Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

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mister_sparkle
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Location: Chicago

Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by mister_sparkle » Wed Mar 14, 2018 1:30 pm

I have begun to hone in on a date where I say goodbye to working and begin to relax and enjoy free time and all that comes with it. And for me the most logical date would be in a little over 3 years when I turn 55, as a) I believe I will have sufficient assets to tide me over until I receive a (smallish) pension at 65 and then Social Security at 67, and b) I can buy into my employer’s health insurance plan at age 55, which would solve the conundrum about health insurance until I am eligible for Medicare.

However, I am feeling burnt out on work, and I am wondering if I have enough saved to retire now, or in a year, without waiting ‘til I am 55.

Here are my portfolio details:

Emergency funds: I keep about $8K in cash in a savings account. If I need more, I would tap my Vanguard taxable account.

Debt: No debt. I rent an apartment and own my car outright. Credit card bill balances get paid each month.

Tax Filing Status: Single (happily – in a relationship but not planning on marrying again)

Tax Rate: 22% Federal, 4.95% State

State of Residence: Illinois

Age: 51

Desired Asset allocation: 70% stocks / 30% bonds

Desired International allocation: 28.5% of stocks (e.g. 20% of overall portfolio)

Overall portfolio: $1,240,000

Taxable holdings - $706.7K
VMMXX – Vanguard Prime Money Market: $2.9K
VWIUX - Vanguard Intermediate Term Tax-Exempt: $61K
VTIAX – Vanguard Total Int’l: $170.3K
VTCLX – Vanguard Tax-Managed Capital Appreciation: $138.5K (TLH partner with VTSAX)
VTSAX – Vanguard Total Stock Market: $333.8K

Tax-advantaged holdings - $533.3K

401K:
VWENX – Vanguard Wellington: $197K

Rollover IRA: $200K
VBTLX – Vanguard Total Bond: $138.4K
VTIAX – Vanguard Total Int’l: $39.7K
VTSAX – Vanguard Total Stock Market: $21.8K

Roth IRA: $81.1K
VBTLX – Vanguard Total Bond: $63.8K
VTIAX – Vanguard Total Int’l: $9.5K
VTSMX – Vanguard Total Stock Market: $7.7K

Inherited IRA: $53.6K
VBTLX – Vanguard Total Bond: $38.6K
VTSAX – Vanguard Total Stock Market: $15K

HSA: $1.6K
Cash

New annual Contributions
Salary: $95K
401k: $24,500 / Employer match is 7%, or $6600
$6500 – Roth IRA (funded from taxable)
Inherited IRA RMD is around $1800/year right now but will increase as I get older

Future income:
At age 65 (2031): $900/month pension, no COLA. Can start pension at age 55, at reduced (50%) of the benefit.

Social Security if I were to stop working in 2018 would be about $2200 in 2033 dollars (FRA of 67)

Monthly expenses: Could probably live OK on $4K/month, but would prefer slightly higher for travel/vacations. The big variable would be health insurance if I retired before 55. Health is OK, don’t see doctors very often.

$4K a month in spending is almost exactly a 4% SWR if I were to retire now, but the health insurance aspect does give me pause. One other option I have is to negotiate a reduced schedule with my job that pays a fraction (say, 50%) but allows me to maintain full benefits.

Would appreciate any thoughts or advice you might have. Thanks.

rkhusky
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by rkhusky » Wed Mar 14, 2018 1:35 pm

4% would be somewhat risky with an early retirement, although that percent would go down after taking pension and taking SS. Have you plugged your numbers into FIRECalc or CFIRESim to see how you would have done in past years?

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mister_sparkle
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Location: Chicago

Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by mister_sparkle » Wed Mar 14, 2018 1:41 pm

I haven't yet. I have a bunch of different calculators etc. that I've got downloaded so I'll try to find FIRECalc tonight.

Darth Xanadu
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Darth Xanadu » Wed Mar 14, 2018 1:44 pm

If I were you, I would spend the next 1 year working, adjust 401k down to only get company match, and pad the taxable account. Then, re-evaluate.
"A courageous teacher, failure is."

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Hyperborea
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Hyperborea » Wed Mar 14, 2018 1:45 pm

Have you tried to price out what the cost of health insurance between now and Medicare would be? That's the elephant in the room. Obamacare would work well for you but the future of that is in serious jeopardy and with 14 years to go until Medicare that would be very risky. I would wait a few years to see what happens to it and by that time the future of it would be more certain or you would be eligible for the company retiree plan.

Your idea of half time sounds interesting - get half the pay that would just cover your living costs and have the health insurance. You could let the portfolio grow for a few years and then retire and take the retiree health care.

FireCalc - https://www.firecalc.com
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

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Pajamas
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Pajamas » Wed Mar 14, 2018 1:47 pm

Look at worst-case scenarios such as sequential negative returns on your portfolio early in your retirement, increasing inflation, deteriorating health, and being forced to buy health coverage at full cost on the open market. That will give you a better idea than just looking at the most likely or mostly-favorable scenarios. I think that becomes more important the earlier you retire simply because there is more time for things to change.

