Retiring at 40 in a year. Update to a previous post. Advice welcome.

[Vicus]

This is the link to my previous post. Would love to hear any thoughts that will effect my plans. http://www.early-retirement.org/foru...ml#post1880558

I wanted to update this post because been some big changes. First we had a second child. This was planned but it wasn't looking realistic at the time of my original post. We been trying for 2 years and were only 2 months from giving up when we found out she was pregnant! Second...retiring at 45 has now changed to 40. I plan to retire from my job around March-June of 2019. Only thing that would change that is if the housing market started to collapse. Since I last posted my home has rose to 250k over the price I purchased it at. I have also completed a few projects that arent even being factor into the the value of the home yet. I am guessing but not planning on it that my house will increase another 30k at a minimum. The schools in my area just had a new High School built and a face life to the other schools. They have all went from 8's to 9's or 10's on the good school scales ect. They are also adding a NHL team among other businesses. The area for work is just doing well. So with that, its to good to pass up on selling.

I am 95% sure I am going to move somewhere in TN. Mainly outside of Nashville (like 45 minutes hour away). I only plan to pay 200k-250k max for a home which will leave me over a 100k to bank/invest. Will take my time and maximize the money I use for a home. My mother lives in the state with her husband and we will live there for a couple of months while we home search. The time is right because our son will start High School at the end of that summer. So we need to make sure we are picking a good school for him. So all this is a little scary. If anyone has suggestions or think of anything I missed let me know. I will be adding 100$ a month for a dental plan that covers the family. Already looked into it. Another side note is my employer has a VEBA program which will have around 14k in it that I can use on any medical/dental expenses. So I will have that money for when my kids need bracers/ect My son will need them but he will get them before I leave my employers program. Any Tennessee residents that have some insight on good places to live? Mom lives in Portland TN, I would like to be within an hour of her for convenience. Been looking at Clarksville due to the good schools and cost of homes. Also will be using every low income/military discount/vet bonus I can to maximize my savings. Ill be 40..so worst case..part time work if all else fails but just dont see it.

Thanks

[Scuba]

I see from your previous post that you will have pension income, which really helps. Plus you’ll have low cost healthcare for you and your family. However, I’m not sure how you plan to fund college, and now you’re having a second child. I’m not seeing how $100K plus whatever “excess” income your pensions will produce will be enough to cover these costs, plus fund a contingency for the unexpected and/or big events (weddings for example).

[joeea]

What do you plan to do with your time in retirement?
Having two young children seems like it will limit the possibilities - at least for the first 20 years or so of a long retirement.

[exnavynuke]

I still am not sure what you expect your total expenses to be in retirement, but it seems to me that your pension numbers would drop by pushing your retirement date up, making the numbers even worse than they were on your post last year. However, you still never told us what you expect to spend in retirement. The most important number when planning for FIRE is what you will spend in retirement. Without that information there is no way to come close to accurately predicting if your plan will work. If you plan to spend less than your pensions, then you're good to go now. If you want to spend more, then we need to know how much more if we're to give you any idea if it might work.

[Vicus]

Quote:

Originally Posted by exnavynuke I still am not sure what you expect your total expenses to be in retirement, but it seems to me that your pension numbers would drop by pushing your retirement date up, making the numbers even worse than they were on your post last year. However, you still never told us what you expect to spend in retirement. The most important number when planning for FIRE is what you will spend in retirement. Without that information there is no way to come close to accurately predicting if your plan will work. If you plan to spend less than your pensions, then you're good to go now. If you want to spend more, then we need to know how much more if we're to give you any idea if it might work.

So I can't get an exact number because I do not know the current rates for the future place of retirement but I expect to have just under 1700 dollars a month in spending. I will not have a mortgage. I would have 1500-1800 dollars left over to spend and place into savings. My mom and her boyfriend are retired in TN and have done some number crunching with them to find out their bills. We are homebodies, most of our activities are either hiking or staying at home together.

I should have around 150,000 in the bank saved up, two Roth IRA's, 1 TSP account, and a deferred comp account to tap into when needed *after 62*.

[Vicus]

Quote:

Originally Posted by joeea What do you plan to do with your time in retirement? Having two young children seems like it will limit the possibilities - at least for the first 20 years or so of a long retirement.

