Anyone retire with less than $500k?

[freebird5825]

DW and I retired with less than 500K in investments. However, we also retired with very good pensions that more than cover our expenses. In fact, we are still saving, and our investments are still growing at this point. We will not take any distributions, until we have to. When SS comes along, we will invest that as well.

Ditto, except I'm single and my pension is a CSRS govt survivor pension with COLAs, PLUS I had a TSP 401(k) consisting of my own life savings to carry me from age 48 (my FIRE age) onward.
At age 54.5, I continue to build my portfolio through DCA.

Several posters who are much smarter at the FIREcalc thing and knowing about "how much is enough?", have given the OP some excellent advice.

 

[clifp]

At 58 is a lot different than 40. I think my parents had less than $500K (+ SS, no pension AFAIK) when my dad retired at 62. They seem to be in good shape 17 years later.

My parents retired at 55 with a modest pension $750/month and just under $400K, but that was 30 years ago and my mom worked part time for another 7 or 8 years.

My friend was laid off in 2007 from a well paying IT job, he took a year off and than start looking just as the 2008 crisis. Without a degree, and rather specialized experience he was unable to find a job. In effect he retired at 52/3 with around 400K. He owned his own home, with mom living in the main house, and he living in cottage out back. He has had to make a number of sacrifice, including renting out the cottage and moving in with mom. He'll make until 62 and collect SS, but it certainly wasn't the type of retirement he was envisioning.

 

[youbet]

DW and I retired (55 and 58 yrs old) with only a few thousand dollars and, now in our mid-60's, we're doing fine. Sure we have pensions, SS and a substantial portfolio of equities and fixed investments. But, we only had a few thousand bux when we pulled the switch and retired. $500k sounds like way, way too much.

 

[comicbookgujy]

Thanks for the feedback!

My $900 a month pension at age 55 is COLA. The present value of the pension is $110k(based on the company's website on what I would receive if I take the lump sum option). I have not calculated my pension or the SS that I would receive at age 62 into my retirement plan since all that can change by the time I am entitled. SSI and pension would add another $3k a month at age 62(if I decided to take early pension at 55 and SS at age 62...if they don't decide to raise it to 90 by that time!!)

My plan at age 30 was to quit working at 40 and then work one year and take one year off. Of course the great recession has scared the crap out of me. I see co-workers that haven't worked in 3 years. Some of them, I interviewed and I didn't hire them. I work in a specialized field and I think if I take a year off, I probably won't be hired again.

I'm thinking of going back to school and find another line of work at age 40. I'm just scared that no one will hire some 40 years old at entry level job. I need to stop reading all these sad stories on the internet about guys in their 40's and 50's not getting any job offers after 2 years.

 

[Texas Proud]

Thanks for the feedback!

My $900 a month pension at age 55 is COLA. The present value of the pension is $110k(based on the company's website on what I would receive if I take the lump sum option). I have not calculated my pension or the SS that I would receive at age 62 into my retirement plan since all that can change by the time I am entitled. SSI and pension would add another $3k a month at age 62(if I decided to take early pension at 55 and SS at age 62...if they don't decide to raise it to 90 by that time!!)

My plan at age 30 was to quit working at 40 and then work one year and take one year off. Of course the great recession has scared the crap out of me. I see co-workers that haven't worked in 3 years. Some of them, I interviewed and I didn't hire them. I work in a specialized field and I think if I take a year off, I probably won't be hired again.

I'm thinking of going back to school and find another line of work at age 40. I'm just scared that no one will hire some 40 years old at entry level job. I need to stop reading all these sad stories on the internet about guys in their 40's and 50's not getting any job offers after 2 years.

It does matter which field you are in... I talked to one of my sisters who is retired... our boss was looking for someone to do some SQL reports and some web programming... this is what my sis did...

But, she said that she worked mostly with military jobs... which were normally 3 years behind... she has been out of her tech job for 3 years.... she said that is a lifetime when it comes to programming... no way could she do what is needed in today's world...


So, unless you are in a field where a year will not matter.... taking it off could be the end of your career... or at least slow it down big time....

 

[Live And Learn]

I'm thinking of going back to school and find another line of work at age 40. I'm just scared that no one will hire some 40 years old at entry level job. I need to stop reading all these sad stories on the internet about guys in their 40's and 50's not getting any job offers after 2 years.

Do you have transferrable skills that can help you get another job today ? You may find that a change of venue a tweak to the job description is enough.

 

[citrine]

I think you can pull it off...but you have to make a LOT of changes in your lifestyle and be willing to do something part time that brings in money. Have you thought about starting a business providing a service such as landscaping, pet-sitting, or tutoring. In central NJ, people pay a lot of money for that kind of thing. I have done it, with 1/3 of what you have but I am semi-retired and my income helps pay half of the household expenses and our savings. If you can hold off on withdrawing any money for at least 10 years, I think you will be in great shape.

