Could I retire if I had to?
- Thread starter gamer-stu
- Start date
Thanks Dtail, good thoughts. I'm currently in a MCOL area, with higher property taxes (compared to the region) to fund good schools. I moved around a lot as a child, and longed for stability and roots. I want to make sure my children get that, so I wouldn't consider a move until they're done with secondary.
Thanks everyone for the valuable input! If I may summarize what I view the consensus to be:
- Retirement now without compromises in budget would be risky and not allow for margin of error.
- Really focus on increasing the after tax "bridge" to 59.5, so I wouldn't have to 72t the pre-tax funds.
- Include SS in my calculations (I haven't been doing that), and also evaluate how not working for 35 years would affect the benefit.
- I am in a good position to take my time seeking a new j*b if the current one disappears. Good "FU" fund, as it were.
- I could keep on keeping on, keep saving, investing, and looking for ways to reduce expenses. Be better prepared for FIRE when youngest son graduates high school. *This is probably how I will proceed, other things equal.*
- I could consider a well-thought out career change to a field that would provide me more personal engagement and enjoyment. I could afford a substantial sacrifice in salary.
- During this contemplative process, I've been able to establish some personal "red lines" in areas that I am not willing to compromise in order to retire early: children's stability, and wife's stress level (I don't want her to change her part time job - she enjoys it so much and contributes to the family in many other ways).
- Retirement now without compromises in budget would be risky and not allow for margin of error.
- Really focus on increasing the after tax "bridge" to 59.5, so I wouldn't have to 72t the pre-tax funds.
- Include SS in my calculations (I haven't been doing that), and also evaluate how not working for 35 years would affect the benefit.
- I am in a good position to take my time seeking a new j*b if the current one disappears. Good "FU" fund, as it were.
- I could keep on keeping on, keep saving, investing, and looking for ways to reduce expenses. Be better prepared for FIRE when youngest son graduates high school. *This is probably how I will proceed, other things equal.*
- I could consider a well-thought out career change to a field that would provide me more personal engagement and enjoyment. I could afford a substantial sacrifice in salary.
- During this contemplative process, I've been able to establish some personal "red lines" in areas that I am not willing to compromise in order to retire early: children's stability, and wife's stress level (I don't want her to change her part time job - she enjoys it so much and contributes to the family in many other ways).
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Oz investor
Full time employment: Posting here.
absolutely on this .
i for one am an example of unexpected twists and turns .
have the back up plan as ready as it can be .
the rest will have to be decided by what suits you ( and your family ) best
best stay working on your FIRE plan refinement and extra knowledge should improve it , as you learn
good luck
I agree that that sounds like cutting it a bit close, considering 1) ACA may go away and 2) lots of people are of the mind that a recession is right around the corner, suggesting it's not too unlikely that you'd end up in one of those 20% of failing scenarios.
But that said can I just comment, at kids' age of 10 and 13 you have house paid off, cars paid off, 0 debt, and college all saved for? Bravo!
But that said can I just comment, at kids' age of 10 and 13 you have house paid off, cars paid off, 0 debt, and college all saved for? Bravo!
I agree that that sounds like cutting it a bit close, considering 1) ACA may go away and 2) lots of people are of the mind that a recession is right around the corner, suggesting it's not too unlikely that you'd end up in one of those 20% of failing scenarios.
But that said can I just comment, at kids' age of 10 and 13 you have house paid off, cars paid off, 0 debt, and college all saved for? Bravo!
Thanks mrWinter. I've actually gotten a bit browbeaten by family and friends for aggressively paying off the house and paying cash for my cars, as opposed to piling more in to investments.
But I've been able to increase my after tax savings rate to 40-50% since paying it off two years ago.
I wouldn't do it.
With possibly a 50-year retirement facing me, and two young children, I wouldn't attempt to retire with your current portfolio and current expenses.
It might not be what you want to hear, but if it were me I'd be planning for my next job now.
