How did/do you prepare for ER--Round 2

[education]

Hello Everyone--

This was originally moved to Best of Boards & we (RE Wahoo & I) felt it could have more participation from the members here about preparations done or to do in getting ready for that gorious day!!!!!!

I originally said:

As I am moving closer to ER I began to think back about my own preparations and wondered what they rest of you did/do.

I paid off my house and put in a swimming pool to help keep arthritis at bay and to help with low impact exercising. We have also joined a health club. We have paid off both cars and have installed many new appliances in the house--new furnace & AC, garbage disposer, water heater, etc. I am changing my glass-paned front door to a solid wood for privacy & security and installed a pvc fence around the backyard to replace the termite-riddled wooden one.

I am getting wife's caps done since I won't have dental ins. We have bought some casual clothes including shorts, knit shirts and deck shoes--on sale of course. We are stocking up on items on sale--wine, detergent, toothpaste, soap, shampoo, etc. And the credit card is paid in fiull each month.

We are trying to be smart and sensible.

The Professor

 

[sgeeeee]

I paid off my house and put in a swimming pool to help keep arthritis at bay and to help with low impact exercising.

I got a low interest loan (5.125%) and paid as little as I could to avoid PMI, then invested the rest in my normal asset allocation. Although I moved from Iowa to Arizona (where I had lived before with a pool) I avoided getting a pool because I didn't want the maintenance burden, preferring instead to travel a lot. I did install a spa in my large master bathroom to relax my tired muscles.

We have also joined a health club.

  I moved to a location that offers nearby hiking and developed a regular workout routine using isometrics, springs, ab-roller and running.

We have paid off both cars and have installed many new appliances in the house--new furnace & AC, garbage disposer, water heater, etc.

I haven't had a car loan in years and I didn't add one. I avoid new appliance purchases until they are worn out or become unreliable. Unfortunately, the first year in retirement I had to replace my air conditioner, hot water heater and dishwasher.

I am changing my glass-paned front door to a solid wood for privacy & security and installed a pvc fence around the backyard to replace the termite-riddled wooden one.

We have a solid door and cinder block fence and I prefer it that way.

I am getting wife's caps done since I won't have dental ins.

We both got dental work done during that last year for the same reason. Because we were also trading fairly generous medical benefits for catastrophic insurance, we also got medical check-ups and stockpiled as much regular prescription drugs as we could talk our doctor into.

 

We have bought some casual clothes including shorts, knit shirts and deck shoes--on sale of course.

This was not an issue for us. Our wardrobe had become increasingly casual for the last several years prior to retirement. I am now concerned about what happens when I am required to attend some formal event that requires I wear a suit. I lost a lot of weight after I retired and became more serious about workouts, so my suits and formal clothes don't fit any more.

 

We are stocking up on items on sale--wine, detergent, toothpaste, soap, shampoo, etc.

We didn't do this. I'm not sure how much this is likely to help. If you're retirement is going to last 30 to 50 years, how much can you stockpile? We do look for bargains and try to stockpile on such items whenever we find them. Of course it never fails that right after we buy 6 boxes of wine, they go on sale at another store.

And the credit card is paid in fiull each month.

Absolutely.

We also completed a major sweep of the treasures/junk in our home and donated to Goodwill. The charity donation deduction is worth more when you are in a higher tax bracket.

 

[heyyou]

We prepped for retirement for my whole career by LBYM.  A few months after my first home purchase, I was laid off for 6 weeks. Used half my emergency fund.  I've been a saver ever since, and have tried to avoid debt other than mortgage. 
For many years, we maxed the 401k % contribution (15% to 25%), and recently the 50+ portion, and made our Roths.    We lived just like our friends who had 1/3 our income.  We still do, we just don't have jobs.  We prepped for retirement by living on our retirement income for many years prior to the date.
Joe

 

[azanon]

Being early in the FIRE process, i'm just slowing "squeezing" the finances where less and less, from a percentage standpoint, is being spent, and more and more is being saved.    This serves both the purpose of accelerating the savings rate, as well as teaching us how to live on less and less.   Since my wife only watches the finances now from a cursory standpoint, i'm able to pretty much do this on my own,  unabated. 

