RetireAbroadAt35
Dryer sheet aficionado
- Joined
- Jun 30, 2012
- Messages
- 48
It's been about 5 years since I put together my financial plan for ER, thanks in no small part to the advice and ideas here on this forum.
Eventually I concluded that while I like living and traveling abroad, I wanted the option to retire in the States, and to be able to afford it. My forum handle is now a bit of misnomer (and a reminder of my youthful impulses).
I went back to work and executed a plan that, financially, ended up a little better than projected.
So folks, can I make it? What financial risks am I not accounting for or thinking about?
Portfolio:
Going by the percentages, this all appears pretty safe. Going by the actual dollar values, it's a bit lean. I'm basically retiring to an annual income that is just a hair over the median individual income for a man in the US.
It seems that my biggest risks are:
I have some mitigations though.
Eventually I concluded that while I like living and traveling abroad, I wanted the option to retire in the States, and to be able to afford it. My forum handle is now a bit of misnomer (and a reminder of my youthful impulses).
I went back to work and executed a plan that, financially, ended up a little better than projected.
So folks, can I make it? What financial risks am I not accounting for or thinking about?
Portfolio:
- My portfolio is 48% tax advantaged, 52% taxable
- Tax advantaged is 80% 401k, 19% Roth IRA, and 1% HSA
- AAis currently 51% US Stock, 13% Intl Stock, 25% US bonds, 12% cash. I will will use an equity glide path to get back to an 75/10/10/5 AA after RE.
- My fixed expenses are pretty low. ACA, my half of the bills, automotive repair/replacement fund, groceries
- My discretionary spending/screwing-off fund is also pretty frugal. Some travel, a few hobbies, exercise, a bit of entertainment.
- My monthly budget is ~65% mandatory and 35% discretionary.
- I am concerned about the financial stability of my aging parents. There could be big expenses in the future. I've oversaved a little, and earmarked what might cover a couple of years of nursing home "upgrades".
- I have a couple of earmarks into my budget. After subtracting them, I can cover all of my mandatory and projected discretionary expenses at a 4% SWR.
- I have a conservative AA to cushion sequence of returns risk during the first few years.
- I can drop down to a 2.5% SWR and pay the bills.
- I can drop down to a 2.1% SWR if I eat into the earmarks
- Conversely, I could flex up to a 4.7% SWR by eating into the earmarks
- No kids
- Not married but SO is doing a bit better financially than I am
- 1 set of aging parents w/o retiring savings
Going by the percentages, this all appears pretty safe. Going by the actual dollar values, it's a bit lean. I'm basically retiring to an annual income that is just a hair over the median individual income for a man in the US.
It seems that my biggest risks are:
- I develop outsized spending habits with my newfound free time
- My SO gets annoyed at my ER lifestyle and kicks me to the curb
- My parents develop significant need
I have some mitigations though.
- While my industry won't tolerate a big career break at this point, I could probably downshift into contract work. I will probably do this to ease my way into ER.
- If I had to go this alone, I could move to a MCOL community. I'm HCOL now but I could move.
- I've oversaved to help with the parents. I don't know how much I'd need so this one is a bit fuzzy.