32 and wanting to retire in a few years

[haha]

Do you guys see companies that employ PT help actually offering health insurance?  I don't see much of it at all.  Maybe it is a geographical thing. 

Starbucks, Trader Joe are 2.
Ha

 

[justin]

The small engineering firm I work for does, if you're worth it.

How good is the health insurance at Starbucks or Trader Joe's I wonder?

 

[wildcat]

I think Costco is another

 

[ProfHaroldHill]

A typical deal is that you can buy-in (at full price) if you work at least 20 Hrs per week; you might get a subsidy from the employer if you work at least 30 H/W. Your mileage may vary. BTW -- I've heard that Starbucks isn't too bad re health insurance.

HH

 

[ProfHaroldHill]

Every $1000 that you earn at your PT job is the equivalent of $25,000 of savings.  For those willing to go PT and earn an average of $1000 a month, it will give the same revenue stream that $300,000 in savings would generate.

This is not true -- the $1000 from the job stops when the job ends, whereas the $1000 from the $25K portfolio goes on for 30 years, more or less. Equivalently, every $1000 that you earn (and invest) provides a lifetime income boost of about $40 per year.

HH

 

[justin]

I've heard that Starbucks isn't too bad re health insurance.

Maybe that is why their coffee is $5/cup.

 

[HFWR]

I'm just po'd that I didn't think of it first...

 

[retire@40]

This is not true -- the $1000 from the job stops when the job ends, whereas the $1000 from the $25K portfolio goes on for 30 years, more or less.  Equivalently, every $1000 that you earn (and invest) provides a lifetime income boost of about $40 per year.

The point is, if you are at the (burnout) point that you just want to quit your job, but your portfolio is short by about $300,000, one option is to quit the full-time job and go PT earning $1K a month to supplement your 4% SWR. 

It goes without saying that you may have a cash flow problem if you stop your PT job.  But if you do that until you can manage without the job, either by reducing your budget as you get older and need less, or by having your investments grow at a higher rate than anticipated (or both), you may have more total free time than if you worked full time those extra XX years to save that additional $300K before going to full retirement.

 

[ProfHaroldHill]

Starbucks isn't too bad re health insurance.

HH

Just bad for coffee . . .    

 

[SteveR]

This is not true -- the $1000 from the job stops when the job ends, whereas the $1000 from the $25K portfolio goes on for 30 years, more or less.  Equivalently, every $1000 that you earn (and invest) provides a lifetime income boost of about $40 per year.

HH

The PT wage of $1000/month will provide a "savings" (not spending) to your retirement account by the amount required to fund the PT wage. In this case $25,000 is required to generate $1000 in income. As long as one works PT at this wage, they will "save" $25,000 in additional savings that would have to be used to create the $1000 income.

I think I said that right?

 

[ProfHaroldHill]

But if you do that until you can manage without the job, either by reducing your budget as you get older and need less, or by having your investments grow at a higher rate than anticipated (or both), you may have more total free time than if you worked full time those extra XX years to save that additional $300K before going to full retirement.

And if you sprout eight steel wheels and a couple of doors, you can be a boxcar.

HH

 

[needtoretireearly]

What a great response to my post!  I did not expect so much of a response.

Right now I have BC/BS of GA and my small company employer pays half.  It is a fancier plan than I would have chosen, but with him paying half it is worth it to me.  It is a ppo, with very low copays.  A while ago, I checked online at the ehealthinsurance site. The 50% I pay is not much more than I'd pay if I got a high deductable indemnity type plan.  I am paying around $170 a month, I forget the exact dollar amount but that is within a few dollars I know.

I don't have any major health probs but I do have to see the doctor at least once a year for some bloodwork for a minor hereditary thyroid condition which has to be treated with medicine for the rest of my life(cost only $120 a year through canada meds).  It is nothing that will cause me probs later in life so long as I take the medicine....I could live to be very old and otherwise healthy.

I have noticed that there is a very long life span for many of the women in my family.  I'm not sure if this is good or bad, but regardless, I need to keep this in mind. If I'm not hit and killed by one of the crazy drivers around here I might end up living past 100. 

