OK what would u do?

[gwraigty]

Curious what you would suggest re converting some to produce income.

And FWIW, it’s *very* easy to spend that in a HCOL area without being able to jet off to Tahiti in business class every month! A nice, fairly recently purchased house could be costing 20-30k per yr in property taxes alone. One of the reasons I really enjoy this forum is because we have such a diversity of posters here. It helps me understand where we are outliers and forces me to think about the opportunity cost for lifestyle choices we’re making. I think my favorite thread is the annual budget one, for exactly that reason.

Some great options were given in post #12 to produce income. Mutual funds/ETF's that are skewed towards income production vs. growth are also an option.

As to your second point, OP did mention in post #4 that he plans to move to a LCOL area, so the rate of spend should decrease afterwards.

 

[24601NoMore]

And FWIW, it’s *very* easy to spend that in a HCOL area without being able to jet off to Tahiti in business class every month! A nice, fairly recently purchased house could be costing 20-30k per yr in property taxes alone. One of the reasons I really enjoy this forum is because we have such a diversity of posters here. It helps me understand where we are outliers and forces me to think about the opportunity cost for lifestyle choices we’re making. I think my favorite thread is the annual budget one, for exactly that reason.

OK..so that's $20-30K. Where's the other $270-280K going?

If OP would post some budgetary #s, I'm sure we can find at least 20-30% that he could cut..especially given his tagline about real wealth being what you can do without..

Getting even 4% on $8M gets a $320K annual income flow. There are a lot of preferred stocks, individual bonds, heck - even non-preferred stocks that kick off a 4%+ yield. Even brokered CDs can still be had for ~3%. So, cut the spend to $240K, put it all in FDIC or NCUA insured CDs and go fishing with ZERO worries about what the market is going to do. QED.

 

[tb001]

Some great options were given in post #12 to produce income. Mutual funds/ETF's that are skewed towards income production vs. growth are also an option.

As to your second point, OP did mention in post #4 that he plans to move to a LCOL area, so the rate of spend should decrease afterwards.

Yeah. If I’m remembering correctly, his housing in that LCOL area is pretty fat. A big house can suck up a LOT of money every year in maintenance etc... Ask me how I know

Ultimately it’s a question of priorities and personalities. For me, it wouldn’t be worth it. I have so many things I’d rather spend my time doing. My DH would jump at the work.

 

[pacergal]

OP--What I would do:
Sell house, pocket the 1.5 mil
Move to LCOL area
Review budget with spouse, be on the same page regarding spending
Review AA to make sure investments were where i could sleep no matter what the markets are doing--I recently went from about 70/30 to closer to 50/50.
I think you have enough, however you and DW need to feel that way too.
I would only go back to work if it is something you really WANT to do.

Come back and let us know your decision!

 

[tb001]

OK..so that's $20-30K. Where's the other $270-280K going?

Just some hypotheticals... You can get to 300k pretty quick with a nice house, two nice cars, a couple of nice vacations and dining out twice a week. Add in a mortgage, because why wouldn't you take $ at 4%. Even in a LCOL area, that nice house can be $ to maintain. I would bet this isn't too far off the OPs budget.

Mortgage 40
Property taxes 30
Insurance 6
House fund 20
Pool maintenance 2
Housekeepers 8
Gardeners 8
Utilities 5
Medical insurance 30
Autos 17
Travel 25
Taxes 30
Kids 20
Food 16
Restaurants 15
Cell 2
Pest service 2
Gym 2
Water 10
Clothes 6
Gifts 4
Personal upkeep 2

 

[karen1972]

Some great options were given in post #12 to produce income. Mutual funds/ETF's that are skewed towards income production vs. growth are also an option.

As to your second point, OP did mention in post #4 that he plans to move to a LCOL area, so the rate of spend should decrease afterwards.

Except it sounded like the house was already paid off, so not sure the LCOL buys the OP anything.

My only concern would be moving to a LCOL, not sure how established they are there and what their entertainment needs may be and how the other half is spending the money or plans to. It could actually end up costing one more to live there if one is bored. Easy to blow a lot of money remodeling a house or starting new hobbies to not be bored.

It seems like a talk with the other half is in order and get on the same page. If the job is something you enjoy and it provides you peace of mind, go back, nothing wrong with it, plenty of OMYer on here. But if you hated it, then I think you just need to evaluate how rationale the fear is, is this a knee jerk reaction or something that really is of concern because at the end of the day, you do have $8M so you're not going broke, but only you can decide how much buffer your family is willing to live with that doesn't infringe too much into your lifestyle.

I personally found it hard to judge exactly how much the lifestyle would change once we retired and the perks you give up. Most of my personal travel was on miles and points that I got thru work travel, etc. We were always taken out by vendors, if I wanted to go to a professional sports game, there was almost always a free box seat, plus of course the lavish vacations (I mean sales conferences). I actually found the perks a little harder to give up than the salary.

