Would you retire at 55 with 1.4m?

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Fishmasterdan

Recycles dryer sheets
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So using the fire calc it says 95% chance of success. My first eligibility is only 10 months away and I fell like I don't have enough. It seems like most folks on here have way more of a nest egg than what I am looking at. I do get a 1300 month pension at 62 on top of my nest egg. I guess I am scared to actually retire. How did you get your confidence to actually pull the plug?
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Everybody is different but I retired with a little less than that at 53 AND that was mid 2007 right before the 2008,2009 fiasco. Sequence of returns and all that baloney. Most people I know when asked about retirement say they wish they retired sooner. Again everyone is different. As Nike says: "JUST DO IT"
 
Most people subconsciously select themselves into our out of early retirement. You don't feel like you have enough, so whether you do or don't actually have enough, you probably won't retire until you are comfortable with what you have (or if an exogenous factor happens, like a layoff or a health issue).

I set a similar metric to declare myself FI and reached that point about age 44. The job wasn't bad and I wanted more, so I worked longer. The job got worse, the money piled up, my Mom was (coincidentally) on hospice, so I retired at 46.

I was still a little nervous at that point but tried to listen to my rational mind. I also made a long list of backups (ways to spend less, earn more, or sell things).

I continued to be frugal, nothing bad happened personally to me, and the worst in history didn't repeat itself - in fact the results were historically average to good. Here I am now 10 years later with a WR% of 1% or so and trying to figure out how to spend more. Never had to use the backups.
 
I ran out situation through every free retirement calculator known to man, Quicken Lifetime Manager and a Vanguard retirement analysis (free back then). All have me various versions of a green light. Also, we had recently shifted from two homes to one, having demolished our seasonal summer home and rebuilt a year-round home on the foundation, moved into the rebuilt summer home and sold our previous main home.

Not only did that bolster our taxable accounts for the proceeds from the sale but also severely reduced our expenses, so it seemed like a good time to pull the trigger.
 
I retired at 60, but with more than double both your savings and pension.

Me....I'd see what the possibility of 65 was for you. Then you have less issues with health insurance (Medicare + supplement vs ACA).... but you do you. And since we don't know what your "burn" is, nor your PIA, I can't model possible decision.
 
Thought I would add. I get subsidized insurance thru my union. Its currently 500$ a month for 60 months. Then 200 a months after 65 for life for Humara I think its called. Supposedly gives me 100% coverage with medicare at 65. So I would be on the hook for 5 years of medical. I for sure wont make 65. I calculated I need less than 60k for bills and went to 100K for annual income in the calculator to cover the medical for 5 years. So I should be able to live well below my withdrawal rate..
 
I was eligible to retire at 51, but did not have enough to be comfortable. At 55 we had a little less than you (about $1.3M), and though various analysis tools said we could retire to cover our "normal" needs, I wanted to retire with enough cover our "extravagant" wants. In addition, I had a pension whose annual value would grow about $2K/year until age 60. So I chose to keep working and build up my pension and our cash and investments until age 60. At that point I felt there was enough for our "extravagant" needs, and a buffer to avoid being forced to sell equities during market downturns. In addition those extra years resulted in me hitting the 35 year maximum SS taxes paid, to get the maximum SS payment when I take it. For us it was worth waiting the additional 5 years.
 
Kind of hard to say. If you are talking about only retiring on 1.4M in retirement accounts than no. Wife and I have things we want to do in retirement that a safe withdraw of 4% of 1.4M would not be enough.
 
To answer the OP question: No.

I wanted basically the same net Income, filing Single, as I did when working, which was around $130k per year.

So I worked a few more years until things clicked...
 
hopefullyoneday said:
Kind of hard to say. If you are talking about only retiring on 1.4M in retirement accounts than no. Wife and I have things we want to do in retirement that a safe withdraw of 4% of 1.4M would not be enough.
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But isn't his budget going to be based on 4% of 1.4 mil + eventual pension + eventual SS?
 
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How did you get your confidence to actually pull the plug?
When I was thinking of retiring in 2000 at age 50, my DW and I decided to budget ourselves on our projected income (savings and pension). I also adjusted my investments from 100% equities to 60/40 which worked out good considering the dot-com bubble bursting. The next couple of years were scary but it all worked out well. I retired on 2003. We also took another unexpected hit when my megacorp decided to cut dependent healthcare in 2008. That unexpected hit lasted until she was 64 and was eligible for Obamacare for a year - then got relief with Medicare the following year.