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wshang
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by wshang » Wed Mar 14, 2018 3:48 pm

4% is for a 30 year time horizon. You are looking at much longer, so it is probably 2-2.5% SWR. Probably not what you want to hear, especially since the likelihood of the next ten years being as good as the last ten years is not as good given valuations.
“. . . extraordinary wealth can be made by knowing the future" - Harry Dent

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Hyperborea
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Hyperborea » Wed Mar 14, 2018 4:13 pm

wshang wrote:
Wed Mar 14, 2018 3:48 pm
4% is for a 30 year time horizon. You are looking at much longer, so it is probably 2-2.5% SWR. Probably not what you want to hear, especially since the likelihood of the next ten years being as good as the last ten years is not as good given valuations.
2-2.5% is far, far too conservative. For a possible 40-45 year max retirement horizon the OP is looking at probably around 3.25-3.75% depending on allocation if he retires in a worst case year.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

soccerrules
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by soccerrules » Wed Mar 14, 2018 4:36 pm

I would play with firecalc and others with different ages 52,54,56.

I have noticed in my situation (age 52) looking to retire at 60, that when you add a year of "work" it actually moves the needle in your favor more than expected.By working 1 additional year (or more) you:
1) Add more Savings (401,IRA, Taxable)
2) Nest Egg usually grows
3) You aren't withdrawing from Nest Egg
4) Have cheaper health benefits (thru work)
5) Probably allows for delaying taking SS and or pensions = bigger benefit

My quick response is to stick it out until 55 for the reasons you listed (Healthcare being the biggest question mark). If you are really miserable, maybe look for something else and then switch jobs. If you enjoy your work and workplace, you are more likely to keep working which makes your retirement more comfy.
Don't let your outflow exceed your income or your upkeep will be your downfall.

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Nestegg_User
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Nestegg_User » Wed Mar 14, 2018 4:43 pm

4% WR is too aggressive for that long, 3.25-3.5 is more likely; also 70/30 might be higher equity allocation than you might want to go (at least initially) due to sequence of returns issues.

{I think you need to stay at least until 55; the company health insurance is a big component for peace of mind. I personally think that your 1.3 large is a bit small given the unknowns of health care, inflation, and future SS (which given your lower future wages, if you went part time or quit entirely, would need to be better estimated with anypia to get a truer value). I think you should target a 3% WR and see if you could make it with that... if not then you might be trying to get too close... you need to get to at least SS start age (62+) and then reevaluate your plans. }

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MP123
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by MP123 » Wed Mar 14, 2018 4:48 pm

Pajamas wrote:
Wed Mar 14, 2018 1:47 pm
Look at worst-case scenarios such as sequential negative returns on your portfolio early in your retirement, increasing inflation, deteriorating health, and being forced to buy health coverage at full cost on the open market.
Also consider a worst case scenario of not being able to buy health insurance on the open market.

delamer
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by delamer » Wed Mar 14, 2018 5:27 pm

Divide your portfolio (just mentally for now) into two parts — what you will need to withdraw pre-Social Security and then the balance available once Social Security begins.

The traditional safe withdrawal rates don’t really apply, since the amount you need are very different in the two parts.

So if you need 12 years of $40,000 (retiring at 55) that’s $480,000, minus what you get from the pension whenever you decide to take it. Then the remainder can be withdrawn at the traditional 4% rate when you start SS.

You need to take inflation into account for the $480,000 also. You can play around with the numbers to get to a comfortable expenditure level (including taxes and irregular expenses) and also develop an investment plan for that money.

There are no guarantees that your company will continue to offer health insurance to retirees until you reach Medicare age. But even a few years would make a big difference. So wait until you are 55 and eligible before retiring.

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wshang
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by wshang » Wed Mar 14, 2018 5:37 pm

Hyperborea wrote:
Wed Mar 14, 2018 4:13 pm
wshang wrote:
Wed Mar 14, 2018 3:48 pm
4% is for a 30 year time horizon. You are looking at much longer, so it is probably 2-2.5% SWR.
2-2.5% is far, far too conservative. For a possible 40-45 year max retirement horizon the OP is looking at probably around 3.25-3.75% depending on allocation if he retires in a worst case year.
I think you bring up a good point. In these discussions, we never discuss our health or family genetics. I plan (financially) to live past 100 or at least my spouse. There is a good deal which can happen between then and now, the biggest near term being an unfavorable change in the healthcare law or Medicare. Those who experienced a world war devastation or national famine, those memories are quickly receding in our present era of a human epoch -- unprecedented period of world peace and prosperity.

So my plan doesn't include a bullet to my temple if I run out of money after 30, 40, 50 years. My plan is for a bulletproof portfolio short of complete collapse of the world economy and at the other end of the spectrum, (cynically) healthcare miracles which cost a fortune affordable to only a few.

JHU ALmuni
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by JHU ALmuni » Wed Mar 14, 2018 5:59 pm

mister_sparkle wrote:
Wed Mar 14, 2018 1:30 pm
I have begun to hone in on a date where I say goodbye to working and begin to relax and enjoy free time and all that comes with it. And for me the most logical date would be in a little over 3 years when I turn 55, as a) I believe I will have sufficient assets to tide me over until I receive a (smallish) pension at 65 and then Social Security at 67, and b) I can buy into my employer’s health insurance plan at age 55, which would solve the conundrum about health insurance until I am eligible for Medicare.

However, I am feeling burnt out on work, and I am wondering if I have enough saved to retire now, or in a year, without waiting ‘til I am 55.

Here are my portfolio details:

Emergency funds: I keep about $8K in cash in a savings account. If I need more, I would tap my Vanguard taxable account.

Debt: No debt. I rent an apartment and own my car outright. Credit card bill balances get paid each month.