 

[OAG]

OP sure you can. I did it with far less (actual NW at the time was negative). Question is CAN and WILL you do what is necessary to supplement savings if it becomes necessary.

 

[youbet]

OP sure you can. I did it with far less (actual NW at the time was negative). Question is CAN and WILL you do what is necessary to supplement savings if it becomes necessary.

But, if you "supplement" savings as you describe, doesn't that mean you failed? If you FIRE with a nestegg of $X with the intention of being done "earning," and the plan doesn't work and you have to go earn some more, I think that's a "failure."

If you're able to go earn some more with a minimum of pain, great. It's not a disaster or doomsday. But it's still a failure of the original plan and makes the answer to the question "did I have enough" a resounding "NO!"

 

[citrine]

I don't think it is a failure....I would call it a "re-evaluation" of the original plan. In life, many plans change and that would mean that everyone is a failure in every aspect of their life. That sounds awful!

 

[youbet]

I don't think it is a failure....I would call it a "re-evaluation" of the original plan. In life, many plans change and that would mean that everyone is a failure in every aspect of their life. That sounds awful!

I guess my view on the use of the term "failure" is a bit less philosophical. In statistics and other data analysis areas, results which fall outside of the expected outcome are usually referred to as a "failure." It's not a personal thing about how a person lived their life or that sort of thing. FireCalc generally refers to an outcome where your portfolio falls to zero before the time period has expired as a "failure." It's not a personal judgment, just the way the numbers worked out and the name that's given to that result........

But, OK, call it a "re-evaluation."

 

[In-control]

Have your run the FIRE calculator? I would be cautious as you can run the risk where you retire, run out of $ in 10 yrs, then try to get back into the workforce. $25K or 5% draw down rate is well beyond a safe level. Personally I work with 3.5% and figure that into my budget. That way I feel covered. I also have 5 yrs of budget in laddered CD's to allow my portfolio to ride out most economic storms.

Have you considered Health insurance? It is expensive and only going to increase. Have you thought of working part time, some places(i.e.Starbucks/UPS/Barns&Noble) offer HC to PT worker?

 

[Andre1969]

I just ran the following scenario through Firecalc:
$25,000 per year expenses, $500K starting portfolio.
End date of 2073 (would take a 40 year old to the age of 100)
Pension of $10,800 per year in 2028 (age 55), adjusted for inflation.

It gave back an 81.5% success rate. So in my opinion, you're close, but not quite there yet. That would probably give you a cushion though, to take off a few years, see how you like it, how expenses really are, etc. But, I would do it with the expectation that if things got rough, I might have to go back to work, even if just part time.

FWIW, delaying retirement to 2014 gives an 86.4% chance of success. 2015 is 91.4%, and 2016 is 97.5%.

So, if you really can make it on $25K per year, I'd say you're close.

 

[daylatedollarshort]

You could make some money just from the side income ideas on places like Fatwallet - earning extra credit card points, signon bonuses, selling free after rebate stuff, etc. With a 25K expenses, a few low stress, flexible side income streams would help increase your success rate.

Also adding at least some SS income would have to be huge plus for your success rate. I would add at least 75% of expected benefits into my plan and run that through firecalc.

 

[David1961]

I'm sure folks have retired with less than $500k, but I would not. At 40, you are still young enough to start a second career, if you desire.

 

[haha]

But, OK, call it a "re-evaluation."

How about "just another route to nirvana"? Remember, it's all good at all times.

Ha

 

[chasesfish]

Can you go work for Costco? That's my backup plan, preferably at a costco next to the beach the day I can no longer stand my job. I have a bit more than the OP saved up

 

[clifp]

Can you go work for Costco? That's my backup plan, preferably at a costco next to the beach the day I can no longer stand my job. I have a bit more than the OP saved up

Actually Costco jobs are pretty darn hard to get, in Hawaii they get many many more applicants than they have positions.

 

[chasesfish]

Actually Costco jobs are pretty darn hard to get, in Hawaii they get many many more applicants than they have positions.

That's actually pretty good to know. Hopefully an ex Megacorp employee could get hired. It would probably be awkward to tell them in the job interview that I own $80k in Costco stock

 

[OAG]

But, if you "supplement" savings as you describe, doesn't that mean you failed? If you FIRE with a nestegg of $X with the intention of being done "earning," and the plan doesn't work and you have to go earn some more, I think that's a "failure."

If you're able to go earn some more with a minimum of pain, great. It's not a disaster or doomsday. But it's still a failure of the original plan and makes the answer to the question "did I have enough" a resounding "NO!"

