Still Dreaming at 40

[EricMD]

Hi Everyone, i love this site but this is my first time posting. well, here are my story... please feel free to advice and comments.

my wife and i are both foreign borned. both are at 40, two youngster 6 and 7 years of age. we came to the state in the 80's , finished college. i am an engineer for the government and my wife has a small business. we like to retire in about 5-8 years if possible. since that is when her leases for the business expired.

we got some investment in real estate (according to "the next door" home price) our networth in real estate is around $1.1 mil and $300k in 401k+ira+mutuals funds. cash flow in real estate is around $3500/mon. total debt is around $250k in home equity line that need to pay off ($1200/mon). no credit card, no car payment, kids attend public school. combined income of around $120k/year (this amount is gone if we decided to ER)

i am tired of working and stress out all of the time. the words "tired and stress" are pretty common in this household. we would like to retire ... please give some advice...

 

[maddythebeagle]

Boy, your situtation is different. What was the home equity loan from. I am also an engineer as are several of the folks here. I suspect that since you and your wife were foreign born, you have a lot of good habits and not huge consumers (300,000 is a nice nest egg).

I suspect the main reason you stay is for the health insurance? with 2 kids that probably is a major thought in this getting a high deductable and paying for the little stuff out of pocket sounds the way that I will go. Have you looked at your government pension to figure what you get if retire in 40s. I suspect that you wont be able to collect anything until you are in mid 50s but I would look at your plan to see what is what and figure what kind of money you will get.

Have you figure how much you will need or thought about going to a smaller house?

What kind of business is your wife in? 

 

[EricMD]

thanks for the respone. yes we have been blessed with an incredible work ethics. 60-70hrs week is normal. my wife is accounting graduate and worked in the field for 4 years but couldn't handle the "office politics", you know we all got a pretty strong accent ams speak broken english. her business is a beauty salon and it generates very humble income. however, you hit it right on the nail, our nest egg is totally depending "living below our mean" and some luck.

i got some extra money from a summer job during the college days and bought a condo in newyork (12 years ago), bought another one after the day of our wedding (with honey moon). lived on 75% of my income, and saved every penny from my wife to buy more houses. $250k line of credit is from mortgage payment on the investing property.

yes the health insurance is a big big pain to think about and you're right i got a long long way to way from the retirement. Office politics is normal here too but what gets to me the most is that i maxed my earning potentail with the govern GS-12. and do not see a promotion any time soon.

stress and more stress.... i will pay good money for stress release.... thanks again

 

[rapoole]

Eric-

If you are with the Federal Gov under the FERS program, you are eligible at 50 years of age and 20 years of service to retire on a somewhat reduced pension, and you get to keep the FEHBP health insurance (you pay, but it continues to be subsidized by the govt.) The trick is you need to be offered an early out due to Reductions In Force or budget cutting. If you are thinking of retiring in 5 to 8 years anyway, it might be worth your while to wait a bit longer. Not what a lot of people here would advise, but might be worth the wait. (Without an early-out offer, you will need to wait much longer or take a much larger reduction.)

rapoole

 

[EricMD]

rapoole,

excellent advice but sticking out longer time is hard to do. i might have to bite the bullet. i was just wonder if there is anywhere else in the world or different states that have affordable health insurance.

i heard that if u stayed in canada for 1 year or longer. you're eligible for citizenship in which health care is free. can anyone comment on this?

off the subject a little, rapoole and maddythebeagle, do u happened to have self direct ira? if so, coudl u tell me something about it. my ira is with schwab account and i like to pull it out to have complete controll of the ira account.

thanks for your comments

 

[rapoole]

Eric-

I understand about wanting out. I'm ready myself. I have the 50 and 20 and am hoping for an early out offer. Otherwise I'll be here another four years.

I don't have any info about self directed IRAs, though I suspect that IRS rules would make it more trouble than it's worth.

rapoole

 

[EricMD]

rapoole, i love most of your comments. how long have u thought about ER? how is is working out for u so far? sounds like u have quite a wealth of knowledge in stock and mutual funds. my wife almost strangle me during the 2000 crash. BTW, why is is most of the government employee refuse to leave when they are eligible to retire? i hope i won't be one of those people. can't wait to get there so i don't have to kiss asses here at work.

thanks

 

[Nords]

BTW, why is is most of the government employee refuse to leave when they are eligible to retire?

I'm just guessing, but I bet it's because their expenses exceed their pension + their savings.

You seem to have figured out that math.

 

[JonnyM]

I'm just guessing, but I bet it's because their expenses exceed their pension + their savings.

You seem to have figured out that math.

Bullseye, because they upgraded their house and cars still again, with no thought to how long it will be till their paid off. They live slightly or greatly beyond their means and the concept of retiring and being "forced" to live on less is unthinkable. They just keep on working.

 

[azanon]

BTW, why is is most of the government employee refuse to leave when they are eligible to retire?

24 Days a year vacation (from tenure), "stepped-out" pay salary, and virtually immune to being fired. If you do the math on that vacation plus all the federal holidays, it comes out to about 34 hrs a week.

Which would you rather do, post here like a lot of folks do at home retired, or do it at work for 80K a year with 30 years tenure and untouchable because of it?

 

[rapoole]

Eric-

     Thanks for asking.  Two years ago I couldn't imagine retiring.  I didn't have a plan.  Couldn't imagine what I would spend my time doing or how I could live on an early out pension plus savings.

      What I am planning is a retirement from the gov, move to lower cost state (NC) and take up a second career doing estate planning part time (I'm a lawyer).  I know where I want to live, what I want to do there, and how I will pay for it.  Now all I need is an early out offer.  End of this fiscal year looks promising.

      Financial resources include 40K expected pension, 500K TSP (mostly in C fund), 250K in spouses IRA's, house roughly 750K (less about 150K mortgate and other debt).  Hope to buy house in NC and have cash left over to live on while I start up a law practice.

       Some here wouldn't call that retirement, but it's what I want - I don't mind working, but want control, which I lack now.

        Anyway, as to why others don't retire when they can, I think it is overspending, as others here noted, and lack of imagination.  I'm no paragon of virtue, but have made a conscious effort not to ratchet up my lifestyle too much.

Regarding Azanon's comment - if your whole life consisted of posting here, maybe that would be right. I have a pretty demanding job with a lot of travel.

rapoole

 

[EricMD]

Which would you rather do, post here like a lot of folks do at home retired, or do it at work for 80K a year with 30 years tenure and untouchable because of it?

I agree with azonon to some extend. Milking the government is fine for someone but that is not something that i am looking forward to. Beside there better things to do in live then being tie up in your office 40hrs/wk for the sake of more money. how about hanging out w/ friends, spouse, children, grand children, travel (can be done cheaply), volunteer, teach, golf, tennis, bowling..... 34/hrs week in the office might not worth it for me.

I don't want to use the same excuses like "i love my job" or "i got kids in college" to stay longer then i have to. Freedom is a pretty big thing for me.

mine 2 cents thought

eric