Greetings from Scrooge, folks. I have been lurking for a number of months and finally decided to post and thank you all for your work contributions here. I thought I had a pretty good grasp of my retirement options, risk tolerance and such, but I have found a lot of information here that I had either never run into (like 72t and RMDs) or didn't fully realize the ramifications of. My "Retirement" bookmark folder has grown tremendously since January and that's always a good thing.
At first I thought that FIRECalc covered all the important areas, but eventually I found the "Annual spending" line, whether adjusted for the 95% rule or not, to be too much of a simplification of my anticipated expense curve over the coming decades. I ended up writing my own retirement calculator, which is vastly inferior to FIREcalc on the earnings side, but much more thorough on the spending side. It estimates yearly taxes, individual-vs-HIPPA insurance costs as I age, IRA-to-Roth conversions, one time costs like car purchases, RMDs and so forth. Unfortunately, it's unlikely to be of much use to anybody else since it makes too many assumptions about my personal circumstances and lifestyle, but it was definitely inspired by FIREcalc and I would like to thank its authors for the idea!
A little bit about myself. I am 40, male, single and work in IT as my avatar and the last paragraph would suggest
I am worth about $750K, including a $350K+ mortgage-free house in the mid-Atlantic region, almost $200K in 401k and $200K in cash and 4-week bills. I make around $100K/y, give or take minor bonuses, spend $15-20K/y, put $15K+employer match into 401k and $35-40K in taxable accounts. I could probably retire at any time, move to a low cost area and live off my savings on $13K/year plus health insurance, although the impact of the latter is hard to predict. I am not 100% sure that I want to retire this early (more on it below) and even if I was sure I would probably spend a few more years feathering the nest. As my current asset allocation outlined above indicates, I am a very conservative investor.
I wasn't always my current frugal self, I was actually quite the free spender 20 years ago. My money management skills were poor to non-existent and I was more interested in liberal arts pursuits than anything else. I ended up with a science degree almost by accident and stumbled into the IT field also by accident. I wasn't really interested in my work in my early 20s, it was just a way to make a living and finance my -- in retrospect unwise -- spending decisions and various self-imposed obligations.
Naturally, I had a rude awakening in a couple of years when I found myself on the verge of losing my job and no money in the bank to fall back on. That turned out to be a very good thing since it made me think about my finances and get rid of the obligations that I had accumulated. It also made me work harder and pretty soon I discovered that I was enjoying my work. Over the following 15 years I was a borderline workaholic, traveling all over the country, sometimes working up to 100+ hours/week and sacrificing social life for the sake of my career. I didn't make the millions that some IT people made in the late 1990s, but then again I dind't lose my shirt or have a heart attack like some other people that I know did. Granted, it irks me some that I am making $100K while my customers are paying my employer $300-500K for my services, but overall I have no regrets.
Another good thing that happened to me when I was around 25 was a revealing experience that I had when I was given an unexpected 20%+ raise. I remember studying my checkbook a few months later and wondering where all that extra money had gone. Apparently, my spending habits automatically adjusted themselves to accommodate the raise. It was a quite a revelation at the time, although now it seems obvious.
The next day I went out and bought a ledger. I entered every single expense that I incurred over the next two years into that ledger and pretty soon I knew exactly where my money was going. (I still have the ledger and in a way it reads like a diary). Next I put myself on a budget, which proved to be more painful than I anticipated, but by and large I managed to stick to it. Soon I noticed that my bank account was -- for the first time in my life! -- growing. In a couple of years I had $25K in the bank, bought a house, began contributing to 401k and, most importantly, kept my spending flat while my income was rising. Here I am, 15 years later, almost able to retire at 40, something that I would have never thought possible in my 20s.
I should also note that my existence hasn't been exactly Spartan, I just tried to be smart about which ones of my interests I pursued and how I pursued them. For example, I spent 9 days in Hawaii (all 4 major islands) a few years ago and the whole thing cost me under $1.5K. I drive a reliable, safe and roomy mid-size sedan, but I paid only $17K for it and not $25K+ that my make/model usually goes for. I had done my homework, knew what I wanted, didn't need any of the options, waited for a manufacturer rebate, set up automatic e-mail notifications for that exact configuration and so on. I'll drive it until it falls apart 15 years from now.
By the way, if some of the details above are a little vague, it's because some people's backgrounds are more easily identifiable than others'. "High school -> college -> office job" may not tell you much, but "bodybuilder -> actor -> politician" is a different story Bluehero's, aka Bob from Portland, Tektronix case (http://early-retirement.org/forums/index.php?topic=7119.msg143091#msg143091) would be a recent example.
Anyway, fast forward to 2004-2005. That's when my workaholic lifestyle began to catch up with me. Health problems, sudden realization that I am half way to the finish line, loss of interest in what I do at work, borderline depression, the works -- a classic midlife crisis. I am still not sure that I want to retire yet, perhaps I just need to find another job, but it's food for thought.
Another thing that bothers me is that the IT areas that I am an expert in are fast going the way of the dinosaurs. My services are still needed, but the types of projects that I am getting are increasingly uninteresting and sometimes unpleasant as the niche is getting smaller and smaller. Many if not most of the brighter people in the field have moved on and of the ones that remain, quite a few are just coasting while waiting for retirement, which tends to poison the environment I could try to move on as well, but it would be a challenge and I am not sure I am up to it any more.
