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Can/Should I Retire Today or in 6 Years?
Old 05-17-2021, 01:47 PM   #1
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Can/Should I Retire Today or in 6 Years?

Retire now or in 6 years time. My current expences are $60K a year with 2 kids and after they leave we'll use the surplus to travel a bit. Kids education cost is taken care of

Situation #1 (Today)

Age:50
401/403/457: $1.2M
After tax mutual funds: $1.5M
Home (paid off): $500K
Investment Home (paid) $500K
Pension $24K (a year)
SS (when I'm 67) $30K (a year)
Company health plan cost $15K

Situation #2 (2027) (note I've just added what I'm putting in not factoring in growth over the 6 years)

Age:56
401/403/457: $1.5M
After tax mutual funds: $1.8M
Home (paid off): $500K
Investment Home (paid) $500K
Pension $50K (a year)
SS (when I'm 67) $36K (a year)
Company health plan cost $7.5K
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Old 05-17-2021, 02:02 PM   #2
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Yes and yes, your preference
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Old 05-17-2021, 02:06 PM   #3
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$2.7M available in funds to spend
$60k expenses, minus the $24k pension, so you need $36k.

Do you like your job? Because you don't need it.
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Old 05-17-2021, 02:22 PM   #4
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You are good to go today based on that pension (is it COLA) and with that and SS in 17 years you will barely need to touch the funds past that point assuming 60k is your spending needs including taxes.
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Can/Should I Retire Today on in 6 Years?
Old 05-17-2021, 02:29 PM   #5
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Can/Should I Retire Today on in 6 Years?

Nice job planning and setting yourself up financially for retirement.
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Old 05-17-2021, 02:33 PM   #6
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Welcome to the forum, King Cheapo. From what you describe, you can go now. If you work the extra 6 years (why 6, anything special about that?) all you do is increase your kids inheritance.
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Old 05-17-2021, 02:49 PM   #7
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I tracked my spending for over 20 years. I knew exactly how much I spent on a yearly basis and on what category. That number was under $50k. After retirement and moving from Virginia to a fairly low cost of living area of Colorado I have consistently spent over $100k per year in my 8 years of retirement. That is quite different than most experiences you will find on this forum but it did happen in my case and without any effort to increase or decrease spending on my part. The moral of this story is make sure you understand your spending in the future especially where kids are concerned. (One of mine was in college and the other just graduated when I retired.)
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Old 05-17-2021, 03:04 PM   #8
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Thank you for that point, so what happened why did you double your spending even though you moved to a lower-cost area

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I tracked my spending for over 20 years. I knew exactly how much I spent on a yearly basis and on what category. That number was under $50k. After retirement and moving from Virginia to a fairly low cost of living area of Colorado I have consistently spent over $100k per year in my 8 years of retirement. That is quite different than most experiences you will find on this forum but it did happen in my case and without any effort to increase or decrease spending on my part. The moral of this story is make sure you understand your spending in the future especially where kids are concerned. (One of mine was in college and the other just graduated when I retired.)
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Old 05-17-2021, 03:07 PM   #9
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Today. If your numbers are right, especially expenses, then you have enough money.... but you don't know how much time you have left... so why squander 6 years if you don't need to?

Let's say that you live to 85... that's 35 years... is it worth giving up 17% of your time left to work? In my case, while I liked my work it just made rich people richer so it was an easy decision.

I assume that kids college is taken care of or you're letting them fend for themselves.
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Old 05-17-2021, 03:28 PM   #10
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Quote:
Originally Posted by Hermit View Post
I tracked my spending for over 20 years. I knew exactly how much I spent on a yearly basis and on what category. That number was under $50k. After retirement and moving from Virginia to a fairly low cost of living area of Colorado I have consistently spent over $100k per year in my 8 years of retirement. That is quite different than most experiences you will find on this forum but it did happen in my case and without any effort to increase or decrease spending on my part. The moral of this story is make sure you understand your spending in the future especially where kids are concerned. (One of mine was in college and the other just graduated when I retired.)



