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So Close, Yet So Far - 56 and Aiming to Retire at 60 – What’ya Think?
Old 09-24-2015, 03:59 PM   #1
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So Close, Yet So Far - 56 and Aiming to Retire at 60 – What’ya Think?

Another pair of Texans looking to retire in about four years – Howdy to all yawl !

Jagers Post on “Tickling The Dragons Tail” - Says it all better than I could ever express.

“The reciprocal to that first tragedy is that most people are stuck. They need their jobs. There is an undercurrent of quiet desperation that lies just beneath the surface. And so they do what they must. They suck it up, absorbing the drama and the politics and the dysfunction. They live with the ever present anxiety of potential loss.

The notion of being able to take a principled stand is a luxury very few have.

We mostly think of financial independence as simply the near prelude to an enjoyable retirement. It’s more than that, though. For those still working, it is perhaps the most liberating thing they can possibly experience.”

Well said Jager !

The Background:
I’m 56 and DW is 54. I work for a major oil company and have been working in Africa since 2003 in countries and locations on land and offshore that are not popular tourist destination’s to say the least. Been in the oilfield since 78 and my dear wife has been chasing me all over the world since 79.

The wife and I have been permanent resident basis since 2008 in Africa. DW lives overseas with me and we spend ~10 months per year in Africa out of the USA. We have kept our home in The Woodlands,Texas, and one of our two adult children is living in it while pursuing additional college degrees.

I was fully vested and eligible for retirement as of age 55 as far as benefits and pension go.

Target Retirement date is 1-Jan-20. We are planning on continuing to work overseas until retirement.

The Numbers:

Personal Savings - Total ~$300K
We have four Admiral funds at Vanguard. Asset Allocation is currently 57/43. Try to stay around 60/40.
• Wellington VWENX
• Total USA Bond, VBTLX
• Total International Stock, VTIAX
• Total USA Stock, VTSAX

Currently saving ~$14K per month. Estimate ~$1M at retirement date.

Company Personal Savings - ~$700K today and estimated to be ~$1.1M at target retirement date. Save maximum allowed of ~$60K per year

Combined total for Personal and Company savings currently is ~$1M.
The combined Asset Allocation is currently 78/22 and we will be working to get that towards 60/40 by target retirement date.

Pension – Have option of taking lump sum or annuity.

Pension with 100% Survivor benefit for DW is $67K per year non-COLA.
Lump sum is estimated to be ~$1.150M

House is paid off and we could sell it for ~$180K to $225K. Home is well maintained and we have replaced the roof, both AC’s, Heater, all appliances, and done a major remodel in the last 5 years that is all paid for. So the house is in excellent condition.

One vehicle, 2006 Accord in excellent condition.

Plan to take Social Security at 67 and the wife will take the one half spousal benefit when she turns 67. Current estimate for me at age 67 is $32K per year.

No debt.

However, we are helping to support our two children financially while they pursue advanced degree’s. These costs are included in the savings estimates detailed herein.

We have estimated in retirement needing ~$9,250 net per month. Gross ~$131K per year.
This includes keeping our Medical/Dental/Vision insurance from mega-corp.

We are leaning towards taking the pension of $67K per year vs taking lump sum.

Therefore we would be need to make up ~$64k per year from our investments and savings.

Estimated current total of personal savings and company savings is estimated to be ~$2M at target retirement date.

No debt or any anticipated major expenses. No known medical issues and the wife and I are in good shape and health.

Firecalc gives us 100% for 40 years with a minimum portfolio of ~$1.575M.

We feel like we are on track.

But after being in the oilfield since 1978 – we don’t get our hopes up too much as we have lived thru a couple of busts and know how bad things can get.
Having said that…….we seem to be headed towards reaching our goals and targets.

God willing, four years to go and like so many others on the site – I admit that I am obsessed with being able to be free from working. I want to be able to spend every remaining moment enjoying life with my dear wife and family.

We’ll be posting periodic updates on the status and progress.

We are rank amateurs when it comes to this investing stuff and are learning so much from this site and the posts of the members.

After all They’s Many A Slip Between The Cup and The Lip

All comments, questions and suggestions would be most appreciated.

Thanks, gamboolman & gamboolgal....
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Old 09-24-2015, 04:23 PM   #2
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$131k a year is a pretty large retirement lifestyle in my experience. What are you spending it on? If you can live on less you can retire earlier and believe me, earlier is better.

Have you run your situation through firecalc for both your plan and if you retired now?
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Patience is the art of concealing your impatience.
Slow and steady wins the race.

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Old 09-24-2015, 05:04 PM   #3
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Welcome to the forum.

I assume some of your spending is because you're helping your kids while they get advanced degrees. Do you have a timeline when that will end? Obviously, that will drop your expenses.

Would/will your expenses be higher or lower when you return stateside? You have a paid for home here - so I would imagine you could live pretty comfortably on less. Especially in tax friendly Texas.

The 67k pension is pretty sweet. Does it stay the same whether you retire now (since you qualify) or delay your retirement?

I had a target date of age 55 to retire... but ended up trimming my budget enough that I was able to a) sock away more and b) need less in retirement. I ducked out of the workforce 2.5 years ahead of plan and would absolutely make the same decision of valuing time more than money to spend on "stuff".
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
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Old 09-25-2015, 02:37 PM   #4
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Welcome to the forum.
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Old 09-25-2015, 03:21 PM   #5
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Welcome! I would second the recommendation to look at your expenses carefully, even if you are "good to go" on your current planned schedule. You might be able to pull the plug a year or two earlier, or have more options in case something changes at Megacorp and you're sent home early, for example.
"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
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Old 09-27-2015, 07:04 AM   #6
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Thanks for the replies and comments.

Concerning our estimated expenses - We agree with all the comments and really appreciate the suggestions. We’ll admit that our estimate is very conservative.

Our estimated expenses do include at least $2K worth of discretionary monies including ~$1K for helping the Adult children.

Based on the suggestions, Ms. Gamboolgal and I have been running Firecalc scenarios this weekend on reduced net needed amounts.

Good Gravy !! The results are Startling to say the least !!

Needless to say Mom and Dad are re-thinking our basis and assumptions.

I think that being oversea’s and on the higher compensation that we kinda just fell into the mind set of maintaining the status quoi without realizing just what that meant to our retirement plans.

More to come for sure. Thanks for all comments and suggestions as we really appreciate being made to think and look at our situation from a different perspective.

Thanks, gamboolman & gamboolgal…
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So Close, Yet So Far - 56 and Aiming to Retire at 60 – What’ya Think?
Old 09-27-2015, 07:50 AM   #7
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So Close, Yet So Far - 56 and Aiming to Retire at 60 – What’ya Think?

Welcome Gamboolman, I too am supporting 2 advanced degrees and that certainly takes a toll near term, but I wonder if you might have clearer picture treating that expense with a separate set aside of an amount instead of a monthly cost. To give perspective, if you use a 4% safe withdrawal rate the monthly spending of $1 requires a savings of $300, so if I just look at kids rent and food of $1000 a month it translates to $300,000 savings but if it's a 4 year commitment you really need $48,000 with some addition for inflation. The bottom line is spending has a huge multiple and if you want to retire at the earliest possible date the small dollar amounts on a monthly basis must be treated like the additional months and years of working and saving that they require. Congrats on your achievement, detailed analysis may show you're already FI at your real spending need.

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