I ultimately want to retire early. I am 41 years old. I probably need to work another 7 to 13 years.
I have a lot of anxiety about losing my job (and not being able to find another one), becoming disabled or having some other financial setback and not being able to meet my minimum expenses. I am single, so I do not have anyone else to rely on if I have an employment loss or other setback. I do have an emergency fund and I have some form of group-based long term disability insurance.
I have a fairly modest single residence home that is mortgage free. Using a safe withdrawal rate of 4% for my current retirement savings, I would have about a $16,000 withdrawal rate annually. My property tax, property insurance, utilities (electric, gas for heating, cable, internet, landline, water, sewer, garbage pickup, cell phone) will end up costing about $13,000. I will have a small defined pension benefit of about $12,000 (which was COLAed, but the state removed the COLA, and that is currrently the subject of a class action legal appeal) that will start 20 years from now and I will will be eligible for social security (if it still exists) in a reduced amount in about 20 years.
I know that the $13,000 annual expense does not account for food, car insurance and maintenance, car gas, entertainment, clothes, home repairs, health insurance, vacation or hobby expenses.
I am just trying to figure out how I can get some sense of security from knowing that at least my most basic needs will be covered if I loss my job (and am not able to find another one), become disabled or have some other financial setback and not being able to meet my minimum expenses. If I had a real sense that, even if everything went bad with work, the economy, my investment rate of return, etc., I could still have most basic needs covered, then I think some of this anxiety would go away and I would then be more productive, effective and optimistic.
How have others gained a sense of security from knowing that their savings/investments toward early retirement, while not complete, still have created a psychological advantage for them?
Thank you for your advice.
I have a lot of anxiety about losing my job (and not being able to find another one), becoming disabled or having some other financial setback and not being able to meet my minimum expenses. I am single, so I do not have anyone else to rely on if I have an employment loss or other setback. I do have an emergency fund and I have some form of group-based long term disability insurance.
I have a fairly modest single residence home that is mortgage free. Using a safe withdrawal rate of 4% for my current retirement savings, I would have about a $16,000 withdrawal rate annually. My property tax, property insurance, utilities (electric, gas for heating, cable, internet, landline, water, sewer, garbage pickup, cell phone) will end up costing about $13,000. I will have a small defined pension benefit of about $12,000 (which was COLAed, but the state removed the COLA, and that is currrently the subject of a class action legal appeal) that will start 20 years from now and I will will be eligible for social security (if it still exists) in a reduced amount in about 20 years.
I know that the $13,000 annual expense does not account for food, car insurance and maintenance, car gas, entertainment, clothes, home repairs, health insurance, vacation or hobby expenses.
I am just trying to figure out how I can get some sense of security from knowing that at least my most basic needs will be covered if I loss my job (and am not able to find another one), become disabled or have some other financial setback and not being able to meet my minimum expenses. If I had a real sense that, even if everything went bad with work, the economy, my investment rate of return, etc., I could still have most basic needs covered, then I think some of this anxiety would go away and I would then be more productive, effective and optimistic.
How have others gained a sense of security from knowing that their savings/investments toward early retirement, while not complete, still have created a psychological advantage for them?
Thank you for your advice.