Are you including the money you spent building your house in this number. If so you didn't really spend it, you put in in another type investment.
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Old 05-17-2021, 03:28 PM   #11
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The one thing which sticks out that I think you should consider, is that if you stayed another 6 years, you'd get more than double the pension per year for the rest of your life. That could be an additional million dollars (pre-tax) for sticking it out a few more years. Do you "need" it? Probably not. Would it be nice to have that extra cushion? Most definitely.
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Old 05-17-2021, 03:31 PM   #12
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You use the word my, does this mean you are single? If so this means you don't have the first to die, what happens to the partner after worry to contend with. But then you say we will travel..?
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Old 05-17-2021, 03:34 PM   #13
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Thank you for that point, so what happened why did you double your spending even though you moved to a lower-cost area
Major cost overruns on last kid/college costs and house building costs plus extreme maintenance costs on a Jeep Wrangler Rubicon that I bought just prior to retirement for use in remote mountains where I now live. I also voluntarily snowplow several miles of roads in my local mountain community. The maintenance costs on the old plow truck and plowing equipment are pretty high. I also have acquired an old tractor that I use around my place and to help neighbors when they ask and light road maintenance in the summer. You could call the snowplowing/road maintenance an expensive hobby that was unplanned.

I also have the retirement funds to allow me to make decisions that keep my expenses fairly high, so I really don't feel any pressure to scale anything back. How comfortable you want to be in retirement vs. how uncomfortable you feel in your current working environment is a consideration in your decision of when to retire. I did not retire until 63. I did not really consider retirement until about 60 because I was comfortable in my working environment.
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Old 05-17-2021, 03:42 PM   #14
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Are you including the money you spent building your house in this number. If so you didn't really spend it, you put in in another type investment.
It seems fair to me to include the major cost overruns. I blew past the original cost estimates several years ago. I had cash set aside for the original costs which were probably pretty solid. Unfortunately, the house size grew along with the costs. I will never sell this house even if I need to move out when I am older. It will go to my daughter and her family.
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Old 05-17-2021, 03:44 PM   #15
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It seems fair to me to include the major cost overruns. I blew past the original cost estimates several years ago. I had cash set aside for the original costs which were probably pretty solid. Unfortunately, the house size grew along with the costs. I will never sell this house even if I need to move out when I am older. It will go to my daughter and her family.

I see your reasoning, I was pretty sure you hadn't spent that extra 400K in Vegas....
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Old 05-17-2021, 05:04 PM   #16
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4M+ net worth get you far today. 6yrs you can enjoy lots of national park visits. You may sleep better after working for 6 more years but that is totally an emotional response.

How much do you want to leave to your kids? Zero is a perfect answer.
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Old 05-17-2021, 05:11 PM   #17
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Take this job and shove it
I ain't working here no more
My woman done left
And took all the reasons
I was working forYou better not try to stand in my way
As I'm walking out the door
Take this job and shove it
I ain't working here no more

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Old 05-17-2021, 05:29 PM   #18
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I see your reasoning, I was pretty sure you hadn't spent that extra 400K in Vegas....
Don't forget that added income also means big time added taxes since all my retirement money is in IRA accounts so probably closer to $250k - $280k spendable over those eight years. I do count gross income when I talk about income and spending. (It would have been fun to spend it all in Vegas!)
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Old 05-17-2021, 09:02 PM   #19
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Is the 15K medical cost figured into the 60K current expenses?
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Old 05-17-2021, 10:25 PM   #20
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You can comfortably go now, or in six years, or anytime in between. Congratulations on getting yourself to this enviable position.

You are debt free, and you own an investment property as well as your home. Any rental income from that investment property? That income, if it exists, may well mean you don't even need to tap the $2.7 million in your investment accounts to cover your $60k annual spend level. Even if not, you only need to do an annual withdrawal rate of between 1% and 2% to add to your pension of $24k.

How do you view your work? If it is just something you do to live (rather than living to do your work) then now is as good a time to go as any. You can get more money by working longer, but you can "never" get any more time!

I retired at 54 with my three kids then ages 7, 11, and 17, and I never regretted it for one second. If I had to make the decision over again I would do exactly the same thing. The twenty one years since I retired I now savor. My dear wife passed away 18 months ago, and those years from when I retired to when she passed were real treasures.
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