Tax Filing Status: Single (happily – in a relationship but not planning on marrying again)

Tax Rate: 22% Federal, 4.95% State

State of Residence: Illinois

Age: 51

Desired Asset allocation: 70% stocks / 30% bonds

Desired International allocation: 28.5% of stocks (e.g. 20% of overall portfolio)

Overall portfolio: $1,240,000

Taxable holdings - $706.7K
VMMXX – Vanguard Prime Money Market: $2.9K
VWIUX - Vanguard Intermediate Term Tax-Exempt: $61K
VTIAX – Vanguard Total Int’l: $170.3K
VTCLX – Vanguard Tax-Managed Capital Appreciation: $138.5K (TLH partner with VTSAX)
VTSAX – Vanguard Total Stock Market: $333.8K

Tax-advantaged holdings - $533.3K

401K:
VWENX – Vanguard Wellington: $197K

Rollover IRA: $200K
VBTLX – Vanguard Total Bond: $138.4K
VTIAX – Vanguard Total Int’l: $39.7K
VTSAX – Vanguard Total Stock Market: $21.8K

Roth IRA: $81.1K
VBTLX – Vanguard Total Bond: $63.8K
VTIAX – Vanguard Total Int’l: $9.5K
VTSMX – Vanguard Total Stock Market: $7.7K

Inherited IRA: $53.6K
VBTLX – Vanguard Total Bond: $38.6K
VTSAX – Vanguard Total Stock Market: $15K

HSA: $1.6K
Cash

New annual Contributions
Salary: $95K
401k: $24,500 / Employer match is 7%, or $6600
$6500 – Roth IRA (funded from taxable)
Inherited IRA RMD is around $1800/year right now but will increase as I get older

Future income:
At age 65 (2031): $900/month pension, no COLA. Can start pension at age 55, at reduced (50%) of the benefit.

Social Security if I were to stop working in 2018 would be about $2200 in 2033 dollars (FRA of 67)

Monthly expenses: Could probably live OK on $4K/month, but would prefer slightly higher for travel/vacations. The big variable would be health insurance if I retired before 55. Health is OK, don’t see doctors very often.

$4K a month in spending is almost exactly a 4% SWR if I were to retire now, but the health insurance aspect does give me pause. One other option I have is to negotiate a reduced schedule with my job that pays a fraction (say, 50%) but allows me to maintain full benefits.

Would appreciate any thoughts or advice you might have. Thanks.

I would say go for it and try to stick to 4% WR. Working additional 3 years won't change much. Assuming you save 50% of your salary in the next 3 years this will increase your portfolio value by ~150K, not a lot if you look at the big picture. Worst case scenario if you feel you need extra money, you can try work part time and get some benefits...

HJG0989
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by HJG0989 » Wed Mar 14, 2018 6:41 pm

JHU ALmuni wrote:
Wed Mar 14, 2018 5:59 pm
I would say go for it and try to stick to 4% WR. Working additional 3 years won't change much. Assuming you save 50% of your salary in the next 3 years this will increase your portfolio value by ~150K, not a lot if you look at the big picture. Worst case scenario if you feel you need extra money, you can try work part time and get some benefits...
It's more than the addition to expenses, it's also the withdrawals. If the OP spends $50k per year that's 150k he won't be withdrawing, so the difference is $300k more by working three more years.

scrabbler1
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by scrabbler1 » Wed Mar 14, 2018 6:51 pm

delamer wrote:
Wed Mar 14, 2018 5:27 pm
Divide your portfolio (just mentally for now) into two parts — what you will need to withdraw pre-Social Security and then the balance available once Social Security begins.

The traditional safe withdrawal rates don’t really apply, since the amount you need are very different in the two parts.

So if you need 12 years of $40,000 (retiring at 55) that’s $480,000, minus what you get from the pension whenever you decide to take it. Then the remainder can be withdrawn at the traditional 4% rate when you start SS.

You need to take inflation into account for the $480,000 also. You can play around with the numbers to get to a comfortable expenditure level (including taxes and irregular expenses) and also develop an investment plan for that money.

There are no guarantees that your company will continue to offer health insurance to retirees until you reach Medicare age. But even a few years would make a big difference. So wait until you are 55 and eligible before retiring.
Delamer beat me to it. As someone who retired 9 years ago at age 45, my ER plan was to split my portfolio into 2 parts, the first one to age ~60 (the mor challenging one) and the second part thereafter, when I can begin tapping into my IRA, SS, and frozen company pension. I have to use only my taxable portfolio, which the OP would have to do, too. That makes SWR rates pretty irrelevant.

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Hyperborea
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Hyperborea » Wed Mar 14, 2018 8:19 pm

wshang wrote:
Wed Mar 14, 2018 5:37 pm
Hyperborea wrote:
Wed Mar 14, 2018 4:13 pm
wshang wrote:
Wed Mar 14, 2018 3:48 pm
4% is for a 30 year time horizon. You are looking at much longer, so it is probably 2-2.5% SWR.
2-2.5% is far, far too conservative. For a possible 40-45 year max retirement horizon the OP is looking at probably around 3.25-3.75% depending on allocation if he retires in a worst case year.
I think you bring up a good point. In these discussions, we never discuss our health or family genetics. I plan (financially) to live past 100 or at least my spouse. There is a good deal which can happen between then and now, the biggest near term being an unfavorable change in the healthcare law or Medicare. Those who experienced a world war devastation or national famine, those memories are quickly receding in our present era of a human epoch -- unprecedented period of world peace and prosperity.

