One year into RE, only 34 more to go.

[Graysand]

Finally saying hello....RE'd over a year ago. Found I was growing old in a young persons' profession. Tried my time in management years ago but found it did not resonate with my desires, and went back to the technical track at MegaCorp. Finally, at 60, and with health issues, realized I couldn't keep up with the kiddy-coders any more. Zero chance of a package from Megacorp, and of course zero pension, but nevertheless one day just had to chuck it.

Spent next three months waking in cold sweats thinking "what on earth have I done", but the firecalc numbers keep showing we're gonna make it, especially after SS kicks in...

The fun part has been managing income for ACA. We live in an expanded-medicare state, so gotta demonstrate realized capital gains of above 138%FPL another 3.5 years until Medicare can kick in. Health-care hasn't been bad (so far), pretty much every doc in this state is in-network, and since I can show an ACA-income of only 23K, premiums and deductible are tiny-ish. Surprisingly, our 2020 premiums are only 42% of what they were for 2019, with same deduct/max-oop! Yay Obamacare?

Our needs are modest, our entertainment/travel desire is small, so, at over a year in, our annual spend turns out to be a few thousand less than original estimates. Our primary fun is driving the Mini at speed through the twisty roads and northern mountains of New England, so next year we'll blow that extra cash on some longer runs with the Mini club

(AA 50/40/10, 3.07% WR,
enough cash to avoid SORR until SSA if we have to...)

 

[Retireby45ish]

Good for you! It seems like it would be a challenge (I haven’t walked it yet) to feel ok with that the numbers tell you that you will be OK without working! Society has us all conditioned to work and save. But once you have enough of an egg you can stop and enjoy!

How are you managing the ACA income and only showing 23k while also having enough to live on (I assume in New England it would have to be more than 23k/yr).

 

[Graysand]

@Retireby45ish We're living off of our stash-o-cash, and I only sell enough stocks from my taxable account to demonstrate 23K capital gains. Depending on what I sell, that can yield like an additional 40-50 in cash proceeds, but they only care about the 1099B gains.

I had planned to not sell anything until necessary, but with ACA if we don't show 148%FPL income, then we don't get insurance at all.... Crazy requirement.

 

[Mdlerth]

Transitioning to RE would be easier if I were a Vulcan

Spent next three months waking in cold sweats thinking "what on earth have I done"

Three months, you say? I'm only three days in and I'm already having those nightmares. I had not expected to, despite having read similar accounts here for years.

"It won't happen to me. I'm increasingly bored at w*rk, I have clear plans for what I want to do once I have the time, and DW is still empl*yed (she just bought her retirement car in December and is paying it off before she clocks out). There's no logical reason to fear anything." And after all, we engineers are trained to think logically.

But logical reasoning addresses only half of our human brains; the other half runs on feelings and randomness. That emotional half seizes control when I'm trying to sleep. I sure hope it doesn't last for three more months.

 

[Mountain skier]

Graysand, would be kind enough list your nest egg and yearly expenses. I derive a great education from folks who share this info...it helps me gear up to pull the retirement trigger myself. I am 59 and hoping to retire in 5 months.

 

[pb4uski]

@Retireby45ish We're living off of our stash-o-cash, and I only sell enough stocks from my taxable account to demonstrate 23K capital gains. Depending on what I sell, that can yield like an additional 40-50 in cash proceeds, but they only care about the 1099B gains.

I had planned to not sell anything until necessary, but with ACA if we don't show 148%FPL income, then we don't get insurance at all.... Crazy requirement.

You might want to look and see how your subsidy changes if you generate more gains since from a tax perspective your tax on the gain will be zero vs potentially 15% later... so if you can realize more gains at a negligible cost in terms of subsidy then it might be worthwile to realize the gains and reinvest the proceeds in the same ticker.... you'll have reset your basis at a negligible cost. Not sure if it works for you but it might be worth a little noodling.

 

[erikg08]

How'd you come up with 34 more to go? I plan to be FI at 45 but I'll probably keep working if it's still enjoyable. Hopefully my FI years go at least as long as my working years. I'd be angry to FIRE just to die soon after.

 

[flybynight]

I'm only 3 months into retirement and surprisingly the transition has been easier than I expected and I've not really stressed over the numbers at all. I guess this just confirms that I was more than ready to jettison all of the stress and travel. I'll tell you one great feeling...I had the best New Years eve and day ever! New Years day had always been not great for me. I would lay comatose on the couch watching football, dreading the return to the grind...even though I did not hate my job. Well this year was great. Totally enjoyed the day and DW and I took off for a nice long weekend vacation on Thursday. Awesome!!

 

[JoeWras]

I'm 16 months in and getting comfortable.

I found the first few months surprisingly difficult, partly because I had to clean up some administrative stuff with M.C. that I didn't expect, and partly because it is quite a change.

