Someone stick a fork in me!

[gauss]

I really don't spend a lot, but I will look at my statements and see what I can cut out. A few things come to mind but nowhere near 40% net!

The 40% was based on the income you could achieve by taking in a roommate and splitting shared expenses (and 40% was probably an aggressive figure)-- not from thrifting your current budget.

 

[joeea]

I find this quite shocking! Barely able to squeak by?! Really!! At 65 with SS, my profit sharing, my pension, and whatever else I save, I will be squeaking by?

I think there is some confusion here.

You now say "I take home $4400/month and spend $800. Just being honest."
But earlier you said your bills were $3400/month, not $800.

If you can give a more accurate account of your expenses in retirement, you'll be able to compare your income to expenses and see where that leaves you.

$500k could safely spin off about $20k/year.
Your pension at 65 will give you about $18k of non-inflation-protected income.
Your social security at 65 will give you about $24k/year.

If you quit work now, you'll need to spend down some of your portfolio until you reach 65 or so. How much of your profit sharing do you expect to have left? And how do you expect to save anything?

Seems to me that's cutting things close. What am I missing?

The problem is that I don't have any marketable skills really.

Everyone who currently holds a job has some marketable skills.

 

[HI Bill]

The "invest, invest, invest" is what I need help with. I have no idea where to start. Call Vanguard and open...what? A Roth IRA? A target retirement fund?

I would start with a Roth IRA, and contribute the maximum to something simple like VTI (Vanguard Total Stock Market Index ETF), then open a Brokerage account, and invest anything over the $5500 in something to diversify what you hold in your retirement and other accounts.

 

[UnrealizedPotential]

I'm at a loss as to understanding the OP monthly spending. Is it $3400 or is it $800? Both it seems has been given. If it's $800, where is the extra cash every month going? If it's $3400, why say it's $800 a month?


Let us assume the spending per month really is $800. There is a lot of opportunity if the take home is $4400 a month. If it's $3400 spending a month then there is probably an opportunity to cut back somewhere.


OP please be clearer what your spending really is. Can you give us a detailed monthly budget? Someone will probably be able to suggest where you can probably cut back. It will only help you in the long run.

 

[gauss]

I interpreted OP as spending a mandatory 3400 with an additional 800 that is discretionary and/or savings.

 

[marinauser]

I think everyone is very cautious because of your marital situation. That $500k may turn into $250k after a divorce. That $1500/month pension may turn into $750. That house that you believe is in your own name - maybe not unless there is an official separation agreement in place. Those are all facts that we just don't know about. Also, you obviously have skills at something or why is someone paying you $90k plus? Is your company the only company in that business in the USA? Also, on expenses, what are the chances of payments from your earnings - alimony - if it happens in your state?

 

[Another Reader]

I think the $800 is spending above the $3,400 in "bills." There may be ways to cut back on the "bills," such as reducing or eliminating cable, unsubscribing to some services, making his home more energy and water efficient, etc. He can look at reducing the $800 in spending by reducing restaurant spending, looking at his car and associated expenses, etc. OP needs to track all of his spending and prepare a budget to see where he really is.

 

[gauss]

Cell phone expenses are often way more than they need to be. Much cheaper plans available with MVNOs.

 

[Omega]

I think there is some confusion here.

You now say "I take home $4400/month and spend $800. Just being honest."
But earlier you said your bills were $3400/month, not $800.

If you can give a more accurate account of your expenses in retirement, you'll be able to compare your income to expenses and see where that leaves you.

$500k could safely spin off about $20k/year.
Your pension at 65 will give you about $18k of non-inflation-protected income.
Your social security at 65 will give you about $24k/year.

If you quit work now, you'll need to spend down some of your portfolio until you reach 65 or so. How much of your profit sharing do you expect to have left? And how do you expect to save anything?

Seems to me that's cutting things close. What am I missing?


Everyone who currently holds a job has some marketable skills.

I see, thank you! I especially appreciate the comment about having marketable skills. I don't mind working really, I just hate the job I have now. 10 years is a lonnnnnggg time to spend 40 hours a week somewhere you hate.

 

[joeea]

10 years is a lonnnnnggg time to spend 40 hours a week somewhere you hate.

I agree!

I know this is an Early Retirement forum. But I believe everyone deserves to feel good about their work.

If you aren't getting what you need out of your current job, you always have alternatives besides leaving the workforce. A new job. A different career. Part-time work. These are all viable options.

Over my work life, I had three distinct careers. The last one was the best by far!

 

[Omega]

I would start with a Roth IRA, and contribute the maximum to something simple like VTI (Vanguard Total Stock Market Index ETF), then open a Brokerage account, and invest anything over the $5500 in something to diversify what you hold in your retirement and other accounts.

Thank you! This is exactly what I was looking for! So I should call Vanguard and talk to someone about opening a Roth IRA and invest it in the VTI? I told you I'm a novice, I just don't want to sound like one when I call.

 

[Omega]

I agree!

I know this is an Early Retirement forum. But I believe everyone deserves to feel good about their work.

