How Close Are You To Your Number and Financial Independence?

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Greenie
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How Close Are You To Your Number and Financial Independence?

Post by Greenie » Fri Sep 27, 2013 1:25 pm

This question goes out to those who are near their "number" or are retired now and went though the same sort of experience. I will be 63 in March. The original plan was work until I am 66 and with my investments and FRA social security projected income live comfortably. I am very close to my original "number" The original plan is still solid but I am growing wary of my work and the waiting game. The temptation is to quit early and roll the dice. My logical side says, hold on it's just a few more years. I would really appreciate other sharing their similar experiences.

dad2000
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Re: How Close Are You To Your Number and Financial Independe

Post by dad2000 » Fri Sep 27, 2013 1:32 pm

I have hit my number to retire at age 67, but am only in my mid 40s and have kids in grade school. So I will have to work for at least another 10 years because there are too many unknowns.

Because of the depressed interest rates, the SWR today is less than it was before the crisis. So IMHO, being near your original number is not good enough at this point. We've had a bull market for several years, so I wouldn't count on outsized equity returns over the next decade either. You probably want to be a little higher than your original number to be safe.

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TheTimeLord
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Re: How Close Are You To Your Number and Financial Independe

Post by TheTimeLord » Fri Sep 27, 2013 1:46 pm

I think I calculated I need a 6.58% annual return to hit my number by 62.
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Re: How Close Are You To Your Number and Financial Independe

Post by MnD » Fri Sep 27, 2013 1:48 pm

4 years 11 months and ~$500K. Savings will cover most of that and our portfolio has to earn less than 2%/yr to hit our number.
I'll probably go 5 years and 1 months so I can attend one last national industry association meeting.
I have better and closer colleagues in the industry than I do in my own organization.

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Greenie
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Re: How Close Are You To Your Number and Financial Independe

Post by Greenie » Fri Sep 27, 2013 2:05 pm

As we all do here I think and plan with the hard numbers. Part of my question is philosophical. As several of you mentioned low interests, uncertainty in markets, etc. but as some point it has to be a gut feeling, letting go. There are a lot of uncertainties in life beyond money. These are the healthiest years right now. I am not getting younger. If you are calling your own retirement there has to be tipping point. I can see the finish line but the mojo is waning.

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Re: How Close Are You To Your Number and Financial Independe

Post by prudent » Fri Sep 27, 2013 2:19 pm

Three years ago, I was two years away. Today, I'm still two years away and it looks like it will be another 3 or 4 more, due to low interest rates. It would have been better for me if I hadn't originally thought about retirement back then because it made the delays a little tougher to take. But it is what it is, I'm blessed and have nothing to complain about.

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Re: How Close Are You To Your Number and Financial Independe

Post by travellight » Fri Sep 27, 2013 2:28 pm

I passed the age I wanted to be able to retire at 2 years ago. Having a kid threw a monkey wrench into that, and a divorce with me funding everything did not help either. My original theoretical goal was millionaire by age 40, and able to retire by age 50.

I don't have a "number" in terms of financial net worth; it is more a number in terms of years/age. I am 4 years away from all mortgages paid off so my current number is 4 years, or age 56. My realistic number is likely 6+ years because that is when my kid will finish college.... so, that number is age 58.

I do have a number for my stretch goal; I would like to hit 8 digits net worth by the time I retire.... which would postpone it further. There is a big difference between my number and financial independence. I have probably hit financial independence already but am not near my number yet.
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Re: How Close Are You To Your Number and Financial Independe

Post by Tortoise Banker » Fri Sep 27, 2013 2:36 pm

I'm about 5% of the way to my goal. I'm looking to earn approximately $75,000 in 2012 dollars in the year 2050, and retire at 62.

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Re: How Close Are You To Your Number and Financial Independe

Post by technovelist » Fri Sep 27, 2013 2:57 pm

travellight wrote:I passed the age I wanted to be able to retire at 2 years ago. Having a kid threw a monkey wrench into that, and a divorce with me funding everything did not help either. My original theoretical goal was millionaire by age 40, and able to retire by age 50.

I don't have a "number" in terms of financial net worth; it is more a number in terms of years/age. I am 4 years away from all mortgages paid off so my current number is 4 years, or age 56. My realistic number is likely 6+ years because that is when my kid will finish college.... so, that number is age 58.

