Counting Down to ER - How best to do it?

[DoingHomework]

About 2650 days, so a little over 7 years out....


I spent most of my free time checking to see how my portfolio was doing compared with my projections (and doing and re-doing various projections), and investigating potential retirement locations online (plus spending all of our vacations checking them out in real life).

See, this is why I'm glad I found this forum. I am 2557 days out - June 1, 2017. I thought planning this far ahead was crazy but now I know I am not alone.

I am in the "obsessed about my projections" stage. I am trying to be as conservative as possible while trying various options (work part time, take tax deferred money first, when to take pension, etc.) I now have a giant spreadsheet with all sorts of different ways to make ER happen. Perhaps the biggest trouble is that I am now confident that I can retire very early, probably now and definitely in about 3 years. So staying motivated to make long term investment in my career is largely gone.

For me the biggest issue at this stage is visualizing what I want retirement to be like. There are a few things I want to do, a few trips to make, but for the most part I don't have a clear picture of what I will actually do each day. I'm not overly concerned about it though, about 8 years ago I took 3 years off to get a PhD. Filling my days was not a problem! And'm not talking about school, about 9 months of that 3 years was after I had finished but before I started back to work. It was a great time to explore a few hobbies and it taught me that I could easily live on very little without actually sacrificing. I had save up for the time off and after 3 years my net savings had gone up, largely because I was teaching college classes for "fun" so I have income I did not anticipate. I suspect I will do the same thing in retirement.

 

[Emeritus]

I did my first Retirement plan 18 years before I took Emeritus status. We had renovated our home and finally several pay increases had come through. I knew that whatever happened our kids would go to college and we would never lose the house. We had to decide whether to refinance or just pay off the short term high interest construction loans. We paid off the loans and then began aggressively investing. (We both have government pensions). We tweaked the plan repeatedly but it never really changed. We saved money for rainy days that have not happened so we have no complaints. `DW will "retire" in 2012, although she will likely go back as a consultant to her agency.

 

[Emeritus]

DW and I still have young kids that are about to start school this year and next, so thinking about the impacts of school and kids is in my mind too. .

I don't know whether to be impressed or depressed
Our deal with our kids was it was their job to do well in school and our job to make sure that money did not prevent them from getting first class educations. The older one is finishing a molecular biology Ph.D. and the younger one just graduated from law school. Both went to State Universities for BS degrees and had scholarships, but the cost of putting them through school was quite large. I just talked with a neighbor who paid the full freight through Northwestern and George Washington law and the total was $375,000.
So what do we owe our kids? Mine paid only a very small portion of my education. I paid the rest and was many years paying it off on a civil servant's salary. Tuitoon is far higher today relative to the same salary

 

[FUEGO]

I don't know whether to be impressed or depressed
Our deal with our kids was it was their job to do well in school and our job to make sure that money did not prevent them from getting first class educations. The older one is finishing a molecular biology Ph.D. and the younger one just graduated from law school. Both went to State Universities for BS degrees and had scholarships, but the cost of putting them through school was quite large. I just talked with a neighbor who paid the full freight through Northwestern and George Washington law and the total was $375,000.
So what do we owe our kids? Mine paid only a very small portion of my education. I paid the rest and was many years paying it off on a civil servant's salary. Tuitoon is far higher today relative to the same salary

We are targeting having enough saved to pay roughly all their tuition at a state school for four years, plus a little money for books and maybe a study abroad stint or two. Room and board and "misc" will have to come from their savings, loans, part time and/or summer work, scholarships, stipends, grants, research, etc. And we live near two excellent state schools, so depending on their demeanor and DW's and my demeanor in 13 years, they may be able to live at home and attend college. Or we may have enough excess cash flow (with good stock markets) to help out more than planned.

Grad school - they will likely be on their own for the most part, unless we really hit it big in the stock market. But many educational tracks are available at low cost (at state schools) and there are loans. In the masters and PhD technical educational fields there are many schools offering research or teaching assistant gigs that, along with stipends and scholarships, can make graduate studies rather profitable for the young inquiring mind. I almost entered a graduate program in engineering that would have netted me over $30k a year for a 9 month per year gig (10 years ago). More than the State was paying for entry level engineers at the time (when adjusting for only working 9 months vs 12) and I would have earned a degree.

If, on the other hand, my children desire a bachelors and a graduate/professional degree from a private school (like Northwestern and Georgetown) then I would expect their decision to be sound on a financial basis. If it costs $375,000 (in today's dollars) to get the necessary degrees, then I would expect their chosen career path to be something that is highly lucrative. It would have to be a lot more lucrative than whatever alternative career trajectory they could obtain at more affordable institutions of higher learning (like the two state schools nearby that offer virtually every degree program imaginable). And since they would be largely on the hook for the $375k, it would be a choice that they would have to make.