If you aren't getting what you need out of your current job, you always have alternatives besides leaving the workforce. A new job. A different career. Part-time work. These are all viable options.

Over my work life, I had three distinct careers. The last one was the best by far!

It's so intimidating to start over. I know more about what I don't want to do rather than what I want to do. Also, I have no formal education which I'm afraid will pose some problems.

 

[Omega]

Thank you all so much for responding. I'm going to give myself some homework so I can post accurate numbers regarding my spending.

 

[kimcdougc]

I look forward to seeing how you move forward.

 

[WyomingLife]

Dear Omega -- Don't fret about the formal education thing. You have the best education on the planet: "life experience." Best wishes to you.

 

[Spiff]

Hi Omega, I would encourage you to carefully consider the situation at work. It is constantly changing for most folks. I have been at the same place for 30 years now, I am on my 3rd CEO, several Presidents and various VPs, countless bratty engineers fresh out of school,,, some are back stabbers, others won't listen to good advice, and it really is pointless to argue with them.... Some folks are great to work with and others are a pain in the ass. I don't think there is anyplace to run to to escape from humans and the trouble they inflict on each other.

All but the current two guys who are a pain in my backside right now ended up leaving or at least the rough edges just worn away over a little time. Each situation was different. At a couple points i had a pretty cool possitions on projects or running a meeting. I was kicked out of a huge cool project several years ago which pissed me off initially, but turned out to be a huge blessing, it was a rolling disaster that ran for years. More recently I used to run an assesment meeting for incoming projects. The sales folks and kid engineers show up to have a look and discuss... i would aproove the projects to be quoted. In some cases the kid would fail, cry like a baby and i would get stuck pulling the project out of the fire. usually with good results. Even after bailing the kids out, they gave me a hard time constantly, untill one day i had had enough fussing, so i said fine, you run this... Now i just show up at the meeting, sip on a little coffee, and watch the kuds hang themselves. They appove the projects, so i dont get stuck in the muck. It is kinda sad and kinda awesome at the same time. Hope that helps. Good luck.

 

[Omega]

Hi Omega, I would encourage you to carefully consider the situation at work. It is constantly changing for most folks. I have been at the same place for 30 years now, I am on my 3rd CEO, several Presidents and various VPs, countless bratty engineers fresh out of school,,, some are back stabbers, others won't listen to good advice, and it really is pointless to argue with them.... Some folks are great to work with and others are a pain in the ass. I don't think there is anyplace to run to to escape from humans and the trouble they inflict on each other.

All but the current two guys who are a pain in my backside right now ended up leaving or at least the rough edges just worn away over a little time. Each situation was different. At a couple points i had a pretty cool possitions on projects or running a meeting. I was kicked out of a huge cool project several years ago which pissed me off initially, but turned out to be a huge blessing, it was a rolling disaster that ran for years. More recently I used to run an assesment meeting for incoming projects. The sales folks and kid engineers show up to have a look and discuss... i would aproove the projects to be quoted. In some cases the kid would fail, cry like a baby and i would get stuck pulling the project out of the fire. usually with good results. Even after bailing the kids out, they gave me a hard time constantly, untill one day i had had enough fussing, so i said fine, you run this... Now i just show up at the meeting, sip on a little coffee, and watch the kuds hang themselves. They appove the projects, so i dont get stuck in the muck. It is kinda sad and kinda awesome at the same time. Hope that helps. Good luck.

Thank you! I really admire how you are handling your situation. My situation is so different. I work for a family business with 13 employees, 5 are family members/owners. They have been very good to me over the years, but there is one employee who over the years has been given so many more benefits and perks than the rest of us "regular" employees that it is getting really tough to take. I might sound like a squeaky wheel, but it's the truth.

There will be no changes, I just need to decide if I can ride it out and somehow change my outlook on the situation or really try and figure out how to leave. Either way, I need to take action on my finances and I'm looking for ward to taking advantage of the wisdom and advice I hope to get here.

Thanks again.

 

[Omega]

So I started my homework lol and this is what I have so far. These are my recurring bills every month, which I got from my cc statements averaged over the past nine months (I moved into my own place in January).

Take home pay is $4,400/month

Mortgage $1450.00
(Includes insurance and about $50/month extra towards principal)
Water $27
Gas and Electric $103
Food, Gas, Prescriptions $323 (these were lumped together in my statement)
HOA $53
Sewer $31
0% Loan $150
Cable/Internet $112
Netflix $11.65
Barnes&Noble $15
PetSmart $40
Gym $80

Total is $2,396


So I have $2,000/month for everything else. I know there are things not included like hair cuts, vet bills, gifts and other essentials, but I can't get an accurate breakdown this year since I've been in transition. I've already started to be much more careful with my spending and will start detailed tracking in January. I just think it will be easier for me that way.

Someone, (or two or three) suggested a Roth IRA this year, which I think I will do. It will be tough since I don't have a lot of cash!

