please critique us!


Full time employment: Posting here.
Mar 20, 2006
I think this board is great and am now delurking after six months of enjoying the wisdom, humor, and humanity!

I'm not usually comfortable calling attention to or talking about myself. It's so much more interesting to hear about others. Was never one of those "look at me, mommy!" kids.
But I really need to talk about our situation and ask for advice.

DH and I are both 52, no kids. Have always had in mind that we would retire early and to that end, have lived frugally and invested. We never had a specific age in mind---thought maybe 57, but now 5 more years seems too long....

Although we have a lot of education, haven't been real successful careerwise. Combined, we've never earned more than $80,000. (Combination of not the most astute college major choices and lacking emotional intelligence/ interpersonal skills that could help us advance at work.)
At this point, we're just tired, physically and emotionally---of getting up 5:30 a.m. every morning, commuting an hour or more each way in heavy traffic, reporting to incompetent bosses, and stress (DH works in a customer service call center; I work with disabled people giving career advice).

Because we aren't interested in expensive trappings (love to cook at home, only eat out once a week in an inexpensive ethnic restaurant, live in a $125K condo that's all paid for, happy driving older cars, etc., liking to just stay home and read), our expenses are about $30,000 a year
(not including taxes or medical insurance). We estimate taxes would be about $12,000 if we retired.

I'm proud to say that we just reached a milestone----
4 million net worth! (includes the 125K condo). It's in about 55% mutual funds like from Fidelity and Vanguard; the rest is in tax-free muni bonds. Currently we get about 54K in tax-exempt income and about 22K in taxable income. (There can also be another 20K in capital gains, but this can vary).

Pensions won't kick in until 55 and 65 and aren't even worth talking about---a few hundred dollars each. Would probably start SS at 62.

No way would we need to withdraw 4% a year---wouldn't know what to do with 160K a year! (We've agreed to not travel and just stay around home until Medicare kicks in).
As I said, expenses of about $30,000 and taxes of about $12,000.

So---you may be thinking this is a no-brainer. The catch is (what else?) health insurance. I qualified for a BCBS high deductible policy of about $120 a month (doesn't do much for me until I get 10K of expenses. But DH, although actually in good health, has some medical conditions that on paper don't look good and caused him to be rejected.

Supposedly with HIPAA, his current employer-sponsored health insurance can be converted to a somewhat similar policy if he leaves. It would cost a little under $700 a month.

So health insurance costs would be 1,000 a month---and then we would paying out of pocket for my occasional doctor visits. With the 30K of living expenses, 12 of taxes, and 12 of health insurance, we're now up to 54K. Probably still doable. But if health insurance premiums double about every five years, we may be paying 4,000 a month in ten years and have about three years to go until Medicare starts (if it's even around in 13 years!)

So--- plaese give us your input. Are we crazy to think about this? Crazy not to think about it? keep in mind that we don't need to preserve our principle to give to heirs (we will leave it to charities, but we come first). But we don't want to run out of money before we depart this world!

Thanks! I trust you all much more than a financial advisor!
Welcome to the board tangomonster, and congratulations on having a very nice nest egg! You asked for advice, so here goes...

Compared to DW and I you are 5 or 6 years younger, have three times the savings, and half the annual expense requirement. We have the very same issue with health insuance, and it was by far the biggest issue we faced when making our decision to pull the plug and retire last year, but we did it and both sleep well at night.

When COBRA runs out late this year, we are looking at a high deductible HSA for me and the state insurance pool for DW (she has no serious health problems but pre existing conditions that will result in exclusions). We are also looking at $1,000/mo premiums and share your concerns about how those costs may skyrocket in the future. But we both sleep soundly at night because there is almost always a fallback position: part-time (or even full time :p) work.

We figure if health insurance costs get beyond our ability to pay/comfort level, we will draw straws and the loser ;) will find part time employment with health benefits. It appears there are lots of those jobs available in our area (call centers, school bus drivers, home depot, etc.). Not an ideal solution, but a heck of a lot better than continuing to work for several more years out of fear of health premium costs.

I see two distinct advantgages you have that we don't: your much larger nest egg plus pensions. You can afford a lot of health care premiums in the next 13 years with those resources available to you.

You should have quit about 5 years ago.

If 4% is 160K and your total expenses are only about 60K with the health insurance, have you decided on the specific charities that you are going to leave your money to? :confused:
"Currently we get about 54K in tax-exempt income and about 22K in taxable income" =76K per year income

"With the 30K of living expenses, 12 of taxes, and 12 of health insurance, we're now up to 54K" = 54K expenses

"we may be paying 4,000 a month in ten years and have about three years to go until Medicare starts (if it's even around in 13 years!)" = 3K additional per month X 12 months = 36K /year
additional expenses

income = 76K  expenses = 90K  shortfall = 14K

$4,000,000 / 14,000 = 285.7 years.  

oh there's lots of things ignored, reduction of principle will cut down income.  Medicare kicks in when you're 65.  The 4M will not increase or decrease.  When healthcare quadruples the goverment won't address the problem.  

