Thinking about retirement

[djr59]

Job is starting to stress me out and I am thinking about calling it quits and looking at doing something else less stressful. Maybe dabble in real estate or just relax. Not sure.

My stats:

Savings - $3.8 Million
Assets - $1.1 Million
No debt
Expenses for a good life run $80K a year
Firecalc says I can easily fund and that does not take into account wife's income.
My portfolio alone generates $150 to $200K a year in income.
Taxes kill my income, so why work!

Age: 58
Wife: 48

My wife will continue to work earning about $200K a year and providing health insurance for us.

Am I crazy or should I do it.
I feel like I have plenty and life is too short to do things you don't like to do.
I make about $225K a year now, so I am giving up alot!

Oh, no pension, so it is what I make it!

Thanks!

 

[jollystomper]

One missing piece of info - how much do you spend? the more your expenses can be covered by one salary, the better your odds.

 

[djr59]

All expenses with a very nice lifetstyle which includes a paid off boat, vacations, etc. is about $80K a year. So after tax my wife's salary will cover until she retires. She is thinking about 2 to 5 years.

Thanks for the reply

 

[Hermit]

Job is starting to stress me out and I am thinking about calling it quits and looking at doing something else less stressful. Maybe dabble in real estate or just relax. Not sure.

My stats:

Savings - $3.8 Million
Assets - $1.1 Million
No debt

Age: 58
Wife: 48

My wife will continue to work earning about $200K a year and providing health insurance for us.

Am I crazy or should I do it.
I feel like I have plenty and life is too short to do things you don't like to do.
I make about $225K a year now, so I am giving up alot!

Oh, no pension, so it is what I make it!

Thanks!

Welcome to the forum!

It all depends on how much you spend. Some retired couples here spend 50k or less per year. If that is you, then you are probably very good to go. Put your numbers in FireCalc (link at the bottom of the page) and see what it says.

 

[LRDave]

Am I crazy or should I do it.

Thanks!

Yes.

Others are going to ask about expenses, ask if you used Firecalc, etc.

Given your bare-bones description of your situation and given the fact you found this site and asked a group of (friendly, helpful) strangers, I'd say this makes a very good candidate for ER.

Good luck and welcome! Lots of good resources in the vicinity!

 

[REWahoo]

Am I crazy or should I do it.

This may help answer that question - yes, answering a question with other questions : http://www.early-retirement.org/for...-answer-before-asking-can-i-retire-69999.html

 

[djr59]

I love reading all the stories of people who retired.
Makes me feel like I can do this.
Retire and fish, boat, read, golf, excercise, basically do all the things I find I have no energy for now because my work sucks the life out of me.
Sure I will miss the huge payday, but its just padding what is a already padded bank account. DW will still work but I will spend my days fixing house up. I will need to find retired friends as my friends are all younger and not retired.

Firecalc shows more than enough. Expenses at $100K and $5Mil net worth for 40 years will be no issue. That does not include her working or SS which I have maxed out for 35 years now.

 

[Beardog]

I haven't read all the posts above, but my opinion is that you would appear to have more than enough to quit tomorrow. Considering what you and your wife should eventually get from Social Security, too (unless you want to live a very lavish lifestyle), you can likely both retire now. Taxes are likely going to always make you nauseated, especially when you reach the age of required minimum withdrawals from deferred retirement plans combined with delayed Social Security payments. All you need to do is some prudent upfront planning and get your proverbial "ducks in a row". Chances are good that your wealth will increase with time. Just do it!

 

[LauAnn]

Yes, IMO, you are crazy not to retire right now.

 

[Earl E Retyre]

+1

If I am reading your posts correctly, you have $3.8M in investable assets and expenses of $80k/year not including healthcare.

Even if you add $20k/year for healthcare making total expenses $100k/year then that would be a withdrawal rate of 2.6%.

And, that does not include SS which sounds like you maxed out nor does it include any years your wife continues to work (which should all go towards additional savings/investments).

Looks like you are in great shape to me. Even if your wife stopped working, you should be good.

 

[djr59]

Thanks. Like I said it feels good to hear people say that.

I always said that I wanted to retire early but I hear people working into 60's and wonder why. I mean at some point you have to stop and smell the roses and enjoy what you have.

My next big dilemma after I get over losing my income is what do I do with my money. I have done well investing. I am a good investor. I am currently sitting at:

Stocks 50%
Bonds 30%
Cash 20%

I know cash is high but I didn't expect the marekt to do well after the election. I was wrong there.

So with $700K in cash, where do I go?
What i would love to do is take $3mil and put it somewhere safe at say 5% and generate $150K a year and never touch the principal!

I said my expenses were $80K and I actually expect they will go down when we move and downsize. I am currently living in a pricey home we don't need and want a condo in Florida.

Thanks again everyone. First day here and I like this site!

 

[REWahoo]

I always said that I wanted to retire early but I hear people working into 60's and wonder why. I mean at some point you have to stop and smell the roses and enjoy what you have.

There are thousands of posts discussing this very topic. Dig around and you'll find them. Hint: search for "OMY"

 

[flyingaway]

What are your $1.1M assets? If that is your house, it should not be included in your retirement income calculation. Even with just $3.8M investment assets, you are good to go, in my opinion.

 

[Hermit]

Some folks on this board maintain 2 to 5 years expenses in cash just to make sure they don't have to withdraw from stock funds in a down market. Others stay totally invested and figure they will make more that way than sitting on cash. There are some that figure they have more than enough for the rest of their lives and are mostly out of the stock market. You get to decide which way makes most sense to you. As you might have figured out, trying to time the stock market in general may not work out so well.