So what do we owe our kids? A good head start. But not bottomless coffers to fund life long education of any field they choose that interests them. My take on college is that it is instrumentally valuable in setting one up to earn a comfortable living which will allow one to pursue other interests throughout life beyond a day job. College is also intrinsically valuable for the life experiences and broadening of one's intellect and interest.

 

[DeborahB]

I started thinking about this maybe 5 years ahead and got very serious about 18 months before retirement. I'm planning to retire July 2 of this year. I have spent the last year or so obsessing over spreadsheets and scenarios and other things like that, to convince myself I had enough money. I'll be 62 in a few weeks.

Anyhow, I hate my job, I am only working for the paycheck, and the stress level has reached the point of no return. I plan to resign 2 weeks in advance, blame it on various legitimate issues (health, sudden death of a close friend, realization that I'm not immortal ) so that I don't burn any bridges. There are good reasons to do it this way.

However, I NEVER plan to work for anyone else again. OTOH, one never knows. I believe I will be okay if I am reasonable in my spending. That's not particularly hard for me. I have lots of hobbies and interests and have not had time or energy to do them in quite a while - my health actually has suffered tremendously from this job stress.

I have 23 more work days - or 31 days total... after today...

 

[W2R]

I started thinking about this maybe 5 years ahead and got very serious about 18 months before retirement. I'm planning to retire July 2 of this year. I have spent the last year or so obsessing over spreadsheets and scenarios and other things like that, to convince myself I had enough money. I'll be 62 in a few weeks.

Anyhow, I hate my job, I am only working for the paycheck, and the stress level has reached the point of no return. I plan to resign 2 weeks in advance, blame it on various legitimate issues (health, sudden death of a close friend, realization that I'm not immortal ) so that I don't burn any bridges. There are good reasons to do it this way.

However, I NEVER plan to work for anyone else again. OTOH, one never knows. I believe I will be okay if I am reasonable in my spending. That's not particularly hard for me. I have lots of hobbies and interests and have not had time or energy to do them in quite a while - my health actually has suffered tremendously from this job stress.

I have 23 more work days - or 31 days total... after today...

Congratulations on your imminent retirement! Those 31 days will go by quickly. We are about the same age and I have not been retired long. It has been so much better than I had ever imagined. I, too, desire to never work for someone else again.

 

[Emeritus]

So what do we owe our kids? A good head start. But not bottomless coffers to fund life long education of any field they choose that interests them. My take on college is that it is instrumentally valuable in setting one up to earn a comfortable living which will allow one to pursue other interests throughout life beyond a day job. College is also intrinsically valuable for the life experiences and broadening of one's intellect and interest.

35 years of teaching at a first class State University convinces me that for the right student they are perfect and certainly were perfect for my kids. But what the private high schools and colleges offer is a higher success rate with imperfect kids and and an enormous head start for the real achievers. Money does not buy success but it can be an insurance policy against disaster.

 

[FUEGO]

35 years of teaching at a first class State University convinces me that for the right student they are perfect and certainly were perfect for my kids. But what the private high schools and colleges offer is a higher success rate with imperfect kids and and an enormous head start for the real achievers. Money does not buy success but it can be an insurance policy against disaster.

I think if my kids end up in that "imperfect kids" category, I might suggest something less intensive than a four year college straight out of high school. My first inclination would not be to pay five or six times the price at a private U for what may be many more than four years of schooling that may not end successfully anyway.

Of course I am biased by experience, since we do have access to two "first class State Universities" right here in town, and from an academic standpoint, the private schools don't really compete or are on equal footing. And I hold degrees from both "first class State U's"!

 

[Emeritus]

I think if my kids end up in that "imperfect kids" category, I might suggest something less intensive than a four year college straight out of high school. My first inclination would not be to pay five or six times the price at a private U for what may be many more than four years of schooling that may not end successfully anyway.

Of course I am biased by experience, since we do have access to two "first class State Universities" right here in town, and from an academic standpoint, the private schools don't really compete or are on equal footing. And I hold degrees from both "first class State U's"!

The imperfections are rarely academic. And as tuition continues to increase at flagship state universities the difference is getting closer to 2 or 3-1 . What worries me about the state universities is that most state's commitment to excellence in the future for their State universities is ZERO ZIP NADA.

As I said my wife and I and my kids all did very well at State U. I just hope the same quality is here for the next generation.

 

[DeborahB]

Congratulations on your imminent retirement! Those 31 days will go by quickly. We are about the same age and I have not been retired long. It has been so much better than I had ever imagined. I, too, desire to never work for someone else again.

