Year to go anxiety

[Old Schwinn]

I am looking at retirement in May or June of 2022 which would be age 57 and 55 for DW. All of the financial calculators and financial advisors say we are past our retirement number. Several big tasks to complete before actually setting the date. First is to sell our mortgage free house and invest those proceeds. Second is to move to a rental home for one year. Third is to get DD off to a college that actually has in person classes(COVID has been a disaster at Loyola Chicago)!! Fourth is to give my 12 mo notice as required by my employment contract. Fifth is to move out of rental and into our retirement home(fully paid for)in the mountains. I’m anxious about the potential for the market to take a nosedive and where to invest the proceeds from the sale of our home. I currently have the first five years of expenses in cash and no debt to carry into retirement, so I feel good about sequence of return risk. Both daughters 529s are overfunded. We have the house ready to put on the market and the realtor has enough interested people in this low inventory seller’s market that he thinks the house will be sold by March. With current valuations and market turmoil I find myself hesitant to pull the retirement trigger and give my 12 month notice. DW is fully onboard and ready for me to retire yesterday. I appreciate the collective wisdom of the FIRE community and I guess I’m reaching out for some reassurance to set the date come May or June. Thanks!!

 

[anothercog]

Why are you selling to move into a rental? Why not skip that second step and wait to sell until you are ready to move to the Mountains? The additional move just seems like added stress.

With five years expenses and no debt, I wouldn't stress too much about market directions. You'll have no problem riding it out.

 

[bloom2708]

What is your desired retirement mix of stocks/bonds/cash?

With one year+ to go, I'd move toward that.

I'm OK with the rental move. An extra downsizing move should make the next move go easer. Kids return to the nest often, so make sure you have room in the nest for kids.

 

[Old Schwinn]

Why are you selling to move into a rental? Why not skip that second step and wait to sell until you are ready to move to the Mountains? The additional move just seems like added stress.

With five years expenses and no debt, I wouldn't stress too much about market directions. You'll have no problem riding it out.

Until the last year houses in our neighborhood have taken a loooong time to sell. Currently taxes, HOA, insurance and upkeep cost us about 30k per year, so we can rent a nice smaller house for the same amount. I could give my year notice and then put the house on the market after retirement, but that 30k a year would significantly eat into our retirement budget if it didn’t sell quickly. We want to sell it while the market is favorable.

 

[RetireBy90]

I spent lots of time projecting different market conditions and planned plenty of extra caches of funds in case I missed something or under estimated expenses. We are much better than expected. If you have done your homework and it sounds like you have, then my experience says to do it.
I ran into other issues than financial. I needed to put some structure into my days, exercise each day and volunteer work, some chores and other events. However, I need some structure that others don’t. Do you know what you will do with your time?
Do you have a social circle outside work? I needed to work on both of these. Some of the structure has been abandoned or cut back as I am more comfortable. I’m sure others will say these aren’t things they never worried about but just one experience. No fan here of daytime TV.

 

[Old Schwinn]

What is your desired retirement mix of stocks/bonds/cash?

With one year+ to go, I'd move toward that.

I'm OK with the rental move. An extra downsizing move should make the next move go easer. Kids return to the nest often, so make sure you have room in the nest for kids.

Right now stocks 50%, bonds 25% and cash 25%. Would plan to gradually move towards 65/25/10 by year 5 of retirement.

 

[Old Schwinn]

I spent lots of time projecting different market conditions and planned plenty of extra caches of funds in case I missed something or under estimated expenses. We are much better than expected. If you have done your homework and it sounds like you have, then my experience says to do it.
I ran into other issues than financial. I needed to put some structure into my days, exercise each day and volunteer work, some chores and other events. However, I need some structure that others don’t. Do you know what you will do with your time?
Do you have a social circle outside work? I needed to work on both of these. Some of the structure has been abandoned or cut back as I am more comfortable. I’m sure others will say these aren’t things they never worried about but just one experience. No fan here of daytime TV.

I have plans! My normal workday will convert to: 90 additional minutes of sleep to get a full 8 hours, 2 hours of daily walking/exercise, 1.5 to 2 hours of meal prep to eat healthy rather than on the go, 1-2 hours of reading, leisurely coffee and breakfast with DW, volunteering with Habitat for Humanity with the balance of time either standing in the river waving a long stick at trout or sliding downhill on skis.

 

[Jimmer25]

“Waving a long stick at trout”. Sounds like my kind of structure

 

[FLSUnFIRE]

Personally, f I were counting on home equity to meet my FIRE number, I would not count it until realized and cash in hand. RE market can shift and selling can have its own surprises (unknown repairs, etc) that arise and chip at the expected net. If home equity is gravy, then it is just an expense issue (reducing housing costs) and I would be more comfortable putting in notice before selling the house.