I do have a number for my stretch goal; I would like to hit 8 digits net worth by the time I retire.... which would postpone it further. There is a big difference between my number and financial independence. I have probably hit financial independence already but am not near my number yet.
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Re: How Close Are You To Your Number and Financial Independe

Post by serbeer » Fri Sep 27, 2013 3:19 pm

Per my "tracking to goals" spreasheet:

Goal .........| % of Goal Saved
___________|_______________
Education....| 31%
Retirement..| 55%
Estate........| 39%
___________|_______________
TOTAL.......| 52.74%

Over the hill!
Last edited by serbeer on Fri Sep 27, 2013 3:20 pm, edited 1 time in total.

letsgobobby
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Re: How Close Are You To Your Number and Financial Independe

Post by letsgobobby » Fri Sep 27, 2013 3:20 pm

not close enough

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Re: How Close Are You To Your Number and Financial Independe

Post by ezeiza » Fri Sep 27, 2013 3:22 pm

Greenie wrote:This question goes out to those who are near their "number" or are retired now and went though the same sort of experience. I will be 63 in March. The original plan was work until I am 66 and with my investments and FRA social security projected income live comfortably. I am very close to my original "number" The original plan is still solid but I am growing wary of my work and the waiting game. The temptation is to quit early and roll the dice. My logical side says, hold on it's just a few more years. I would really appreciate other sharing their similar experiences.
Have you thought about just decreasing hours/going part time? Or taking some time off (weeks to months)? It's amazing what a little time off (especially with travel) can do to quell the need to quit entirely. Plus, it keeps you engaged an active a while longer, never mind the obvious financial benefits.
Jay-B

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Re: How Close Are You To Your Number and Financial Independe

Post by nodenuff2 » Fri Sep 27, 2013 3:28 pm

We hit the number 2 years ago but I was not ready to quit working. Now I am ready, better off financially and waiting for the big ball to drop so I can say so long to the corporate grind. I have been very blessed. ready for the next chapter of life. Will miss my work friends though.
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Re: How Close Are You To Your Number and Financial Independe

Post by hicabob » Fri Sep 27, 2013 3:44 pm

Hit and passed it by quite a bit when I sold my little company 1.5 years ago - just need to fulfill my contract to the purchaser, which is another 6 months then my hard earned freedom awaits.

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Re: How Close Are You To Your Number and Financial Independe

Post by bengal22 » Fri Sep 27, 2013 3:50 pm

sorry to say but while I was very faithful in my saving and I invested wisely, I just "winged it" when I said I was ready to retire. I retired when I was 59 and now 2 years later I am pretty sure I made the right decision. I think if you wait for the optimum time you miss out on some fun retirement years of golfing, travelling, and relaxing.
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Re: How Close Are You To Your Number and Financial Independe

Post by Levett » Fri Sep 27, 2013 4:04 pm

Greenie wrote:

"There are a lot of uncertainties in life beyond money. These are the healthiest years right now. I am not getting younger. If you are calling your own retirement there has to be tipping point. I can see the finish line but the mojo is waning."

You have given voice to how some of us--by no means all--think.

I'd seen too many people plan for their "golden Years," only to watch them deteriorate or die before they had one moment of late-life freedom.

I bagged it at age 58, with good resources, but with even greater determination to seize the time that remained.

Friends would say to me: " but you are too young to retire." And I would respond without hesitation: "That's the point!"

That was 13 years ago.

Go for it when you can while you can. Time and tide wait for no man or woman.

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Re: How Close Are You To Your Number and Financial Independe

Post by Sam I Am » Fri Sep 27, 2013 4:05 pm

Message deleted.
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Re: How Close Are You To Your Number and Financial Independe

Post by gerrym51 » Fri Sep 27, 2013 4:11 pm

i retired this year at 62. assuming things go as planned i run out of savings at 98 years old. the wife will be 103 at this time. of course plans never go as planned but it was time for me to retire :mrgreen:

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Re: How Close Are You To Your Number and Financial Independe

Post by dimdum » Fri Sep 27, 2013 4:31 pm

On target to retire by 2030 if things go as plan for next 10 years i.e. I continue to earn good money and save at current rate. And get 5-6% return on investment.