Relax, stay at home, lakes, family fun stuff. We don't plan on travelling the world. I have visited over 50 countries already during my military career and my wife over 15. My son is almost 13 so he only has a small window left and now he is getting to the age where bad things can go wrong if he's not looked after. Our daughter is a different story of course and she will be with us all the time. But my mother will be nearby and can babysit in situation when we want to take a few days off to travel ourselves.

[Vicus]

Quote:

Originally Posted by Scuba I see from your previous post that you will have pension income, which really helps. Plus you’ll have low cost healthcare for you and your family. However, I’m not sure how you plan to fund college, and now you’re having a second child. I’m not seeing how $100K plus whatever “excess” income your pensions will produce will be enough to cover these costs, plus fund a contingency for the unexpected and/or big events (weddings for example).

College is funded from the Post 9/11 GI Bill. Also the states I am looking into pay for or discount college a lot of disable veterans. Also my wife use to work for a large college and knows the tuition/scholarship process like the back of her hand. With law enforcement/military *war time*/good grades/ ect we will have no issue paying for college.

I also will be able to save a good amount of my retirement pay each month while retired. Since I hopefully have 20+ years before I have to worry about a wedding, I will cross that road when I come to it. It is a good thing to think about to help out with the wedding but if my children are depending on me to cover the cost of there wedding 100% then I feel like I didn't raise them right and they probably aren't ready for marriage yet.

[joeea]

Quote:

Originally Posted by Vicus Relax, stay at home, lakes, family fun stuff.

Not the kind of retirement life I'd prefer for a 50-year+ run, but to each his own.

That's the great thing about financial independence - we each get to decide how to spend our life without the burden of needing an income.

Good luck.

[ExFlyBoy5]

A couple of things I would consider.

First, home value. There are ZERO guarantees what will happen with home values. They may increase, they may decrease. I would NOT recommend using a "hypothetical" value of a house in any retirement planning.

Second, Tricare. Presently, it's a GREAT deal, but again, this is NOT guaranteed. As you most likely know, they have tweaked it over the last several years, and this last year, the "tweaks" were not insignificant.

Third, VA disability. You didn't mention *when* you retired, but unless you're rated condition(s) are static and PERMANENT, or it's been more than 10 years since your award, this can go away. There are several decent websites that discuss this at length, so no need to go in depth here. Just wanted to make sure it's on your radar.

[Hermit]

We paid for Dad's braces twice

[Hermit]

Quote:

Originally Posted by Hermit We paid for Dad's braces twice

Once when we started her program in Colorado and a second time when we moved to Virginia. Drs at both ends had excuses why they needed all the money. Don't pay it all up front if you will be moving.

[Vicus]

Quote:

Originally Posted by ExFlyBoy5 A couple of things I would consider. First, home value. There are ZERO guarantees what will happen with home values. They may increase, they may decrease. I would NOT recommend using a "hypothetical" value of a house in any retirement planning. Second, Tricare. Presently, it's a GREAT deal, but again, this is NOT guaranteed. As you most likely know, they have tweaked it over the last several years, and this last year, the "tweaks" were not insignificant. Third, VA disability. You didn't mention *when* you retired, but unless you're rated condition(s) are static and PERMANENT, or it's been more than 10 years since your award, this can go away. There are several decent websites that discuss this at length, so no need to go in depth here. Just wanted to make sure it's on your radar.

Understood about the home. If the martket tanks then I will just continue to work but right now I am up almost 300k on my hours. I don't see it going down much in the next year. All signs point up because it is currently the highest demand for houses in the area and the lowest inventory in the history of the area. Just to many job opportunities here and honestly with the homeless running here and the LBGT community moving her to be "safer" and more comfortable, it won't change. Even when the market went down during the soft crash in 2008, the Seattle area wasn't hit near as hard as the rest of the country.

Understand Tricare is a risk but hasn't failed me in 24 years so until I see some major signs I will still depend on it. Also from my experience the cuts to pension/benefits start at the new join end ..and try to avoid the retirement end.

Also know the VA could take away my percentage but I have perma issues that won't disappear. Multiple surgeries and tons of documentation that the issues will get worse with time. I have been keeping up on all my appointments and medical documentation. If they take something away they will have a fight. I am also starting a new claim to add two addition issues to my VA because I am having new issues caused by my injury in Afghan.