This is getting long, I better stop while I am ahead. I may have some more specific questions later on, but for now I'll just use this opportunity to once again thank all of you for many hours of enlightening and thought-provoking reading
At first I thought that FIRECalc covered all the important areas, but eventually I found the "Annual spending" line, whether adjusted for the 95% rule or not, to be too much of a simplification of my anticipated expense curve over the coming decades. I ended up writing my own retirement calculator, which is vastly inferior to FIREcalc on the earnings side, but much more thorough on the spending side. It estimates yearly taxes, individual-vs-HIPPA insurance costs as I age, IRA-to-Roth conversions, one time costs like car purchases, RMDs and so forth. Unfortunately, it's unlikely to be of much use to anybody else since it makes too many assumptions about my personal circumstances and lifestyle, but it was definitely inspired by FIREcalc and I would like to thank its authors for the idea!
A little bit about myself. I am 40, male, single and work in IT as my avatar and the last paragraph would suggest
I am worth about $750K, including a $350K+ mortgage-free house in the mid-Atlantic region, almost $200K in 401k and $200K in cash and 4-week bills. I make around $100K/y, give or take minor bonuses, spend $15-20K/y, put $15K+employer match into 401k and $35-40K in taxable accounts. I could probably retire at any time, move to a low cost area and live off my savings on $13K/year plus health insurance, although the impact of the latter is hard to predict. I am not 100% sure that I want to retire this early (more on it below) and even if I was sure I would probably spend a few more years feathering the nest. As my current asset allocation outlined above indicates, I am a very conservative investor.I wasn't always my current frugal self, I was actually quite the free spender 20 years ago. My money management skills were poor to non-existent and I was more interested in liberal arts pursuits than anything else. I ended up with a science degree almost by accident and stumbled into the IT field also by accident. I wasn't really interested in my work in my early 20s, it was just a way to make a living and finance my -- in retrospect unwise -- spending decisions and various self-imposed obligations.
Naturally, I had a rude awakening in a couple of years when I found myself on the verge of losing my job and no money in the bank to fall back on. That turned out to be a very good thing since it made me think about my finances and get rid of the obligations that I had accumulated. It also made me work harder and pretty soon I discovered that I was enjoying my work. Over the following 15 years I was a borderline workaholic, traveling all over the country, sometimes working up to 100+ hours/week and sacrificing social life for the sake of my career. I didn't make the millions that some IT people made in the late 1990s, but then again I dind't lose my shirt or have a heart attack like some other people that I know did. Granted, it irks me some that I am making $100K while my customers are paying my employer $300-500K for my services, but overall I have no regrets.
Another good thing that happened to me when I was around 25 was a revealing experience that I had when I was given an unexpected 20%+ raise. I remember studying my checkbook a few months later and wondering where all that extra money had gone. Apparently, my spending habits automatically adjusted themselves to accommodate the raise. It was a quite a revelation at the time, although now it seems obvious.
The next day I went out and bought a ledger. I entered every single expense that I incurred over the next two years into that ledger and pretty soon I knew exactly where my money was going. (I still have the ledger and in a way it reads like a diary). Next I put myself on a budget, which proved to be more painful than I anticipated, but by and large I managed to stick to it. Soon I noticed that my bank account was -- for the first time in my life! -- growing. In a couple of years I had $25K in the bank, bought a house, began contributing to 401k and, most importantly, kept my spending flat while my income was rising. Here I am, 15 years later, almost able to retire at 40, something that I would have never thought possible in my 20s.
I should also note that my existence hasn't been exactly Spartan, I just tried to be smart about which ones of my interests I pursued and how I pursued them. For example, I spent 9 days in Hawaii (all 4 major islands) a few years ago and the whole thing cost me under $1.5K. I drive a reliable, safe and roomy mid-size sedan, but I paid only $17K for it and not $25K+ that my make/model usually goes for. I had done my homework, knew what I wanted, didn't need any of the options, waited for a manufacturer rebate, set up automatic e-mail notifications for that exact configuration and so on. I'll drive it until it falls apart 15 years from now.
By the way, if some of the details above are a little vague, it's because some people's backgrounds are more easily identifiable than others'. "High school -> college -> office job" may not tell you much, but "bodybuilder -> actor -> politician" is a different story
Bluehero's, aka Bob from Portland, Tektronix case (http://early-retirement.org/forums/index.php?topic=7119.msg143091#msg143091) would be a recent example.Anyway, fast forward to 2004-2005. That's when my workaholic lifestyle began to catch up with me. Health problems, sudden realization that I am half way to the finish line, loss of interest in what I do at work, borderline depression, the works -- a classic midlife crisis. I am still not sure that I want to retire yet, perhaps I just need to find another job, but it's food for thought.
Another thing that bothers me is that the IT areas that I am an expert in are fast going the way of the dinosaurs. My services are still needed, but the types of projects that I am getting are increasingly uninteresting and sometimes unpleasant as the niche is getting smaller and smaller. Many if not most of the brighter people in the field have moved on and of the ones that remain, quite a few are just coasting while waiting for retirement, which tends to poison the environment
I could try to move on as well, but it would be a challenge and I am not sure I am up to it any more.This is getting long, I better stop while I am ahead. I may have some more specific questions later on, but for now I'll just use this opportunity to once again thank all of you for many hours of enlightening and thought-provoking reading
One of the better reasons to consider ER...![:-\](https://www.early-retirement.org/sk/forums/images/smilies/undecided.gif "Undecided :-\")