If you don't continue working, it would likely go down a lot. The numbers you get a SSA.gov assume you'll continue to receive your current income until your FRA (whatever age that is at that time).
Completely understandable. Time to find something you would enjoy doing for the next 20 years or so.
Either that or have your wife find something she would enjoy doing for 20 years or so.
foxfirev5
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Absolutely. You've hit the wall a little early. When I was about 20 years into my career my company was bought out for the third time. Massive reorg and all the BS. For the only time in my career I networked (not a thing back in the day) and kissed butt to pull down a better job. These are the defining moments that create success.
I realize that good fortune and well timed moves have no place around here but it had a significant impact on our success. We started out having nothing and only one way to go. To paraphrase Jimmy Buffet, DW and I are the people your parents warned you about.
But I digress.
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gauss
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joeaa - Just to be clear, I did provide, in my above post, the proper way to get OP's correct SS estimate that would only include his current accrued benefit - ie no future earnings.
Yup, snipped from an earlier post...
I try to access the calculator while logged in to my.ssa and I get a "Forbidden Unfortunately, you do not have access to this service. Please check your url for errors and try again." message. Anyone else encounter that?
gauss
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I usually do it while not logged into my personal SSA account.
The Retirement Estimator does not require an SSA account.
https://www.ssa.gov/benefits/retirement/estimator.html
This is the URL I just successfully used to take me to the page to enter my personal info and then run the Estimator.
The Retirement Estimator does not require an SSA account.
https://www.ssa.gov/benefits/retirement/estimator.html
This is the URL I just successfully used to take me to the page to enter my personal info and then run the Estimator.
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220volt
Dryer sheet aficionado
I'm also 44 but have half of your assets. Married no kids. Once we hit our magic number which is 4% WR, we are out. I am not falling into that "one more year" or "just to be sure" trap. Screw that. If you're flexible during your retirement, you can easily mitigate anything that comes your way.
We only have one life, so if you overwork and miss several years of potential joy, there is no going back. Those years are gone.
At your age, you can always try it for a few years and see if your assets hold up and if you like it. If not, you can always go back a working year or two to replenish. Hell, you can even start a new totally different career that you actually might enjoy. Just delivering pizza or starting a blog could make a huge difference.
There are literary hundreds of strategies to make your money last lot longer than you think. Flexibility is the key.
We're all different but If I had your assets, I would be gooone.
We only have one life, so if you overwork and miss several years of potential joy, there is no going back. Those years are gone.
At your age, you can always try it for a few years and see if your assets hold up and if you like it. If not, you can always go back a working year or two to replenish. Hell, you can even start a new totally different career that you actually might enjoy. Just delivering pizza or starting a blog could make a huge difference.
There are literary hundreds of strategies to make your money last lot longer than you think. Flexibility is the key.
We're all different but If I had your assets, I would be gooone.
Thank you, I was able to get it to work after logging out and going incognito. There must have been a cookie screwing me up.
Anyway, with
$0 contributions from now until 62 - $1600/mo
$0 from now until 65 - $1969
$0 from now until 67 - $2272
The benefit at age 67 is about $800 less per month than if I keep on working at the same income level.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
As you can see being in your 40's, there is a decent difference in SS payments if cutting off the income spigot now.
You should also run your numbers to 70 years old, as typically this is one further popular choice that folks consider.
JakeinChina
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I would totally wait it out for around 4 more years or until your about 50 and save, then invest as much cash as you can. The worst thing would be in your early fifties and after a few years of not working full time and getting use to it, to HAVE to go back to work because you don't have enough.
Its much better to be conservative in your math as you prepare to early retirement.