So my plan doesn't include a bullet to my temple if I run out of money after 30, 40, 50 years. My plan is for a bulletproof portfolio short of complete collapse of the world economy and at the other end of the spectrum, (cynically) healthcare miracles which cost a fortune affordable to only a few.
I'm not too worried about 3.25-3.75% surviving for 50 years. It easily handled the great depression and starting in 1967, the two worst starts in the historical record. Add in the ability to be flexible in your spending (a large amount of discretionary spending), a glide down and back up (more bonds/fixed at retirement and immediately thereafter to deal with sequence of returns), and the addition of SS not counted in that, and you have likely enough security that anything that would break it will likely break society too. Nothing to be done in that case but a case of beans and a bunker.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

MrPotatoHead
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by MrPotatoHead » Wed Mar 14, 2018 11:15 pm

wshang wrote:
Wed Mar 14, 2018 5:37 pm
Hyperborea wrote:
Wed Mar 14, 2018 4:13 pm
wshang wrote:
Wed Mar 14, 2018 3:48 pm
4% is for a 30 year time horizon. You are looking at much longer, so it is probably 2-2.5% SWR.
2-2.5% is far, far too conservative. For a possible 40-45 year max retirement horizon the OP is looking at probably around 3.25-3.75% depending on allocation if he retires in a worst case year.
I think you bring up a good point. In these discussions, we never discuss our health or family genetics. I plan (financially) to live past 100 or at least my spouse. There is a good deal which can happen between then and now, the biggest near term being an unfavorable change in the healthcare law or Medicare. Those who experienced a world war devastation or national famine, those memories are quickly receding in our present era of a human epoch -- unprecedented period of world peace and prosperity.

So my plan doesn't include a bullet to my temple if I run out of money after 30, 40, 50 years. My plan is for a bulletproof portfolio short of complete collapse of the world economy and at the other end of the spectrum, (cynically) healthcare miracles which cost a fortune affordable to only a few.
+1

WanderingDoc
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by WanderingDoc » Wed Mar 14, 2018 11:56 pm

mister_sparkle wrote:
Wed Mar 14, 2018 1:30 pm
I have begun to hone in on a date where I say goodbye to working and begin to relax and enjoy free time and all that comes with it. And for me the most logical date would be in a little over 3 years when I turn 55, as a) I believe I will have sufficient assets to tide me over until I receive a (smallish) pension at 65 and then Social Security at 67, and b) I can buy into my employer’s health insurance plan at age 55, which would solve the conundrum about health insurance until I am eligible for Medicare.

However, I am feeling burnt out on work, and I am wondering if I have enough saved to retire now, or in a year, without waiting ‘til I am 55.

Here are my portfolio details:

Emergency funds: I keep about $8K in cash in a savings account. If I need more, I would tap my Vanguard taxable account.

Debt: No debt. I rent an apartment and own my car outright. Credit card bill balances get paid each month.

Tax Filing Status: Single (happily – in a relationship but not planning on marrying again)

Tax Rate: 22% Federal, 4.95% State

State of Residence: Illinois

Age: 51

Desired Asset allocation: 70% stocks / 30% bonds

Desired International allocation: 28.5% of stocks (e.g. 20% of overall portfolio)

Overall portfolio: $1,240,000

Taxable holdings - $706.7K
VMMXX – Vanguard Prime Money Market: $2.9K
VWIUX - Vanguard Intermediate Term Tax-Exempt: $61K
VTIAX – Vanguard Total Int’l: $170.3K
VTCLX – Vanguard Tax-Managed Capital Appreciation: $138.5K (TLH partner with VTSAX)
VTSAX – Vanguard Total Stock Market: $333.8K

Tax-advantaged holdings - $533.3K

401K:
VWENX – Vanguard Wellington: $197K

Rollover IRA: $200K
VBTLX – Vanguard Total Bond: $138.4K
VTIAX – Vanguard Total Int’l: $39.7K
VTSAX – Vanguard Total Stock Market: $21.8K

Roth IRA: $81.1K
VBTLX – Vanguard Total Bond: $63.8K
VTIAX – Vanguard Total Int’l: $9.5K
VTSMX – Vanguard Total Stock Market: $7.7K

Inherited IRA: $53.6K
VBTLX – Vanguard Total Bond: $38.6K
VTSAX – Vanguard Total Stock Market: $15K

HSA: $1.6K
Cash

New annual Contributions
Salary: $95K
401k: $24,500 / Employer match is 7%, or $6600
$6500 – Roth IRA (funded from taxable)
Inherited IRA RMD is around $1800/year right now but will increase as I get older

Future income:
At age 65 (2031): $900/month pension, no COLA. Can start pension at age 55, at reduced (50%) of the benefit.

Social Security if I were to stop working in 2018 would be about $2200 in 2033 dollars (FRA of 67)

Monthly expenses: Could probably live OK on $4K/month, but would prefer slightly higher for travel/vacations. The big variable would be health insurance if I retired before 55. Health is OK, don’t see doctors very often.

$4K a month in spending is almost exactly a 4% SWR if I were to retire now, but the health insurance aspect does give me pause. One other option I have is to negotiate a reduced schedule with my job that pays a fraction (say, 50%) but allows me to maintain full benefits.

Would appreciate any thoughts or advice you might have. Thanks.
Yes, you can retire in one year, or even now. You don't need to get this "perfect". Go out and enjoy, see the world while you are still healthy. You don't know if you will be sick, debilitated, or dead tomorrow. The average American has ~$140K at retirement. You have 10X that. I am sure you could make due with that :D If for some reason you needed to make some extra money in 15 years, you are smart enough to do that. Stop doing that job you hate right NOW. Good luck!
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

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mister_sparkle
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Location: Chicago

Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by mister_sparkle » Thu Mar 15, 2018 1:07 pm

Thanks for all the reasoned thoughts.