I think when it comes to retirement everybody is different, and only you can make that decision. In my case I think the less stressful lifestyle (less business travel and corporate BS) improved my health.

My point is you cannot predict the future, but we have now been retired for 23 years (no earned income) and in hindsight I think it was one of the best decisions we ever made.
 
Have a plan, run the numbers and see if it works out.

I’m still working, but I can tell you what is required for me to stop: a complete replacement of base income in Firecalc at a 100%.

I’m willing to spend less if markets/economy is bad, but I don’t want to have any major impact on quality of life.

You might be asking the wrong person though. I’ve passed that number and keep working. Now I tell myself this is mostly for logistical reasons: it’s easier for me to retire in the year I turn 55.
 
When are you going to take SS? I guess that would make it a game changer for me. I ran your numbers and you should be fine but you would need a backup plan and be able to be able to do some cutting if things went south.
 
If you’re not comfortable, then don’t retire. I started running the numbers once a year for about 6 years before retirement. My retirement spending increased a little each year, decided to build a larger CD ladder for fixed income, etc. I wouldn’t feel comfortable unless my investments were 120% of spending, but that’s me. If I estimated wrong, would I want to go back to work part-time for a few years?
 
I quit at 53, single, but I actually just quit my job, so I didn't have quite the same decision to make as you have, though it wasn't easy. After a few months to get my head right, I started applying to some places, and a week later found out I had some windfall coming. So took the time dealing with that, once I figured out where that put my total holdings, and started running calculators. I gave myself a deadline, and when that time came I declared to myself that I was retired.

I was very solid on knowing my expenses (and they are loooow), I had spent that time unemployed figuring out insurance costs, figuring lumpy expenses, running models, I upgraded my basic spreadsheets to include more data and inflation, messed with the numbers a bunch, did tax form iterations, by hand, for future milestones to figure out exactly how cap gains, SS, RMDs, etc, would impacted my taxes, and then tweaked my spreadsheets some more. I basically decided that I might have to live pretty lean until I can start collecting SS. It was worth it to me. The stock market and interest rates went a little crazy right after that, so I'm doing a lot better than my worst case, now. Of course that could change at any time, but I remind myself often that a 50% loss in the stock market affecting what I have now leaves me about where I was when I decided I could make it work.
 
A lot of people retire with much less. It’s all about your expense budget and making sure you’ve also planned for some large, unknown expenses.

Until you reach Medicare eligibility, health insurance can be incredibly expensive. If married, you’ll lose the ACA subsidy with an income of $84,601 and $62,601 as a single. So make sure you fully understand your MAGI. And with the current wackiness in Washington, things are subject to change every year. You’ll have 10 years to navigate.

I also retired at 55 and have 1.5 years until Medicare and my wife has a little more than 2 years to go.
 
You absolutely can retire, the question is whether the level will make you happy. Run Firecalc to solve for 95% (or pick your number) confidence spending with all the inputs, savings, SS, pension. Is that "enough" ?

Remember there are two major inputs to retirement finance success. How much you have and how many years it has to last. As much as it gets pooh-poohed here, the OMY decision is usually very powerful for improving predicted results.
 
IMO, to be comfortable, too many things can go wrong with a 35 to 40 year retirement with only 1.4m. I'd feel a lot better retiring at 65 with 1.4m and great if I was ~70. Inflation, bad investments, market down turns, health, etc. "Stuff does, and will" happen. But that's my opinion.
 
Fishmasterdan said:
So using the fire calc it says 95% chance of success. My first eligibility is only 10 months away and I fell like I don't have enough. It seems like most folks on here have way more of a nest egg than what I am looking at. I do get a 1300 month pension at 62 on top of my nest egg. I guess I am scared to actually retire. How did you get your confidence to actually pull the plug?
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Click to expand...
We did...retired at 55 with a bit less than a $1.4 NW. But we were also 100% debt free. I'd been tracking expenses vs anticipated income for several years and based on those numbers we pulled the plug.
 
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