Thanks for thinking of new information. Keeps me thinking and looking for ways that could sneak up on me.

[exnavynuke]

Quote:

Originally Posted by ExFlyBoy5 A couple of things I would consider. First, home value. There are ZERO guarantees what will happen with home values. They may increase, they may decrease. I would NOT recommend using a "hypothetical" value of a house in any retirement planning. Second, Tricare. Presently, it's a GREAT deal, but again, this is NOT guaranteed. As you most likely know, they have tweaked it over the last several years, and this last year, the "tweaks" were not insignificant. Third, VA disability. You didn't mention *when* you retired, but unless you're rated condition(s) are static and PERMANENT, or it's been more than 10 years since your award, this can go away. There are several decent websites that discuss this at length, so no need to go in depth here. Just wanted to make sure it's on your radar.

Just a note here for clarification, the only time a VA disability rating can't be lowered is if you've had it for 20 years (assuming no fraud involved). Even being rated "permanent and total" can be changed. VA's use of the word "permanent" doesn't mean the rating can't be changed or lowered, just that the rater does not anticipate that the condition will improve and will generally not schedule any planned re-evaluations for any condition.

The 10 year rule just prevents the disability from having it's service connection removed, but the rating can still go down after 10 years.

[exnavynuke]

Quote:

Originally Posted by Vicus So I can't get an exact number because I do not know the current rates for the future place of retirement but I expect to have just under 1700 dollars a month in spending. I will not have a mortgage. I would have 1500-1800 dollars left over to spend and place into savings. My mom and her boyfriend are retired in TN and have done some number crunching with them to find out their bills. We are homebodies, most of our activities are either hiking or staying at home together. I should have around 150,000 in the bank saved up, two Roth IRA's, 1 TSP account, and a deferred comp account to tap into when needed *after 62*.

Well, with $3k passive income from your military retirement and VA combined, and spending of less than $2k/month, the napkin math says you have more than enough before accounting for any savings at all. So, you should be fine financially assuming your spending estimates are correct.

[ivinsfan]

I think your annual spend seems low, even for a homebody. Does it include a sinking fund for vehicles, possible home repairs, are you just going to the lake to sit or are you needing a boat, jet-ski, etc.

Internet, cell phone, utilities, food for a family of 4, gas, insurance...you should still be fine, since you have some cushion, but I might try to nail down those expenses...car insurance for a 16 year boy costs a few bucks.

[ExFlyBoy5]

Quote:

Originally Posted by exnavynuke Just a note here for clarification, the only time a VA disability rating can't be lowered is if you've had it for 20 years (assuming no fraud involved). Even being rated "permanent and total" can be changed. VA's use of the word "permanent" doesn't mean the rating can't be changed or lowered, just that the rater does not anticipate that the condition will improve and will generally not schedule any planned re-evaluations for any condition. The 10 year rule just prevents the disability from having it's service connection removed, but the rating can still go down after 10 years.

Good catch...I knew the 20 year period, but put down 10 instead. My bad!

[ESRwannabe]

Quote:

Originally Posted by Vicus This is the link to my previous post. Would love to hear any thoughts that will effect my plans. http://www.early-retirement.org/foru...ml#post1880558 Any Tennessee residents that have some insight on good places to live? Mom lives in Portland TN, I would like to be within an hour of her for convenience. Been looking at Clarksville due to the good schools and cost of homes. Also will be using every low income/military discount/vet bonus I can to maximize my savings. Ill be 40..so worst case..part time work if all else fails but just dont see it. Thanks

I grew up in Clarksville and have relatives that still live there. I go back there several times a year.

You can easily buy a very nice house for $200k-$300k. This will put you into some of the nicest neighborhoods. Or if you instead want something more secluded this would also be plenty. My parents bought their current house for around $400k about ten years ago. For that they have a couple of acres of wooded land, three story house, around 5000 sqft, three car garage, etc.

Clarksville has a large military base. Ft Campbell is there with I think 40k troops. Anyway with your military background I imagine you would have access to the base and all the benefits. We have no affiliation with the military so I have only been on base a handful of times. They have cool fireworks displays on the 4th.