For the time being, I'll stick with the job for at least another year. The issue that's giving me the most pause is the health insurance issue. If I can hold onto working 'til 55, then that gives me 10 years of price stability 'til Medicare. Without that I'm looking at fending for myself on the public market for 10-13 years, and right now I just don't trust in the government getting it right.

I'll revisit in a year, and will possibly try for the part-time option for the remaining 2 years. :sharebeer

mrgeeze
Posts: 194
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by mrgeeze » Thu Mar 15, 2018 1:32 pm

I'm in a similar boat having disencumbered myself from the working economy 3 years ago at 56.

Healthcare is a bit of a pain but I think the longer you wait the more risk you run.
A friend showed me an approach that works quite well if you can control your income.
Generally all you have do do is a little tax harvesting of losses.

Assuming you are healthy, purchase a catastrophic type (bronze) plan on healthcare.gov.
You must maintain your AGI below the max (not sure what it is for single - perhaps 45K)
Your annual premium for this policy will be $0. Yes zero. Turns out you qualify for a 100% subsidy from ACA!!!
Whoopee!!!

Every year you take advantage of this ACA policy you save 10 grand +-.
If it all falls apart in 5 years you'll have money to pay whatever rises from the ashes
If it doesn't bite the dust you win big!

Bear in mind you might incur some costs during the year if you go to the doctor.
However regular checkups and a few other things are covered.
And if you get real sick - you will spent $7500 out of your pocket.
About what you'd pay for premiums in the open market.

Anyway, we're starting our 3rd year (husband/wife) and so far we're happy.

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Pajamas
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Pajamas » Thu Mar 15, 2018 1:34 pm

MP123 wrote:
Wed Mar 14, 2018 4:48 pm
Also consider a worst case scenario of not being able to buy health insurance on the open market.
Is there really any way to plan for that? :shock:

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wshang
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by wshang » Thu Mar 15, 2018 7:38 pm

Pajamas wrote:
Thu Mar 15, 2018 1:34 pm
MP123 wrote:
Wed Mar 14, 2018 4:48 pm
Also consider a worst case scenario of not being able to buy health insurance on the open market.
Is there really any way to plan for that? :shock:
Absolutely, save more $. What can be given can be taken away.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by bobcat2 » Thu Mar 15, 2018 10:39 pm

I would first determine how much income I want to generate annually from my portfolio in retirement. Then I would calculate my funded ratio. I wouldn't retire early (before 62) unless the funded ratio was at least 1.10 in the year I want to retire.

See this thread for how to calculate the funded ratio.
Link - viewtopic.php?f=10&t=219878

These are just the assets for retirement income. Reserve or emergency fund assets and assets set aside for bequests are in addition to the portfolio assets targeted for retirement income.

Also realize that living alone is typically about 20% more expensive than living together. Something to keep in mind in your relationship. One last thing, renting, instead of owning mortgage free, is a big added expense in retirement.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by WanderingDoc » Thu Mar 15, 2018 11:40 pm

bobcat2 wrote:
Thu Mar 15, 2018 10:39 pm
I would first determine how much income I want to generate annually from my portfolio in retirement. Then I would calculate my funded ratio. I wouldn't retire early (before 62) unless the funded ratio was at least 1.10 in the year I want to retire.

See this thread for how to calculate the funded ratio.
Link - viewtopic.php?f=10&t=219878

These are just the assets for retirement income. Reserve or emergency fund assets and assets set aside for bequests are in addition to the portfolio assets targeted for retirement income.

Also realize that living alone is typically about 20% more expensive than living together. Something to keep in mind in your relationship. One last thing, renting, instead of owning mortgage free, is a big added expense in retirement.

BobK
Living together is more expensive if only one person pays the bills.
Being unmarried makes it a lot easier to save more money. That is why taxes are higher (at least thats what I tell myself) :wink:
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by sixtyforty » Fri Mar 16, 2018 9:27 am

I just recently went through exercise myself to answer the same question. This is what I did, which is basically what most of the posts recommend;

1. Calculate your expenses over the last two or three years, if you can. Include any HC costs. If you don't know what that is, go to your state sponsored plan with ACA and get an estimate. Subtract any expenses you think you won't need in the future.
2. Run FireCalc and and use the Investigate tab to vary parms like delaying retirement. Are you getting better than 95% success ?
3. Run CFireSim and vary the spending options
4. Run i-orp and specifically the Monte-Carlo simulation. For the worst case scenario, Is the worst case spending limit calculated, more than your expenses ?

The above, will provide you the basic answer to "if you can retire or when".

Lastly, the 4% is mentioned a lot but it's important to understand that in the trinity study the 4% is the beginning portfolio amount that is adjusted for inflation each year "regardless" of how your portfolio is performing. It's a great baseline to judge other withdrawals against, but there are other strategies that are probably more effective and take into account the performance of your portfolio each year, such as VPW.
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Hyperborea » Fri Mar 16, 2018 10:48 am

sixtyforty wrote:
Fri Mar 16, 2018 9:27 am
1. Calculate your expenses over the last two or three years, if you can. Include any HC costs. If you don't know what that is, go to your state sponsored plan with ACA and get an estimate. Subtract any expenses you think you won't need in the future.
Get the health care costs both assuming that you get the subsidy and that you don't. You can likely arrange it now so that you keep under the subsidy line but the subsidy is in danger of not being there over your time until Medicare. Also, check the price at a few different ages between now and Medicare age to get a feel for the change in costs. Look at the max out of pocket on those insurance plans and estimate that you might spend at least some of that every year (current health costs/issues or ones that might develop). Use those larger numbers (health insurance + out of pocket) in Firecalc/CFireSim as a temporary expense from now/retirement age until 65.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by PhilosophyAndrew » Fri Mar 16, 2018 11:46 am

wshang wrote:
Wed Mar 14, 2018 3:48 pm
4% is for a 30 year time horizon. You are looking at much longer, so it is probably 2-2.5% SWR. Probably not what you want to hear, especially since the likelihood of the next ten years being as good as the last ten years is not as good given valuations.
Since a 3% withdrawal rate can — absent black swan events for which there is no certain preparation — likely sustain a portfolio indefinitely, what is your rationale for recommending a lower rate than this?

