Hoping to retire early 2026...

[DreamingOfFI]

Hello Everyone,

Longtime lurker - first time poster. I've been enjoying reading about others who have successfully retired in similar situations.

I posted on another forum (starts with B - ) about 18 months ago and got mostly positive results. The markets have also been kind since then. I'm currently doing OMY (in a stressful job) since then trying to get the courage to pull the trigger early next year.

Ages: me (58), DW (61)
3 kids - 2 out of college (1 moved out), 1 a freshmen in college (I have money set aside for this outside of retirement money).

House value - $830K no mortgage
debt - $5K on a 0% car loan
MCOLA with state income tax

Pensions - None
Social Security Plan :
Me: take at 67 (2034) - PIA $46,380 annually
DW take at 62 (2026) - $10,668 annually
DW take spousal at her 70 (2034) - $8046 annually

Taxable Investments (combined):
$670K - This is a mix of index funds, a couple of iBonds, and laddered MYGAs through my age 65. The HSA was also considered here as I have several years of receipts allowing me to withdraw much of it tax free.

Traditional IRAs (combined) :
$755K - includes laddered MYGAs through my age 67 and index funds

Roth IRAs (combined) :
$45K - index funds

401K (mine):
$1.93 million - index funds

Total investments - $3.4 million
Asset breakdown : 51% equity, 49% bonds (MYGAs considered in this bucket) - about 3/4 of equities are US, remainder international. Plan is to start with 50/50 and begin an increasing equity glide path moving to 65/35 over 12-15 years. Plan to use Bogleheads VPW as a withdrawal approach.

Current annual spending $125K annual - excludes taxes and out of pocket health care expenses. Includes travel. With healthcare and taxes I'm assuming a $145K annual spend for the next few years, with it hopefully dropping as remaining kids move out. Plan is to keep income low enough by spending from taxable account, and utilize ACA for healthcare until medicare, controlling income to get subsidies as possible. With family of 3 on ACA, I plugged into my state's ACA site and got an estimate of $1000 per month with a similar deductible of $4k - $7200 annual.

I have a $300k home equity credit line to use for tax free income (to keep MAGI in the right spot) and to reduce sequence of returns risk during earlier retirement if I need to.

Firecalc, ficalc, and Flexible Retirement planner show 100% probabilities of success, especially if a variable spending approach is used and/or expenses are reduced in the future (Bernicke with reductions at age > 70), which should be highly likely. Boldin (Monte Carlo) shows a 93% probability of success.

I think my fears center around:

1) Health Insurance until 65, especially given the current ACA environment
2) The fact that very few of my colleagues of similar age are retiring
3) That the market (especially the US) is significantly overvalued currently

Am I overblowing those fears?

Thanks everyone in advance for your time.

 

[RetiredHappy]

I think my fears center around:

1) Health Insurance until 65, especially given the current ACA environment
2) The fact that very few of my colleagues of similar age are retiring
3) That the market (especially the US) is significantly overvalued currently

Am I overblowing those fears?

Thanks everyone in advance for your time.

You have plenty saved and health insurance until 65 should not even be on your list of fear. I am 63 this year and I have been pay full freight outside of ACA exchange since I retired 10 years ago You may have to pay double of the $1000 per month but it is nothing compared to what you can safely withdraw on.

Who cares about who is retiring? Isn't it all about you and your spouse?

The market is significantly overvalued, but it should not stop you from retiring. Just move enough money out into safer instruments that when/if the stock market crashes, it doesn't derail your retirement.

You wrote that you would start with 50/50 and move to 65/35, presumably stock to fixed income since that's how we normally write for the ratio. If you are indeed worried about the stock market, why are you moving to 65/35?

We are at about 80/20 and not about to change anytime soon. We were at 65/35 at retirement when our money was managed by a firm. We moved it to 80/20 since we took back management of the funds about 3 years ago.

 

[Aerides]

I think my fears center around:

1) Health Insurance until 65, especially given the current ACA environment
2) The fact that very few of my colleagues of similar age are retiring
3) That the market (especially the US) is significantly overvalued currently

Am I overblowing those fears?

Thanks everyone in advance for your time.

I had the same concerns, in 2016, but retired anyway with less assets then than you have now. Been retired for over 8 years and our egg has far outgrown any spending, similar budget to you. I'd personally want to firm up your tax expenses, and ensure you have a good plan to get that budget withdrawn while staying in the ACA subsidy range.

Welcome!

 

[Dtail]

You are ready to retire now if you are psychologically prepared to. You are certainly financially ready.
As RetiredHappy stated, I would not worry if others your age are retired yet. You made it and there could also be upcoming jealousy.
RetiredHappy plays a lot og golf. I play a lot of Pickleball. Perhaps a hobby will assist in your decision.
I have stated this before. We have quite a few comments about folks wishing they retired earlier. Not really the other way around.

 

[Dash man]

We had about the same total when we retired in 2013. But we figured out 5 years of expenses and put that in “safe” investments. So our equity ratio was higher. You’re good to go, but be flexible in how you manage it and put some guard rails in place, especially in the early years.