I really like BC/BS as I've had other plans in the past and in comparison this is a good company.

I was thinking about the pt work thing.  It would be possible to do my sales job pt from home, though I get a lot out of working in the office environment.  This would be my easiest option, and although I would have SOME stress from talking to difficult customers, it would be a lot less.

I was offered the chance to work from home when my growing company switched a lot of us over from independent contractors to employees 3 yrs ago. I declined, because I knew I would not get any house accounts, not to mention other benefits, if I were not there in that office.  Also, my condo can get noisy and I do not enjoy working here unless I have to.  I have worked here before due to snow days (which here in GA means just a tiny bit of snow) so I know I have the discipline to do it if I need to.

I have a feeling that if I went to the owner of my company in 10 years and wanted to work from home, pt, he would be okay with it.  I will have a house instead of this noisy condo.

I have enough accounts I could easily make $30000 a year (would be higher for inflation) working part time calling on my established accounts 15-20 hours a week from home.  I would not get the benefits of being in the office, but by that time I would have enough saved I could take the loss. 

Without opening many new accounts eventually my account base would die off, but I could sustain myself for a few years.  It would really depend how much I wanted to work.

However a lot can change in 10 yrs and who knows what the office will be like then.  But I just can't see my boss turning me down if I go to him, 10 yrs from now, and tell him this is what I want to do. 

I might be able to keep the company health insurance, but they are always changing their policies on that, for people who work outside the office, so it would depend what rules were in place at the time. 

About getting married, I do not know if I will or not.  I definatly could live without it.  But I would never say never.
I do not want to have kids of my own.  However I believe one day I will adopt an older (unwanted but relatively healthy) child or children.  By older I mean any age from school age to teen. There are so many out there.  I can't imagine going through my entire life with no kids at all.  It would be better if I were married but if I don't get married, I still will adopt an older child.  I figure if I'm in my mid 40's and still not married, I can adopt on my own.  By not adopting a baby or young child that would be doable. 

I will definatly keep the expenses in mind when I get closer to retirement.  But a lot could happen in 10 yrs, I don't know whether I'll be married or not, and how much I'll have saved.

just_hatched:  I have $15K "equity" in this condo but they are not selling well right now.  If I sold it now I might gain $5K if lucky.

That $100K figure was all my net assets, on paper. 
In reality it is lower than that, maybe 90K.

I was thinking of paying off my mortgage in 10 or so years. Getting a 15 yr mortgage and paying it off early. I'll check and see if the rate is much lower with a 10 yr mortgage, and if that would be a better option which it might.

wildcat: I was at work today and suddenly remembered your quote!!!!  About the walls and prison!!  It is so true, as I do have a sense of security from being in "prison".  That security is the money I am able to earn.....

my goal is to create my own security without having to rely on those "prison" walls.  But for now I need them or I would not survive.....

 

[Jack_Key]

I am so happy to have found this board.
I am 32, never married, female (not that that matters!) and have been saving for some time now.  My ultimate goal is retirement.  I have about $70000 saved in my 401K (maxed out each year since it started), Roth IRA (maxed out), and other mutual funds and savings accounts so far.  This doesn't include all my assets on paper which would add up to about $100000 at most, including the $70000.

Hiya. I'm 30 and my ultimate goal is to retire in 7 years. I have a blog (retireat37.blogspot.com) on which I detail my progress. I think it should be possible for you to reach your goal with $650000 (or even less than that). I also have cumulated about $100000 net assets to date and I earn about the same than you. Firecalc is a good start, but even better, if you are able to play with Excel, is to put down the numbers and try some scenarios. For instance, I put my real gain (gains minus inflation) on investments at 4% a year, then I try to estimate my salary increases (since I'm young, for instance, I plan bigger increases in the first years).

When you play with the numbers with your own sheets, you will likely notice something very important: playing slightly with any number will have very important results for the future. For instance, if I play with my expected investments yield rates, increasing it by 1% may be the difference between having $600k at 80 or nothing at all.