I'm trying to imagine a senerio where you will go broke.   Maybe getting sued or long term health care.   I think you should look into insurance to protect your nest egg and retire (maybe not in that order)  
What CT said. You have plenty. It is time to retire. :)

I also think you likely have enough to self insure for long term care.
Why have you "agreed to stay home and not travel"?  It sounds like you have led an austere lifestyle for such a long time that you might not realize that now you can actually get out and travel, try new things, etc.  And if you are extremely frugal by nature, you don't have to fly around and stay in fancy hotels.  Maybe get a camper and drive around the country, staying in state parks or something?

"You have nothing to fear but fear itself". As others have already pointed out, you have more than enough to retire immediately and even live less frugally than you have been. However, you need to get comfortable with that reality before you pull the plug on w**k. Run some calculators such as Firecalc to see how you fare under different assumptions about inflation and amounts you will withdraw from your portfolio. I am a big fan of gradual retirement. I worked part time for two years (three days a week at first, then two days a week) before fully retiring. Your assets are sufficient that you can easily afford to take a part time job even if the pay is much lower than your current salary. Go for it!

Congratulations on creating such a great nest egg on your salaries.  It is a feat many have not attained even with twice the salary.  Might I ask how you were able to do it?

As for the living expenses.  It is really hard to see how you could NOT make it with that much $$.  The short advice is........RETIRE NOW!   What are you waiting for?  Unless one of you has some really major health issues to worry about, I would go with a high deductable policy and fund the little stuff out or your income stream from the $4MM.  That should not cost you all that much and you would still be covered for any major expenses should they occur.

Be happy!  Your networth looks to be in the top 10% on this board with expenses near the average so there is not much else to do except create an income stream and check your asset allocation year to year and have fun for the rest of your lives.  :D
Tangomonster, I think you and your spouse deserve a standing ovation for amassing a nest egg like that on a modest salary!! Congratulations!!

I know health insurance is a big unknown, but I agree with the others should have more than enough to get you through the roughest patches. So get out there and start enjoying your lives!

About all I'd say though, is that if you enjoy a fairly modest, frugal lifestyle, just do what really makes you happy. Going out and blowing it on expensive things and opulent vacations will not, in and of itself, make you happy. I don't know if this is the right way to say it, but use your money to make your life easy and happy, but don't just go blow money for the sole purpose of spending it. I think that's where a lot of people get into trouble.

Personally, I could never fathom spending through $4 million. Heck, I probably couldn't even spend the INTEREST that would accumulate from $4 million each year! But I'm sure there are many who could.

Sounds like you two are set for a comfortable, happy retirement.
Simon Cowell says:

I don't want to be rude, but to not realize that 4 million is way more than you need you must be mathematically challenged.  

I would like to congratulate you on your outstanding ability to amass that much networth on such modest income.  I hope you will spend some time sharing your saving, investment strategy.  I hope to learn from you and pass it along to my two children (18 & 17).

Here's my critique on your plan:  Regardless of the future cost of health insurance, you will make it.   Another way to look at it is this:  If you can't afford health insurance, 99.9% of the US population can't either.

As many have said, you should have retired long ago.  Do it, and use your spare time to teach me how you did it.

Thanks to all of you who replied, we are now convinced.  
We're going to do it later this year (I need a colonoscopy in June that would cost 3K if I paid out of pocket with my high deductible/catastrophic policy).  We're not comfortable discussing our situation with friends and relatives; you people were the perfect sounding board!!!

RE Wahoo--the only thing I disagree with you is about working part-time.  First of all, it could actually be difficult finding a part-time job.  Some people would think we're overqualified.  Even Walmart is going to be pickier about how they hire as greeters or other employees (a memo came out to this effect that got exposed---cutting down on hiring the disabled and older people to cut health care and worker's comp costs).  And I actually think some of the part-time jobs you mentioned would be worse than what I'm doing now---working retail or driving a school bus!  

CutThroat---it's not easy to come up with charities we want to leave our money to.  I work for a nonprofit and have been very disllusioned about how money/contributions are spent (like perks for the Executive Director).  But we think it will be the public library, some arts organizations, some environmental organizations, and possibly one human service organization that is run bare bones and we feel comfortable witj.

RiskAverse---being the neurotic worriers that we are, we do realize that a major illness could be a real problem, but this would go beyond just the financial aspects, so at that point, we probably couldn't work anyway.  And we have covered the sueing issue, with an umbrella polict.