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Re: How Close Are You To Your Number and Financial Independe

Post by scrabbler1 » Fri Sep 27, 2013 4:45 pm

I hit my number 5 years ago when I was 45. Been retired ever since, about to celebrate my 5-year anniversary.

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Re: How Close Are You To Your Number and Financial Independe

Post by synergy » Fri Sep 27, 2013 4:54 pm

In a year and a quarter, I will be 66 and able to collect "full" SS. For the last several years, I have been tracking our expenses and have a reasonable handle on what we need to maintain our current comfortable lifestyle. I am mentally ready to retire and start the next chapter but spouse, who is the same age, is still full of vim and vinegar at work. One move I have made is to go to a 4 day week, though the work load does not seem to have lessened (but it does give me an excuse to miss many unproductive meetings).

Since our kids have been out of the house and out of college, we have been stashing as much cash as we can. I think that the combination of our two SS and the earnings from our various retirement accounts we should do fine (barring health issues) and not have to invade our capital. I am reasonably confident but time will tell.

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Re: How Close Are You To Your Number and Financial Independe

Post by curmudgeon » Fri Sep 27, 2013 5:20 pm

Hit my number several years ago. I still like the stimulation and challenge of my work, so sticking with it for a while longer. One thing we have done is taper down the savings rate a bit, and are spending some more in our current life. We don't have overall expensive tastes, but I realized if I was planning for a $20k/yr travel budget in retirement, I should be willing to spend that now if circumstances warranted (some years we do, some we don't). I may drop down to some form of part time in a couple of years, but that's a bit complicated by the fact that we currently live in a high cost/tax area and plan to retire to a lower cost one.

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Re: How Close Are You To Your Number and Financial Independe

Post by RNJ » Fri Sep 27, 2013 5:30 pm

About 1/2 way to the "number". Planning to retire in 12-13 yrs when pension eligibility kicks in. Assumptions are based on a 4% return on investments, 3% inflation, and a 3% withdrawal rate. There is a lot of flexibility built into the plan including continuing to work, reducing withdrawal rate (our number is high enough to give us that flexibility), or retiring early.

I'm curious about the assumptions people are making in determining their "number".

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Re: How Close Are You To Your Number and Financial Independe

Post by ofcmetz » Fri Sep 27, 2013 6:14 pm

If my police pension comes through then ill be there in 11 years at current saving rate. If the pension takes a haircut like I expect then I'm a about 20 years at this savings rate from it.

Age 34. Wife has no pension. Savings rate 25% of gross.

Want $1,000,000 with paid off house if pension comes through. $2,000,000 if pension takes a serious haircut.
Never underestimate the power of the force of low cost index funds.

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Re: How Close Are You To Your Number and Financial Independe

Post by sans souliers » Fri Sep 27, 2013 6:27 pm

SIX months to go -- 7 tops. I want to make one more deposit to the HSA, the ROTH and find a place to escape to while I have some minor construction done around the house... what's a good destination for about six weeks? I'll come up with something.
Sometimes pessimism leaves me pretty well prepared for when things don't go my way, and pleasantly surprised when they do.

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Re: How Close Are You To Your Number and Financial Independe

Post by Meaty » Fri Sep 27, 2013 7:22 pm

Given I'm probably 30 years out, I don't even know what my number is.
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Re: How Close Are You To Your Number and Financial Independe

Post by letsgobobby » Fri Sep 27, 2013 7:31 pm

curmudgeon wrote:We don't have overall expensive tastes, but I realized if I was planning for a $20k/yr travel budget in retirement, I should be willing to spend that now if circumstances warranted (some years we do, some we don't).
This is a good perspective, probably even more so if one no longer has the expense of children to raise but isn't yet retired. It's more complicated when you're still raising young kids, saving for college, etc: one doesn't expect one's entire life to revolve around one's kids forever, only for a decade or two (maybe).

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Re: How Close Are You To Your Number and Financial Independe

Post by Grt2bOutdoors » Fri Sep 27, 2013 7:46 pm

At least 20 years, if not more.
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Re: How Close Are You To Your Number and Financial Independe

Post by Bacchus01 » Fri Sep 27, 2013 8:49 pm

I am 10 years and 18 days from "the date" if things go as planned. I will be at 8 figures at that point at age 50.

