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Old 09-01-2021, 05:09 AM   #21
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@PaPa-T, you cannot get SS any earlier than 62. At 62, you can start taking it, but will get quit a bit less than if you wait until FRA (Full Retirement Age), and you would get even more if you want until age 70. There are lots if discussions here about whether to take "early" or "later".

You have to live off your investments or some other form of income until you take SS.
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Old 09-01-2021, 05:09 AM   #22
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Originally Posted by mrfeh View Post
+1



Being able to FIRE and having car payments is an unusual combination. Having to use 72t also makes me wonder if you are really FI.



I haven't looked at your numbers, and I'm not saying you can't make it work, but there are some yellow flags here.
For some who don't mind risks and like to sleep thinking they owe money to some mega corp, it makes perfect sense.

It is a life style choice in this modern era. It used to be a big no-no but time has changed. What used to be a common sense is no longer common.
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Old 09-01-2021, 05:33 AM   #23
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What was the cost of the vacation home that you will be paying $1,800/mo to rent?
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Old 09-01-2021, 06:34 AM   #24
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When I run the ss numbers on government site it says I have the 40 credits. Taking it 62 gives me 2024 a month. How do you change it for retiring at 55? Thought once you have the credits the number is good.
The 40 credits just means you had earned income for at least 40 quarters (10 years). The benefit is based on a complicated formula that starts with the earnings in 35 years. By stopping work at 55, you are likely to have some zeroes averaged in, which will hurt you some.

To get the estimate of what you will receive without working longer, log in to SSA.gov and scroll down to Plan For Retirement and click on Future Earnings. Set those to zero. The graph will show you your benefits at different claim ages. Do this for both spouses. Even if your spouse never worked, a spousal benefit up to one half of the benefit you would get at age 67 is available on your earning record, though the amounts also vary with age spousal can't be collected until you claim on your record. Note that on the death of either spouse, the spousal benefit disappears.

It's often not the best plan to claim at 62 unless you have known health problems. Between you and your spouse, it's quite complicated; use opensocialsecurity.com to get a calculation of you and your spouse's best plan.
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Old 09-01-2021, 07:37 AM   #25
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Thank you I will check it out
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Old 09-01-2021, 07:37 AM   #26
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$450 on lake norman,nc
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Old 09-01-2021, 09:50 AM   #27
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When I run the ss numbers on government site it says I have the 40 credits. Taking it 62 gives me 2024 a month. How do you change it for retiring at 55? Thought once you have the credits the number is good.
40 quarters of credit merely qualifies you for SS payment and eligible for Medicare. The number you see on your statement for the amount at 62 is only if you continue to work and get paid the same amount up until 62. Your SS payment will be much less if you do stop working now at 55.

Go to SS website and download anypia software application to your computer. After you get it installed, you will need to enter each past year's earnings and then leaving the rest of the years as zeroes. Somewhere on the app you will also indicate that you have stopped working. It will give you actual SS income numbers.
https://www.ssa.gov/oact/anypia/download.html

This software is updated on the SS website every year for COLA adjustment and you will need to download the software again each year to get accurate COLA adjustment SS numbers.
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Old 09-01-2021, 10:17 AM   #28
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Go for it. YOLO!
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Old 09-01-2021, 11:22 AM   #29
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Thank you
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Old 09-01-2021, 11:40 AM   #30
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Your SS payment will be much less if you do stop working now at 55.
It might well not be that much less because of how the bend points work. I retired at 50, but with 35 years of earnings. I think 27 of those years were maxed out contributions. If I’d kept working, replacing lower income years with maxed out years, it only moved the needle maybe $150/mo at 62.

But definitely the OP should use a SS calculator that uses actual earnings and doesn’t assume he works till 62
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Old 09-02-2021, 09:24 AM   #31
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Iím also 55 and FIREd. think youíre on the right track with renting, in my experience. We rented for a spell a few years ago and I loved the financial predictability and ease. One never knows what a purchased home is going to cost month-to-month.
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Old 09-02-2021, 05:04 PM   #32
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I am having a hard time understanding why a car payment is a red flag. Can you explain a little more? We are a little concerned about renting from our kids but we have had extensive talks about and believe it will work out great for bot of us.
I personally would clean up any consumer debt including car debt before you stop working.
Because yes you do have enough wealth accumulated if the markets continue to go to the moon.
But if we get a real 25% permanent market correction will your portfolio deliver the income you need without burning through your 200k of cash?
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Old 09-02-2021, 05:25 PM   #33
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If your kids can easily afford a 450k lake house that needs work you should be fine renting from them.
But if they are stretching financially to buy a vacation house and you end up stretching in FIRE. Drama might happen.