 

[24601NoMore]

If OP has a mortgage, that's one of the FIRST things I'd eliminate with an $8M nest egg..the interest expense is an immediate and obvious savings.

Also - if he is ER'd, there are a lot of potential areas of savings in the sample budget posted (eg: Housekeeper @ $8K, Gardener @ $8K..). And $31K/year in food? I thought our food budget was high at sub $10K..

Real #s from OP would be helpful..I'm sure there are areas that could be trimmed to get closer to $200-240K..and then, 3% insured CDs on the $8M gets him free and clear with zero market risk.

 

[tb001]

If OP has a mortgage, that's one of the FIRST things I'd eliminate with an $8M nest egg..the interest expense is an immediate and obvious savings.

Also - if he is ER'd, there are a lot of potential areas of savings in the sample budget posted (eg: Housekeeper @ $8K, Gardener @ $8K..). And $31K/year in food? I thought our food budget was high at sub $10K..

Real #s from OP would be helpful..I'm sure there are areas that could be trimmed to get closer to $200-240K..and then, 3% insured CDs on the $8M gets him free and clear with zero market risk.

I would argue with that nest egg you should keep the mortgage for as long as possible. You don't have the risk of not being able to pay it off and you should be able to make more in the mkt, especially when you consider it's not subject to inflation.

Eating out 2x/wk at a decent restaurant can easily hit $150 per dinner if you have a drink or 2. And then shopping organic, eating lots fish, etc... can easily boost your food budget.

Totally agree lots of places to save, so not taking issue with your post at all, but my guess would be that they've gotten used to a certain level of lifestyle and neither he nor his wife want to go back to cleaning toilets and mowing their own lawn.

I would kill for a sub 10k food budget. We have a family of 4 and live in a HCOL area and despite trying, can't seem to get there. A quart of milk is close to $5!

 

[Mdlerth]

Next stop: the Blow That Dough thread

I am happily retired (age next week 63). The last thing I really wanted was to suit up and join the game. But.....the recent market drop cost be a few years of WD's. No worries a drop for me is around $400K!!!. So, Ive started takin the calls and am 50/50 on whether I should re-enter the race at 63!!. Still have about $8MM in eggs but will absolutely spend $300K annually (shoot me now!). Offer is for about a 2 year commitment for what looks like $3MM. Admittedly don't need this but I got 2 years till the magic 65.....ugh....I love this forum and don't judge just slap me and say get over it!!! This forum is full of honest feedback so give me your thoughts.

This is NOT a criticism: The game is already won, and you are merely running up the score.

Here's why it's not a criticism: I would do the same thing. I could do an awful lot of damage with an extra 3 million bucks.

 

[Rianne]

See Here

 

[gwraigty]

If OP has a mortgage, that's one of the FIRST things I'd eliminate with an $8M nest egg..the interest expense is an immediate and obvious savings.

Also - if he is ER'd, there are a lot of potential areas of savings in the sample budget posted (eg: Housekeeper @ $8K, Gardener @ $8K..). And $31K/year in food? I thought our food budget was high at sub $10K..

Real #s from OP would be helpful..I'm sure there are areas that could be trimmed to get closer to $200-240K..and then, 3% insured CDs on the $8M gets him free and clear with zero market risk.

Yes. I don't understand how that sample budget would be realistic in a LCOL area. $40K/yr mortgage? I just saw a listing on Zillow for a $575K house, 5/3, 3122 sq. ft., estimated mortgage of $2258/mo., property tax of $10045/yr. in a well-to-do community about 15 miles from where I live. That's high-end for this LCOL area.

Prices vary widely in the area on both existing homes and new construction, from $150K to $300+K. In some cases, the same builder will have the same model with a price variance of $100K, depending on what side of a border it's on.

We have no mortgage. Zillow estimates a mortgage on our house to be $724/mo. Our property taxes are $2667/yr. About 1900 sq. ft., more than enough for our household of 4.

Insurance for our house, 2 cars (we buy new), umbrella, is about $1300/yr.

No way do our utilities (including water) come close to $5K/yr.

Raising 2 kids hasn't cost us $20K/yr., even in years when there were significant medical expenses due to a couple of surgeries.

$15K/year in restaurants, eating out twice a week, would mean over $144 spent per meal. For how many people? Eating out is discretionary anyway.

Groceries are our biggest annual expense and don't come close to the sample budget figure for food.

$2K/yr. for cell service. Really?

 

[Cut-Throat]

A quart of milk is close to $5!

I'm guessing you meant a Half Gallon.

 

[24601NoMore]

I would argue with that nest egg you should keep the mortgage for as long as possible. You don't have the risk of not being able to pay it off and you should be able to make more in the mkt, especially when you consider it's not subject to inflation.