However, I'm starting a new job next week and there are a LOT of perks there if I worked until at least 55. Tempting.

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Re: How Close Are You To Your Number and Financial Independe

Post by Cookies » Fri Sep 27, 2013 8:55 pm

Just hit around 1x salary in balance, so something like 1/25th of the way. Luckily I hope to be in a cheaper COL location upon retirement so that might be closer to 1/15th of the way. It should keep getting faster from here.

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Re: How Close Are You To Your Number and Financial Independe

Post by kingpoppy » Fri Sep 27, 2013 9:06 pm

Bacchus01 wrote:I am 10 years and 18 days from "the date" if things go as planned. I will be at 8 figures at that point at age 50.

However, I'm starting a new job next week and there are a LOT of perks there if I worked until at least 55. Tempting.
Another 8-figure goal! What's your secret?

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Re: How Close Are You To Your Number and Financial Independe

Post by flipflopliving » Sat Sep 28, 2013 6:35 am

Greenie, I hit my age goal three years ago and my number this year. Work became a real chore this year, probably exacerbated knowing I could leave. Told them a month ago I am leaving and it is even harder knowing I am leaving, my coworkers do not know yet either. Objectively we are both too young to retire but we want to go have some fun. My grandparents were all gone by 70 and my dad by 62. Life is short and the short term pain of leaving work will pass. Who knows if our number is too much or too little, but it is a highly educated guess. I surely enjoy making money just for the fun of it, but the tipping point for me is the lack of job satisfaction.

Good luck, Flipflopliving
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Bustoff
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Re: How Close Are You To Your Number and Financial Independe

Post by Bustoff » Sat Sep 28, 2013 7:50 am

For me examining the motive for retirement was as important as the financial aspect.
Regarding the financial, you may find this helpful:
When all is said and done, I still know of no better risk analysis tool for retirees under the age of 70 than this simple narrative: At a 2 percent withdrawal rate, your nest egg will survive all but catastrophic institutional and military collapse; at 3 percent, you are probably safe; at 4 percent, you are taking real chances; and at 5 percent and beyond, you should consider annuitizing most, if not all, of your nest egg. – William Bernstein

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Re: How Close Are You To Your Number and Financial Independe

Post by sephage » Sat Sep 28, 2013 8:06 am

I hit The Number last year at 40. That number was a net worth of $1M. Not enough to carry us until our 90s (especially with a 5 year old daughter who will need "funding" until she's an independent adult), but enough to allow me to kiss the corporate gig goodbye and try to make money as a freelance wine writer at a fraction of my former salary.

Which is a long way of saying that The Number is a malleable concept and one that won't be the same for everyone on either amount or purpose.

Cheers!
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Re: How Close Are You To Your Number and Financial Independe

Post by MathWizard » Sat Sep 28, 2013 8:47 am

6 yrs. to minimum Fin. Ind. at 61

Expect to work until at least 65 to have money for travel and fun.

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Re: How Close Are You To Your Number and Financial Independe

Post by HJG0989 » Sat Sep 28, 2013 8:51 am

Hit the number a few years ago and retired 4 months ago at age 56. Life is good!!!!

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Re: How Close Are You To Your Number and Financial Independe

Post by Tycoon » Sat Sep 28, 2013 8:54 am

We passed the original number years ago. However, inability to predict college costs ($0 to >$500,000 for both kids) keeps us in our accumulation phase.
“To know what you know and what you do not know, that is true knowledge.” Confucius

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Re: How Close Are You To Your Number and Financial Independe

Post by jimmyq » Sat Sep 28, 2013 9:06 am

Originally, I always thought that the "Number" was supposed to be some firm value that is calculated early on (accounting for inflation), and didn't change. In actuality, I've found that my "Number" seems to be more of a variable that constantly shifts upward. My original number was 1M which would enable me to have a bare minimalist retirement. Having hit that number a few years ago, my number keeps swelling because my expectations for retirement keep growing. I suppose having a number is a good way of having a goal to shoot for... but I just wish that dang number wouldn't keep moving around.