Thanks - it should be an interesting transition. I'm not worried about being bored!

 

[FUEGO]

The imperfections are rarely academic. And as tuition continues to increase at flagship state universities the difference is getting closer to 2 or 3-1 . What worries me about the state universities is that most state's commitment to excellence in the future for their State universities is ZERO ZIP NADA.

As I said my wife and I and my kids all did very well at State U. I just hope the same quality is here for the next generation.

Our ratios are still around 7:1 or 8:1 for undergrad, which is why I could not easily justify a private U. Maybe edging up to the 3:1 or even 2:1 range for some professional schools. State taxes are pretty high though, so we pay for the education one way or the other. The tuition itself is so cheap that it is dwarfed by living costs, books, extracurricular stuff, etc.

Yes, I hope states can keep up the quality of education at State U's. For many people, my family included, they have served as a springboard to allow us to jump a couple notches up the ladder.

 

[JonnyM]

DW and I had the epiphany that ER was a viable goal seven years out, for us age 43. The working environment had gotten very negative for her, it became a matter of actually looking at what was possible. In hindsight, our pretty spur of the moment plan; would not have been very comfortable financially, but we were convinced mentally that we could do this if we concentrated on the prize at the end. Also this was about 1998 and we assumed hugely inflated returns on our investments outside of the DBP we were both counting on for basic expense coverage. Taking an out at the bare minimum age the system permitted (50) would leave us with a small fraction of what we were conditioned to spending, about 1/3 in my case. As it happens in all good plans they don't survive battle, but the essence was there, some really bad stuff happened, and one really good thing happened, and all the while our house was approaching the end of its mortgage. I stuck around until early 2006, still 50 but more like 50.75. I spent the last 3 years in a slightly better paying Management job that I didn't enjoy, but it helped the DBP calc a few points in my favor. I built a spreadsheet with all my up to the minute calculations and marveled at it on a daily basis. I preached to my coworker's about the wonders of FIRE and made a few converts during those last few years, but notably few. The majority had really never thought about it, didn't really want to think about it, didn't like being confronted with reality of it, and mostly assumed they had to work typically 5 to 10 years longer than I could show them they really needed to, much of that based on the information I'd gleaned from already being a member of this board for some time. My Supervisor was a sympathetic friend who was very supportive of my wish to get the heck out, and we would discuss ER all the time. Her reality was she already had many more years in than me, was a few years older, and still was going to hang around until she reached the magic 30 years plus one more to really cash in on a killer payout. I called her the mercenary and she would just smile back at me. Worked for her, her take home is more than DW and mine combined, but then she is single, and figured she'd need it. The only thing I would do different is start the forced savings the day I started my 23 years with the company, rather than playing catchup and never really succeeding. Some of the bad stuff I referred to has already wiped out that part of the equation. We are still hopeful that SS will give us combined about a $24K/year raise around 2018 to help with whatever stagnation our income has experienced over the first 12 years of FIRE. Overall, we easily meet expenses, have too many toys, and are content with our lot. Once could do worse.

 

[Alan]

Thanks - it should be an interesting transition. I'm not worried about being bored!

Congratulations

I hope you don't mind, but I added your name to the 2010 ER class list

http://www.early-retirement.org/forums/f29/will-the-class-of-2010-please-rise-49446-8.html

 

[DeborahB]

Congratulations

I hope you don't mind, but I added your name to the 2010 ER class list

http://www.early-retirement.org/forums/f29/will-the-class-of-2010-please-rise-49446-8.html

LOL! Nope, I don't mind although I don't see me on the list... ?

 

[Alan]

LOL! Nope, I don't mind although I don't see me on the list... ?

really? You don't see yourself listed on post #145, just below tesaje ? - I added you to the list at 10:05pm yesterday.

 

[DeborahB]

really? You don't see yourself listed on post #145, just below tesaje ? - I added you to the list at 10:05pm yesterday.

Ooops - yes, I do exist - thanks!

 

[Alan]

Ooops - yes, I do exist - thanks!

No worries.


It's the eyesight that goes first .......

 

[Emeritus]

Our ratios are still around 7:1 or 8:1 for undergrad, which is why I could not easily justify a private U. Maybe edging up to the 3:1 or even 2:1 range for some professional schools. State taxes are pretty high though, so we pay for the education one way or the other. The tuition itself is so cheap that it is dwarfed by living costs, books, extracurricular stuff, etc.

Yes, I hope states can keep up the quality of education at State U's. For many people, my family included, they have served as a springboard to allow us to jump a couple notches up the ladder.

My apology for speaking inexactly. I should have written As tuition increases the TOTAL cost ratio is 2 or 3 to 1 I agree there is little difference in the "other costs"