Turning 50 in a month, I know what you are going to say..

[SALTedOut]

I disagree. Things have changed. .

Looking at your first post your goal was for $16K in monthly spend. You're now at $25K so things have changed. I don't fault you for that, things get more expensive as I'll discuss below.

Many here have focused on reducing spending. I'm not going to do that because when I retired at 51 I told myself I'd only do it if my lifestyle would say the same. I was not going to compromise on they way my wife and I liked to live in order to FIRE. Many here do but not I. My first post on here was similar to yours with slightly lower numbers. I too was chastised for spending levels and told I should cut everything. It's what many people here do. Take that with a grain of salt and decide your own lifestyle needs/wants.

IMO (and experience), your expenses will go up as your kids get older. Their hobbies/activities get more expensive not cheeper just like yours have. Cars, insurance, dating, weddings, family trips, etc. all get more expensive. Not to mention grandkids and then everything gets even more expensive.

My kids are both out of college and on their own in different states. We visit each at least once a year and fly them here when they want to visit as well. We still go on family vacations that I pay for because I feel its important. When they are married and have kids I'm sure we will be going their often. For vacations I'll probably take the whole family, because I feel its important to share that time.

The major flaw I see in your planing is modeling to 87. In todays world that is way too young to plan for. At that point your wife will only be 77. Whats her plan from there?

Also make sure your taxes are conservatively covered in your budget. Most of your money is in taxable accounts. I'm not convinced that capital gains will stay at 15%. I'd plan for higher and be happy if they don't.

My FIRE plan was to plan for the worst for both longevity and spending. Worse case scenario is that my kids inherit more than I intend.

 

[WhenIsItTime]

Great example of the unconscious bias of this forum. If the OP had divided all the numbers by 3 ($3M investments, 2 houses worth 750k w/$188k mortgage, $100k spend, $580k for kids, $8k for CC), I bet the responses would be different.

Congrat's on your earnings and savings power. Great accomplishment at any age and more so <50.

Devil in the details. Tax mechanics really change in retirement. Are your investment values after business sale, net of tax? That portion would have high basis, which means you could spend it first with little tax impact. Your AA now and for FireCalc assumptions matter. Are you a trader or investor? Trading can lead to higher taxes. Maybe you are already getting to this conclusion, but might have to earn more to preserve spend and sub 3%wr. That is your choice and maybe your view will change if/when you need to look for a new job. Will also be interesting to see how market behaves over next 9 months, which could impact the #'s.

 

[StuckinCT]

A lot of good points here and really do appreciate everything including constructive criticism.

In terms of investments, I have about a $2.8mm capital gain in the portfolio. Part of the reason I bought the Lake George House was to peel off some fixed income and leveraged equity/ closed end funds that are interest rate sensitive. Right now I am positioned 80/20 with about $2mm in individual Dow stocks that I have weighted differently, some miscellaneous growth stocks and dividend Aristocrats and then ETFs such as IVW, VWO, VNQ, IJR, IWS, IWM, DVY, VYM etc. I am pretty much buy and hold, but as the portfolio has appreciated I have pulled back on risk some. I am considering increasing equity exposure if we get a pull back, I don't see how you make money in bonds, with a few exceptions.

So 50 is just a number, but I have to stay on til March to get my final check from this deal I did. Not sure where I go from there, I am darn close to calling it so maybe depending on how the market does over the next ten months and potentially cancelling the club now that the kids are somewhat growing out of the pool and having the lake will put me over the top.

I don't mind working, don't love my job like my wife, but admit in my heart of hearts, I am still working til 55- I would like to fund a Lincoln annuity to create a pension with about $1-1.5mm throwing off $50 75k with new savings. Also, the kids are still young and being home with COVID over the last year was great, but the truth is, there is no retirement happening around here any time soon until they get a bit older. I just don't know what my earning power will be after next year, so at least I have a back up plan.