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Re: How Close Are You To Your Number and Financial Independe

Post by livesoft » Sat Sep 28, 2013 9:36 am

We are about 33% from our number, but on the other side of it.
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Greenie
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Re: How Close Are You To Your Number and Financial Independe

Post by Greenie » Sat Sep 28, 2013 10:18 am

hicabob wrote:Hit and passed it by quite a bit when I sold my little company 1.5 years ago - just need to fulfill my contract to the purchaser, which is another 6 months then my hard earned freedom awaits.
I have a small business that consists of my wife, myself, and one employee. It's been good to me with hard work and has got me where I am today financially but I am at the burnt out stage now. I have lost interest and have just been going through the motions. I am just hanging on trying to keep the value of the business close to what it has been in the last few years. Which in itself has been challenging. I spoke to a competent business broker. Wait and throw more on the pile or take the risk of some uncertainty of what my wife (age 54) and my finances are twenty years from now???

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Re: How Close Are You To Your Number and Financial Independe

Post by gerrym51 » Sat Sep 28, 2013 10:27 am

here is the number-the amount of money that will be your yearly expenses(this is a guess unless your really close to your retirement age) minus your ss(whatever it is).

thats the amount times whatever age you need to get to(most people use 95). say it 20000 and you retire 65. the amount withinflation will be 600000 and hopefully your investments will keep pace with inflation. thats a 30 times number

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Re: How Close Are You To Your Number and Financial Independe

Post by tacster » Sat Sep 28, 2013 11:14 am

Reached my minimum number earlier this year, retiring next January at age 57. Sixty five working days left...in my life...not that I'm counting, mind you.

I could work longer to accumulate a bigger cushion and a bit more retirement income, but I enjoy active hobbies and want to retire young and healthy enough to enjoy them for as many years as possible. As others have pointed out, you never know how much time you've got left. I'd rather not spend it chasing $$ at a job I don't much care for.
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Greenie
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Re: How Close Are You To Your Number and Financial Independe

Post by Greenie » Sat Sep 28, 2013 11:16 am

flipflopliving wrote:Greenie, I hit my age goal three years ago and my number this year. Work became a real chore this year, probably exacerbated knowing I could leave. Told them a month ago I am leaving and it is even harder knowing I am leaving, my coworkers do not know yet either. Objectively we are both too young to retire but we want to go have some fun. My grandparents were all gone by 70 and my dad by 62. Life is short and the short term pain of leaving work will pass. Who knows if our number is too much or too little, but it is a highly educated guess. I surely enjoy making money just for the fun of it, but the tipping point for me is the lack of job satisfaction.

Good luck, Flipflopliving

Thanks Filpflop

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Re: How Close Are You To Your Number and Financial Independe

Post by FoolStreet » Sat Sep 28, 2013 11:42 am

I just checked. I'm 40 now and have a target for retiring at 55, figuring I could easily work longer if needed. We have about $1M in 401k, and if left at a 7% growth rate, 2% inflation, then I'll hit about $2.5M in 15 years, assuming no additional contributions. If I add Roth and 25k ea contributions by my wife and I for the next 15years, that gets us to $4M. (I have some other investments to handle education and that either offers upside or depending on college costs, but most likely no downside.)

We live (relatively) simple lives, but our biggest expense is a $1.3M mortgage, which will be paid off at age 70 assuming normal amortization.

So, my rough plan is to pay off the mortgage when I'm 55 (approx 850k by then), and then discount the remaining dollars via inflation to get a feel for today's dollars, then apply the 4% withdrawal rate, then figure out taxes.

It's not exact, but I'd roughly look at $50k income in today's dollars from our 401ks per year at 55, asssuming no additional contributions (this is mentally my floor). About $100k/year of today's dollars if we assume ongoing 401k/Roth contributions. At some point, I could add SS of another $50k.

$50k income with no mortgage is super tight until SS but survivability. ($2.5M "number" in 15 years)
$100k income with no mortgage is comfortable but travel is backpacking and hostels, not hotels. ($4M "number" in 15 years)

Ideally, I'd like to nudge the savings up a bit, but then again, Ideally, I'd find a lifestyle corporate job that allows plenty of international travel at 55 so that it's fun to work and travel with plenty of side trips built in :-)

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Re: How Close Are You To Your Number and Financial Independe

Post by JDaniels » Sat Sep 28, 2013 11:49 am

On target :D
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Re: How Close Are You To Your Number and Financial Independe

