Want out of this job!!!!

[COZICAN]

Hi guys! I'm about to be 57 and DW is about to be 56. We're in good health (wife smokes). We are debt free in Oklahoma. As of now
we have $483,000 in my 401K, and $170,000 in my IRA and $61,000 in her IRA. We have $120,000ish liquid cash/investments. A monthly
budget of $4000 is more than sufficient and includes everything except emergencies . We can draw combined SS at 62 $2400
@ 67 $3600 @ 70 $4500.

My plan is to FIRE May 31, 2019 with $35,000 income for the year keeping my ACA income low and supplimenting $13,000 from cash
savings. That covers 2019. For 2020 I plan to pull $40,000 from my 401K using rule of 55 and supplimenting with $8,000 from cash. For
2020 I plan to use $24,000 from cash until I turn 59.5 and then draw $24,000 from my 401K.

All of that would keep me in free or almost free ACA insurance until age 60. It would reduce my savings by $45,000 and my 401K by 40,000
at 59.5.

Comments? Suggestions?

Coz

 

[bloom2708]

I think you can make it work. Your withdrawal % will be over 4% for the first X years.

Holding off on SS to at least 67 makes sense.

Your wife smoking is always a red flag. The health issues really start to show up in your late 50s and early 60s. Ask my "triple bypass" father who smoked his whole life. Quitting would be very very good.

What does your term life insurance look like?

Worst case, 1 or both get part time jobs to supplement. Probably not necessary if you keep spending in check. Is your mix of stocks/bonds correct for retirement? 50-50, maybe 60-40 at most.

Make the plan and you can always course adjust or do OMY.

 

[COZICAN]

"What does your term life insurance look like?"

250K but It expires when I turn 61.

"Make the plan and you can always course adjust or do OMY."

OMY is constantly on my mind BUT I JUST CANT!!!!!!

 

[cyber888]

So you got about $714K in 401K/IRA and $120K in cash/stocks. If you retire around 57.5, Yes - you can use your $120K cash/stocks until 59.5 yrs to survive, without touching your before-tax retirement until 59.5 yrs old. But yes, the 55 yr old rule works for the 401K. If you get your SS at 62 yrs old, you've got $2,400 and you only need $1,600 - $1,700 to withdraw from your 401K/IRA and sustain your $4,000/month expenses. It should work !

 

[golfnut]

Have you input your numbers into FIRECALC?



Presently, you have about $830,000. In another year (when you decide to hang it up) and with a conservative 10% growth (contributions/investment growth) of your 401. let's figure your assets are $900,000. Taking a 3.5% conservative dist.each year, gets you $31,000 so a $17,000 shortfall of needed $48,000 until ss age. Can you find a p/t gig?


If not, then your rate is 5.3% until age 62 then when ss kicks in (approx $29,000/year) and only only $20,000 needed from your portfolio.


I would think you guys are fine but getting a part time gig would be optimal (especially if you can do something you actually like). Less stress on you and the portfolio.


I know what is like having a job you hate. I left corp. America when I was 55. I might be bored here and there but definitely beats hating going to the workplace every freaking day.

 

[COZICAN]

Have you input your numbers into FIRECALC?



Presently, you have about $830,000. In another year (when you decide to hang it up) and with a conservative 10% growth (contributions/investment growth) of your 401. let's figure your assets are $900,000. Taking a 3.5% conservative dist.each year, gets you $31,000 so a $17,000 shortfall of needed $48,000 until ss age. Can you find a p/t gig?


If not, then your rate is 5.3% until age 62 then when ss kicks in (approx $29,000/year) and only only $20,000 needed from your portfolio.


I would think you guys are fine but getting a part time gig would be optimal (especially if you can do something you actually like). Less stress on you and the portfolio.


I know what is like having a job you hate. I left corp. America when I was 55. I might be bored here and there but definitely beats hating going to the workplace every freaking day.

Thank you for your input. A p/t job would be nice and will likely happen just for something to do. As long as I can stay in my ACA numbers I'll do what I can. I've done my grind for 31 years. Its only 14 miles to work but its 24 red lights each way; no options. I'm as sick of the drive as I am the job.

 

[Red Badger]

Piling on to what golfnut suggested. When I exited at 60, my back up plan was either consulting (but, after retirement, that thought made me queasy) or handing out paint and screwdrivers at a big box. Have not had to do either, and been free for 15 months.

Have a contingency plan or two, but go for it! You only get 1 go-round on this rock.

 

[Walt34]

Its only 14 miles to work but its 24 red lights each way; no options. I'm as sick of the drive as I am the job.

There was a poll a while back about why people chose to retire early. I was surprised at the number who actually liked their jobs but retired because of either lousy/incompetent management and/or terrible commutes.

http://www.early-retirement.org/forums/f29/poll-why-retire-early-54674-2.html

 

[COZICAN]

Piling on to what golfnut suggested. When I exited at 60, my back up plan was either consulting (but, after retirement, that thought made me queasy) or handing out paint and screwdrivers at a big box. Have not had to do either, and been free for 15 months.

Have a contingency plan or two, but go for it! You only get 1 go-round on this rock.

I'm waaaaaay to ADHD to not have something to do. My wife calls working the hardware isle at Lowe's (big box) my dream job. Congrats on your freedom!!

Coz

 

[Dtail]

What is the plan from 60-65 for medical ACA management? Are you using 24k cash yearly to supplement the 24k 401k withdrawals?

 

[COZICAN]

What is the plan from 60-65 for medical ACA management? Are you using 24k cash yearly to supplement the 24k 401k withdrawals?