 

[Perryinva]

Not everywhere nice in CT is THAT expensive except Greenwich/Fairfield County stuff. Practically just an extension of Westchester. Conn is small enough you can compromise nearby enough with current location, I’m sure.

 

[daylatedollarshort]

Cutting expenses and cutting one's lifestyle are two entirely different things. In many cases it is possible to live better for less, especially if you have a two income household with kids and haven't had a lot of time to compare prices. Reviewing expenses like finding a cheaper cell phone plan with more data and better coverage; price shopping insurance; making the house(s) energy and water efficient; cutting out fast food; finding a better mechanic that charges less for better quality work can all add up and reduce expenses while improving, or at least not lowering, one's lifestyle.

Anyway, the between the OPs recent posts with different retirement timelines, making a decision not to retire within 12 hours from one post to another within just this thread, and not fine tuning the retirement calculations to incorporate changes like adding in Social Security, the wife living past 77, not factoring in the kids growing up and moving out, etc. it doesn't seem like he is really that motivated to retire early or making the numbers work.

 

[DawgMan]

Thanks for everyone's thoughts. $300k is our budget, and there is nothing really we want to cut, except maybe the CC club at some point. Also, some of the the $1.75mm (targeting $2.5mm in 8 years) we have for the kids is for cars, weddings, down payments and 5th year in college if that happens. We spend about $20k in activities now so I actually expect that to drop in HS with less camp, lessons etc.

We're not big spenders at all where we live. I get that we are prob in the second percentile but we feel upper middle class. For a long time the real estate market was so bad here we could not sell our home, hence the name StuckinCT. Now we can sell, but my wife and kids like our home so we are staying. Believe me, if I could snap my finger we would live in a more modest home- I would be happy in four bedroom updated center hall colonial, but to sell our place now seems stupid with $100k in transaction costs and then all the new expense of setting up a new house. We just bought a second house in Lake George with a boat and we are very excited about it, with the idea it will be a home up north to get out of the heat with a home down south when we downsize so that we can enjoy now.

I like the idea of downsizing at 62, but since that won't be happening anytime soon and houses in Mount Pleasant SC cost about $1mm for what we want, it is not like we would be lowering our expenses that much and the public schools here are like private schools. Our plan is to keep Lake George and dump the CT house for SC house at 62.

First world problems for sure, but I believe I need to save another $1.5-2mm to retire comfortably which will bring us to $14mm which is just crazy to me but those are the numbers, so I will need to find a new gig next year. Thanks for everyone's thoughts, I am close but no cigar IMHO and I really do enjoy my goodies, i.e. boat and vaca house to a lesser extent club- I am willing to keep working for it.

Something else to point out as it relates to housing and planned downsizing... it doesn't always happen the way you plan. We had plans to downsize from our big a$$ house once the kids got out. Well, 2 of them are married now and live nearby and have given us 3 grandkids! Now we are remodeling the basement and using the pool again! Guess what, we ain't going no place! Kids call it "home" and we want a place we can all gather comfortably and enjoy, so we are staying put until further notice. Just something else to think about if you were going to rely on a downsize to help fund your retirement.

 

[pjigar]

It is hard to get a point of view of situation that you have never been there before. There is always going to be a wide gap between what people define what is "essential" for them in RE. And that is OK. It is hard to accept it but that is the truth.

May I present my beat up joke I tell my friends all the time: A a guy wanted to live next to a waterfall so he built a huge mountain with a waterfall in his ranch "backyard". Someone asked "Why would you do that?" The guy replied "Because I can."

Moving the goal post is also normal as you grow in your working life. There is nothing wrong with not wanting to sacrifice the life style in RE. To the contrary, that is the whole point or RE. If you already 70 and not ready to RE then that is a different situation altogether.

 

[StuckinCT]

I unfortunately agree. In a different recent thread, the OP did mention that he is looking to retire at 55 which is 5 years from now.