I'm basically pulling off the artifical scarcity approach with relative ease.   I can tell since i'm doing it gradually and we're living like this year end and year out, they'll (my family) will never be the wiser of how we could have lived if we were to spend like a typical american, living off of 100%+ of our income.

It definitely helps when your overall income is high enough, that you can save a whole lot, and the remaining amount is enough that you still are able to live a similar lifestyle to your family and friends. We're doing much better than our friends/family realize judging by the things they can see.   

Azanon

 

[brewer12345]

Similar to Az' comments, we are a ways away from FIRE but the big thing we do aside from LBYM is to just make sure we never "see" a sizable portion of income so its not missed when saved. 401k helps a lot with this, and when bonus time comes around (an increasing % of my income), the vast majority gets put away.

 

[KB]

You might consider getting a line of credit on your house.
I found it really hard to do having a paid off house also, but took a $100K LOC, just in case.

I hope I never need to use it, but feel more comfortable having it available.

 

[setab]

You guys,

Anybody can ER if you do those things. I just held my nose, closed my eyes and jumped in. Well, okay, I do have a COLAd pension and a modest TSP, and little savings...and I am accelerating repayment of my debt...I been hanging around here too long...it's starting to make me more like a responsible adult.

setab

 

[SteveR]

We are counting down to a bit over 14 months to go so we are still in countdown mode and the pre-launch activities include:

1. Pay off DW's stock loan.

2. Make additional payments on the mortgages. I moved several times and have only been in this house for 3 years so the mortgage while not huge still has to be paid each month. Our plan is to pay as much on them as we can before we bail next year. They won't be paid off but one will be in two more years...sooner depending on other expenses.

3. Get my son out of school.

4. Take care of the major house/cabin remodel/repair/improvement projects while we still have a paycheck. Not paying these big ticket expenses next year and the year after will allow us to pay off the mortgage by year 4 of RE. Then our income stream can be reduced.

5. Continue the downsizing of stuff in the house. Combining two households together with our recent marriage increased the mass of stuff in an already full house. We have started a Goodwill pile...and an Ebay pile. The Ebay pile will have to wait until ER for us to sell these things. Until then, we give away a pile of stuff about once a quarter. We can start to see the back wall in a few closets now.

6. Move investments around a bit each year to line them up to create an income stream when needed. Review allocations and adjust as needed. Watch over the nest egg and plan our strategy over the next 2-3 years, 5 years, and 10 years out.

7. Create model income streams against expected life events e.g., son out of school, loan paid off, mortgage paid off, IRA withdraws, SS, Medicare etc.

8. Add to list of places we want to visit and put some best guess dates of when we want to make the trip. Determine approximate cost and fold into budget for that year.

9. List activities we want to do after ER like volunteer work, yard upgrade (mostly labor), house/garage organize, clean out, simplify, and cull down to only what is really needed.

10.Re-model our lives to take care of us instead of Mega. Corp.

 

[azanon]

You guys,

Anybody can ER if you do those things. I just held my nose, closed my eyes and jumped in.

JG?

Azanon

 

[riskadverse]

Don't forget to stock up on your stationary supplies. Pens, pencils, post-its, cd-r blanks, etc.

 

[perinova]

The finances are now under control. Consolidated everything in easy to manage low cost funds. Twas a mess before with as many as five 401k, plus IRAs plus misc. funds from several families. But we are not quite completely FI yet.

Getting rid of old stuff. Why do we get attached to junk?

The most difficult on the list = figuring out where to live after I pull the plug.
For us there are potential but none meet completely our requirements.
- Cost of housing, Property/income taxes, Cost of health insurance
- Close to Airport possibly bu still Land available
and also schooling for DS (good overall education, close to a Univ.?, good library, ) (maybe we have to wait he is older)

Other than the research about the area one would want to visit the top choices. That might take some years to figure out.

Getting ready psychologically might be a major one, but since we are getting ready materially it seems that wont be a problem'once everything is done.

 

[education]

Hi Guys--

Another great thing we have found are the "dollar store" type chains--Dollar Zone and Dollar Tree. Great values abound there, but you do have to be cautious of greedy overconsumption and the avoidance of really poor quality things. We try to stick with name brands when possible. It proves to be quite a savings of essentials--soap, toohbrushes, toothpaste, aspirin, even food stuffs, etc. for us.

The Professor