 

[Slepp]

I don't want to sound like a Dave Ramsey and tell you to eat beans and rice , but your mortgage is killing you income at your age to fire. Not to mention repairs or upgrades that are needed to maintain a home.

You need to downsize or rent cause home equity will never be a long term retirement vehicle when health or the economy can destroy the value of home in a quick sale to raise cash.

Slepp

 

[joeea]

So I started my homework lol and this is what I have so far. These are my recurring bills every month, which I got from my cc statements averaged over the past nine months (I moved into my own place in January).

Take home pay is $4,400/month

Mortgage $1450.00
(Includes insurance and about $50/month extra towards principal)
Water $27
Gas and Electric $103
Food, Gas, Prescriptions $323 (these were lumped together in my statement)
HOA $53
Sewer $31
0% Loan $150
Cable/Internet $112
Netflix $11.65
Barnes&Noble $15
PetSmart $40
Gym $80

Total is $2,396


So I have $2,000/month for everything else. I know there are things not included like hair cuts, vet bills, gifts and other essentials, but I can't get an accurate breakdown this year since I've been in transition.

So next is to compare this $2000/month against what you are actually saving.

Have you saved $2000/month for the past 9 months? If not, dig in.

 

[pb4uski]

It looks like you may have enough. Plug your situation into FIRECalc and use the investigate tab to solve for spending level. Since your mortgage is fixed, put your mortgage payments in as off-chart spending with an offsetting "pension" when the mortgage payments end... or reduce your nestegg by your mortgage and eliminate your mortgage payments from your spending.

But even if you have "enough" you may not have penalty free access to it until you are 59 1/2 if it is all tied up in tax-deferred accounts.

 

[Omega]

It looks like you may have enough. Plug your situation into FIRECalc and use the investigate tab to solve for spending level. Since your mortgage is fixed, put your mortgage payments in as off-chart spending with an offsetting "pension" when the mortgage payments end... or reduce your nestegg by your mortgage and eliminate your mortgage payments from your spending.

But even if you have "enough" you may not have penalty free access to it until you are 59 1/2 if it is all tied up in tax-deferred accounts.

Thank you. I haven't even looked at FIRECalc yet, but the thought of actually being able to retire in 5 years is a light at the end of the tunnel.

 

[Omega]

I would also like to mention that while I was looking at my cc statements I noticed a recurring charge for $15 every month. I had seen it before and mistakenly thought it was a charge for streaming HBO (which I just canceled to save money). Turns out it was a fraudulent charge going back to April of 2016! Chase canceled my account and refunded almost $500 to my account.

 

[target2019]

I would also like to mention that while I was looking at my cc statements I noticed a recurring charge for $15 every month. I had seen it before and mistakenly thought it was a charge for streaming HBO (which I just canceled to save money). Turns out it was a fraudulent charge going back to April of 2016! Chase canceled my account and refunded almost $500 to my account.

Now you have to split that return with the nice members of the forum who helped bring attention to the matter...'


When I joined E-R, I was about your age. The picture below shows where we were at. The times for us felt like that picture, not very pretty. There was no way we could early retire with our investments, pension, SS, etc. However, I decided to go with 25% contributions in 401k. Also, started Roth accounts for two of us.

Fortunately for us, there was a recession at the time, and we invested at fire-sale prices. Still, it took discipline to continue as the total continued to drop. Thirteen years later, I can see the results. Still working, but not really hating the job, and much happier with life.

The key is regular investing, pay yourself first, or whatever works for you. Open a Roth, and have $$$ deducted monthly.

Find a way to love the job and what it provides to you monthly. Ride it til the end.

BTW, I won't retire early, but since 2015 it has felt like retirement, but they pay me a lot for my experience and attitude.

Good luck!

 

[Omega]

Now you have to split that return with the nice members of the forum who helped bring attention to the matter...'


When I joined E-R, I was about your age. The picture below shows where we were at. The times for us felt like that picture, not very pretty. There was no way we could early retire with our investments, pension, SS, etc. However, I decided to go with 25% contributions in 401k. Also, started Roth accounts for two of us.

Fortunately for us, there was a recession at the time, and we invested at fire-sale prices. Still, it took discipline to continue as the total continued to drop. Thirteen years later, I can see the results. Still working, but not really hating the job, and much happier with life.

The key is regular investing, pay yourself first, or whatever works for you. Open a Roth, and have $$$ deducted monthly.

Find a way to love the job and what it provides to you monthly. Ride it til the end.

BTW, I won't retire early, but since 2015 it has felt like retirement, but they pay me a lot for my experience and attitude.

Good luck!

I would share if I could lol.

Thanks for your thoughtful response. I will fully fund a Roth for this year out of my limited cash (which scares me a little, but I can access the money if I need to), and then start monthly payments for 2019.

I have been at this job more than 30 years and was happy until a few years ago, and things will not change. I feel like I'm too old to find something new and I would not make anything close to the money I make here, not to mention the benefits. I will not be able to find a way to love my job again, but I do love how it allows me to live and that's what I will focus on.