Yes and I still feel 55 is right age. If you go back and read the original post, I simply posed the question of, can I retire (now that net worth up 2.5mm) with firecalcl at 100%?

The other point I am trying to make is that firecalc is saying I am 100% at a 3.5% WR- I am not sure I am comfortable with that.

As others have suggested, a 3% WR is safe. Others have asked why my spend has gone up and part of that has to do with budgeting more for home maintenance, second home, health insurance and taxes. 16k 5 years ago is 18k today, I think I could live on that in some parts of the country, but not here and we decided to stay and move to SC at retirement.

I feel we have a comfortable lifestyle, but certainly not extravagant. I am sure I could be happy living on $150k in other parts of the country. People Greenwich pay their staff $300k, I know because my wife was a Nanny. It is really funny because we have nothing in common with these people. And I don't fault them for living the way they do. That said I get that we are reasonably well off even here in the expensive NE, which is why I keep asking this question, but this is a numbers exercise...

 

[anothercog]

Just worry about completing the sale of your business. If the buyers offer you something to stay on consulting then consider it, if not take six months before deciding if you want something. My guess is a consulting role or some other gig will fall on your lap sooner than you want it to.

Your assets seem to be plenty to maintain your current lifestyle so you have little to worry about from a financial perspective but I get that it is hard to spend when you have been a saver forever.

 

[daylatedollarshort]

I feel we have a comfortable lifestyle, but certainly not extravagant. I am sure I could be happy living on $150k in other parts of the country.

My $300K lifestyle but spending $150K example was just to illustrate how expense optimization over 40 years may be more impactful instead of saving $X dollars one more year. No one is saying you should live on $150K a year in retirement. With your NW you obviously can have a much higher spend rate than that, if you choose. However, if you really want to retire early, figure out what your spend rate would be with an average 3% or less SWR, or higher but with discretionary expenses you would be willing to trim back, one or both of you living to 90, and factoring in kids being off the payroll, SS, etc. Most retirement planners, like the Fidelity planner, let you enter in all those factors. Otherwise, save more, which seems to have been your plan anyway.

 

[chassis]

You're good. Congratulations!

 

[RobLJ]

Congrats on your accomplishments!
I would be even more shy than you, given the age of your yewts, although your reserve for them seems more than sufficient.

I would echo someone's advice to at least explore the possibility of consultancy (perhaps during a sabbatical). While this may not be applicable to you, it might be a way of dipping your toe into semi-retirement, while preserving career options.
(While not very relevant to your circumstance, I wanted a 10-15% minimum "slack" on the numbers including a generous yearly travel budget which we haven't fully spent in any of the last 6 years. When I pulled the plug at 57, my university offered a generous 1/2 time online for 1/2 pay option for 2-5 years. This allowed the younger DW to fully retire 3 years ago, 7 years ahead of "the plan" and I was happy to work part-time on my own schedule 9 months out of the year while the portfolio continued to swell. Now our "slack" is about 40%).

Far down the road, the second home (which I think you own free and clear) and an ability to downsize the main homestead give you a lot of budget "slack" or optionality--if your wife and you are willing to consider it. But I would ignore this and other advice on your budget; you know your priorities as a family--it's just a thought. DW is complaining about the high 90's temps in Reno the last 2 summers, so I'm almost regretting selling the Colorado cabin when we moved from Houston to Reno 6 years ago.

 

[GoodLife59]

At first glance the answer is YES! But your wife is significantly younger and you have younger kids. So lifestyle desires and expectations should be considered. Also, your kids are coming to an age where they’ll be watching mom and dad to see how they conduct adulthood. I get the impression you are a skilled leader with the ability to build and develop meaningful businesses. Likely how you’ve done it are good examples for your children.

Probably being a little too personal. Congratulations on all your successes to this point.

