bigcmagor
Recycles dryer sheets
Daily lurker here and looking for some advice for my complex situation. Always hoped to retire by age 55 and that time has arrived (I'll be 56 this fall and DW is 56 now). The financial crisis took quite a bite out of my plans - in part because I've been jumping in and out of the market ever since after losing 50% of my 401k balance and a third of my net worth during those years. I'm not in the market today, I know I will need to be and seek the perseverance to stay in when it goes south.
My job is managing a family business (and I'm not family) that I have been instrumental in growing from nothing 35 years ago to a $100+ million annual sales company. Managing the company through the financial crisis sucked out my life energy. I have recently given up daily control of the company. At the moment, I am still CEO but only in the office 10-15 hours per week and the company president is my only report, although I am always available and expected to oversee the company's financial performance. With approval from the family, I am able to spend my winters in Florida where we own a home. Because of my stepping back, I am out of the bonus pool but still enjoy a $150,000 salary.
We have accumulated $1 million in company stock that has a $1.25 million basis (sub chapter S benefit, plus significant formula undervaluation). We also have $825k in the retirement plan of which $125k in in Roth funds. At year end, we also have $150k in cash on hand, so a nice round $2 million to invest with a $250k capital loss to consume.
The homes are worth $350k (Florida) and $300k (Indiana) and are both owned outright. We also have a yacht we keep on lake Michigan worth $80k including the slip.
Total expenses are currently running $100K per year and I anticipate this jumping up to $120k with retiree health insurance added in. Interestingly, each home and the yacht are running $12k per year to own, aside from recent large outlays connected to each that were intended to get the big hits out of the way prior to retirement.
I have maxed social security out for 32 of 35 years while the DW has stayed home to raise three great kids who are now all college educated and independent. I expect $32k combined social security if we both claim at 62 and about $55k annually if we both defer to 70.
One more tidbit is my parents. They are currently 78 and soon to be 81. Their pictures come up when googling "frugal". As a result of their choices, they have amassed a $7.5 million net worth, comprised of $2mm in laddered cd's, a $500K house and $5mm in highly appreciated stock and mutual funds. My brother and I are sole heirs to their trusts. I know they are close to needing much more help with day to day activities to maintain their independence. My brother already dedicates one day per week at their home helping out.
The dilemma;
I know I have a great gig at work, however, after building something from nothing I don't want my legacy to be the guy who retired on the job and milked the cow until it keeled over or was finally just asked to leave.
If I retire at year end, I will have to draw 6% from the initial portfolio at least until I reach 62 and can start social security, so 6 years. The health insurance load will also drop significantly at 65, but that is 9 years off.
I can make the numbers work by unloading the yacht and the Florida house, although northern Indiana winters are likely to drive me to therapy if I don't have the snowbird option. I can't unload the Indiana house until my folks no longer need me. We eventually plan to domicile in Florida.
I can also walk away today without much concern for the financial ramifications if I consider what I am likely to inherit, but that seems morbid. Fact is, however unlikely, I would prefer to leave this world before my folks so I am spared that grief.
The bottom line is that I am dog-assed tired, vocationally spent and ready to not be where the buck stops at work. I've been advised never to count on an inheritance, but it seems I have to in order to bag it at this point without reducing expenses (by selling assets) to a level that can be maintained with my current net worth.
I'm feeling as though it's time to turn the page but realize I'm sticking my neck out if I don't downshift the lifestyle and there is no eventual inheritance. What would others do in my shoes?
Also, thanks for reading my book!
My job is managing a family business (and I'm not family) that I have been instrumental in growing from nothing 35 years ago to a $100+ million annual sales company. Managing the company through the financial crisis sucked out my life energy. I have recently given up daily control of the company. At the moment, I am still CEO but only in the office 10-15 hours per week and the company president is my only report, although I am always available and expected to oversee the company's financial performance. With approval from the family, I am able to spend my winters in Florida where we own a home. Because of my stepping back, I am out of the bonus pool but still enjoy a $150,000 salary.
We have accumulated $1 million in company stock that has a $1.25 million basis (sub chapter S benefit, plus significant formula undervaluation). We also have $825k in the retirement plan of which $125k in in Roth funds. At year end, we also have $150k in cash on hand, so a nice round $2 million to invest with a $250k capital loss to consume.
The homes are worth $350k (Florida) and $300k (Indiana) and are both owned outright. We also have a yacht we keep on lake Michigan worth $80k including the slip.
Total expenses are currently running $100K per year and I anticipate this jumping up to $120k with retiree health insurance added in. Interestingly, each home and the yacht are running $12k per year to own, aside from recent large outlays connected to each that were intended to get the big hits out of the way prior to retirement.
I have maxed social security out for 32 of 35 years while the DW has stayed home to raise three great kids who are now all college educated and independent. I expect $32k combined social security if we both claim at 62 and about $55k annually if we both defer to 70.
One more tidbit is my parents. They are currently 78 and soon to be 81. Their pictures come up when googling "frugal". As a result of their choices, they have amassed a $7.5 million net worth, comprised of $2mm in laddered cd's, a $500K house and $5mm in highly appreciated stock and mutual funds. My brother and I are sole heirs to their trusts. I know they are close to needing much more help with day to day activities to maintain their independence. My brother already dedicates one day per week at their home helping out.
The dilemma;
I know I have a great gig at work, however, after building something from nothing I don't want my legacy to be the guy who retired on the job and milked the cow until it keeled over or was finally just asked to leave.
If I retire at year end, I will have to draw 6% from the initial portfolio at least until I reach 62 and can start social security, so 6 years. The health insurance load will also drop significantly at 65, but that is 9 years off.
I can make the numbers work by unloading the yacht and the Florida house, although northern Indiana winters are likely to drive me to therapy if I don't have the snowbird option. I can't unload the Indiana house until my folks no longer need me. We eventually plan to domicile in Florida.
I can also walk away today without much concern for the financial ramifications if I consider what I am likely to inherit, but that seems morbid. Fact is, however unlikely, I would prefer to leave this world before my folks so I am spared that grief.
The bottom line is that I am dog-assed tired, vocationally spent and ready to not be where the buck stops at work. I've been advised never to count on an inheritance, but it seems I have to in order to bag it at this point without reducing expenses (by selling assets) to a level that can be maintained with my current net worth.
I'm feeling as though it's time to turn the page but realize I'm sticking my neck out if I don't downshift the lifestyle and there is no eventual inheritance. What would others do in my shoes?
Also, thanks for reading my book!