple of years before any sale occurs. The reason this site interests me is to hear some sound advice on early retirees on how they felt, if they had no insurance what site did they go after, how did they fill their time etc. Thanks again for posting and hope to hear more from you and others. JRFRIPPIN

Hello John--glad to hear you want to move back to our wonderful state! Feel free to post your own "Hi I am" so we can grill you some more and offer some (un)solicited advice!