Hoping to Retire ASAP

L

lennyandgragg1

Dryer sheet aficionado
Joined
Aug 10, 2016
Messages
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Location
Waxhaw
Hello there. I’m not new, but I don’t comment often. I usually read the newsletter each week though.
I turned 50 recently and I’m not sure what happened but I really want to retire. I am a teacher and after enjoying the freedom of summer, it just really hit me that I want that freedom all the time. I’m just not sure I can do it yet. I’m hoping if I provide some numbers maybe some of you can help me determine if I really can do it and it’s just a matter of me being scared to do it.
I have 1,000,000 in brokerage and Roth IRA’s and 600,000 in IRA’s. All investments are 90% stocks. At 60 I will receive a pension of around $25,000 annually.
I have two children who are in high school, so if I retired now I would need to buy health insurance in the marketplace which I am guessing would cost around $12,000ish a year based on what I see out there. The income between wife and myself is about $120,000 which is about $60,000 each. If she kept working I know I could retire but want to see if both of us could retire. Current yearly expenses are around $80,000, but I am figuring they will grow as my kids go to college. However, I do not feel it is my responsibility to pay for their college.
As for social security, I estimate that bringing in around $2000 a month each for me and the spouse.
I tried to put all of this in firecalc, but not sure if I did it correctly. It showed I was good about 80% of the time. That was another thing I was wondering. For those who use firecalc, do you only retire if is shows 100% or is there a lower percentage that most feel comfortable with?
Thanks in advance for any help.
 
Are you sure on the pension and Social Security numbers if you quit working now?

At 60,000 a year, that seems like a pretty good Social Security check with retiring at 50.

And if your wife is about the same age, is she going to be OK with you not working, and her continuing to work?
 
Without running the numbers I would say 80% firecalc estimate is a pretty accurate assessment of the possible outcome which is a one in five chance that you will run out of money at some point. Most on this forum, I would venture, would find this an unsatisfactory risk. Many feel more confident at 90% or greater and probably if you can be flexible with your expenses, based on how your sequence of returns is, then you can really influence that percentage of success.
If it were just you and the wife I would say "worth the risk" but with the wild card of the kids I'd say keep going for a couple years until you get more clarity.
 
Thanks for the input. Social Security is an estimate. My income was almost double that for a long time before we moved. Wife says she would be okay with me not working while she does, but who knows if that would change😀 She actually likes working whereas I have had enough.
 
It assumes that you continue working. Did you make sure that you have $0 earnings starting from next year?
 
lennyandgragg1 said:
Wife says she would be okay with me not working while she does
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I think this really tips the scales... If she can commit to hanging in there for 5 years then I think you're much more secure, especially if you picked up a little side hustle $$.
Your firecalc estimate didn't include your wife working scenario correct?
 
Correct. I didn’t calculate a side hustle either which I would most likely have. I just can’t take education anymore😀
 
lennyandgragg1 said:
Correct. I didn’t calculate a side hustle either which I would most likely have. I just can’t take education anymore😀
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Yeah I get that, "when you know you know." I really think it all comes down to your confidence level and whether your wife can be okay with continuing to work for several years.
 
At what age did you start your full-time work? Social security bases the payout on 35 years worth of work history. So if you started work at the age of 20 then you'd have approximately 5 years of zero income averaged in. But if you started full-time work at the age of 25 you'd have 10 zero years averaged in. Social security website has an option of changing future years to zero so that your estimate will be accurate for retiring immediately.
One more question, is the $25,000 pension index for inflation? In other words, is it $25,000 in today's dollars and then adjusted for inflation each year so that by the time you do draw it at age 60, it would probably be more like $35,000 or $40,000?
 
Thanks for your time in education, I know that is a tough profession and getting tougher. Great job saving! So if wife is working and kids in school, what does a typical day look like, or week or months? Maybe a job change would bring more happiness? Or Part time work?

