Hello from Arizona. Help me figure this out!

[JohnAZ]

I am 55 year old male and desperately want to put an end to my 9-5 routine! I am a senior professional and have worked in big business for about 30 years. I already took one step aside from 2003 to 2006 when I left big biz to pursue a long standing dream in another field. It did not quite work out, so I stepped back into the grind in early 2006. The step back in was at a lower salary, but I am only interested in benefits and 401K. I had a lot of fun trying to pursue the other career, but it was just not as financially lucrative as I had hoped.

I currently have about $1.05million in retirement savings and an additional 60,000 or so in cash, US Savings Bonds and the like. I contribute the max amount to my 401K including the over 50 catchup. I am single with 2 wonderful adult (29 and 31) daughters who as of yet have not let on that they are expecting an inheritance from daddy! I live a pretty frugal lifestyle, a 6 year old car and a 13 year old Jeep. I have no debt other then about 58,000 left on the mortgage.

My goal was to hold out until I was 60 and then do the occasional part time consulting work in my profession (Human Resources). But tonight is Thursday and I would love to walk in to the bosses office tomorrow afternoon and say, "I think I have had enough!" I have been thinking about that for awhile but again I was planning on staying on the job, getting benefits and maxing out the 401k contribution. So , I am not prepared for my sudden urge to cut 4-5 years out of my earning curve.

Fidelity is my 401K carrier here at work. I have about $24K in that account and the rest is in an account with Merrill Lynch.

I tried the FireCalc calculator and ranged anywhere from about 55% to 100% success based on my inputs. I need to dig around that some more to determine how it works.

So that's about it for now, I look forward to participating on the board and getting good (?) info from the rest of you.

Best Regards

JAZ

 

[73ss454]

Welcome John, you seem to be on the right track.

The only thing is I think you need to get away from ML. The expenses there are killing you softly. If you have tax advantaged accounts there move them ASAP. If there taxable accounts be carefull that you don't create a taxable event by selling anything with gains. Fidelity or Vanguard are the most popular choices here.

Playing with firecalc will help you decide when it's time to go.

 

[JohnAZ]

Thanks for the reply 73ss454. Maybe it's just nomenclature, but what does Tax Advantaged mean?

One other item to mention as I was looking at other folks messages. $58,000 left on a house valued at about $345K.

 

[73ss454]

Taxadvantaged would be, IRA's, SEP, 403B's etc.

Taxable is pretty much everything else. If you sell anything in the taxable that has a profit you will be taxed. .So if ML has you in things that can't be transfered without selling you will be taxed. If your holding a security like GE and want to transfer it that would be OK because you won't have to sell it.

 

[JohnAZ]

Gotcha! a little under 60:40 tax advantage vs. taxable

And one more thing. A small pension from a previous employer about 15.9K/yr at 66. I already turned down the chance at getting cash instead. What I would leave on the table with my current employer is base x 15% potential bonus + 18,000 in RS/year cliff at 4 years

 

[crazy connie]

Hi John! Welcome to the board from another Zonie! If you can cover the bills on 40 to 50K a year then give the boss the exit strategy! You should be able to do that on what you have saved up. With 1M you can draw 40K per year and that should last as long as it is a balanced portfolio. Once SS kicks in, then you can adjust as needed. Keep reading here on the 4% safe withdrawal rate and runing thru the Firecalc. Any questions or concerns speak up and folks here will help you on the learning curve.

Isn't the weather great right now? I have my usual spring fever that starts in the fall.

 

[JohnAZ]

You're right the weather has been near perfect in the Phoenix area where I live for about 2 weeks now. One of my daughters just moved to N Arizona and it's even nicer up there.

Regards,

 

[chinaco]

...
But tonight is Thursday and I would love to walk in to the bosses office tomorrow afternoon and say, "I think I have had enough!" I have been thinking about that for awhile but again I was planning on staying on the job, getting benefits and maxing out the 401k contribution.

...

You did not provide enough info on your expenses. Be sure to consider health care expenses. Use the 4% SWR as a guideline to see if expenses can be covered.

Some advice: (I am sure you will do this anyway... but I will mention it)

Overcome the urge to tell the company or boss why. Just resign the normal way. Give a two week notice. You do not need to provide an explanation, rationale, or reason. You can simply say you have decided to take a sabbatical for a year. Just in case you decide later you need a job (even part-time). They would be listed as your job history.

If you decide that you need to continue working, but are tired of that job, float your resume. You have nothing to lose. Matter of fact, while you are figuring it out, you might just send the resume out and see what comes back.

Or you could go into part-time work and ease into ER.


If you decide to stop working, good luck.

 

[Coach]

JAZ, welcome to the forum!

A lot of folks on here have a $1M retirement savings goal. You're quite a bit ahead of that with the pension, so if your needs are modest, and you have health care covered, I'm betting you can pull the plug.

Good luck!

Coach

 

[Fred333]

Welcome to the forum. Good luck on reaching the goal.

 

[HFWR]

Welcome!

If you were to decide to move from ML to a lower-fee provider (i.e. Fido or Vanguard), then 2008 might be a good year for tax purposes. YMMV...

 

[thefed]

so....how much are your monthly expenses? and once that mortgage is paid off, there's some free $$. plus SS at 62, and your pension a few years later...

Assuming your ss is 15k/yr (stab in the dark), and the pension is 15k, that's a nice chunk of change. As mentioend, you can pull 40-50k from that million $$ and be okay....some would even say more at your age. That means when your pension kicks in, you could spend 70-80k per year and still maintain that $1mil in the bank. and remember the mortgage will be gone soon too....



DO IT!!

 

[haha]

As mentioend, you can pull 40-50k from that million $$ and be okay....some would even say more at your age. That means when your pension kicks in, you could spend 70-80k per year and still maintain that $1mil in the bank. and remember the mortgage will be gone soon too....

Not necessarily so. The 4% business promises nothing about maintaining the value or nominal amount of your stash. Only that given similar scenarios as those in the past, you will not come up craps before you reach the end of your chosen test period.

Ha

 

[JohnAZ]

Hello from Arizona. Help me figure this out!

Thanks to all for the good inputs. I am currently guessing that my monthly expenses are in the range of $3,150 to $3,650. I need to do some more work on that. That of course includes the company paid medical and dental. I can imagine that paying medical out of pocket is going to be 3-5x as much as what I am paying now (need to find a paystub to confirm). If I leave I will get about 18 months of cobre, which will also be expensive, but at least there will be continuity.

Does anyone have any comments on what AARP is offering for medical insurance through...

I figured that ML would be higher then some, and need to investigate that as well.

I actually did go in on Friday and told my boss I was thinking about resigning. I was asked to give it some more thought over the weekend. So in about 8-9 hours I need be prepared. I still plan that the answer is "GO!"

I may take a few months off, but I will look again at PT contracting and consulting work as I did in '03 - '05

Regards

 

[JohnAZ]

Just as an update. I did tender my resignation last week. My boss has asked me to stay on until at least the end of January '08 and maybe until 05/08. That surprised me a little bit. I have been thinking about it. It will give me more time to maximize savings and prepare for the next step as well as look around for part time contracting/consulting work. We will see!

Regards

 

[Rambler]

Well, if you do decide to stay on, at least there will be light at the end of the tunnel, you will have a larger nest egg, and you could even set some of the terms...