Your recommendation is a common refrain here, but it a eems ad hoc and perhaps justified more by fear or a habitual conservatis than anything that provides a general reason to agree.

If one already has sufficient assets to support such a low usage, that’s great for one’s heirs and charitable bequests. But for those who wish to retire, a needlessly conservative recommendation amounts to advocating years of additional unwanted work.

Am I missing something that makes rational a 2 or 2 1/2% withdrawal rate? Some may simply prefer to have that level of assets, but a personal preference doesn’t constitute a reason for recommending extreme conservatism to folks who wish to retire and don’t have unusually large bequest needs.
Last edited by PhilosophyAndrew on Fri Mar 16, 2018 2:11 pm, edited 1 time in total.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by michaeljc70 » Fri Mar 16, 2018 12:03 pm

I think you'd be fine, but could be cutting it close, especially with how long the bull market has been going. If I were you, I would probably up fixed income for the first few years to avoid a bad sequence of returns and/or try the part-time thing. Maybe the part-time thing will make your job more tolerable. One thing I worry about when considering that is if they will be expecting me to do almost as much work in a lot less time for less money.

I am actually in a similar situation. Trying to balance working in a job/field I no longer like vs. possibility retiring on less than what is ideal. I am 47 and trying to work a few more years. I am sort of pissed at myself as I just took 18 months off and I could probably be retired had I not done that (though I enjoyed the time off). I might go the part-time route if my job allows it. The negative is you have to work 30 hours a week at my company to get benefits and so that is practically 4 days a week. I can't really see working for $12 an hour somewhere part-time at Home Depot or whatever.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by wshang » Fri Mar 16, 2018 12:20 pm

PhilosophyAndrew wrote:
Fri Mar 16, 2018 11:46 am
wshang wrote:
Wed Mar 14, 2018 3:48 pm
4% is for a 30 year time horizon. You are looking at much longer, so it is probably 2-2.5% SWR. Probably not what you want to hear, especially since the likelihood of the next ten years being as good as the last ten years is not as good given valuations.
Since a 3% withdrawal rate can — absent black swan events for which there is no certain preparation — likely sustain a portfolio indefinitely, what is your rationale for recommending a lower rate than this?
Am I missing something that makes rational a 2 or 2 1/2% withdrawal rate? Some may simply prefer to have that level of assets, but a personal preference doesn’t constitute a reason for recommending excessive conservatism to folks who wish to retire and don’t have unusually large bequest needs.
Thank you for your civil tone and carefully worded request. BH's often say you cannot invest in the review mirror, in other words, you cannot buy past returns. The studies advocating a SWR or as I would like to say, maximum limit of safe withdrawal, are based upon several assumptions which may or may not be justified. One is just this objection, the past does not necessarily mirror the future -- past returns and their sequence of returns are not reliable enough to categorically calculate precise future SWR's. IMHO, one must err on the side of caution.

Dr. Pfau points out a strong corollary in his criticism of SWR, found in the SWR section of BH's Wiki: "Six countries experienced SAFEMAX values below 3 percent. With the 10th percentile column, retirees accepting a 10 percent chance for failure could enjoy a withdrawal rate above 4 percent in 9 countries, but 5 countries still found these withdrawal rates to be under 3 percent even with the allowed chance for failure."

These aren't obscure countries, but seventeen well-regarded, developed, market economies. The longer the anticipated time period in retirement, (30+ years) the weaker the predictive value and conclusion which can be drawn from studies such as the Trinity Study. These 4% SWR studies can also be guilty of cherry picking the data with survivorship bias, when using American stock market data. There is less of a guarantee going forward compared to the epoch of time when the rest of the world was in ruins and the American dollar and economy reigned supreme.

To quote yet another BH aphorism: How lucky do you feel? (What is your risk tolerance?)
----------
“An International Perspective on Safe Withdrawal Rates from Retirement Savings: The Demise of the 4 Percent Rule?” - Journal of Financial Planning

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by gotester2000 » Fri Mar 16, 2018 12:44 pm

mister_sparkle wrote:
Thu Mar 15, 2018 1:07 pm
Thanks for all the reasoned thoughts.

For the time being, I'll stick with the job for at least another year. The issue that's giving me the most pause is the health insurance issue. If I can hold onto working 'til 55, then that gives me 10 years of price stability 'til Medicare. Without that I'm looking at fending for myself on the public market for 10-13 years, and right now I just don't trust in the government getting it right.