I work in local Gov. job and see a lot of guys retire early because they are burnt out, had enough, etc...then they are back to work pretty quickly, or regret leaving because a few more years would be a higher pension.....I think you have a good financial situation, but at 50, you could live another 50 years! That social security is calculated on your highest 35 years of work, if there is less than 35 years, each of those years is a ZERO.
 
OP, we have a lot in common. Just turned 50 with about the same in assets. You're better off than me as most of your is in taxable as I'm working on building that now.
I completely get the burnout and wanting something more/different. My work isn't that bad, but the people are unbearable and toxic. Everyday I calculate what it would take to walkout, lol. Things have gotten so bad that I've thought about raiding an old IRA to enable my leaving. I'm trying to endure a few more years, but only time will tell. Hang in there!
 
You may find that with ACA for health insurance (neither w*rking) you costs could be much lower.

Also, there are often things you can do to reduce costs in retirement. But, of course, retirement is when you want to make up for all those years you couldn't get away, so...

Do you have an option of a different line of w*kr for a while? I understand education being difficult these days. I don't know how anyone does it. I had a friend who drove a school bus and it was all he could do not to commit violence!
 
50 seems to be a watershed year. I'm currently just slightly beyond that, and remember hitting 50 as psychological watershed. Before, one ponders career and workplace-participation as something to be indefinitely continued. After, it feels optional, so that further work is more of a bonus or an extra assurance, than an imperative. Then came job loss that pushed me into the RE portion of FIRE.

In the OP's case, impending retirement looks to be optional. One may do it, or one may not. FI bestows the freedom to not-panic, if one's job goes away. FI doesn't necessarily imply RE! The optionality to retire, or not, is a pleasant luxury, to be treated with care. It sounds like in the OP's case, the much-maligned "one more year syndrome" has merit. An extra year or two, improves the finances and tilts the retirement prognosis from likely-to-succeed to almost-definitely-succeeding. Thus the recommendation to pick some retirement date in the near-future, and to structure one's emotions in anticipation of that date.
 
militaryman said:
Without running the numbers I would say 80% firecalc estimate is a pretty accurate assessment of the possible outcome which is a one in five chance that you will run out of money at some point. ...
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Nope. It is a one in five chance that you would have run out of money in the past given the starting parameters you gave Firecalc and economic conditions similar to those experienced in the past.

From the site:
----------------------------------------------------
How can FIRECalc predict future returns from past performance?

It can't.
----------------------------------------------------
Be careful out there.
 
I don't think the numbers are there but maybe a career shift or even downshift (coast FIRE although I'm not a fan of the term). With experience in education there are peripheral opportunities. I know one person that ended up working for an energy management company that contracts with school systems to reduce their costs (for a cut of the savings). They wanted people with experience in education to have cred and be able to speak the language (a big part was "voluntary" compliance at the school level). This person loved it and thrived moving up in the company and making more money than when working in education while still helping the schools and the environment. I'm sure there are other similar things out there.
 
Diogenes said:
50 seems to be a watershed year. I'm currently just slightly beyond that, and remember hitting 50 as psychological watershed. Before, one ponders career and workplace-participation as something to be indefinitely continued. After, it feels optional, so that further work is more of a bonus or an extra assurance, than an imperative. Then came job loss that pushed me into the RE portion of FIRE.

In the OP's case, impending retirement looks to be optional. One may do it, or one may not. FI bestows the freedom to not-panic, if one's job goes away. FI doesn't necessarily imply RE! The optionality to retire, or not, is a pleasant luxury, to be treated with care. It sounds like in the OP's case, the much-maligned "one more year syndrome" has merit. An extra year or two, improves the finances and tilts the retirement prognosis from likely-to-succeed to almost-definitely-succeeding. Thus the recommendation to pick some retirement date in the near-future, and to structure one's emotions in anticipation of that date.
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Yes, FI is the key. Once you reach that, you can stay and enjoy your j*b or you can say "goodbye" and walk out because you are fed up. It is incredibly liberating.