Post by stan1 » Sat Sep 28, 2013 12:15 pm

Greenie wrote:
hicabob wrote:Hit and passed it by quite a bit when I sold my little company 1.5 years ago - just need to fulfill my contract to the purchaser, which is another 6 months then my hard earned freedom awaits.
I have a small business that consists of my wife, myself, and one employee. It's been good to me with hard work and has got me where I am today financially but I am at the burnt out stage now. I have lost interest and have just been going through the motions. I am just hanging on trying to keep the value of the business close to what it has been in the last few years. Which in itself has been challenging. I spoke to a competent business broker. Wait and throw more on the pile or take the risk of some uncertainty of what my wife (age 54) and my finances are twenty years from now???
Greenie (original poster), thanks for providing this additional information as it changes the situation quite a bit from what I would recommend if you were a salaried employee. Correct me if I'm wrong, but it sounds like a substantial part of the assets you would need to retire come from the sale of the small business. I would begin the process of looking for a buyer for the business especially if you and the broker think the market conditions are such that it would be easier to sell the business now that if there was a downturn in the economy. The economy goes up and down, but if your timeline is under 5 years you may find yourself waiting 7-10 years for another good selling opportunity. I'd say keep going if your heart was still in the business -- but sounds like it isn't.

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Rob54keep
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Re: How Close Are You To Your Number and Financial Independe

Post by Rob54keep » Sat Sep 28, 2013 12:37 pm

I plan on leaving the corporate world in 10 months (after 32 years) but have already started teaching college courses for my encore career. I reached my "number" last year and will teach at my own speed and much lower income until ???? Truly blessed!

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Re: How Close Are You To Your Number and Financial Independe

Post by catchthewave » Sat Sep 28, 2013 1:13 pm

57 here, about 1-2 years to go. Need to sell 2 properties for the extra $600K +/- to bring portfolio up to 2.2m Just sold the vacation property at a 40% loss but that now gone we gain some freedom and one more step towards uprooting and heading West. Of course we hope the market will add to the kitty, so 3% WDR would be close to $80K/year.

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Greenie
Posts: 148
Joined: Thu Apr 30, 2009 9:43 pm

Re: How Close Are You To Your Number and Financial Independe

Post by Greenie » Sat Sep 28, 2013 1:35 pm

I have a small business that consists of my wife, myself, and one employee. It's been good to me with hard work and has got me where I am today financially but I am at the burnt out stage now. I have lost interest and have just been going through the motions. I am just hanging on trying to keep the value of the business close to what it has been in the last few years. Which in itself has been challenging. I spoke to a competent business broker. Wait and throw more on the pile or take the risk of some uncertainty of what my wife (age 54) and my finances are twenty years from now???
Greenie (original poster), thanks for providing this additional information as it changes the situation quite a bit from what I would recommend if you were a salaried employee. Correct me if I'm wrong, but it sounds like a substantial part of the assets you would need to retire come from the sale of the small business. I would begin the process of looking for a buyer for the business especially if you and the broker think the market conditions are such that it would be easier to sell the business now that if there was a downturn in the economy. The economy goes up and down, but if your timeline is under 5 years you may find yourself waiting 7-10 years for another good selling opportunity. I'd say keep going if your heart was still in the business -- but sounds like it isn't.
Thanks Stan 1 Actually I am very near my number and the sale of the business would put me over the top. I will start my SS benefit in 3 1/2 years and I have 2 1/2 years until Medicare. I will have to fund my wife's (age 54) and my health insurance fully until Medicare. The ACA might provide some relief in my reduced retirement income qualifies. My gut tells me I am being overly optimistic with my finances but I have always been an underspender.

heyyou
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Joined: Tue Feb 20, 2007 4:58 pm

Re: How Close Are You To Your Number and Financial Independe

Post by heyyou » Sat Sep 28, 2013 10:15 pm

When I didn't like my job, I tried to save more. DW and I practiced living on our retirement budget for the last years of working. That was a nice, small distraction from my job, but good confirmation about our future retirement spending.

We don't have expensive tastes, so we now know that we could have retired with less, and just as thoroughly enjoyed this portion of retirement. Millions of other retirees have happily done that on less assets than ours. We enjoy retirement living so well that we haven't needed a vacation from it, not like when we were working. These days, our travel is more constrained by her schedule (art classes, gardening, and volunteer work), than by our budget. That was unexpected.

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