I plan to take the maximum that I have to from my 401K/IRA's as income for ACA and supplement the remainder with cash. May tap my DW's SS at 62 and hold off on mine until 70.

 

[NW-Bound]

There was a poll a while back about why people chose to retire early. I was surprised at the number who actually liked their jobs but retired because of either lousy/incompetent management and/or terrible commutes.

http://www.early-retirement.org/forums/f29/poll-why-retire-early-54674-2.html

Hey, I missed this poll. It's still open, so I just voted too. Yep, megacorp BS and politics drove me nuts, and I had to quit my contract work. Not being a full-time employee did not protect me from the crap.

They just wouldn't let me alone to do what I did best for them. When I quit, then they wanted me to go back. Nope. Same as divorcing a terrible wife, why would you marry her again? Would she be any different the 2nd time around?

 

[Dtail]

I plan to take the maximum that I have to from my 401K/IRA's as income for ACA and supplement the remainder with cash. May tap my DW's SS at 62 and hold off on mine until 70.

I assume you are using the word "maximum", as the minimum needed to qualify for an ACA subsidy, as the maximum income to qualify for a subsidy will be above what you state you needed for your monthly expenses.

 

[Ready2Save]

Congrats on being debt free and just about at the goal line! Just stating the obvious, but any major repairs lingering out there with the house or cars to take care of before punching out in May 2019? Not a SS expert, but do those monthly estimates take into account you would have no more wages in there from 2020 on (assuming you don't work PT) in the calc?

 

[COZICAN]

I assume you are using the word "maximum", as the minimum needed to qualify for an ACA subsidy, as the maximum income to qualify for a subsidy will be above what you state you needed for your monthly expenses.

Yes. You assume correctly. I kinda struggled with wording that correctly.

 

[COZICAN]

Congrats on being debt free and just about at the goal line! Just stating the obvious, but any major repairs lingering out there with the house or cars to take care of before punching out in May 2019? Not a SS expert, but do those monthly estimates take into account you would have no more wages in there from 2020 on (assuming you don't work PT) in the calc?

Yes. I've budgeted in savings for home, pool and vehicle maintenance.

 

[COZICAN]

And BTW....I've been planning and calculating and crunching $$$ for a few years now and "so far" this is the best plan I've came up with. I still plan to tweak it until I feel its a perfect fit. As of now I can see the puzzle and make out what it's going to look like. I just haven't fit all of the pieces into it yet.

Coz

 

[Amethyst]

In my case, not the same at all. When the ex-job called me back, it was with the attitude "We'd be lucky to have you," instead of the "You're lucky to have us" attitude that pervaded when I retired.

Also, I only had to travel to the ex's house 2 days a week. And the ex knew if they started a fight over trivial nonsense (and you know they want to, it's their nature), I could simply walk out and not come back.

They just wouldn't let me alone to do what I did best for them. When I quit, then they wanted me to go back. Nope. Same as divorcing a terrible wife, why would you marry her again? Would she be any different the 2nd time around?

 

[Dtail]

It sounds like you are good overall. As SS (62) approaches, you can calculate what makes sense at that time. I am 58 and am thinking about similar stuff.

 

[COZICAN]

Why does insurance have to be such a hurdle? It just scares me to walk away from my group insurance after 31 years. ACA seems so unstable but hopefully we can get by for eight years.

 

[MRG]

Why does insurance have to be such a hurdle? It just scares me to walk away from my group insurance after 31 years. ACA seems so unstable but hopefully we can get by for eight years.

I've been on ACA since day one. Couldn't pass underwriting.

I've watched the unsubsidized cost of a silver plan go from $400 to $1850 per month. Next year I'll probably buy a cheaper plan with a smaller network.

Employer based insurance is the only thing I miss.

 

[Dtail]

I hear ya. Another thing to keep in mind is if you have any known upcoming large medical expenses, especially in the area of eyes, hearing and dental, you should get it done before retirement.

 

[HI Bill]

My plan is to FIRE May 31, 2019 with $35,000 income for the year keeping my ACA income low and supplimenting $13,000 from cash savings. That covers 2019. For 2020 I plan to pull $40,000 from my 401K using rule of 55 and supplimenting with $8,000 from cash. For
2020 I plan to use $24,000 from cash until I turn 59.5 and then draw $24,000 from my 401K.

All of that would keep me in free or almost free ACA insurance until age 60. It would reduce my savings by $45,000 and my 401K by 40,000
at 59.5.

I would suggest setting up a spreadsheet showing income from what sources and taxes on an annual basis, from your planned retirement year to age 100. Consider the current and future tax consequences of your sequence of withdrawals, and the added SS income, when it comes, and eventually, the effect of RMDs on taxes.

 

[COZICAN]

I would suggest setting up a spreadsheet showing income from what sources and taxes on an annual basis, from your planned retirement year to age 100. Consider the current and future tax consequences of your sequence of withdrawals, and the added SS income, when it comes, and eventually, the effect of RMDs on taxes.

That is next on my list. I'm gathering all my facts and figures and comparing various scenarios which when complete will go into a usable spreadsheet. Thanks for the input; it is appreciated.

Coz

 

[COZICAN]

Ok. Change in plans. Due to some excellent advise on this board I will be working to 59.5 which will be 01MAR21. Instead of draining my cash I will be able to leave 3 years worth of expenses in cash should there be a market downturn and I will begin drawing from my 401K while waiting to 67 to draw SSI. It just works. My wife will be eligible for full survivor benefits with her waiting to 67 also. It will be a tough two years but I think it makes better sense financially for us. Thanks to you all for the education!

Coz