Personally, I stay about 55/35/10 stocks, bonds, and cash and rebalance when I do my annual withdrawal of about 2%. My basic expenses are covered by SS and pension, so my investments are not critical.

 

[djr59]

Yes the $1.1M is house, boat, cars, and rentals. Oh there is a life insurance policy with cash value in there too but the value alive not dead! LOL

I disagree with you.
If I cashed everything in that $1.1M I would have $1.1M that can be invested and I can go out and rent a condo and lease a car and those payments would still be less than the carry costs on the current assets. Boat and home are the 2 big nuts in the costs and both are overkill for my life right now and will be scaled back in the future.

I think you should always look at net worth as everything you own minus debts.
Think about it, if I take $500K and buy a summer house, I have a asset worth $500K. If I sell it I may get more or less, usually more. Therefore it has value to my portfolio.

 

[Earl E Retyre]

What i would love to do is take $3mil and put it somewhere safe at say 5% and generate $150K a year and never touch the principal!

I would love to do that too ... unfortunately, this does not exist.

 

[djr59]

I would love to do that too ... unfortunately, this does not exist.

Well maybe if interest rates rise we will get the chance. I saw you posted about those andrews CU CD. That seems like a decent deal. I am getting 1% on liquid cash now and i have some 2% CD's

I may have to do the andrews CU one.

Anywhere from 3 to 5% is fine.

 

[Hermit]

Yes the $1.1M is house, boat, cars, and rentals. Oh there is a life insurance policy with cash value in there too but the value alive not dead! LOL

I disagree with you.
If I cashed everything in that $1.1M I would have $1.1M that can be invested and I can go out and rent a condo and lease a car and those payments would still be less than the carry costs on the current assets. Boat and home are the 2 big nuts in the costs and both are overkill for my life right now and will be scaled back in the future.

I think you should always look at net worth as everything you own minus debts.
Think about it, if I take $500K and buy a summer house, I have a asset worth $500K. If I sell it I may get more or less, usually more. Therefore it has value to my portfolio.

We tend to use investments to determine what an available and sustainable withdrawal rate might be. That is the determining factor in deciding if we have enough to live on for the rest of our lives. If you have assets that can be sold, but you have no intention of selling or will have to replace, such as a place to live, that asset will not help sustain your desired living standard. If, on the other hand, you have a very expensive house and plan to downsize and/or move to a lower cost of living area, you may want to look at a portion of that asset as a later bump in your nest egg. I don't think most here bother trying to slice it that close.

 

[DrRoy]

Yes, IMO, you are crazy not to retire right now.

+1 You're not crazy. RE now.

 

[Golden sunsets]

Well maybe if interest rates rise we will get the chance. I saw you posted about those andrews CU CD. That seems like a decent deal. I am getting 1% on liquid cash now and i have some 2% CD's



I may have to do the andrews CU one.



Anywhere from 3 to 5% is fine.

I think that the Andrews CD is for an IRA only and not for taxable funds.

Regarding your situation, I think you are well situated to retire. Do you have children?


Sent from my iPad using Early Retirement Forum

 

[djr59]

Yes two kids both older and on their own.

It does not say IRA only on the website

 

[Earl E Retyre]

I think that the Andrews CD is for an IRA only and not for taxable funds.

Sent from my iPad using Early Retirement Forum

That is not the case. They are currently offering a "holiday certificate" for non-IRA. See https://www.andrewsfcu.org/personal/checking-and-savings/share-certificates.html and look under specials.

Someone had posted a few weeks back that it used to just be IRA. But they opened it up to non-IRA for the moment anyway.

I successfully opened up a non-IRA account and funded 4 CDs.

 

[pb4uski]

Yes the $1.1M is house, boat, cars, and rentals. Oh there is a life insurance policy with cash value in there too but the value alive not dead! LOL

I disagree with you.
If I cashed everything in that $1.1M I would have $1.1M that can be invested and I can go out and rent a condo and lease a car and those payments would still be less than the carry costs on the current assets. Boat and home are the 2 big nuts in the costs and both are overkill for my life right now and will be scaled back in the future.

I think you should always look at net worth as everything you own minus debts.
Think about it, if I take $500K and buy a summer house, I have a asset worth $500K. If I sell it I may get more or less, usually more. Therefore it has value to my portfolio.

I think you have plenty to retire. My thinking was that once I had enough (realistically, had more than enough) that continuing to work was only benefitting Uncle Sam and my kids inheritance, so even though I still enjoyed my work, work colleagues and most of my clients, I decided that it was time for me.

I disagree with you on including the $1.1m in your calculations, while it is part of your assets and net worth, it is not income generating like stocks, bonds or investment real estate so you can't withdraw from it to provide money to live on. Owning thee things (house, car, boat, etc) benefits you in that your expenses are lower... if you didn't have a paid off house then you would need to increase your $80k for rent on wherever you live, etc... so owning them reduces the numerator rather than increases the denominator.

Now if you plan to sell your house, downsize and invest the difference in income, then that excess would be fair game and there presumably would also be reductions in the numerator (expenses/spending) for the lower costs of the more modest housing.

 

[gayl]

Contacting https://www.andrewsfcu.org/personal/checking-and-savings/share-certificates.html about:

Holiday Certificate3 3 months $1,000.00 2.975%

 

[sheehs1]

I agree with the other posters. Just one comment/question. Thinking about the other recent polls, what percentage of that 3.8 million is in tax deferred accounts that you will owe tax on?. And do your calculations take that into account?

However, you are a ways from having to take RMD's (required minimum distributions).
Otherwise it appears you are "ready to go"!