Saw an old co-w*rker last night at an entertainment event and he convinced me I made the right choice!

I know some people wake up the next day and are 100% into the transition. I thought I'd be one of those. Not so. It takes time. I'm still adjusting, although not as much as the first 6 months.

 

[imoldernu]

Fun to read. @ age 60, I also looked at 34 years to go...
Now, 31 years into RE, at age 84... the 94 age goal looks doable.

Can't speak to the money part, except that we never had a lot, and feel safe for the next 10 years.

All those planning options worked out perfectly.... taking SS @ 62, Using up our IRA's during the no salary years, stashing our nest egg in 30 year IBonds, paying for healthcare 'til medicare kicked in and all of the tax planning, so we didn't have to pay taxes, and the hundred or so spending plans, for home, autos, travel and fun.

Worry? Yeah... but never enough to spoil a great retirement.

The New England experience hits another happy point. All of New England, From Madawaska Me., to Connecticut.... and then 15 years of camping, canoeing, snowmobiling and exploring the Adirondak Forest and Chain iof Lakes.... with jeanie, and when possible, with our four sons.

So, now quite a bit slower, in our retirement community, but extremely happy and thankful. We do, go, spend, and enjoy anything that comes our way.

 

[Graysand]

How'd you come up with 34 more to go?

I ran Firecalc out to 95, and jumped ship at 60, now 61, so... hoping for 34 more years

 

[Graysand]

You might want to look and see how your subsidy changes if you generate more gains since from a tax perspective your tax on the gain will be zero vs potentially 15% later... so if you can realize more gains at a negligible cost in terms of subsidy then it might be worthwile to realize the gains and reinvest the proceeds in the same ticker.... you'll have reset your basis at a negligible cost. Not sure if it works for you but it might be worth a little noodling.

Thx for suggestion, will have to dig really deep into spreadsheets to figure this one out in coming years! The independent insurance policies I've found equiv to what we currently have seem to run around $18K-$22K / year. That's a lot more than I'm reaping off dividends (only getting around $4K/yr)

In terms of ACA, since we're officially 'poor', the gov't takes pity on us, and our 2020 policy (self+DW) is $79/month premium, $600 deduct, max OOP $1200, so we're all-in for around $2K max. Thanks Obama lol! And many thanks to all those still working and paying my subsidy!

 

[retiredtuna1]

I retired at 58 from a high pressure stress inducing job at 58. I then worked part time in property management and online teaching until last October when I turned 65. Until then, I had kept a full schedule of activities, including the kind that don't generate an income. I am finding it hard to slow down; to do less. I am getting there, but it has not happened overnight.

 

[Graysand]

Three months, you say? I'm only three days in and I'm already having those nightmares. I had not expected to, despite having read similar accounts here for years.

Good luck and enjoy!

Interesting story re how my panic subsided: For me, eventually DW grabbed a big whiteboard and mapped out a 5 year plan for our cash reserves, expenses, healthcare costs, and listed which taxable accounts or IRAs we'd eventually dip into until SSA. She jotted it all down with big arrows and green and red markers while I sat watching and whimpering and drinking....when she was all done, we transferred it to a spreadsheet, and I was finally able to dust myself off and begin enjoying the freedom.

 

[Graysand]

Graysand, would be kind enough list your nest egg and yearly expenses. I derive a great education from folks who share this info...it helps me gear up to pull the retirement trigger myself. I am 59 and hoping to retire in 5 months.

By standards of this board, as per my bio, I kinda RE'd before FI ready, but hell, yolo right?

-annual expenses budgeted for 60K, actual in year 1 was 50K
-1.3M IRAs
-300 taxable investments
-200 cash (incl short-term bond ladder)
-both self/DW will get tiny $5K/yr pensions @65
-if we hold off until 70, combined SSA should exceed our expenses
And if it doesn't work, well...

 

[The Cosmic Avenger]

By standards of this board, as per my bio, I kinda RE'd before FI ready, but hell, yolo right?

-annual expenses budgeted for 60K, actual in year 1 was 50K
-1.3M IRAs
-300 taxable investments
-200 cash (incl short-term bond ladder)
-both self/DW will get tiny $5K/yr pensions @65
-if we hold off until 70, combined SSA should exceed our expenses
And if it doesn't work, well...

That's interesting, because that last part reminds me of something I've been toying with.

Most planners adjust your spending upwards to account for inflation. I'm thinking that we'll want to travel a lot initially, but by the time we're 70 and take SS (which will still be enough for travel and eating out), our expenses will probably be lower. I've wondered about trying to spend down the principal somewhat (not 100%, but maybe 50-75%?) by 70, and then trying to live mostly off of SS. That would probably give us around a 5% spending rate for a while, allowing us to really enjoy some splurges while we're still young.

Of course, I would probably change my tune if we saw a prolonged recession...but only temporarily!