Clarksville has a small college in it with around 10k students. They have a nice upgraded football field. If you like going to local football/basketball games, college plays/musicals, etc.

Its about 45 minutes from Nashville where you can find and do anything you can do at any other giant city. They also have an airport. My parents are in their 70s and drive to Nashville several times a month for doctor appointments. They have never had any trouble with it. If you don't want to drive yourself there are buses/vans that go there every day you can sign up for. Its also easy to use Uber to go back and forth. Tons of people that live in Clarksville commute to Nashville every day to work.

Clarksville has a nice new hospital, but once my parents started having more serious health issues they started going to Nashville. That really didn't happen until they got into their 70s. If you are retiring at 45, you'd probably use the local healthcare for the next two decades just fine.

If you are into out door things there are plenty of places to go. If you have a boat or like to fish there is the Cumberland River. They have a nice new park/marina built just a few years ago. Land between the Lakes is just an hour away. Plenty of places to go hiking.

If you like golf/tennis, look into the Clarksville Country Club. There are also a few other golf courses and driving ranges. If you like bowling, plenty of places to do that. There is a large mall (Governor's square mall) if you want to go shopping, lots of restaurants.

Be aware that it gets very hot and humid during the summer. On the plus side there is pretty much never any snow. You might see snow for one week out of the year...

Because of the big military base, people from all over the country live there. I grew up there and don't have a southern accent, and I would say the area is not typical for TN.

Anyway hope that helps.

P.S. Looking at your financial info you would have no problem at all retiring there. The cost of living is cheap, housing is cheap, no state taxes (be aware of the "Hall tax" though, however it is being phased out). The only down side to the area is that it gets *hot* during the summer.

[ESRwannabe]

Quote:

Originally Posted by Vicus So I can't get an exact number because I do not know the current rates for the future place of retirement but I expect to have just under 1700 dollars a month in spending. I will not have a mortgage. I would have 1500-1800 dollars left over to spend and place into savings. My mom and her boyfriend are retired in TN and have done some number crunching with them to find out their bills. We are homebodies, most of our activities are either hiking or staying at home together. I should have around 150,000 in the bank saved up, two Roth IRA's, 1 TSP account, and a deferred comp account to tap into when needed *after 62*.

If you buy and pay off a house then $1,500-$1,800 will be plenty to live off of in Clarksville. I'm not pulling this out of thin air. My parents live there, I know what it costs to live there. You will be fine.

For your kids there is a very good college they can go to right in town. That will save them a ton of money on living expenses and they will just have tuition and such.

Worst case scenario, you or your wife can pick up a part-time or seasonal job. With your military background you will have a leg up. Ft. Campbell is very important to the city and employers go out of their way to hire veterans.

[ESRwannabe]

Quote:

Originally Posted by Vicus College is funded from the Post 9/11 GI Bill. Also the states I am looking into pay for or discount college a lot of disable veterans. Also my wife use to work for a large college and knows the tuition/scholarship process like the back of her hand. With law enforcement/military *war time*/good grades/ ect we will have no issue paying for college. I also will be able to save a good amount of my retirement pay each month while retired. Since I hopefully have 20+ years before I have to worry about a wedding, I will cross that road when I come to it. It is a good thing to think about to help out with the wedding but if my children are depending on me to cover the cost of there wedding 100% then I feel like I didn't raise them right and they probably aren't ready for marriage yet.

Also FYI, look into the Tennessee Promise. Your kids can get half of their schooling paid for for free by the state. The local college is eligible for this. So, have them live at home, then get tuition paid for the first two years. Your kids will just need to cover two years of tuition. I'm guessing that would be like $10k total.

Tennessee Promise

[TrophyWife]

I think it's an assumption that everyone plans to pay for college for their kids. We chose not to. One son got a full ride with the ARMY ROTC and the other went to a state school and cash flowed school by working. I don't think as parents we owe our kids a free ride to college.

I found the process to be very character building for them (and me) as we both would have liked to pay for them. We stayed focused on paying off our home and getting debt free.

BTW-Our sons knew that we would not be paying for college since the time they were in jr high. In the end we were able to pay a small amount to supplement them and we now match some of their retirement savings. I think it's important to help when you can but not at the expense of your retirement.