Almost ready to find out what this "Retirement thing" is all about

[Luvtoride]

I just found this forum and its exactly what I'm looking for. To say I'm obsessed with Retirement planning may be an understatement. I don't expect to get an answer as to WHEN I can retire, but look forward to learning as much as I can.
Here are a few of my particulars:
- I am a CPA and have been working in the financial/ accounting side of the P&C Insurance business for the past 35 years (31 with the same company I am still with). I will collect a very good traditional pension from the company when I retire
- My wife and I both turn 64 years old this year. We just celebrated our 41st anniversary
- I'm still working full time, although have been working remotely for the past 18 months and loving it...hoping to finish my career working this way
- My wife retired from her full-time job in Health care management 2 years ago and now has a health care consulting business. She already collects a pension, for the past 6 years from NYCers after a 15 year career
- I speak to everyone I can about retirement (both those who are retired and those who are and are not planning to retire) to learn the pros and cons, not just financial aspects, but what they do with themselves. The responses are surprising!
- We have a Financial Advisor who we have been working with and have implemented a solid plan for retirement (mine) in about 2 years. We have a fairly sizeable amount of assets for retirement
- We own two homes, one in North Jersey and one at the Jersey shore with mortgages but a significant amount of equity in each. We are not planning to move away from this expensive area as our daughters and grandkids all live around here
- I've been greatly impacted by the death of some very close friends over the past 3 years, making me think more and more about retirement and "enjoying" life more
- I just read the book "Die with Zero" which has made me think more about enjoying the fruits of our labors while still healthy enough to do the things we want to do

I'm looking forward to participating in this site and these forums to learn more about the road to retirement...getting there and enjoying it! Thanks,
Brian in NJ

 

[Ronstar]

Welcome to the group! Reading "Die with Zero" is a perfect launching pad for retirement IMO. Enjoy the ride!

 

[rodi]

Welcome! And hope you're surviving TS Henri's rain.

Talking about/asking questions about retirement is a great way to see if you are ready. I found this forum very helpful when I was getting ready to retire. And now, 7 years later, I still find it helpful. LOL.

You'll probably get some advice to reconsider using a financial planner. The idea is that if you keep your portfolio simple, you can do it yourself. That's something you'll have to decide/think about/research. I would avoid getting locked into annuity products (some FAs love these - because they are a great product for *their* bottom line).

To know if you are ready to retire you need to understand your spending, and your assets. Spending changes some in retirement - health insurance, increased travel, lower dry cleaning bills, etc. And it can be emotionally tough to start pulling from the nest egg after years of adding to it.

Welcome. Feel free to ask questions.

 

[Yoheadden]

Welcome aboard
I’m originally from central Jersey, but found my way up to New England. You have indeed found the best corner of the internet. Lots of friendly, helpful folks on here about all sorts of topics.
It’s good that you are considering the “What to do” question, as well as the “Can I” question.
Feel free to ask away. We all learn from the great conversations that take place.

 

[HI Bill]

Welcome! At 64, with your assets and pension (assuming you have adequate assets to retire), if there's anything you want to do in life besides work, then RE now! Why wait? Seriously!

I did the OMY (one more year) thing from age 50 to 55. It worked out for me, as I doubled my FIRE budget, and bought a house. I FIRED this year, and have no idea how I had time for work. Besides working on the house, building stuff, repairing stuff, painting stuff, scuba diving, and volunteering, I'm busier than ever (will be busier when travel returns to normal)! But I get to do just what I want to do, on my schedule. I can take a nap whenever I like. No more meetings or work spreadsheets. No more personnel issues.

 

[skyking1]

Welcome aboard!

 

[Bamaman]

When I see someone's a CPA, I immediately think of Uncle J.T. He was managing partner of our state's largest independent accounting firm. After he died of a heart attack at age 54, my father always said "the numbers killed him." I remember the pressures he was under, especially in the month of April of every year.

You've apparently executed a long term plan to retiree, and it sounds as if you can go at any time. None of us know how may days we have on this earth, and I'm a firm believer to ER when possible--especially if your health's good now.

I'm an obsessive non-planner--living my life on cruise control which is the way I like it. We roll with the flow taking care of 2 grandkids and splitting days between our main house and our lake house.