Martha---we agree that we can self-insure for long-term care.  My parents were basically able to live at home until their nineties and not need long-term care.  We're hoping this would be the same for us.  Definitely long term care insurance isn't such a great proposition for consumers or they wouldn't be pushing it so much (no one wants to insure DH for his health, but he gets enough offers for LTC insurance!)

Chuck---we stopped traveling actually about ten years ago to take care of my parents and weren't able to leave them.  
Got out of the habit and started to look at it as just another consumer purchase and not real meaningful.  The second a vacation was over, the relaxation or the interesting experience stopped, so it didn't seem worth it.  We did travel some---it was okay, not teh highlight of my life.  We're definitely not the RV type, but maybe a state lodge ocasionally....

Grumpy---at this point I'm so burnt out that I'm not even sure I'd want to work three days a week.

Andre----I totally agree with not blowing money just to spend it---don't see any reward in it.

Steve---no great secrets about how we accumulated so much.  We started to invest even in graduate school, discovered Fidelity Money Market and then their mutual funds.  Had some great years in investing (thsoe returns will never be seen again!)  But mainly, it's living below our means.  Have always lived in a two bedroom condo.  Don't have fancy cars.  No kids---waited until we were 40 to even acquire our first pet (cat).  Starbucks is a once a week, thank God it's Saturday treat, not every day.  Gifts are always modest.  One TV in our home and just basic cable.  $10 haircuts instead of the $50 to $100+ women blow on their hair.  Stuff like that---it adds up.

And Trombone Al---yes, it does sound like something Simon Cowell would say.  Not mathematically challenged.  Just have lived life very cautiously and second guess ourselves all the time.  But that cautiousness is getting old at this point and interfering with our peace of mind/freedom/ happiness.  So I do agree it's time to seek it and you all have convinced me that it's doable....
Thanks Sam. We aren't very proud of ourselves career wise and should have done a lot differently, but we are proud of our networth.

And to be perfectly honestl "only" 3 million was our doing.
The other million was inherited, half from my aunt, half from my parents, but we took care of my parents for ten years so they wouldn't have to buy assistance, so in a way, it's money that we got through our efforts---and we haven't spent one penny of it!

I think you're right---even if we do have to spend money for health care, it's doable (although so expensive!)and there's nothing more worth spending money on than our health.
Right now here in Georgia, there's a bill taht may be passed that authorizes the government to recoup money spent on nursing home care for Medicaid patients by getting hold of the equity in their home (after they and their spouse dies---they're not kicking anyone out of their homes). People are in an uproar about it----the kids of Medicaid patients want to be able to inherit the houses and feel the government is supposed to take care of their parents! So I guess it's not totally off the wall to look after our own medical costs....
although the Canadian system does seem to have its merits....(and a new study came out that said US medical care is really substandard and nowhere near idael, even though it's the costliest!)
tangomonster said:
Thanks to all of you who replied, we are now convinced...

...Just have lived life very cautiously and second guess ourselves all the time. But that cautiousness is getting old at this point and interfering with our peace of mind/freedom/ happiness. So I do agree it's time to seek it and you all have convinced me that it's doable....

I suspect you were already convinced prior to posting this moring but just wanted to hear "just do it" from the forum. No way someone who has lived life very cautiously and who second guesses themselves all the time is going to be convinced to make a life-changing decision by a handfull of posts and 6 hours of mulling it over. ;)

Thats not to say you shouldn't ask for input or that it's not a good idea to get a second, third, fourth, etc. opinion. But it's obvious to me you probably already had your mind made up before posting, and you already know you've got more than enough.

Go for it! :)
After 52 years of worrying and tormenting myself with the "what-ifs," I think I can make what will hopefully be the second half of my life more enjoyable by retiring early.
This just feels right---it's the culmination of what we have worked so hard for (and we have worked very hard, even if our salaries don't reflect it---people at the bottom often have to work harder and for less money and perks and with so much more grief than those higher up) and "sacrificed" for (I put quotes around sacrifice because we really didn't do without that we which we really needed and wanted---
just didn't want a lot---a modest condo has always made perfect sense to us).

How nice it is to communicate with like-minded people who understand that there's more to life than accumulating and spending! The priorities and values on this board are much more reflective of (at least in my opinion) life is meant to be, not what it has become for most of society....
tangomonster, you could establish a Scholarship at your local University for the study of something that is of interest and gear it to a low income student??
NOt sure if it was brought up, but .. how about self-insuring. Put 1 mil to the side, conservite investments, and use that for your medical expeneses.
tangomonster said:
Thanks to all of you who replied, we are now convinced.
We're going to do it later this year (I need a colonoscopy in June that would cost 3K if I paid out of pocket with my high deductible/catastrophic policy).