 

[Bdroc]

Okay so the big 5-0 is just over 30 days away, and here is where things stand:

Primary Home- $1.49mm $565k mortgage
Second Home- $717.5k Paid
Taxable Portfolio- $7.2mm
IRA- $1.35mm
Roth-$150k
SS $42k me at 70 stopping now, wife will get $21k
No pension
No other debt

Total Spend including Taxes Health insurance is $300k
DW makes $25k part time job she likes and ten years younger
Three kids 11,10,9 have $1.75mm set aside in 529s /other accounts for Ed
Will downsize house at age 62 for $1mm home, reduce spend some as kids leave?

Firecalc just barely 100% spending $290k- assuming DW contributes $10k

I have to work until March of next year for final payment of business sale, which is factored in above, So drum roll, can I retire? Firecalc saying 3.5% WR is 100% living to 87 not including downsizing etc.??

** We assume $25k for misc expenses each year like new furniture, painting, replacing boilers AC Roof etc..

I still feel uncomfortable- I could cut CC club which is $25k or work part time as well.

You have almost $9m excluding real estate. Assume you live to 85 and your investment returns are no more than inflation. That means you can spend more than $250k per year. That doesn't include SS or savings from downsizing.

Your bigger issue is to have a good estate plan. Do you live in a low tax state?

 

[Dtail]

You have almost $9m excluding real estate. Assume you live to 85 and your investment returns are no more than inflation. That means you can spend more than $250k per year. That doesn't include SS or savings from downsizing.

Your bigger issue is to have a good estate plan. Do you live in a low tax state?

Stuck in CT translates to stuck in Connecticut.

 

[kykejuga]

I had a very similar situation so I thought I would reply. The short answer is yes, you can retire and shouldn't have to worry about it to much.

I retired at 50 with a slightly lower net worth (9M) and slightly lower annual expenses (250). I had a 2nd winter home, CC membership, and 2 kids in college. I alleviated some of my fears by consulting part-time which brought in enough income to avoid having to dip into savings and it kept my head in the game. It's worked out great and now I'm 58 and looking to retire fully at 60. Another thing that might be similar is I found out that I overfunded my kids college via 529 such that there was enough left over that I will now have my future grandkids colleges paid for. With the amount that you have saved in your 529, you might be in the same situation.

My advice, relax and enjoy your success

 

[patela6]

Congrats to the OP. I've always thought of ER being tied to my kids going to college and us parents getting our time back, for me at around age 50. At the moment it really feels like being an uber driver for my 10 and 12 year old. I may as well work while bring said uber driver...lol

You are in an awesome spot.
I would think about what you really value next 5 or 10 years. In your situation I wouldn't balk at a 'priceless' Africa trip with the kids in a few years (first class of course!). To do these kinds of $50k to $100k trips, you'd likely need to reduce some expenses. Second home sounds like the best option to nix.

Easy to play with someone else's portfolio. You have plenty of money...just not enough to do 'everything'. Good luck and enjoy your retirement!

 

[troutnut1]

Traditionally 50 is the year you get your first colonoscopy. New studies say we should be doing it at 45. If that comes out good, and inflation doesn’t eat all your cash, you’ll probably be ok.

 

[HunterAdvisor]

Question is do you really want to retire and what will you do instead? What is your passion?
I would recommend meeting with a CFP who is also a RLP. All of these letters stand for Certified Financial Planner who is also a Registered Life Planner with the Kinder Institute. There are several in your area.
7 Stages to Money Maturity
Congratulations and Happy Birthday !





UOTE=StuckinCT;2609188]Okay so the big 5-0 is just over 30 days away, and here is where things stand:

Primary Home- $1.49mm $565k mortgage
Second Home- $717.5k Paid
Taxable Portfolio- $7.2mm
IRA- $1.35mm
Roth-$150k
SS $42k me at 70 stopping now, wife will get $21k
No pension
No other debt

Total Spend including Taxes Health insurance is $300k
DW makes $25k part time job she likes and ten years younger
Three kids 11,10,9 have $1.75mm set aside in 529s /other accounts for Ed
Will downsize house at age 62 for $1mm home, reduce spend some as kids leave?

