Married 56 yo, debt free, pension, $1.7 mill saved.

[besa]

Hi All,

The internet is powerful. Glad you are here.

I retired from the military (E7) in 2003. I get around $1700 after taxes. I have a rental property, paid off, that rents for about $800 after fees.

Sorry this bounces around, my chrome mini laptop is tough to cut and paste.

Anyway...please read on...

I will take any and all advice on retirement etc. I was feeling mentally ready to retire 10 years ago when we paid off my 2 homes.

Since then I have been moving money into CD's and Bonds and have been virtually (jk) unharmed by the covid crash. To me this crash was a buyers market and I have been doing some shopping.

This might sound like bragging, but it is exactly how I believe things are going.

I offer this because I might be delusional and need a wake up call.

If I could get some feedback from the smart folks that read this you would pretty much make my year and maybe the rest of my life.

With this covid thing, I am feeling more and more ready to stop working for the man and start relaxing and doing exactly whatever I feel.

Sincerely,

Besa

 

[euro]

Welcome to the board! If you are asking whether you have enough to retire, then you need to provide more info on your expenses. Also, is the $800 from your rental free cashflow (net of ALL expenses)?
Regarding your plan for moving into equities now: proceed with caution! Obviously, the market is hyper volatile at the moment and while it is true that this may be a buying opportunity, it is also true that we might not even be close to bottom. You can dump all your cash into the market today, and tomorrow it could drop another 20%-30%. At this point it seems highly likely that we haven’t reached bottom. People still seem to vastly underestimate the seriousness of the Corona situation. I see the healthcare issues that lie ahead pale in comparison to the short/medium term economic impact.

 

[besa]

I was hoping for more than 1 reply after 132 views.

Did I word my question incorrectly or something?

Euro,

I make around $800 after I pay the property manager. The bills are probably around $3k per year, so the home gives me about $6k net. Some years more or less.

Nothing big yet, e.g. a new roof. This could run about $5k or so.

Regarding the stock market, I am betting it is going to begin to recover soon.

30% is a big loss. I didn't spend all my liquid cash for sure. I am DCA'g as it moves down. I try not to watch it too much as it causes stress.

 

[REWahoo]

besa, have you seen this? Some Important Questions to Answer Before Asking - Can I Retire?

 

[calmloki]

Welcome to the board! If you are asking whether you have enough to retire, then you need to provide more info on your expenses. Also, is the $800 from your rental free cashflow (net of ALL expenses)?
Regarding your plan for moving into equities now: proceed with caution! Obviously, the market is hyper volatile at the moment and while it is true that this may be a buying opportunity, it is also true that we might not even be close to bottom. You can dump all your cash into the market today, and tomorrow it could drop another 20%-30%. At this point it seems highly likely that we haven’t reached bottom. People still seem to vastly underestimate the seriousness of the Corona situation. I see the healthcare issues that lie ahead pale in comparison to the short/medium term economic impact.

Prime example here: had $$ sitting in Vanguard for months waiting for a buying opportunity. When the market dropped 5% below its 52 week high I bought. When it dropped 10% I bought twice as much. When it dropped 20% I bought 2.5 times the 10% number. Now it's 30% below the 52 week high. My gal is not real excited about us throwing more money at the market right this moment. I'm glad we bought , but can see buying for less is more attractive. How much less? Aye, therrrs the rub.

 

[Golfquest20]

Besa

I’m not certain I understand what feedback you seek, exactly. I can confirm that I’m approaching the market slide same as you. I began DCA once the correction passed 20% and twice since as it continued to fall. I’ve never been out of the market, but I always maintain a decent cash position for precisely these situations. I’m not certain I agree with you that a 30% correction is about as low as it will go. My hunch is we haven’t reached the bottom, way too much uncertainty still exists. That doesn’t concern me though, as I didn’t bail on stocks during the slide. With your passive income and pension you aren’t relying on your savings exclusively so that’s a bonus. As Euro said, if you require more precise feedback you may want to provide more details around anticipated annual expenses, S.S. etc. Welcome

 

[besa]

Appreciate the feedback.