I think it is the most important part of very early retirement, like retiring at 37 with $350k or so: if things go well, you can die with more money than what you started with. But if things go bad, you can have nothing left in your nestegg at 55 or even sooner. Thus, have a plan B. My plan B is to consider working part-time if needed after retirement to cover the difference between planning and actual results.

I did this site's calculator and it actually said if I have $650000 and lived modestly ($25,000 a year) I could retire right now. 

To me this makes sense as you figure 5% of $650000 is over $32000 interest. 

You would be okay, but figure approximately 4% safe withdrawal (which would give you $26k, still enough to retire with $650k). Asset allocation will be important at that time. After years of good stock market returns, for instance, you will be better withdrawing from stocks and put some money aside in the money market. On the other hand, if the market goes down, it would be better to withdraw from the money market, so not to give a double-hit to your stock portfolio. With proper asset allocation and rebalancing of your portfolio, a 4% withdrawal rate should be safe enough.

Any suggestions or support would be appreciated.  I look forward to reading some good info on this board!!!!

As I said, I will yet again make a shameless plug about my blog. I'm not posting quite often on boards, but if you care, you can have a look to my ideas, suggestions, thoughts and share yours.

Good luck,

Jack

 

[needtoretireearly]

Jack,

That is a really great blog.  I normally don't like blogs as a lot of them are boring.  But I will be coming back to yours to read more. 

You think the same way I do, especially about your job. 

Sure I could quit and pursue art or writing, which would be fun.  But who knows if I would be able to survive at all on that.  Probably not. 

Better to suffer a few years at a stressful job and then have the rest of your life to enjoy doing what you please.

I do take at least 1 week vacation each year.  It is unpaid, but I feel it is necessary and healthy for me to take it.  I will be going next week actually, to a fitness spa which I really enjoy.

Life would be so much better, and yes I would be happy, if I could gain financial independence. Then I could spend more time doing things I enjoy like the fitness spa (which is pretty cheap to stay at).

If I found a man like you who was not married, and lived nearby, I might marry him!!  We would not argue over money because we would have the same goals in mind.  And think the same way.

But I don't know if there are many men (or people at all) who think like you.  At least not any I know. 

The friends I have are great but they definatly do NOT think like I do, about money.

 

[Billy]

SteveR said:

Do you guys see companies that employ PT help actually offering health insurance?  I don't see much of it at all.  Maybe it is a geographical thing. 

needtoretireearly said:

I might be able to keep the company health insurance, but they are always changing their policies on that, for people who work outside the office, so it would depend what rules were in place at the time. 

SteveR, it might be geographical, I think you are right. Certain coverage by insurance companies are offered "standard" in one state, and not in another. Some states have very high "standards" (like aromatherapy, acupuncture, massage, etc.) and whether you want those services covered or not isn't up to you. They are offered as the bottom standard -- and that is why some states' insurance rates are so high.

Also, the amount of hours a Part Time person works to qualify for health care also varies. A friend of mine works in Florida 30 hours a week to cover her medically retired husband. She is always scrambling, trying not to "only" get 28 hours or 25... It can be stressful.

And, needstoretire, the company's tendency to always change their health insurance policy requirements for out of office workers can keep you mentally hostage. If you know that point, it's fine. A good question to ask yourself is if your retirement hinges on medical care... or not. Just so you know.

My husband and I retired at the age of 38. That was 15 years ago. There are always trade offs. But that doesn't mean it's a bad thing.  8)  Check us out.

Akaisha
Author, The Adventurer's Guide to Early Retirement
www.RetireEarlyLifestyle.com

 

[Jack_Key]

Jack,

That is a really great blog.  I normally don't like blogs as a lot of them are boring.  But I will be coming back to yours to read more. 

Well, thank you 

You think the same way I do, especially about your job. 

Sure I could quit and pursue art or writing, which would be fun.  But who knows if I would be able to survive at all on that.  Probably not. 

Better to suffer a few years at a stressful job and then have the rest of your life to enjoy doing what you please.