 

[bolt]

Your a CPA. No doubt good w/numbers. If your not close to certain of your WhoWhatWhenWhereWhy&How, along with the probalities, plausiabilites, and possiablies, then I'd refer you to MikePiper.
Like Madonna, theres only one Mikepiper,

Do whats best.
I'm going to try to pic a dead pals last pic, here in this last pic.of him & his prize fish on CCodCanals top tide timeline for that season. He died, @62.

I'd advise you to not retire, instead, pear down your work load.
Keep busy, or not.
I could never retire. I must work till I die, whatever im doing.
Someone, Morgan Housal, iirc, had a great presentation I'll look for to link here for you to peruse. You might like this: MorganHousals - 8/11/21 - https://www.collaborativefund.com/blog/thread/
Things that happen collaboratively!

He retired 58 yrs.old.
Look @ that CCCanal fresh fishes dish!

Good luck & Best wishes.....

 

[MC Rider]

Welcome Luvtoride.


I am with the thought of why are you not already retired?

Cheers.

 

[Souschef]

Welcome Luvtoride.


I am with the thought of why are you not already retired?

Cheers.

+ 100!
Get rid of the FA and keep all the money yourself. As someone else said, run from annuities!

 

[Luvtoride]

Thank you all for the warm welcome and the helpful comments and advice.

I can see there is a bias here for Retirement as soon as possible (I suppose I should have realized that by the forum name) and against Financial Advisors and the products/ services they offer.

Perhaps I’m a bit late to this forum but I’m willing to learn from others. My first question, which I’m sure will be answered as I read more threads here….

How did you know/ decide the timing for YOU to retire?

I know this has to be a very personal decision for each of us,based on many factors. As I consider my own timing the experience/ thoughts of others might be helpful to me.

My second question is about the Firecalc tool. I see that referenced here frequently and went to the link for it, but I’m not sure how it’s used and what it really means in terms of Retirement readiness. Any assistance would be appreciated.

 

[ImThinkin2019]

My second question is about the Firecalc tool. I see that referenced here frequently and went to the link for it, but I’m not sure how it’s used and what it really means in terms of Retirement readiness. Any assistance would be appreciated.

Hi Luvtoride,

In answer to your question about Firecalc, that is how I found this forum. I was looking for a good retirement calculator and Firecalc came up. I found it to be easy to use and data-based.

If you look at it a little bit, you should see it is very intuitive. All you need is to know your retirement savings, your pre-tax income required, and how long your savings need to last. Then you can run the simulation which will compare the results if you had retired at the beginning of a given period. As you can imagine, the investment results vary depending on market returns over each period.

You can go to the second tab and add any additional income streams like pensions, social security, etc. And any future expenses if you wish.

I found Firecalc very useful to check nest egg sizes to be sure we would have enough. I do use other calculators as double checks, but Firecalc helped me a lot.

There are lots of people on this forum with plenty of experience, so if you need further help you should be able to get it easily.

Best wishes for your evolving future!!

 

[Time2]

Thank you all for the warm welcome and the helpful comments and advice.

I can see there is a bias here for Retirement as soon as possible (I suppose I should have realized that by the forum name) and against Financial Advisors and the products/ services they offer.

The thing against Financial Advisors. If you have $2M under management at 1%, That's $20k a year and more than $200,000 in 10 years. Also plenty of studies to show Financial Advisors do no better than the market over the long term. You have a good 20 years, so puuf! 1/2 a Million gone. Take some time to read this forum and learn how to invest.

 

[DayDreaming]

....
How did you know/ decide the timing for YOU to retire?

I know this has to be a very personal decision for each of us,based on many factors. As I consider my own timing the experience/ thoughts of others might be helpful to me.
...

First you need to figure out if you are FI (Financially Independent), or else when you would be FI. If you are FI, then you can decide if you want to retire now, or else continue w*rking for some reason.

To determine if you are FI, you really need to figure out your expenses - how much you really spend every year The first time I did this for myself, I carefully went over 1 year's worth of credit card statements and check book entries and added up what I spent on everything. I categorized things as best as I could, and there was some guesswork, but it gave me a pretty good idea of what I was spending on groceries, restaurants, utilities, insurance, healthcare, etc, etc. Since then, I now keep track of things as I spend, so it's very easy and no guesswork. I use a program called MoneyDance, others use Quicken, and you can find many threads on this topic.

In short, I think your first step is to figure out how much you need to live on, and take it from there. Good luck!

 

[Ole Red 29]

I was pushed into retirement 5 years earlier than I had planned. I spent a lot of time on this forum learning what I needed to know. The transition from accumulating wealth to living off of it was a huge learning curve for me. Now, 3 years later I feel blessed that I got the "nudge" into retirement. Life is short and retirement life is wonderful. Welcome.