Its much better to be conservative in your math as you prepare to early retirement.
gamer-stu, I think that in your situation, with lower expenses and an early retirement, I'd take as much advantage of tax savings now and later. Instead of investing after tax, invest as much as possible tax deferred and then do Roth rollovers in retirement. I'd focus on setting up a Roth conversion ladder as soon as you quit working, the concept can be found here: https://www.madfientist.com/how-to-access-retirement-funds-early/
It is especially valuable if you are a high income earner that does not have high expenses, save large tax $ while working and paying very little in tax $ in retirement.
flintnational
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Congrats on your saving achievements. You could also consider a career that has shorter hours or that does not pay as well but that you enjoy. You may just need to give your savings time to grow. And, obviously, the longer you work the shorter time your savings will be needed.
Long time lurker outing himself due to changing circumstances.
I'm 44 years old and have been working towards FIRE before I even knew it was called FIRE. I work hard, but, frankly... I really don't want to work.
Anyway, the company I work for is being acquired. I have no idea whether I am "safe" or not (are we ever?
44 years old, married, two children aged 10 and 13.
House has been paid off for a few years.
No debt. Cars paid off.
401k, Roth, and Rollover IRA ~ $700K
After tax investments/liquidity (not including home equity) ~ $300K
College savings in 529 ~$100K, enough for a state education for both kids.
Expenses ~ $48K, including taxes, insurance, and some cushion. I have priced in an Obamacare silver plan and $4,000 in reserve for medical expenses. We already are pretty frugal, so I don't know that I could squeeze more out of the budget.
Wife earns ~$8K a year. I could easily pick up some extra work if I had to, but don't really want to.
So, if I get the heave ho, could I FIRE? I've been planning on at least $1.8 million before considering, but it would be comforting to know that I could say screw it if I had to. I know that I would have to 72T, which makes me nervous. And I'm afraid that even if I could do it, I am asking for a very frugal rest of my life whether or not my tastes change.
You appear to be where we were 3 years ago, almost identical numbers but the big difference is we don't have kids. We took the plunge and did it and so far so good, but I also have a partner that was willing to tighten the belt and squeak out a few more thousand for our budget temporarily until we get to $1.5M, which we are just shy of $1.3M investable right now.
The sad thing about the SS #s, if you plug in 2-3 more years of work, you'll see the number only go up a tiny amount as your likely past the second bend point so for every dollar your putting in, your getting only a tiny fraction of an increase back.
gauss
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+1 That is my conclusion also. He is past the 2nd bend point in the SS PIA formula.
In my own analysis, I decided not to continue working even though I had only 22 years of full time service (ie 10 years of 0 or near 0 in the 35 year average). This was because being past the 2nd bend point, I was no longer on the sweet spot of the SS curve for lifetime earnings.
Note that OP can increase his SS payout from the above age 67 figure by about 24% by delaying SS draw three more years until age 70.
-gauss
At 44, I was you. We had $1.4M in net worth but owed $372k on our mortgage. We had $118k in 529 accounts for a 7- and 5-year old. There was no way I would have considered retiring. I think your circumstances are too tight for comfort, especially with kids involved. The 4% withdrawal rate may be fine for a typical 30-year retirement, but I think 3% or 3.5% is recommended for early retirees. Even though I expect social security will still be around at at least 75% of current pay-out, you are 23 to 26 years away from collecting, so I would not count it. Find another job that you enjoy more (or dislike less) and/or ask your spouse to earn more so you can accelerate your savings and FIRE.
Get out while your health is good so you can enjoy life. I've seen too many people work until they drop dead trying to get that extra cushion. Like you said, you MUST be flexible in retirement. Your health is your wealth!
This could be the best current advice I’ve received on this site! That is downshifting your stress at full time job then moving to part time before RE. I am guilty of only thinking of binary or cliff decisions. Either working at 110% stress or fully retire. There is a middle ground and many people still do a good job at work without making it their entire life’s focus. I sometimes forget that is an option.
I knew a guy who did this for 8 years before he was laid off. In fact, he didn't even fulfill his job function by any measure. He survived 4 rounds of layoff during 2006 downturn and I was surprised every time that my company kept him on payroll.
PS: He would excuse himself in the middle of customer meeting to go visit Starbucks!