Exactly. I have friends who are professional artists (particularly in the writing and musical domains). While they are doing what they like, all of them work elsewhere to pay the bills (McJobs for most of them). They often feel bitter about life in general, since they work at minimum wages during the day and don't have much time for their artist careers the rest of the time.

I do rather enjoy my work, even if its stressful, sometimes too demanding, but at least, I'm well paid for the drawbacks, and given that, I should be able to retire and then, be financially independant for life.

I do take at least 1 week vacation each year.  It is unpaid, but I feel it is necessary and healthy for me to take it.  I will be going next week actually, to a fitness spa which I really enjoy.

Enjoy This summer, we visited UK for two weeks, we had to do some sacrifices all year long in order to be able to afford this travel while saving enough according to my plan. But these sacrifices were greatly rewarded, and I see early retirement just as that: small sacrifices and great rewards. For me, a small sacrifice is not buying the latest plasma TV and a great reward is a travel to London. Or having a small, used car, a rather small condo or house, no unnecessary devices, letting the car in the park lot whenever possible, etc., and the great reward: retiring early, being financially independant and do things that please me .

But I don't know if there are many men (or people at all) who think like you.  At least not any I know. 

The friends I have are great but they definatly do NOT think like I do, about money.

Same for me and if I could have a suggestion for you: don't talk too much about your ER plan to relatives. First, they'll try to convince you that you are wrong. I don't know why they are doing that, but they are. Maybe it's because they are trying to rationalize their own choices regarding money, savings and purchases. Actually, I think that most people don't like seeing others living differently than their own lifestyle. When everybody is making the same choices, you don't have to question yourself. This is a commonplace, but sometimes, commonplaces are plain true

Again, good luck and I hope to hear more from you on this board or on my blog.

Jack

 

[wildcat]

Same for me and if I could have a suggestion for you: don't talk too much about your ER plan to relatives. First, they'll try to convince you that you are wrong.

Agree and I would throw in your fellow employees as well. I think it happens b/c 1) It's not normal in our society 2) jealously b/c they can't 3) some people find their identity in a job and feel unimportant or bored without it. Point being is that most people will think your crazy and it's prob best to quietly go about your business.

 

[Cut-Throat]

Firecalc is a good start, but even better, if you are able to play with Excel, is to put down the numbers and try some scenarios. For instance, I put my real gain (gains minus inflation) on investments at 4% a year, then I try to estimate my salary increases (since I'm young, for instance, I plan bigger increases in the first years).

Quicken has an retirment planner, that does this and a lot more. You can play with 'what if' scenarios to your hearts content! Nice Graphs also. If you track your investments with Quicken, Most all of the input data is already there.

 

[Billy]

Jack_Key said:

I could have a suggestion for you: don't talk too much about your ER plan to relatives. First, they'll try to convince you that you are wrong. .. Maybe it's because they are trying to rationalize their own choices regarding money, savings and purchases. ...When everybody is making the same choices, you don't have to question yourself.

wildcat said:

Agree and I would throw in your fellow employees as well. 

You have put your finger on it.    It's called Peer Pressure. Even though we might think we are making a decision about our own lives (to retire early) it upsets a kind of (unspoken) balance between peers. Doing something so radically different is threatening to others. It may not have anything to do with them, but they will see it that way.

If they are truly your friends, they will be happy for you. If they are your peers, they will feel challenged.  It can be uncomfortable... 

When we retired 15 years ago, this issue was a surprising one for us.  8)

Akaisha
Author, The Adventurer's Guide to Early Retirement
www.RetireEarlyLifestyle.com

 

[wildcat]

Akaisha -

You are pretty famous among the ER crowds. Just wanted to say that I enjoy your website. I just met a celebrity

 

[thefed]

i might be mathematically inmpaired, but I think the OP needs to save more than she's planning on for an ER.

Inflation is a mother.....

Good luck though! I'm hoping on a 45 yr old ER....but we'll see.

 

[Billy]

wildcat said:

Akaisha - You are pretty famous among the ER crowds.  Just wanted to say that I enjoy your website.  I just met a celebrity   

Ha ha.. Thanks, Wildcat -- I don't know about the "celebrity" part, but we are very happy you find our site fun and informative. 