Either way I would sell now if I were you but I wouldn't put in my 12mo notice if I needed the equity until I had it in hand. As to market timing, if you have plenty of cash and have a LT time horizon, invest it. If the equity is gravy (don't need returns for your plan to work) and you'd sleep better with a bigger cash cushion then keep it in cash/throw it in the market later.

 

[freedomatlast]

There will never be a time when you won't have any anxiety about pulling the plug. There will always be some level of concern about the future of the stock market, future real estate prices and other events in the future you have no control over. You've done your homework, you have a sound plan, you've thought things through ....time to jump in. The only thing that's certain is that for every day you are still working, you'll have one less day in retirement.

 

[Dtail]

I have plans! My normal workday will convert to: 90 additional minutes of sleep to get a full 8 hours, 2 hours of daily walking/exercise, 1.5 to 2 hours of meal prep to eat healthy rather than on the go, 1-2 hours of reading, leisurely coffee and breakfast with DW, volunteering with Habitat for Humanity with the balance of time either standing in the river waving a long stick at trout or sliding downhill on skis.

I think you have the daily activity planning down pat. I find there sometimes can be an overreach of concern of forum members about filling time in retirement.
I play Pickleball 6x weekly for 4 hours daily and then the rest of the day fills in or sometimes doesn't. There are many former work Type A's who are never bored in retirement whether busy or not.

 

[DrRoy]

I would give my notice now, but at least do it as soon as your house is sold.

 

[MBAustin]

I would give my notice now, but at least do it as soon as your house is sold.

+1

If you already have 5 years expenses in cash, I would invest the house proceeds to move you towards your target AA.

Congratulations on such a great plan! Hopefully the 12 months will go quickly and smoothly for you and you'll be visiting with the trout every day!

 

[ATX78701]

I'm 11 days away from giving two weeks notice and nervous as heck, but I know it's the right course of action after years of prep work to get to this step.

For you, it looks like you have made a plan and are ready to get started. I'd say sell that house first if that is the hold up before giving notice since in the past homes in your area took awhile to sell. If the house is ready to list, do it this weekend! Get offers, close on the sell, give notice, move to rental house.

With the cash from the sale in hand/invested, you'll be more comfortable on giving that notice and rerunning your numbers.

It's great that your retirement house is paid off - that was good planning!

 

[Bigdawg]

What is your desired retirement mix of stocks/bonds/cash?

With one year+ to go, I'd move toward that.

I'm OK with the rental move. An extra downsizing move should make the next move go easer. Kids return to the nest often, so make sure you DO NOT have room in the nest for kids.

Bold mine. I don't want them back. Yes, I do love them. LOL

 

[pacergal]

If you are required to give a 12 month notice, I would do that now. It sounds like you are financially ready, it may or may not take a while for your house to sell. If it sells quickly, you can move into a rental, If not, then you stay put until t does and hopefully be closer to retirement/end of year of work and be able to move to your retirement home(unless it is far away from current location)
There is always potential for the market to take a nose dive, whether working or retired. Have an investment strategy that lets you sleep at night, no matter what.

 

[Old Schwinn]

I'm 11 days away from giving two weeks notice and nervous as heck, but I know it's the right course of action after years of prep work to get to this step.

For you, it looks like you have made a plan and are ready to get started. I'd say sell that house first if that is the hold up before giving notice since in the past homes in your area took awhile to sell. If the house is ready to list, do it this weekend! Get offers, close on the sell, give notice, move to rental house.

With the cash from the sale in hand/invested, you'll be more comfortable on giving that notice and rerunning your numbers.

It's great that your retirement house is paid off - that was good planning!

Congratulations on your quickly approaching retirement!

I realize moving twice is a pain in the neck, but feel it’s less anxiety provoking than having the expense of my current house hanging over my head. We built it way bigger than we needed in case we had another set of twins, but that never happened. So now we live in a really nice, really big house that doesn’t fit our current lifestyle and is expensive to maintain. I’m sad to move from the place where our kids grew up, but it’s time to move on. It simply makes no financial sense to keep it. Sentimental objects have to have a cost maximum!

 

[YoungSaver]

Wow

* calculators and financial advisors say we are past our retirement number
* I currently have the first five years of expenses in cash
* no debt to carry into retirement
* Both daughters 529s are overfunded
* 12 month notice

Sounds like a no brainer. If you're past your number and worried about the markets, why not just sell it all and put it into cash or some bond/annuity?