If you are not certain that you are FI, then all bets are off on the "good feeling" of stay or go. My FI was based on reaching a certain number of retirement "points" (age + years service) which then locked in a pension and Megacorp-supplied health insurance. It was literally one day you were not FI and the next day you were FI. Of course, I'd been saving/investing for almost 30 years or I wouldn't have been FI.

That feeling of freedom or "independence" from the j*b made all the difference in the world. It was palpable. I relaxed and enjoyed the ride for several years. When I no longer enjoyed it, I left almost instantly.

If one doesn't have that FI feeling, making the decision to RE is a lot less comfortable. It means a lot more figuring and planning and contingencies. YMMV
 
Koolau said:
Yes, FI is the key. Once you reach that, you can stay and enjoy your j*b or you can say "goodbye" and walk out because you are fed up. It is incredibly liberating.

If you are not certain that you are FI, then all bets are off on the "good feeling" of stay or go. My FI was based on reaching a certain number of retirement "points" (age + years service) which then locked in a pension and Megacorp-supplied health insurance. It was literally one day you were not FI and the next day you were FI. Of course, I'd been saving/investing for almost 30 years or I wouldn't have been FI.

That feeling of freedom or "independence" from the j*b made all the difference in the world. It was palpable. I relaxed and enjoyed the ride for several years. When I no longer enjoyed it, I left almost instantly.

If one doesn't have that FI feeling, making the decision to RE is a lot less comfortable. It means a lot more figuring and planning and contingencies. YMMV
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Thus the magic of defined-benefit pensions, even if they're small! They're psychological palliative and assurance. They offer capstone and sense of mission-accomplished. Now imagine on the contrary having to leave one's employment 5 or 10 years before reaching your "points". Yeah, you'll still get a pension (albeit a smaller one) n-number of years in the future. But not in the present. In the present, there's that gnawing feeling of unfinished business.

One might argue that your slant on FI also captures the self-release to RE. More conventional FI is just a matter of portfolio size vs. projected expenses. Suppose that Joe and Bob both spend $100K/year. Joe has $2M, but Bob has $7M. By conventional retirement-calculation, Joe isn't quite FI, but Bob is comfortably so. But we forgot a tidbit... Joe and Bob are both career civil-service employees at the Department of Health and Human Services. Joe just turned 57, and has 30 years of service. Bob is only 50, with 23 years of service. Joe is eligible for a FERS pension right away, plus can carry his health insurance policy into Medicare age. Bob can not. Bob is three and a half times richer than Joe, and yet, who is more FI? And who is better placed for RE?
 
From the info provided, I come up with safe spending of $80,586 in 2024 dollars.
  • $1.6m portfolio
  • 50 year time horizon (to age 100)
  • $32,400 for his SS starting in 2041
  • $24,000 for her SS starting in 2041
  • $25,000 fixed pension starting in 2034 at age 60
  • Investigate for safe spending at 95% success rate
  • All other assumptions are default assumptions
A spending level of $80,586 provided a success rate of 95.2% (104 total cycles, of which 5 failed). This spending level is 5.04% of your starting portfolio. (Your spending is assumed to come from any Social Security and pensions you entered, as well as from the portfolio.)
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1. Refine/verify your SS at the SSA website. Go to ssa.gov and log in. Then go to the Retirement Calculator (see screenshot below) and change average future salary to $0 to get your SS benefit if you retired now and had $0 future earnings.
1725147115752.png

2. Pension is fixed or COLA?

If I add in your wife continuing to work for another 10 years at $60,000 with inflation adjustments, then sfe spending is $105,023.

Seems like you could stop working full time now if you want to. YMMV.
 
Last edited:
pb4uski said:
IME those additional years of $0 didn't make much difference.... about $20/month as I recall, but YMMV.
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Yeah, I had 35 years of credits and my 11 - 0 years seemed to affect my final number very little. I didn't calculate it but wouldn't argue with $20/month. The key is having the 35 years already under your SS belt. Of course, YMMV.
 
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