Firecalc just barely 100% spending $290k- assuming DW contributes $10k

I have to work until March of next year for final payment of business sale, which is factored in above, So drum roll, can I retire? Firecalc saying 3.5% WR is 100% living to 87 not including downsizing etc.??

** We assume $25k for misc expenses each year like new furniture, painting, replacing boilers AC Roof etc..

I still feel uncomfortable- I could cut CC club which is $25k or work part time as well.[/QUOTE]

 

[FLD3C]

It is not about your savings. It is not about your spending.It is not about the country club. You have enough money to retire.
This is about your emotional readiness to stop working. If you are not working at the buisness then who are you?
If you want to work it is ok to keep working until you feel ready to call it a career and start your next chapter.

 

[medved]

My advice is this: First figure out when you want to retire. That’s not about the country club and the houses and boats and stocks and whatever. It is about how you want to spend the finite and unknown number of years you have left on earth, and how many of those years you want to spend working. There is no right answer to that question. I know people who retired very early and are happy. I also know people who worked into their 80s and were also happy. But that’s the first thing you need to figure out. And probably the most difficult. In your situation, I would not allow other issues to get in the way of that threshold decision.

Then, when you retire, pick a withdrawal rate that you feel comfortable with. Maybe that is 2 1/2% or 3% or 4%. Whatever you feel comfortable with. I personally would keep it under 3% at most — and probably less — but others would disagree. And then fit your expenses within that withdrawal rate. You have a lot of luxuries within your budget. That is fine. There’s wrong with luxuries; you earned it! But there is no question that you can tailor your expenses to fit within whatever withdrawal rate you select, and still have an extremely high quality of life.

 

[HunterAdvisor]

I remembered another book I found interesting “Encore”. Discussion about volunteer, part time and other options in early retirement.

 

[Retired Expat]

Expenses after retirement

The silly comment was before seeing you do actually intend to spend $300k/year.

I would not feel comfortable at all in this situation - the expenses are way too high. You need to downsize and get better control over your expenses - I'd agree with ditching the country club to save $25k/year...is it really worth $500/week? Minimally sell one of the homes before leaving the job. It should not take $10k/month to run a household, even with three kids and a nice house.

Just my views.

Good luck whatever you decide.

Slightly different perspective.

You may well find that preretirement expenses don’t jive with post retirement projections…. Preretirement spent $2500 a year on professional laundry and dry cleaning. Ate lunch out everyday and ordered in dinner a lot as there was no time to cook. About 15k in savings per year. Spent $100 a week on Gas in CA. In retirement more like $100 a month or less. (Don’t need to drive stop and go in rush hour). Tons more like those

But if you want to play more golf and tennis,, swim etc you should keep the CC. This is a time of enjoyment!

 

[Delawaredave5]

Your lifestyle expenses have seemed to cause you to be a financial prisoner of your own making. You could move to the south of France tomorrow if you wanted and never have to work again.

You might want to read some books or watch videos on happiness studies and also the benefits of simplifying and minimalism. What good is all that savings if you aren't using it to buy happiness and peace of mind? Also check out the studies linking materialism to depression and anxiety.

Excellent points.

I used to think Americans had better lifestyles than Europeans - bigger houses, more "stuff", lawn tractors, toys, etc. However many Americans are "slaves to stuff" and materialism.

 

[StuckinCT]

At first glance the answer is YES! But your wife is significantly younger and you have younger kids. So lifestyle desires and expectations should be considered. Also, your kids are coming to an age where they’ll be watching mom and dad to see how they conduct adulthood. I get the impression you are a skilled leader with the ability to build and develop meaningful businesses. Likely how you’ve done it are good examples for your children.

Probably being a little too personal. Congratulations on all your successes to this point.

Great point on the kids, I think about this all the time. I always say kids learn by watching. Appreciate the vote of confidence, I def feel like I have steered the ship okay thus far.