 

[DreamingOfFI]

You have plenty saved and health insurance until 65 should not even be on your list of fear. I am 63 this year and I have been pay full freight outside of ACA exchange since I retired 10 years ago You may have to pay double of the $1000 per month but it is nothing compared to what you can safely withdraw on.

Who cares about who is retiring? Isn't it all about you and your spouse?

The market is significantly overvalued, but it should not stop you from retiring. Just move enough money out into safer instruments that when/if the stock market crashes, it doesn't derail your retirement.

You wrote that you would start with 50/50 and move to 65/35, presumably stock to fixed income since that's how we normally write for the ratio. If you are indeed worried about the stock market, why are you moving to 65/35?

We are at about 80/20 and not about to change anytime soon. We were at 65/35 at retirement when our money was managed by a firm. We moved it to 80/20 since we took back management of the funds about 3 years ago.

Thanks RetiredHappy, you are right not to think about others and their choices. Sometimes you wonder if you are the odd man out being in the minority though . I think it's just me being paranoid.

I want to move to 65/35 as that is where I would like to be long term, but think starting at 50/50 will provide a small measure of defense against sequence of returns especially if it happens in the early part of retirement.

 

[RetiredHappy]

I want to move to 65/35 as that is where I would like to be long term, but think starting at 50/50 will provide a small measure of defense against sequence of returns especially if it happens in the early part of retirement.

Makes sense. We have gotten more aggressive the longer that we have been retired.

 

[imjustawarrior]

3) That the market (especially the US) is significantly overvalued currently

If you are 100% with the retirement calculators, do you think they ran the scenarios where the market is significantly overvalued? They have.

If things go south, just be flexible with your spending. If you want to make it work, then it will work.

 

[DreamingOfFI]

Thanks much for all the replies so far.

 

[pb4uski]

... I think my fears center around:

1) Health Insurance until 65, especially given the current ACA environment
2) The fact that very few of my colleagues of similar age are retiring
3) That the market (especially the US) is significantly overvalued currently

Am I overblowing those fears?

Thanks everyone in advance for your time.

I can understand the concern on ACA health insurance, but I think it should be ok for the next 7 years. I viewed the additional cost of private health insurance over my cost for my employer plan simply as part of the cost of freedom to do what I wanted. Since we were relatively healthy it was bankruptcy insurance as much as anything and gave us access to negotiated rates for health insurance services. Nonetheless, I was relieved when we became eligible for Medicare even though it cost more than our ACA plan but with much lower deductibles.

I had similar concerns when I resigned/retired at 56, but in some ways it was a badge of honor that I had planned better than many others.

I share your concern on the valuation of the market but it seems to just keep going up, but at 50/50 and over funded you should be fine.

Congratulations and enjoy, and welcome from behind the shadows of lurking.

 

[Koolau]

I agree that covering health care before MC eligible is the scariest part of Early Retirement. From what you have shared, I see no reason not to go for it as soon as possible.

Welcome to the Forum. Please keep us posted on your decisions.

 

[Cassius King]

Welcome. Appears you have everything worked out and considered. Get on with your retirement!

 

[pacergal]

Calculators all say you are good to go.

Have you answered these questions under the ER FAQ section:
Some Important Questions to Answer Before Asking - Can I Retire?

It appears you are set

 

[DreamingOfFI]

Calculators all say you are good to go.

Have you answered these questions under the ER FAQ section:
Some Important Questions to Answer Before Asking - Can I Retire?

It appears you are set

Yes, I gone through these questions and feel prepared. To eliminate some bigger 'lumpy' expenses we bought a new car in 2023, and put on a new roof in 2024. We tend to keep cars at least 13-14 years so that should be good for a while. We plan to keep the roof until the insurance company decides they no longer want to insure us with it . Obviously other expenses can crop up like a new furnace but I don't think that should break the bank.

It's a little difficult to project taxes far into the future. I know Boldin attempts to do that but there are too many unknowns.

 

[NeilDH]

I also back your deciding to FIRE anytime. Your portfolio is there, plus you have significant home equity that in the future can more or less fund long-term care expenses.

DW and I are two years in, in our mid-50s, with NW a little lower than yours, and the ACA situation now isn't helping, but our math (such as through FIREcalc) is still checking out.

 

[Surewhitey]

I agree with you on the ACA. This is a good time to experience the stress test of the possibilities of it's longevity. If it settles down, you'll be more than fine.

Even without, there will be options for 20 million people (or whatever it really is). We had 3 years pre-ACA and didn't have a problem with getting catastrophic coverage.

 

[stevenr]

I was in your situation 2.5 years ago (also at 58) when I decided to retire sooner than I had really planned, mostly due to my primary client who was becoming more and more demanding. I was really scared. This forum helped.

Like you, one of my main worries was how people my age would react to my early retirement call. I was even uncomfortable saying the word "retired" until about the last year or so, for fear of people's response. Most in my circle are invested in the Midwestern hard-core work ethic mindset. As expected there were a few "what are you going to do all day?!" remarks, but I just say "whatever the hell I want to."