Not all sporting seasons end "undefeated" yet many are successful franchises. You do what you have to do to "succeed" IMHO. If OP wants to give it a shot he should (again IMO).

I think that at 38 (when I "retired") the "plan" was adjustable in the abstract. I don't remember ever thinking in my mind that "failure" was possible but I can see how not being 100% successful can be considered, by some, as exactly that.

 

[comicbookgujy]

Can you go work for Costco? That's my backup plan, preferably at a costco next to the beach the day I can no longer stand my job. I have a bit more than the OP saved up

I actually thought of Costco because they offer benefits to part-timer. But retail jobs are thought to get nowaday. You have 100 people applying for 1 job opening.

I'm thinking part time Usher at ballpark. I did that in my early 20's. Can't beat getting paid and watching game for free.

I think I will create a phoney corporation and pay that $400 annual fee so I if I actually have to go back to work and they ask me what I have been doing for the past 2 years, I can say, "started my own small business."

 

[youbet]

Not all sporting seasons end "undefeated" yet many are successful franchises. You do what you have to do to "succeed" IMHO. If OP wants to give it a shot he should (again IMO).

I think that at 38 (when I "retired") the "plan" was adjustable in the abstract. I don't remember ever thinking in my mind that "failure" was possible but I can see how not being 100% successful can be considered, by some, as exactly that.

As explained earlier, my use of the word "failure" was in the statistical testing sense/context, as in a FireCalc "failure."

If your plan was intended to be "adjustable," and you've voluntarily or involuntarily gone back to work, changed your budget, moved, whatever, and that is to your liking, great. If your plan was to be truly and permanently "FIRE'd" and it didn't work out and you're back at work, that's what I call a failure. That doesn't imply a failure in life or unhappiness. Rather just a mathematical outcome outside of the "success" parameters defined at the beginning of the plan.

Example:

A 50 yr old plans to FIRE on $100k/yr income living in a pricey coastal area and enjoying a significant amount of entertainment and travel. By 60 yrs of age, he sees his portfolio dropping, in his opinion, too quickly and feels that even starting SS early won't save things. He moves to a less expensive area and cuts down on travel and entertainment. His new budget is $70k/yr. Despite the fact he discovers he loves his new geographic area, has found some exciting hobbies and interesting friends and is continuing to truly enjoy life, his original plan is technically a "failure" in the sense of the word I'm using.

EDIT: I just re-read my original post to you. Ooooops! I see I used the terminology "you failed." I meant to say "your plan failed." I think my mis-wording has caused our misunderstanding. Sorry if that's the case.

 

[youbet]

I'm thinking part time Usher at ballpark. I did that in my early 20's. Can't beat getting paid and watching game for free.

I checked on doing that at Wrigley Field. They told me they had so many qualified applicants in queue they weren't even accepting additional applications!

They were taking applications for vendor jobs. But those are commission based and you really have to hustle. If you don't sell much, you not only make little money, you get canned.

We also have a couple of minor league ball parks in the area I've considered applying at but so far haven't. Which ballpark did you usher at?

 

[comicbookgujy]

I checked on doing that at Wrigley Field. They told me they had so many qualified applicants in queue they weren't even accepting additional applications!

They were taking applications for vendor jobs. But those are commission based and you really have to hustle. If you don't sell much, you not only make little money, you get canned.

We also have a couple of minor league ball parks in the area I've considered applying at but so far haven't. Which ballpark did you usher at?

I was an usher at Candlestick Park. Soon to be gone next year!!
I saw in the paper the concession workers in AT&T park make $12 to $20 a hour. I think I was making $11 a hour back in 1997.

There seems to be 3 times of people that work as usher:

1.) The retired looking to get out of the house. They get the "nice" sections like lower level and club seating. Newbies like me had to work upper deck dealing with drunks, gangstas, and smokers.

2.) The people in their 20's looking for a cool part time job

3.) The people that are working 4 part-time jobs so they don't go homeless

The vendor jobs seem to have job openings in most place. It's tough work and I don't I would want to do it. Can't really enjoy the game working as vendor.

 

[Backpacker]

I actually thought of Costco because they offer benefits to part-timer. But retail jobs are thought to get nowaday. You have 100 people applying for 1 job opening.

I'm thinking part time Usher at ballpark. I did that in my early 20's. Can't beat getting paid and watching game for free.

I think I will create a phoney corporation and pay that $400 annual fee so I if I actually have to go back to work and they ask me what I have been doing for the past 2 years, I can say, "started my own small business."

My P/T "dream" job in retirement is driving the hotel shuttle bus from airport to hotel and making cash tips.