I'm Still Nervous ...

[Bryan Barnfellow]

What is the financial status of your parents? Will you potentially be responsible for some of their living/health care expenses in the future? Is this factored into your long term planning?

Regarding spending a large amount: I agree it can be very hard if you have saved the funds in small LBYM increments over a long period. You might have an emotional attachment to the money. Perfectly normal. Best to separate this from the factors when making the build/buy decision. Also, consider the difference as spread over 30 years or more. On an annual basis it's not so big!

-BB

 

[2017wasthe year]

What is the financial status of your parents? Will you potentially be responsible for some of their living/health care expenses in the future? Is this factored into your long term planning?

Regarding spending a large amount: I agree it can be very hard if you have saved the funds in small LBYM increments over a long period. You might have an emotional attachment to the money. Perfectly normal. Best to separate this from the factors when making the build/buy decision. Also, consider the difference as spread over 30 years or more. On an annual basis it's not so big!

-BB

Thankfully, my parents live well within the means of their two pensions (auto worker and post office employee) and social security. They have modest investments that are only to be used for future healthcare needs, so taking care of them financially is not a concern.

I think you're right about viewing the cost over the long term.

 

[2017wasthe year]

+1. You’ve been conservative with your spending so far, no reason to think you’ll change in retirement. You’re not talking about an extravagant house for your net worth, and since you’re building you should get a house you’re very happy with. Normal to worry, but you’ve planned well. You’re safety factor is prudent, $66K spending vs $110K, if that doesn’t work a lot of us are going to be scrambling - you can’t plan for Armageddon.

Thanks for the vote of confidence. I think and hope that in a few years I won't be as nervous about spending as I am right now. You retired at my age a few years ago. I'm guessing it does get easier after a few years pass?

 

[Midpack]

Thanks for the vote of confidence. I think and hope that in a few years I won't be as nervous about spending as I am right now. You retired at my age a few years ago. I'm guessing it does get easier after a few years pass?

It does get easier, but there will always be some uncertainty. Eventually you’ll appreciate the old saying...

God, grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
And wisdom to know the difference.

You can plan and build in the safety factor you’re comfortable with, but there are no guarantees, only probabilities. Our WR is about 2.5%, I sleep like a baby every night, and we have more than enough. We’ll reduce spending if necessary, and if that’s not enough, money will probably be the least of our problems.

 

[2017wasthe year]

You haven't indicated your age and your other goals, so it's hard to say if your portfolio is big enough or not (although I'm guessing it's fine).

But lots of folks do things for reasons that aren't strictly financial but help them sleep at night or avoid stomach churn.

If purchasing a less expensive home than you can afford makes you feel better, just do it. To hell with what anyone else thinks - it's your life, you can live it the way you prefer.

I'm 57 1/2 and currently have $3 million invested 60/35/5. I am recovering from foot surgery and :

1. Can't stop thinking that I should have done OMY ( I gave notice last April and now kind of wish I'd waited until now.)
2. Am overwhelmed with facing no paycheck and living off my investments AND building a house at the onset. This has been my plan but now that it's here I am wide-eyed and kind of wishing I had kept my miserable status quo of commuting to a j*b and banking the pay. I can't stop the second thoughts. I think I'm afraid of all the change that is before me.

 

[2017wasthe year]

It does get easier, but there will always be some uncertainty. Eventually you’ll appreciate the old saying...

God, grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
And wisdom to know the difference.

You can plan and build in the safety factor you’re comfortable with, but there are no guarantees, only probabilities. Our WR is about 2.5%, I sleep like a baby every night, and we have more than enough. We’ll reduce spending if necessary, and if that’s not enough, money will probably be the least of our problems.

Do you ever think about the money you left on the table by not doing OMY? I can't stop thinking about it. Thinking that somehow that would have removed my current insecurity about the future ...

 

[Helen]

Do you ever think about the money you left on the table by not doing OMY? I can't stop thinking about it. Thinking that somehow that would have removed my current insecurity about the future ...

Think about all the money you will leave on the table once you pass.

Have you plugged your numbers into FIRECALC? That might help.

 

[copyright1997reloaded]

Do you ever think about the money you left on the table by not doing OMY? I can't stop thinking about it. Thinking that somehow that would have removed my current insecurity about the future ...