And guess what? The bottom has not dropped out in my world! All that worry--for what?! I am having a ball! Retirement made me realize how much time I devoted to my work, and how I could never really enjoy a trip or day goofing off, since I was waiting for the next hair-on-fire email. These days, when I see a guy in the airport pacing the gate area and talking on his ear buds, or flipping out his laptop in the coffeshop or lobby bar I thank my lucky stars that I achieved escape velocity!

We have similar financial situations too. I am 65/35 give or take. I would recommend finding a good CFP who can confirm your plan and offer some tweaks. They can also reduce your worry and give you peace of mind.

 

[DreamingOfFI]

Thanks much for the additional replies. It's great to hear people in similar situations and how it has worked out.

 

[Cujet]

I think my fears center around:

1) Health Insurance until 65, especially given the current ACA environment
2) The fact that very few of my colleagues of similar age are retiring
3) That the market (especially the US) is significantly overvalued currently

Am I overblowing those fears?

I retired at age 60 in a situation much like yours. A bit less in savings, lower expenses too. It's been fine. I've been able to use ACA insurance. I have significant health issues (albeit inexpensive) so working longer was not a viable option. I also shared your concerns. Accept the expense. Cut elsewhere. I'll be cutting out the $15K/yr homeowners and reducing the $8K/yr auto.

1) So far ACA has been trouble free. I picked the cheapest plan/high deduct+out of pocket. Offsets the low premium. So far, I've not used it other than for labs. So the low premium saved me money. I expect the same for 2026. Future years may cost more.

2) None of my colleagues have retired. Doug, an ex boss worked without telling us about his terminal disease and died working. I tried gentle persuasion. He said that he did not know what else to do. Another guy, Ed is on his 4th heart attack, still working in his early 70's. Bob my late best friend collapsed and died heading to his girlfriends house at age 59. Had the money to retire and ignored heart probs. My point is, don't be that common guy saying you don't know what to do. You saved, they may not have. Activities you enjoy are not difficult to find. NOTE: I loved my aviation job. So much fun. Retirement is better.

3) We know the market is tough and oldsters may not have the time to wait a downturn out. That's why I invest half in CD's. Just an FYI, both Ameriprise and UBS screwed me over. Ameriprise made cash (non invested) money disappear in $15K increments. Lawsuit upcoming. Choose carefully, stay on top of it.

 

[Cujet]

The day I retired, the stress evaporated. It took me very little time to understand just how much better I felt. My old boss would call with questions/requests/accusations and the stress level went right back up. The contrast became clear as day. Then one day he sent me a text: "Chris, I need you to..... " and that was it. I blocked his phone number, and all the others, their spouses, and so on. No more stress. Just life as it should be.

I fly my airplane when I feel like it. I've had enough travel to last a lifetime. I work on long neglected house projects, drive my convertible sports car, and do the engineering projects I've always wanted to do.

 

[finnski1]

Thanks much for the additional replies. It's great to hear people in similar situations and how it has worked out.

You are very well prepared and ready. Enjoy it. Pepperell is a beautiful area. I grew up in central Massachusetts and snuck over the NH border 37 years ago.

 

[DreamingOfFI]

I'll be cutting out the $15K/yr homeowners and reducing the $8K/yr auto.

Thanks Cujet.

I'm curious, are the above insurance costs? These seem quite high for insurance.

 

[Cujet]

Thanks Cujet.

I'm curious, are the above insurance costs? These seem quite high for insurance.

Yes, insurance in South Florida has reached the absurd level. Just an FYI, right after I retired our F150 was totaled. My stupidly expensive Allstate car insurance paid half of the used replacement value. Put another way, I'm out another $12K despite paying no accident full coverage since 1990. New F150 Lariat, same trim same color was $66.5K.

One can 'self insure' vehicles in FL with sufficient funds in the bank. I would have been far better off doing this. 10 years of such premiums would cover the extent of my ins coverage.

My house is built to Dade County standards and is rated to 145MPH no damage. Yet hurricane insurance is still absurd. I can't stomach paying those premiums anymore.

Allstate also kept collecting 6 months of premiums on my totaled F150, was only willing to refund 1 month.

My house is well inland, so lower windstorm risk. Not zero due to embedded tornado's in hurricanes, but far lower than on the coastline.

 

[Koolau]

^^^^^^

Insurance companies do not like taking losses. When a "big" one comes along, they have to recoup those losses by jacking up rates. Our rates have gone crazy due to the Lahaina Maui fires - and we don't even live on that Island.

The insurance companies had a big loss "downtown" a few years ago because of poor fire management at an old (frame) condo. We're now paying for that here in our concrete egg-shell condo (plus we'll be paying $40 to $60K to retrofit sprinklers).

Insurance companies have begun saying "Take it or we're leaving it."

 

[Cujet]

Insurance companies do not like taking losses.

I get that, and it is obvious we've had some terrible national situations lately. However, I can't stomach paying exorbitant auto premiums for half coverage. It has become obvious to me that I'm financially better off self insuring.

It's not worth it to hire a lawyer to fight Allstate for $12K. They know it, I know it. But $8K full coverage premiums mean replacement value in all practical terms.

They won't get another dime from me.