If retirement with gobs of cash was easy, everyone would do it.

Never intended to come here and ask such a question, but the...read first...post said to do it.

So I thought cool....

We here have a better chance to make it to the end with the right numbers.

Yay for that.

 

[besa]

besa, have you seen this? Some Important Questions to Answer Before Asking - Can I Retire?

Thanks!

 

[cnocmmz]

Appreciate the feedback.

If retirement with gobs of cash was easy, everyone would do it.

Never intended to come here and ask such a question, but the...read first...post said to do it.

So I thought cool....

We here have a better chance to make it to the end with the right numbers.

Yay for that.

First and foremost, thank you for your service...Navy E7?

Chief you have asked for input; however, you have left out a lot of details for folks to give you any real detailed recommendations.
For instance:
-Married..Does spouse work? If so, if one of you passed could the other maintain living conditions?
-Total guaranteed income coming in the house?
-What are your output, i.e. Bills etc?
-How much do you intend to spend annually for living expenses and then of course the Fluff (emergency fund for roof, AC etc).
-Lastly, have you run your number through FireCalc?
I commend you on your prudent savings of 1.8M, impressive indeed.
I retired in 04 from the Navy as a CMC, and I hope to retire this year sometime at age 60.
All the best

 

[besa]

Air Force E7.

I love all services. They all are amazing in there own way.

I have answers to all of your questions, but Id rather keep details to myself.

I was fishing for those type of questions, not to answer them here, but to answer them in my life.

Love this site and thanks for the help.

 

[Rianne]

I get around $1700 after taxes. I have a rental property, paid off, that rents for about $800 after fees.

Since then I have been moving money into CD's and Bonds and have been virtually (jk) unharmed by the covid crash. To me this crash was a buyers market and I have been doing some shopping.

I'm no financial genius, actually, most of my recent knowledge I got here.
-I understand you have $1.7m in cash and CD's and bonds now.
-Income is ~$2500K per month
-You're looking for investment ideas


Hold your horses. Two forums come to mind. 2020 Investment Performance and Bonds. The first is helpful b/c we went from riches to rags in 3 months. This forum will take you through a blend of what to do with too much $$ to what to do when the sky is falling.


Also, go to firecalc.com. Most of us use this calculator. I've been putting worse case scenario in there. For instance, if we're left with our CD's, I bond and cash ~$300K. Like the index funds are completely gone. Then, I put a negative in the Crystal Ball scenario. I do "off the wall" scenarios...$500K losses (ha, not so off the wall). You have to read and educate yourself and this forum is a great place.

-Observe how many years some of our posters have been here.
-Observe the many ups and downs they've been through and how they handled it. Some posters here since 1999 and the mods.

-There is no limit to the research and discussion in this forum.
-If you want answers, take the time and research here. Many articles, opinions, experience...it's all here.

 

[besa]

I'm no financial genius, actually, most of my recent knowledge I got here.
-I understand you have $1.7m in cash and CD's and bonds now.
-Income is ~$2500K per month
-You're looking for investment ideas


Hold your horses. Two forums come to mind. 2020 Investment Performance and Bonds. The first is helpful b/c we went from riches to rags in 3 months. This forum will take you through a blend of what to do with too much $$ to what to do when the sky is falling.


Also, go to firecalc.com. Most of us use this calculator. I've been putting worse case scenario in there. For instance, if we're left with our CD's, I bond and cash ~$300K. Like the index funds are completely gone. Then, I put a negative in the Crystal Ball scenario. I do "off the wall" scenarios...$500K losses (ha, not so off the wall). You have to read and educate yourself and this forum is a great place.

-Observe how many years some of our posters have been here.
-Observe the many ups and downs they've been through and how they handled it. Some posters here since 1999 and the mods.

