thinking of retiring on 12/31/2010

[johnoh]

Hi All,

I am 49 and thinking of retiring here in Texas, but am unsure. Firecalc is saying it should work but is not saying how it will feel.

Current situation is 1.1M in a market-index fund (300k of which is a 401k), no debt, 100k in cash, an owned house, and 60k that is slated for my daughter's college education. Up until 2 months ago I was paying $2100/mo to my ex-wife and for the last 15 years have been living in a (owned) 5 bedroom house that averages $1500/mo in taxes, maintenance and utilities. $800 this month for electricity alone - can't wait to move away from that! Selling the house will produce another 250k or so.

Several years ago I moved into a high-pressure sales job which has paid on average 300k/year of which I paid 75k in taxes, saved 120k, distributed 25k to the ex, and lived on the other 75k. My plan now is to sell the house and move into a 1 bedroom apartment and also quit my job. I project future monthly spending to be as low as 1500/mo to as high as 3000/mo. The reason for the large range is I do not really know how its going to feel watching the net worth chart - these last few years have been a period of fast growth with little concern for market downturns so now I figure that by being even more frugal than necessary will perhaps minimize my worries(?). I get a kick out of being cheap and drive a 40mpg car and until I started reading this board thought I was the cheapest guy around! After one big year 2008 (saved 510k that year) I told myself to get out of this job as soon as my youngest moved out, and now that time is here. The job is now paying maybe 150k/year but is no less stressful than it used to be, which also is making me want to move on. Two open questions I have about this move are what am I going to do every day and how will market downturns feel with no new constant savings to offset them. My only future income aside from asset growth is social security - there is no pension coming from the job. I have zero interest in moving to some other job, at least right now. Any input is welcome - thanks

 

[REWahoo]

Welcome to the forum.

Two open questions I have about this move are what am I going to do every day and how will market downturns feel with no new constant savings to offset them.

If you haven't already done so, please check out the threads here:

http://www.early-retirement.org/forums/f47/faq-archive-but-what-will-i-do-all-day-30655.html
http://www.early-retirement.org/forums/f29/handling-the-just-one-more-year-syndrome-20091.html

Truth is the only way for you to find the answers to your questions is to actually experience retirement. The good news is it appears you have no one else other than yourself depending on your income which gives you a great deal of flexibility. If you try early retirement and don't like it, I'm betting you can always find yourself another sales job.

 

[walkinwood]

I think you'll have to answer the "what will I do" question yourself, but keep in mind, that you'll take longer to do all the everyday things that you rush through now - you'll sleep longer, take more leisurely meals etc., so it isn't like you have to substitute something for every minute that you work now. On the other hand, you do need some interests to pursue.

On the "market downturn" question. It is hard. Actually very hard to see your hard earned $s vanishing while there is no income coming in. 2008 was very hard for me. I think what saved me was the education I gave myself on long term investment returns, asset allocation, low cost investing and the explanations/back testing behind all the Safe Withdrawal Rate methods out there. Without this knowledge, it is easy (imho) to panic and do some irreparable damage to your savings. I never felt - never - that I'd rather be working than deal with emotions that come with a portfolio dropping like a stone.

All the best with your decision.

 

[dex]

Two open questions I have about this move are what am I going to do every day

Think carefully about this. You are going from a stressful scheduled day to a blank sheet. Someone said - It is time for retirement when work does not leave you enough time for your outside activities. There are steps between where you are and where you are going.

and how will market downturns feel with no new constant savings to offset them.

There are threads from the last downturn about how people reacted.

My only future income aside from asset growth is social security - there is no pension coming from the job. I have zero interest in moving to some other job, at least right now. Any input is welcome - thanks

A detailed budget of for retirement will help you get things in perspective. I would also suggest looking at cash flow to address your concerns about market downturns. Having several years of estimated expenses in cash equivalents is helpful.