I left a job that paid me around 200K with bonus, and that was back in 2009 dollars. I don't regret leaving at all. I've had eight years being home and not having to be away for work over half of the working year. I've had eight years of being with my child (now 15), being able to spend time with him. Last year my child had serious medical issues, including several emergency operations. I give thanks every day for the time I've been given with my child, no matter how long that is. (Things seem to be much better now.)

You should live every day as if it is your last. You have done years and years of LBYM so you can be here and have a choice. Take it.

 

[Midpack]

Do you ever think about the money you left on the table by not doing OMY? I can't stop thinking about it. Thinking that somehow that would have removed my current insecurity about the future ...

Not really. I retired when career satisfaction was really low and I reached 200% of what a 4% WR suggested we needed. At that point, I figured that was enough safety factor. I worked 6 years beyond the number SWR said we’d need.

The financial aspect wasn’t the final barrier for me anyway.

 

[pb4uski]

Do you ever think about the money you left on the table by not doing OMY?...

Nada... nothing.

 

[Scuba]

No matter when one retires, money is being left on the table compared to continuing to work. Everyone has to make his or her own decision about when the time is right for them.

It appears to me from the information you’ve provided that you can afford to build a nice home. I think you’ll relax about spending once you see that assuming you have your funds invested well, your net worth will likely increase as the years go on.

One option if you aren’t sure is to rent for a while, spend time with your parents, and see how things go. You’ll know when the time is right.

 

[Midpack]

One option if you aren’t sure is to rent for a while, spend time with your parents, and see how things go. You’ll know when the time is right.

+1, great advice for the OP. Allows a little time to decide if living close and the new city are OK. And after you decide, you’ll be nearby renting to visit the build instead of trying to supervise from afar? I built one house and visits during construction turned out to be essential for us.

 

[braumeister]

Am overwhelmed with facing no paycheck and living off my investments AND building a house at the onset.

One last comment:
If you're overly stressed now, building a house will probably raise that stress level to a completely new level.

 

[ncbill]

I'm 57 1/2 and currently have $3 million invested 60/35/5. I am recovering from foot surgery and :

1. Can't stop thinking that I should have done OMY ( I gave notice last April and now kind of wish I'd waited until now.)
2. Am overwhelmed with facing no paycheck and living off my investments AND building a house at the onset. This has been my plan but now that it's here I am wide-eyed and kind of wishing I had kept my miserable status quo of commuting to a j*b and banking the pay. I can't stop the second thoughts. I think I'm afraid of all the change that is before me.

Why in such a hurry?

Move, but rent for awhile while you spend time with your parents.

Take the time to evaluate your future home options.

Our 3BR/3BA townhome is probably ~2100 sqft. and we're looking to downsize after the last kid leaves this fall.

 

[Spanky]

What I know is that my stomach churns at the thought of the outlay. Totaling up the mortgage and my other expenses, I get a padded total of $66k for my annual living expenses. Am I crazy to hesitate?

No need to hesitate as your finance situation is perfectly fine. That is, the SWR is only 2.2%.

 

[RenoJay]

A house is an asset that generally appreciates, so I’d go for it without concern as long as you don’t go too nuts with the landscaping, finishes, etc. just move the $250k to a new line item on your balance sheet to remind yourself you didn’t throw away the $$$, you just moved them to a different bucket.

 

[jkern]

After growing up and living in the SF Bay Area my whole life, it makes me feel like I'm from another planet when someone talks about a $250k house being expensive. A $250k house was expensive here about 40 years ago.

 

[timemoveson]

After growing up and living in the SF Bay Area my whole life, it makes me feel like I'm from another planet when someone talks about a $250k house being expensive. A $250k house was expensive here about 40 years ago.

Yes, that $ number is about the cost of the driveway where I am from. Very different scenarios for everyone.

 

[copyright1997reloaded]

Yes, that $ number is about the cost of the driveway where I am from. Very different scenarios for everyone.

I still remember a conversation with my manager who was paying more for garage rental in NYC than my mortgage (for a house definitely not anywhere close to NYC).

 

[Spanky]

Yes, that $ number is about the cost of the driveway where I am from. Very different scenarios for everyone.

It is time to move, right?