-There is no limit to the research and discussion in this forum.
-If you want answers, take the time and research here. Many articles, opinions, experience...it's all here.

Thanks. Thanks. Thanks.

I have made some major mistakes with our nest egg over the years, the biggest one was blindly relying on a financial advisor. He was fired about 10 years ago. Long sad story.

Now I handle everything myself. Moving stuff when I need to. Greedy when others are fearful etc.

That being said, I am looking forward to learning all i can from folks like you to the point where I can offer insight based on smart/routine money moves.

Love love love.

 

[mckittri2000]

All depends on your expenses. Since you are retired military then you have your health insurance through them. No mortgages and 2500/month income with 1.7 mil saved. It is time to pull the plug and enjoy life while you can.

 

[WyomingLife]

All depends on your expenses. Since you are retired military then you have your health insurance through them. No mortgages and 2500/month income with 1.7 mil saved. It is time to pull the plug and enjoy life while you can.

I haven't studied this thread.

That said, it doesn't look like OP has posted his/her expenses, aside from the rental.

 

[besa]

I haven't studied this thread.

That said, it doesn't look like OP has posted his/her expenses, aside from the rental.

Normal annual expenses are <$20.

I lost around $15k in the covid crash.

I have since moved about $100k into stock market/stock market indexes.

The remaining $1.6 M is in cds, annuities, and money market.

Thanks for any help.

 

[pb4uski]

So your normal annual expenses are ~$20k/yr. That sounds really low... especially for 2.

And your income from your military pension and your investment property is ~$30k/yr. And you have $1.7m, mostly in cash, CDs, annuities and MM.

What is your intentions for the $1.7m? Any heirs? Charities that are near and dear to your heart?

You're probably not spending enough.

 

[besa]

So your normal annual expenses are ~$20k/yr. That sounds really low... especially for 2.

And your income from your military pension and your investment property is ~$30k/yr. And you have $1.7m, mostly in cash, CDs, annuities and MM.

What is your intentions for the $1.7m? Any heirs? Charities that are near and dear to your heart?

You're probably not spending enough.

My estimated~$20k/year is might be low. Got it.

I haven't properly assessed my expenses. That is valid.

My question is: What could my expenses be and still retire?

I can start SS at 62. I can get to my 401k IRA, up to $100k now penalty free early due to covid.

I can take 10% per year from my annuities about that are~$300k.

What is my "max expenses" number per year.

My Wells Fargo guy ran my numbers about 5 years ago (more conservatively at about $1.4 M) and said I could get to 92 years old spending ~$4k/month.

Every calculator I have ever ran says I am good.

Just want to make sure I am not crazy thinking I can retire with what we have.

I think many here can relate to this. When I got to this level of perceived financial independence, getting up and going to work for the "man" is more and more difficult.

I am sure I am not a favorite worker either, because I tend to be a bit more opinionated because of my perception/reality.

 

[REWahoo]

What is my "max expenses" number per year.

If you input your numbers into FIRECalc you can see what history says you could have spent per year without running out of money for X years. That's what I would use to try to answer your question.

 

[pb4uski]

+1 Plug your situation into FIRECalc... then use the Investigate tab to solve for annual spending at a 95% level of confidence.... I'm guessing that it is ~$90k without SS.

Little doubt that you have enough from what you have written unless you are totally offbase on your spending.

Next question is whether you have enough where you can get penalty-free access until you are 59 1/2.

 

[besa]

+1 Plug your situation into FIRECalc... then use the Investigate tab to solve for annual spending at a 95% level of confidence.... I'm guessing that it is ~$90k without SS.

Little doubt that you have enough from what you have written unless you are totally offbase on your spending.

Next question is whether you have enough where you can get penalty-free access until you are 59 1/2.

Thanks. This is such a better topic than addiction or covid.