 

[Aerides]

I can see there is a bias here for Retirement as soon as possible (I suppose I should have realized that by the forum name) and against Financial Advisors and the products/ services they offer.

- We have a Financial Advisor who we have been working with and have implemented a solid plan for retirement (mine) in about 2 years.

That's mainly why. If you are knowledgeable enough to craft your own plan, your FA isn't adding much to the mix, certainly not enough to take 1% per year of AUM. If they are funning your plan, why pay. That's where we got to when I left my FA, once I realized that the only moves he made were at my direction, and that I was positioning us better than he had done.

But yes, the products/services part, almost always can be outperformed by simpler funds. I think FA's and their firms sometime try to make it more complicated than it needs to be. Most of us can do better with a very simple portfolio.

 

[MichaelB]

How did you know/ decide the timing for YOU to retire?

Dory36, one of the founding members of this forum and author of FIRECalc, described the timing in a way that resonates with many forum members, in this post https://www.early-retirement.org/fo...aise-your-std-of-living-20605.html#post381043

Don't worry about it.

At my last employer (overseas), folks said that people started out there with two buckets, one in each hand.

One bucket started empty, and gradually filled with b.s. as you worked there.

The other started out with your net worth, and it too continued to fill as you worked there.

Eventually, the b.s. will outweigh the net worth, and you'll know it's time to go.

If you aren't there yet, enjoy what you're doing and keep filling that other bucket.

In the meantime, be careful about reading too much stuff from folks here, as it might make you less and less tolerant for the weight of that b.s. bucket!

 

[pb4uski]

^^^ So true! I was lucky that my BS bucket wasn't a burden in that I enjoyed my work and colleagues and most (but not all) of my clients... but from posts here over the years I see that I was lucky.

.... I can see there is a bias here for Retirement as soon as possible (I suppose I should have realized that by the forum name) and against Financial Advisors and the products/ services they offer.

Perhaps I’m a bit late to this forum but I’m willing to learn from others. My first question, which I’m sure will be answered as I read more threads here….

How did you know/ decide the timing for YOU to retire?

I know this has to be a very personal decision for each of us,based on many factors. As I consider my own timing the experience/ thoughts of others might be helpful to me.

My second question is about the Firecalc tool. I see that referenced here frequently and went to the link for it, but I’m not sure how it’s used and what it really means in terms of Retirement readiness. Any assistance would be appreciated.

Late to the thread, but welcome to e-r.org. We do have a bias for retirement because it is so great! The water's fine... time for you to jump in. The bias for DIY investing is because it is so frighteningly easy to do and the savings are substantial. FAs tend to end up with complicated portfolios to make it look hard to justify their AUM fees... and don't get me started on mis-sold annuity products.

I was also a CPA and was also in insurance... in financial management at a life insurer for 12 years (ironically, was CFO of our annuity line of business for a few years) and then 13 years with one of the big 4 firms in insurance M&A.

My timing was driven by our consolidating from two homes to one which increased our portfolio for the proceeds from the sale of our main home and reduced our expenses dramatically, and a growing desire to have less shackles on my free time. Even though I was only working 50% time, my schedule was jerked to and fro by firm and client demands so it was hard to schedule fun stuff. In short, we had plenty and even though I still enjoyed my work and colleagues continuing to work was only enriching our heirs so I chose more free time over further enriching our heirs. (Sorry kids )

FIRECalc is a great tool. What it does after you input your info is to calculate needed withdrawals (spending less pensions less SS) and then run simulations as if you retired in the past applying actual historical investment returns and increasing each year's withdrawals (net of spending, pensions (if applicable) and SS) for actual historical inflation and seeing if your portfolio could survive for the selected time horizon... then it summarizes the simulations as a success rate. Each of the squiggly lines that you see is the investment balance over time for each simulation year.

Another useful thing is to go to the Investigate tab and select "Given a success rate, determine spending level for a set portfolio, or portfolio for a set spending level".... that will calculate what you could safely spend annually at various success rates given your inputs. So for the default scenario, the user could spend as much as $30,286 annually and have a 95% success rate... if they wanted more surety then they could spend $27,257 annually and have a 99% success rate.