I'll revisit in a year, and will possibly try for the part-time option for the remaining 2 years. :sharebeer
What is your plan of housing in retirement? I feel your current savings are not enough to cover both housing and healthcare.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Hyperborea » Fri Mar 16, 2018 12:48 pm

wshang wrote:
Fri Mar 16, 2018 12:20 pm
Dr. Pfau points out a strong corollary in his criticism of SWR, found in the SWR section of BH's Wiki: "Six countries experienced SAFEMAX values below 3 percent. With the 10th percentile column, retirees accepting a 10 percent chance for failure could enjoy a withdrawal rate above 4 percent in 9 countries, but 5 countries still found these withdrawal rates to be under 3 percent even with the allowed chance for failure."
I think that there are two major objections to Pfau's results. First, he assumes that the entirety of the retirees portfolio was invested completely domestically. That may have been the only option in the past but it hasn't been that way for perhaps 40-50 years and certainly isn't now. Similar world results for a 30 year 50/50 portfolio are around 3.5% historically.

Second, the 6 countries with the sub 3% SAFEMAX for domestic portfolios all occur during significant upheaval within the country where one's life was significantly changed whether one was retired or not - WWI, WWII, or the middle of the Franco dictatorship. In the countries so affected they were essentially either occupied or controlled by dictators and their economy destroyed.

The big lesson to draw from these is not to save twice as much but to not keep investments completely within one's own home country.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by btenny » Fri Mar 16, 2018 12:52 pm

I think you need to wait a while to get a better handle on your expenses and what you will spend on medical insurance. Your numbers would work IF you changed jobs to lower income but with medical and more enjoyable. So I would not quit for a few years unless you have a plan to work elsewhere.

Good Luck

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by dknightd » Fri Mar 16, 2018 2:44 pm

mister_sparkle wrote:
Thu Mar 15, 2018 1:07 pm
Thanks for all the reasoned thoughts.

For the time being, I'll stick with the job for at least another year. The issue that's giving me the most pause is the health insurance issue. If I can hold onto working 'til 55, then that gives me 10 years of price stability 'til Medicare. Without that I'm looking at fending for myself on the public market for 10-13 years, and right now I just don't trust in the government getting it right.

I'll revisit in a year, and will possibly try for the part-time option for the remaining 2 years. :sharebeer
I think this is smart. 10-13 years of health insurance on the open market could be expensive (and difficult to predict)

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by z91 » Fri Mar 16, 2018 5:24 pm

Just throwing this out there, but if you leave the workforce, it may be very difficult to get back in if you needed to. I understand a lot of folks here own practices and do their own thing, but in my industry, I think it would be hard to get hired at 50+ years of age, especially if you left the workforce temporarily (it could be seen as being let go due to performance).

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by Cosmo » Fri Mar 16, 2018 5:47 pm

JHU ALmuni wrote:
Wed Mar 14, 2018 5:59 pm
mister_sparkle wrote:
Wed Mar 14, 2018 1:30 pm
I have begun to hone in on a date where I say goodbye to working and begin to relax and enjoy free time and all that comes with it. And for me the most logical date would be in a little over 3 years when I turn 55, as a) I believe I will have sufficient assets to tide me over until I receive a (smallish) pension at 65 and then Social Security at 67, and b) I can buy into my employer’s health insurance plan at age 55, which would solve the conundrum about health insurance until I am eligible for Medicare.

However, I am feeling burnt out on work, and I am wondering if I have enough saved to retire now, or in a year, without waiting ‘til I am 55.

Here are my portfolio details:

Emergency funds: I keep about $8K in cash in a savings account. If I need more, I would tap my Vanguard taxable account.

Debt: No debt. I rent an apartment and own my car outright. Credit card bill balances get paid each month.

Tax Filing Status: Single (happily – in a relationship but not planning on marrying again)

Tax Rate: 22% Federal, 4.95% State

State of Residence: Illinois

Age: 51

Desired Asset allocation: 70% stocks / 30% bonds

Desired International allocation: 28.5% of stocks (e.g. 20% of overall portfolio)

Overall portfolio: $1,240,000

Taxable holdings - $706.7K
VMMXX – Vanguard Prime Money Market: $2.9K
VWIUX - Vanguard Intermediate Term Tax-Exempt: $61K
VTIAX – Vanguard Total Int’l: $170.3K
VTCLX – Vanguard Tax-Managed Capital Appreciation: $138.5K (TLH partner with VTSAX)
VTSAX – Vanguard Total Stock Market: $333.8K

Tax-advantaged holdings - $533.3K

401K:
VWENX – Vanguard Wellington: $197K

Rollover IRA: $200K
VBTLX – Vanguard Total Bond: $138.4K
VTIAX – Vanguard Total Int’l: $39.7K
VTSAX – Vanguard Total Stock Market: $21.8K

Roth IRA: $81.1K
VBTLX – Vanguard Total Bond: $63.8K
VTIAX – Vanguard Total Int’l: $9.5K
VTSMX – Vanguard Total Stock Market: $7.7K

Inherited IRA: $53.6K
VBTLX – Vanguard Total Bond: $38.6K
VTSAX – Vanguard Total Stock Market: $15K

HSA: $1.6K
Cash

New annual Contributions
Salary: $95K
401k: $24,500 / Employer match is 7%, or $6600
$6500 – Roth IRA (funded from taxable)
Inherited IRA RMD is around $1800/year right now but will increase as I get older

Future income:
At age 65 (2031): $900/month pension, no COLA. Can start pension at age 55, at reduced (50%) of the benefit.

Social Security if I were to stop working in 2018 would be about $2200 in 2033 dollars (FRA of 67)

Monthly expenses: Could probably live OK on $4K/month, but would prefer slightly higher for travel/vacations. The big variable would be health insurance if I retired before 55. Health is OK, don’t see doctors very often.