There are lots of components that make up Retirement or Early Retirement. Money is a big one, but it's not the only one. The effects of Peer Pressure, the differences in how men and women approach ER, Health Care, Fear -- all that "stuff" plays a part.   8)  (We talk about all of that in our book....)

Someone can have all the money it takes to retire, but still can't make the leap, because they are held mentally hostage to something - what their friends think, the need to buy new toys all the time, or just plain fear of making the leap - taking the chance...   

Feel free to write any time, our email address is on our site.

Thanks again for your support! The best to you all ways.

Akaisha
Author, The Adventurer's Guide to Early Retirement
www.RetireEarlyLifestyle.com

 

[Billy]

Jack_Key said:

I have friends who are professional artists (particularly in the writing and musical domains). While they are doing what they like, all of them work elsewhere to pay the bills (McJobs for most of them). They often feel bitter about life in general, since they work at minimum wages during the day and don't have much time for their artist careers the rest of the time.

Jack_Key, I have been rolling this statement around in my mind for awhile...  since this is an opinion board, I'm gonna let you know what I think of this.  Take it for what it's worth ...   8)

IMHO, these people feel bitter about life because they are not committed either way --  Not to their job and not to their creativity. They are in the miserable middle ground, feeling unhappy in both places.

They need to take the lumps on either side of the fence. They have options, they simply don't see them.

1.) They could  commit to their  jobs and save enough cash to "afford" creative time to themselves.
2.) They could commit to their creativity and "do or die, sink or swim" make a go of it.   
3.) Free lance themselves out utilizing their talents and skills and which gives them considerable down time between jobs.
4/) Work 6 months out of the year (seasonal work presents this opportunity very well) and then the other 6 months they dedicate to their creative expressions. (and these are just 4 examples...)

What employer wants a miserable half committed employee? I'm sure these people will be getting raises right and left by their wonderful attitude...    And what kind of substantive creative project can come from a miserable artist? Well.... maybe something.. and how will that project benefit the world, if it comes from despair and bitterness?

The world does not reward half hearted efforts. Get in the boat or swim on your own... otherwise you will simply be dragged along....  This is an internal issue for them that needs sorting out.

Again, ... IMHO...

Akaisha
Author, The Adventurer's Guide to Early Retirement
www.RetireEarlyLifestyle.com

 

[Nords]

Exactly. I have friends who are professional artists (particularly in the writing and musical domains). While they are doing what they like, all of them work elsewhere to pay the bills (McJobs for most of them). They often feel bitter about life in general, since they work at minimum wages during the day and don't have much time for their artist careers the rest of the time.

Hey, T-Al, you have a similar background but a different outlook. Is it because you're self-employed, or some other reason?

 

[bosco]

[

4/) Work 6 months out of the year (seasonal work presents this opportunity very well) and then the other 6 months they dedicate to their creative expressions. (and these are just 4 examples...)

I have found that this is a much better option than I realized. After working for a professional engineer (bridge designer) for many years, I found that I was burnt out. It was incredibly stressful to look myself in the mirror and feel that I wasn't putting out my best work (I mean best work in terms of output--nothing has ever collapsed ) These feelings are damaging to one's self-esteem and are of form of violence to one's self IMO.

last spring I transferred to a seasonal construction position. I find that it is much easier for me to give my all when I know that in October I can stop for 6 months. Even though I was working 60 hour-weeks, the time flew by. Plus, I make as much money in 6 months as I did before in 12.

This is a much better arrangement for me. I have my season pass in hand and will be skiing hard all winter.

2 more construction seasons and I can hang it up permanently at 54. Although this is not real early by this board's standards, I am still healthy and feel that the 6 months off are helping me become psychologically geared to full-time ER.

As an aside, I can honestly say that the most financially devastating thing I ever did (which undoubtedly delayed my ER by many years) was getting a divorce. That being said, it was totally worth it as what's the point of being retired if you are not happy? For that matter, what's the point of working if you are not happy?