I have that procedure in the forefront of my mind as I'm going in for the screening in a couple weeks. No idea it "cost" that much as I too am covered by good medical plan. In our case we were offered the choice between cobra or a similar but slightly different coverage plan just for retiree's from my agency, the retiree plan being slightly cheaper once we have to pickup the entire cost.

Question, do you really have to work 3 more months just for this once Medical procedure? What would it cost you to maintain Cobra coverage for a year or 18 months before you switch to the high deductible policy. Might be worth it...
tangomonster said:
Although we have a lot of education, haven't been real successful careerwise. Combined, we've never earned more than $80,000. (Combination of not the most astute college major choices and lacking emotional intelligence/ interpersonal skills that could help us advance at work.)

Tango, you've built an impressive net worth, you've worked helping folks, you sound like nice people -- the world could do with lots more folks who are only as successful as you are! I hope you have a great second half of your life. Like most everyone else, I certainly think you've got retirement covered financially. With your net worth and lifestyle preferences I can't even imagine health insurance costs being more than an annoyance.

Johnny, I get it done every 3 years (fun, fun, fun) due to a family history (both parents) of colon cancer.  All told the last one was about 3K (doctor, hospital facilities).  And waiting a few more months doesn't seem bad at all---will still retire before I turn 53.  In fact, I could even start to enjoy work more now that the end is in sight.  And due to the nature of my work, I need to work until the end of the school year to complete; it wouldn't be right to expect someone to come in and take up where I left off (see I do have a good work ethic, even though I've never earnd over $45,000 in my life--even with a master's degree!)
Thanks Coach! It's just too bad that our society leads to our self-esteem hinging on what we earn. I've tried to tell myself that my low earnings stemmed from choices I made and is not a reflection of my innate ability. After all, this isn't like Soviet Russia was, screening young people to see who had the best potential to be trained to be gymnasts and ballet dancers based on their physique! I think I took the sixties a little too to heart and then didn't develop the savvy or interest in the business world/economic well-being I probably should have as an adult (but thank goodness I did understand right away that I was responsible for my own financial security and liked the idea of saving and investing). And hopefully in the second half of life, stuff like status and earnings become last important to (almost) everyone....

Now if I could just meet some people like you all in real life....

Congratulations!  It sounds like you’re both the perfect example of LBYM.

Just curious, but what was your motivation or goals to save such a large next egg (anything you've been putting off doing)?  It seems like you’re at the 99.999999% confidence level so it’s just surprising that you’re still questioning if it’s doable. 

Aaron, I think all we were after was security. And I guess we always kinda knew that we weren't going to do that well earning money and had to look out for ourselves. Maybe deep down we knew that we weren't totally cut out for the work world (not the popular kids in school---and it's no different in the work place!) and taht we could be too sensitive to tolerate it for 30+ years.

Still don't think we made any sacrifices per se. For a while when we were traveling, we made our trip selections based on what was on sale, such as a great package to Hong Kong or England, rather than just going to our dream destination (not sure what that would be, even). We thought there was value and enjoyment to be had in wherever we went.

We did put off having kids until we felt we could afford them. By the time we felt like maybe we had enough of a cushion, we were firmly entrenched in our life and then didn't especially want any changes. Don't regret having kids---we're intense introverts who possibly couldn't ahve dealt with all that is entailed with child raising.

Always knew that a bigger home wouldn't do anything for us other than give us more to clean.

Love to read but live in too small a place to accumulate books, so the library suits us just fine.

And truly we're not saints or financial wizards. A lot of what we've been able to do is just due to our personalities---being introverted, you don't have to keep up with the Joneses---all you want to do is say hello and keep going, but not spend time one-upping or even keeping up! We do have a big screen TV since we watch movies at home; haven't been out to a movie theatre in ten years! Not just due to the money---it's also that we couldn't tolerate people talking, kicking our chairs, and so on. And we like some independent/foreign films that aren't shown in theatres but can just be rented through Netflix.

No regrets. I know I've missed out on experiences and "things" that other people have had, but I wouldn't have enjoyed them as much as most people do (or think they do). Even travel didn't quite turn out to be what I had hoped---can't really get to know a place in depth in one week as a tourist, miss the creature comforts of home.

But who knows? Maybe with early retirement and less tress and more time and energy to enjoy life, I'll turn into a spending machine to take up the slack!
WOW! Congrats on your nice nest egg on a modest salary. I have nothing to offer (I'm still in the learning process) but to get out and enjoy yourselves. If I were you, I'd retire now rather than waiting for 5 years.
Tango -

Welcome. I am just reading your posts and nodding my head in agreement with a lot of your thoughts. So much of what you have said sounds like me, except the 4 mil part of course :D. I hope you decide to stay a while and be sure to enjoy what you have worked so hard to accumulate. Best wishes.
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