Paying off the mortgage is a guaranteed rate of return, and has the added benefit of lowering that $300K annual spend - if nothing else, it eliminates the interest expense being payed monthly along with any principal reduction.

Investing in the market as we all know does not have a guaranteed rate of return, and has in some cases resulted in a net loss for periods exceeding ten years. At 63, the OP may or may not have 10 years to recover from a nasty and prolonged market drop. Of course, the market may continue to go up - but given the very long bull run we've had, I'm not counting on it.

You can guess the status of my mortgage ..

 

[MichaelB]

It may be a bit late for OP to expect spouse to change spendings habits, especially if they’ve been married for a couple of decades. If their budget makes sense to them, it really doesn’t matter how much other couples spend.

It makes sense to try. If OP can convey his need to retire and show how that benefits them both, that might help his case. From the first post, it sounds like the OP himself is on the fence; in that case, my guess would be the prevailing view will be the option of the additional two years.

 

[GravitySucks]

OPs WR is less than 4%. He'll probably get SS in 10 years dropping it close to 3.5%. He's over 60 yrs old. He's got some equity in the house he's planning on tapping.

And most are saying he should cut expenses!

Suspenders, belt, and duct taping the pants into your hips.

You're fine OP, but take the gig and pay some more into SS please.

 

[bobandsherry]

See Here

Like what ya did there.

 

[bobandsherry]

I've learned a new word. Thanks.





To the OP - You should go back to work. You do not belong in ER world. Work, work, work, and have fun, fun, fun in what you do. If you find the answer to ER life, come back here and post. Until then, your post is really a strange one to my taste. These are the things I find to be strange even to a point of suspecting you are a troll or see Cut-Throat's post above.

• 2018 market drop was preceded by strong market years. The gain in those years should have been more than enough to offset 2018 drop even with your spending splurge of $300k/year.
• Can't make a living on $8M.
• Must spend $300k/year when you are worried about market drop and considering going back. Most would look at cutting their budget first.

Work, work, work, you go.

Agree with ya 100%[emoji3]

 

[haha]

I would not go back to work to support my spouse's spending habit. I would start discussing the mechanics of retirement with her to see if we could get on the same page about spending. Going back to work if you cannot agree would not be my choice.

Your work sounds interesting and good for the ego. If I were in good health and I thought I would enjoy the work, I would do it, but only with an agreement with the spouse about a reasonable level of spending.

Really, a married person has no alternative to doing whatever a non-earning spouse wants. Better to lose a bit year after year than to lose an unpredictable but generally large amount right away in a divorce action.

Ha

 

[Winemaker]

I'm guessing you meant a Half Gallon.

I paid $4.55 for a gallon of 1% milk in a Pittsburgh PA suburb yesterday.

 

[jkern]

If I was going to enjoy or semi-enjoy those two years, I would do it for $3M even though I had $8M. If I was going to hate it, NO WAY!

 

[gwraigty]

I am happily retired (age next week 63). The last thing I really wanted was to suit up and join the game. But.....the recent market drop cost be a few years of WD's. No worries a drop for me is around $400K!!!. So, Ive started takin the calls and am 50/50 on whether I should re-enter the race at 63!!. Still have about $8MM in eggs but will absolutely spend $300K annually (shoot me now!). Offer is for about a 2 year commitment for what looks like $3MM. Admittedly don't need this but I got 2 years till the magic 65.....ugh....I love this forum and don't judge just slap me and say get over it!!! This forum is full of honest feedback so give me your thoughts.

OPs WR is less than 4%. He'll probably get SS in 10 years dropping it close to 3.5%. He's over 60 yrs old. He's got some equity in the house he's planning on tapping.

And most are saying he should cut expenses!

Suspenders, belt, and duct taping the pants into your hips.

You're fine OP, but take the gig and pay some more into SS please.

The bolded parts of the OP make it appear that the OP really doesn't want to go back to work, but the $300K spending combined with the recent market drop makes him feel like he has to. Hence, the valid suggestions to cut expenses and invest less for growth and more for current income.

 

[dunkelblau]

If I could pad my stash by 20% for OMY on a job that doesn't hurt my health, and I had no other pressing obligations on my time, I would take the OMY. One might argue that ER could be detrimental to health if worrying about the stock market would cause more stress than a OMY.

 

[bobandsherry]

I paid $4.55 for a gallon of 1% milk in a Pittsburgh PA suburb yesterday.

$3.23 at Sam's Club for 2% gallon yesterday. Up from $2.49 about 4 months ago. [emoji41]

 

[FANOFJESUS]

I would not go back. You are fine. I think you will be surprised as you age you might spend a lot less. It happens to a lot of people. Regardless of what they are spending.

 

[pb4uski]

I paid $4.55 for a gallon of 1% milk in a Pittsburgh PA suburb yesterday.

Find an Aldi's... yesterday I paid $1.48 for a gallon of 1% milk.