 

[Romer]

Another useful thing is to go to the Investigate tab and select "Given a success rate, determine spending level for a set portfolio, or portfolio for a set spending level".... that will calculate what you could safely spend annually at various success rates given your inputs. So for the default scenario, the user could spend as much as $30,286 annually and have a 95% success rate... if they wanted more surety then they could spend $27,257 annually and have a 99% success rate.

The Investigate tab took me a bit to find as there are a lot of capabilities to this tool. It defaults to a low risk portfolio so you will want to check that as well

The Investigate spending tab let me know I could increase spending 20% for a 40 year period and still have a 95% success rate. My baseline spending already has $45K a year for blow that dough It is a good tool to look at were you are based on PAST HISTORY

 

[Dtail]

As mentioned previously, many users here can assist you with the Firecalc calculations and analysis of results.
Let us know when you are ready.

 

[tmm99]

Welcome!

When you can fund your spending habit for the rest of your life is when you should retire IMHO. I wouldn't let anybody (FA, or anybody else) tell me when I could retire. It's good to have some tools/arsenals so you could decide on your own.

I used firecalc, fidelity retirement planner (pretty comprehensive - I don't know if you have to have an account there...), i-orp and flexible planner.

 

[Luvtoride]

Thanks, Tmm99 and all. As many have mentioned and as I’ve learned from reading so many of your stories and personal experiences, there are many factors to consider RE. FI is probably one of the most straightforward (if not scariest) to measure readiness.
In my case, the fact that I can continue to work from home since the beginning of Covid closures is another factor that makes RE less of a priority for now.
I do have a fidelity account and will check out the tool there as well as the other calculators mentioned here.
Just having conversations with friends and people I meet about retirement is a great way for me to gauge my readiness and enthusiasm for RE.

 

[Katiek]

Welcome! You didn't give specific numbers about pension, savings and spending, but you're obviously good with numbers and two traditional pensions are a wonderful base for a solid future.



As for financial advisors, I haven't used one for ongoing management, but I did go to an hourly FA recently when I was considering retirement. Even though I've used firecalc and done a lot of planning, it was reassuring to have a pro do a review and made me more comfortable that I wasn't overlooking things.


I suspect you're more than ready financially, but you may still need to get there mentally. That's natural because it's a big decision, but this forum is very reassuring.

 

[Luvtoride]

Lifestyle level makes it more challenging

Welcome! You didn't give specific numbers about pension, savings and spending, but you're obviously good with numbers and two traditional pensions are a wonderful base for a solid future.



As for financial advisors, I haven't used one for ongoing management, but I did go to an hourly FA recently when I was considering retirement. Even though I've used firecalc and done a lot of planning, it was reassuring to have a pro do a review and made me more comfortable that I wasn't overlooking things.


I suspect you're more than ready financially, but you may still need to get there mentally. That's natural because it's a big decision, but this forum is very reassuring.

Thanks Katie, so did you retire? Was the FI calculations the primary factor impacting your decision? I know better than to ask anyone if they made the right decision (duh).

I was with my kids and grandkids this weekend at our beach home. I am actually able to have discussions about finances and retirement planning with my son-in-law who is in finance in the banking industry. I was talking to him about finding this forum and some of the topics and stories I've been reading here about others decisions to retire and FI. I think he feels I'm ready to retire any time.
So we went out for dinner tonight to a waterside restaurant here at the Jersey shore. My daughter (his wife) and my granddaughter wanted crab legs for dinner.
When we asked the price for the King Crab legs and were told $85 for 1 1/2 pounds, he looks and me and says...."early retirement, huh?" ROFL.
I looked at him and said....with this family, I'll have no trouble to "Die with Zero" (which I've also talked to him about).

I guess me and my family do have an expensive lifestyle which we enjoy. Figuring out the full costs of this and our total annual spending will be a key factor to determine my FIRE readiness. I'm not saying I can't do it, but it will take awhile to accumulate an accurate spending profile to use for the Firecalc and other calculator tools.

I think I read somewhere here (the Net Worth Today thread I think), that some folks don't calculate ALL of their expenses into their annual Spend need and instead rely on a "good year in the market" to plan and take vacations etc. Perhaps that works for some, but I'm not ready to compromise on those things based on how well my portfolio did recently.

 

[2177V]

I suggest retirement as soon as you are ready. Maintain relationships with old friends, family and co-workers. Make new relationships by volunteer service or joining a club. I take a pleasure in having lunch or dinner with someone with common interests. Some of my best vacations involve other family or friends. Watch your diet, stay physically fit by regular exercise and strive to connect with other people.