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Taking the plunge into FIRE
Old 08-24-2018, 07:23 AM   #1
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Taking the plunge into FIRE

Hi my name is Tony and i've been lurking for a while now.

I'm 48, Single with 0 debt (outside monthly revolving credit) and turnied in my notice with a corporate giant yesterday

My asset picture is roughly 1.03 million in an inherited IRA, 420K in mixed stocks, 200K in fixed income preferred stock, and 220K in a mixed fixed/growth ETF's. Also have roughly 610K in cash/savings. My current house is jointly owned by myself and my sister (inherited) valued around 225K that also has a roughly 175K joint cash account attached to it and I am in the process of building a new house that is going to be roughly 245K and will be paid for outright. then I will partly reimburse/replenish my cash assets after the sale if the current house. so I figure in the end a net cash loss of 100K after the house is sold/new house paid for since my Sister and I will be splitting the proceeds of the old house sale and the account we attached to it.


Living expenses right now are roughly 36K a year (I live in central MO it is a cheap place to live) and I will be using COBRA to continue medical for a while (470 a month) Every scenario i run through FIREcalc gives me a 100% chance of success but I still am scared about taking this leap even though in my mind I know it is the right thing to do as outside of Family visits/commitments I have not taken a real vacation since 1999.

Anyone have any additional insight as how I can better maximize my income for the next 30+ years?
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Old 08-24-2018, 08:10 AM   #2
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Since it looks like you easily have your needs covered, I think you should be concerned with preservation of your purchasing power rather than maximizing income.



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Old 08-24-2018, 08:18 AM   #3
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Welcome, looks like you are more than ready!

While your assets to expenses ratio looks great, the details - particularly how "rough" your actual spend is, vs. where and how your assets are invested - are the key. That 610 isn't doing you many favors in cash! You've lurked here so I presume you have thought out your asset allocation, and have the larger equities nut properly balanced.
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Old 08-24-2018, 08:34 AM   #4
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Tune in, turn on, drop out... then drop back in

Welcome, Tony! You appear golden with a WR of 1.5%. Wanna spend more? You could double your withdrawals and still be safe.

No vacations since 1999? Wow! You must have been very dedicated to your career. You've certainly earned a break...

...which brings me to my only real suggestion. It sounds like you have doubts. Since your numbers are well beyond secure, I wonder if you're mentally ready. There are many stories here of people who are FI but not prepared for the RE part. Do you have ideas for how you'll spend your newly acquired free time each day?

You just submitted your notice. Once you turn in your pass and your keys, go ahead and take time off. Do fun things, sleep/eat/exercise/chase girls/learn/meditate/etc., as much as you want. But be alert to signs that you may not have wanted to retire so much as you just needed some Me Time. Give a little thought to what you might do if you change your mind about dropping out of the w*rkforce.

I look forward to reading about your progress!
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Old 08-24-2018, 09:46 AM   #5
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Welcome to the forum as a member and not just a lurker. It seems you are good to go. However, I do think you might be a bit heavy on cash with $610K plus the portion of the $175K. I don't know what your inherited IRA is invested in. Your personal savings has good equities exposure. It's nice to have the house owned clear and a value associated with it, but that does not generate income. It gives you a home and some security.


Maybe you are conservative with your risk, and happy with the high cash allocation. I just believe you could be leaving some easy money on the table. You could invest that cash into lower risk fixed income type allocation, and it would produce income near your expenses. Then you can let the equities grow to offset the inflationary concerns.


Congrats on the retirement, I am just over 1 year and it is a great change form the corporate working world.
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Old 08-24-2018, 09:49 AM   #6
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Quote:
Originally Posted by Aerides View Post
Welcome, looks like you are more than ready!

While your assets to expenses ratio looks great, the details - particularly how "rough" your actual spend is, vs. where and how your assets are invested - are the key. That 610 isn't doing you many favors in cash! You've lurked here so I presume you have thought out your asset allocation, and have the larger equities nut properly balanced.
Yeah the main reason I have kept the 610 available has been due to building a new place as it will be a huge cash dump even though I know a mortgage has tax savings I'd rather just have the place free and clear as I don't know how long the current house will sit as it is a 4800 sqft monstrosity that needs updating and neither myself or my sister want to spend the 75-80K to update it just to get maybe another 60K out of it especially since we spent 35k just fixing things that needed to be done like drywall cracks, painting, wood siding replacement, etc. Rather sell as is than once that money is divided ladder 250K or so into cd's or t-notes.
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Old 08-24-2018, 10:05 AM   #7
Confused about dryer sheets
 
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Originally Posted by Mdlerth View Post
Welcome, Tony! You appear golden with a WR of 1.5%. Wanna spend more? You could double your withdrawals and still be safe.

No vacations since 1999? Wow! You must have been very dedicated to your career. You've certainly earned a break...

...which brings me to my only real suggestion. It sounds like you have doubts. Since your numbers are well beyond secure, I wonder if you're mentally ready. There are many stories here of people who are FI but not prepared for the RE part. Do you have ideas for how you'll spend your newly acquired free time each day?

You just submitted your notice. Once you turn in your pass and your keys, go ahead and take time off. Do fun things, sleep/eat/exercise/chase girls/learn/meditate/etc., as much as you want. But be alert to signs that you may not have wanted to retire so much as you just needed some Me Time. Give a little thought to what you might do if you change your mind about dropping out of the w*rkforce.

I look forward to reading about your progress!
Yeah I am ready, Not that I have not taken time off but my vacation time was always centered on either going to visit family as up until 2009 I was in 15 hours away from them and family time is really not a real vacation actually doing something fun.

I went through a health scare 3 years ago and changed my lifestyle as I was pushing 370lbs, with High blood pressure, heart issues, and diabetic now I'm healthy, around 200 lbs with only blood pressure to deal with and have learned I want to enjoy life as well as live it if that makes any sense.
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Old 08-24-2018, 12:58 PM   #8
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Welcome Locotony to our wonderful site. You sound like you are in great financial shape with a WR% less than 2%. You will need to provide for medical expenses for ~15years before medicare.
While you do have a lot of cash, it could come in handy for management of ACA medical tax subsidies. i.e. keeping your taxable income (MAGI) low enough.
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Old 08-24-2018, 02:41 PM   #9
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Great that you are in such a good position! Looks like you're more than set, with a very low safe withdrawal rate. Unless you are wanting to leave a lot to kids or charities, I'd suggest increasing your spend rate to 3-3.5%, and enjoy life! With such a low spend rate, even considering the house, I also think you need to put most of your cash to work.
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Old 08-24-2018, 09:50 PM   #10
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Welcome Tony! I just joined the forum, too. You're in the position I hope to achieve many years from now. I'm glad to find another person in such great shape! Congrats!
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