 

[Time2]

You said,

"$1.6 M is in CDs, annuities, and money market."
So you have very little in the stock market.
Do you plan to leave it that way?
If you use FireCalc, you will need to change the asset allocation.
I think Fircalc starts with an assumption of 75% stock allocation.
You haven't given clear numbers.
You need to fix the numbers I guessed at below.

Military pension-$20,400 ?

Rental income- $ 6,000 ?

Annuity income- $30,000 ?
4% of 1.6M = $64,000 ?

Maybe be conservative (less that 4%) since you don't own stocks

SS later ? $xx.000

 

[pacificlou]

Time to Buy

I've been investing since 1975, been very fortunate to retire at 55 with enough income to live very nice. I read a book by Warren Buffet many years ago and he mentioned that you really don't need a FP (financial Planner) to invest YOUR money, when they make you money they make money when you lose money they make money, for the most part they always come out ahead, at least from what I've seen over 50 years.
Warren says always invest in markets that have billions in assets, always invest in funds that have a positive 10 year running, 8-10 years is good, always remember that if it sounds too good it's a high risk and you loose.
Look to see where these funds put their money in, Banks, Bonds and Oil, etc... No one can predict what the future may bring, if they could they would be selling life Insurance. Remember death and taxes are certain.
If your young enough continue working, having good health helps. I worked after I retired and it's nice to tell someone to F off if I wanted to anytime. Before I threw in the towel I was making $250K which included my IRA's, annuity and SS, I was 67 when I decided to work but after paying $50K+ in taxes I resigned, enough was enough.
Good Luck in whatever you choose, if your married keep your wife up to date and make sure you have a Living Trust to insure no probates.

 

[ckelly78z]

If you have been married for 56 years, what age are you ? You should be eligible for the maximum SS, and pension amounts, along with your sizable nest egg (even without the help of thieving FAs), I don't see a problem, unless you don't want to retire.

 

[pb4uski]

If you have been married for 56 years, what age are you ? ...

You misinterpreted... he said Married 56 yo...

 

[besa]

I've been investing since 1975, been very fortunate to retire at 55 with enough income to live very nice. I read a book by Warren Buffet many years ago and he mentioned that you really don't need a FP (financial Planner) to invest YOUR money, when they make you money they make money when you lose money they make money, for the most part they always come out ahead, at least from what I've seen over 50 years.
Warren says always invest in markets that have billions in assets, always invest in funds that have a positive 10 year running, 8-10 years is good, always remember that if it sounds too good it's a high risk and you loose.
Look to see where these funds put their money in, Banks, Bonds and Oil, etc... No one can predict what the future may bring, if they could they would be selling life Insurance. Remember death and taxes are certain.
If your young enough continue working, having good health helps. I worked after I retired and it's nice to tell someone to F off if I wanted to anytime. Before I threw in the towel I was making $250K which included my IRA's, annuity and SS, I was 67 when I decided to work but after paying $50K+ in taxes I resigned, enough was enough.
Good Luck in whatever you choose, if your married keep your wife up to date and make sure you have a Living Trust to insure no probates.

We need a living trust. Thanks for the insightful reminder. Otherwise, everyone that posted pretty much said we are FIRE ready.

My problem now is:

1: getting the wife on board with retiring and....

2: feeling guilty for retiring right after I go back to work after getting 1 months free salary while staying home.

The FIRE calculator had me accumulating $26 mill. if I went 75% stocks. I don't need all that risk and stress. I need to play with it some more to get a better feel. I like how it does all those variable runs.

My wife's problem is she can't get her head around the fact that eventually we need to retire.

Since we both have decent jobs, she considers us blessed to be working.

My argument is our physical and mental health.

My job gets me up at midnight periodically and has me routinely driving on a very dangerous stretch of road for about 30 miles. Plus the stress of the job and the politics.

Her job is mostly working mid shift and office politics.

This covid quarantine has shown me i am pretty good at filling a day with activity. Some of my activities are worth while (cleaning the house), while others are more selfish (binge watching reality TV series etc).

Thanks for the insight and finance therapy. Great stuff!!