Your money situation is not a home run at age 55 with the big wild card being healthcare.
Hopefully the ACA will survive another 10 years to help your gap to medicare.
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Old 09-02-2021, 06:42 PM   #34
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I personally would clean up any consumer debt including car debt before you stop working.
Because yes you do have enough wealth accumulated if the markets continue to go to the moon.
But if we get a real 25% permanent market correction will your portfolio deliver the income you need without burning through your 200k of cash?
I agree and here's my specific thinking on debt at retirement: If the market corrects, you can invoke what I call "back ups" to your plan (for instance: stop eating out and switch from steak to hamburger, delay vacations and other travel, stop paying your life insurance premiums if possible, ditch one phone plan, lower the temp in winter/raise the temp in summer, etc. etc.) But if you have debt, it's difficult to not pay on it. The consequences of failing to pay your debts can be dire.
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Old 09-02-2021, 08:08 PM   #35
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The car payment issue is a red flag. Because they do not have substantial 401k wealth. Not even close when retiring at age 55 with healthcare costs unknown.

I assume you have much more wealth accumulated so yes a car payment for you is no big deal. Writing a 39k check for them is real money.

Renting from your kids to FIRE is also part of the same red flag.
Quote:
Originally Posted by PaPa-T View Post
I am having a hard time understanding why a car payment is a red flag. Can you explain a little more? We are a little concerned about renting from our kids but we have had extensive talks about and believe it will work out great for bot of us.
Quote:
Originally Posted by purplesky View Post
I personally would clean up any consumer debt including car debt before you stop working.
Because yes you do have enough wealth accumulated if the markets continue to go to the moon.
But if we get a real 25% permanent market correction will your portfolio deliver the income you need without burning through your 200k of cash?
PaPa-T, don't sweat the car payments. Some of our members are myopically opposed to debt of any kind... it's their problem, not yours. We had a car payment for 4 years because the rate was only 1.9% and I have numerous retired friends who... are your ready for it... lease their cars! Can you imagine!

You say that you are 100% with FIRECalc... now if you rerun FIRECalc reducing your portfolio for the amount of your remaining lease payments and the buyout and reducing your spending for your car payments and are still 100%, then it doesn't matter does it?

Ignore the foolishness.
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Old 09-02-2021, 08:27 PM   #36
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Hello, running through the numbers and think we are going to pull the trigger in Dec. 2021. We are both 55 yes old. We have 1.2m in 401k and 200k cash from sale of our lake house. Our kids bought a investment property on lake norman NC. We will become renters for the first time in our lives. Thought this would stabilize our costs of home repair...we are planning on doing a72t which amounts to 44k and supplement with cash from house for the 5 years required. This will give us a total of 76k to live on. Rent is 1800 and we have two car payment of 650 combined. Concerned about if this is enough especially with the healthcare wildcard. Can't get price until we are retired. Estimating 1000 a month.
==================
If it was me in your situation, I would be worried about the $1,800/mo rent + $650/mo car payments. I'm trying to retire next year with at least $1.3 mil, and I only pay $280/mo for my house (Heloc), and $0 car debt. If you could pay off your cars and find a home rental for $1600/mo, that would help, so the $200 goes to utilities instead (electric, water, gas).
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Old 09-02-2021, 08:45 PM   #37
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PaPa-T, don't sweat the car payments. Some of our members are myopically opposed to debt of any kind... it's their problem, not yours. We had a car payment for 4 years because the rate was only 1.9% and I have numerous retired friends who... are your ready for it... lease their cars! Can you imagine!

You say that you are 100% with FIRECalc... now if you rerun FIRECalc reducing your portfolio for the amount of your remaining lease payments and the buyout and reducing your spending for your car payments and are still 100%, then it doesn't matter does it?

Ignore the foolishness.
I guess we can close the thread.
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Old 09-02-2021, 08:55 PM   #38
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PaPa-T, don't sweat the car payments. Some of our members are myopically opposed to debt of any kind... it's their problem, not yours. We had a car payment for 4 years because the rate was only 1.9% and I have numerous retired friends who... are your ready for it... lease their cars! Can you imagine!

You say that you are 100% with FIRECalc... now if you rerun FIRECalc reducing your portfolio for the amount of your remaining lease payments and the buyout and reducing your spending for your car payments and are still 100%, then it doesn't matter does it?

Ignore the foolishness.
Everyone agrees that PaPa-T can retire early at age 55. That has been established. It's totally his call.

But PaPa-T has no room for error at age 55 with his current wealth accumulated.
The car payments aren't really the issue.
If PaPa-T had $2 million in his retirement portfolio plus 200k in cash he hits a home run and FIRE at age 55 comes with much less risk.

I am sure a good CFP acting as a fiduciary would have the same concerns as several other people in this thread.

There are so many people now in their mid 50s all in the same boat.
With about the same assets as PaPa-T and they are retiring by choice or because they are being forced into retirement.

So this thread could be helpful to other people with concerns about consumer debt and healthcare.
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Old 09-02-2021, 10:12 PM   #39
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Is your $76K including taxes? $1.4M seems a little light. Do you have pensions kicking in later or just SS?
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Old 09-03-2021, 06:09 AM   #40
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Thank you now that makes sense to me . It provides more cushion and a safety factor. We were considering 1 car for a while or 1 car and an older used if we need it.
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