$4K a month in spending is almost exactly a 4% SWR if I were to retire now, but the health insurance aspect does give me pause. One other option I have is to negotiate a reduced schedule with my job that pays a fraction (say, 50%) but allows me to maintain full benefits.

Would appreciate any thoughts or advice you might have. Thanks.

I would say go for it and try to stick to 4% WR. Working additional 3 years won't change much. Assuming you save 50% of your salary in the next 3 years this will increase your portfolio value by ~150K, not a lot if you look at the big picture. Worst case scenario if you feel you need extra money, you can try work part time and get some benefits...
“Working additional 3 years won't change much.”
Wait. Huh? Go back and read this back to yourself out loud.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by mhadden1 » Fri Mar 16, 2018 6:01 pm

It sounds like waiting until 55 really solidifies the health insurance aspect. I think I would try hard to do that. Believe me I know how long 1-3 more years can seem. Oh yes.
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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by invst65 » Fri Mar 16, 2018 6:04 pm

Something you might not be factoring in is that at age 52 it's not necessarily a permanent retirement decision like it would be if you were, say 60+. You still have a fairly long window to go back to work if it's not working out the way you want it to.

I semi-retired for a couple of years at age 50 after my first wife died and then re-married and went back to work. It was like a second wind, recharging my batteries. I didn't have enough money to keep it going like you might very well have but if you are feeling that burnt out you might not have a lot to lose by going into it as an experiment to see how it goes.

(Oh, and BTW, I just said "screw it" on the health insurance aspect and went without. And I was still raising a child. She broke her arm once and I got a lot of hospital bills but it still wasn't even close to what the insurance premiums would have been just for that year. And a lot of the doctors gave significant discounts for paying cash).

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by michaeljc70 » Fri Mar 16, 2018 11:06 pm

wshang wrote:
Fri Mar 16, 2018 12:20 pm
PhilosophyAndrew wrote:
Fri Mar 16, 2018 11:46 am
wshang wrote:
Wed Mar 14, 2018 3:48 pm
4% is for a 30 year time horizon. You are looking at much longer, so it is probably 2-2.5% SWR. Probably not what you want to hear, especially since the likelihood of the next ten years being as good as the last ten years is not as good given valuations.
Since a 3% withdrawal rate can — absent black swan events for which there is no certain preparation — likely sustain a portfolio indefinitely, what is your rationale for recommending a lower rate than this?
Am I missing something that makes rational a 2 or 2 1/2% withdrawal rate? Some may simply prefer to have that level of assets, but a personal preference doesn’t constitute a reason for recommending excessive conservatism to folks who wish to retire and don’t have unusually large bequest needs.
Thank you for your civil tone and carefully worded request. BH's often say you cannot invest in the review mirror, in other words, you cannot buy past returns.
Absent a crystal ball, what else are we going to look at? I'll use the historical returns in the US over historical returns in other countries.....
Last edited by michaeljc70 on Fri Mar 16, 2018 11:22 pm, edited 1 time in total.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by michaeljc70 » Fri Mar 16, 2018 11:21 pm

invst65 wrote:
Fri Mar 16, 2018 6:04 pm
Something you might not be factoring in is that at age 52 it's not necessarily a permanent retirement decision like it would be if you were, say 60+. You still have a fairly long window to go back to work if it's not working out the way you want it to.

I semi-retired for a couple of years at age 50 after my first wife died and then re-married and went back to work. It was like a second wind, recharging my batteries. I didn't have enough money to keep it going like you might very well have but if you are feeling that burnt out you might not have a lot to lose by going into it as an experiment to see how it goes.

(Oh, and BTW, I just said "screw it" on the health insurance aspect and went without. And I was still raising a child. She broke her arm once and I got a lot of hospital bills but it still wasn't even close to what the insurance premiums would have been just for that year. And a lot of the doctors gave significant discounts for paying cash).
As someone mentioned above, this depends on your job/field. I work in IT and once I retire in my 50s, it is very unlikely I would be able to go back after more than a year or two at similar pay if at all. Look at women who take 5 or 10 years off to raise kids and try to go back to work. And they aren't typically 50+ years old. They often start at a much lower level than they were previously.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by WanderingDoc » Sat Mar 17, 2018 12:27 am

michaeljc70 wrote:
Fri Mar 16, 2018 11:21 pm
invst65 wrote:
Fri Mar 16, 2018 6:04 pm
Something you might not be factoring in is that at age 52 it's not necessarily a permanent retirement decision like it would be if you were, say 60+. You still have a fairly long window to go back to work if it's not working out the way you want it to.

I semi-retired for a couple of years at age 50 after my first wife died and then re-married and went back to work. It was like a second wind, recharging my batteries. I didn't have enough money to keep it going like you might very well have but if you are feeling that burnt out you might not have a lot to lose by going into it as an experiment to see how it goes.

(Oh, and BTW, I just said "screw it" on the health insurance aspect and went without. And I was still raising a child. She broke her arm once and I got a lot of hospital bills but it still wasn't even close to what the insurance premiums would have been just for that year. And a lot of the doctors gave significant discounts for paying cash).
As someone mentioned above, this depends on your job/field. I work in IT and once I retire in my 50s, it is very unlikely I would be able to go back after more than a year or two at similar pay if at all. Look at women who take 5 or 10 years off to raise kids and try to go back to work. And they aren't typically 50+ years old. They often start at a much lower level than they were previously.
Good point. Its even worse if you're a physician. In my field, after one year of not practicing, you might be as good as a resident, after 2 years, its as if you've never done it. That said, I don't think we should treat ourselves as snot-nosed, armless children (to quote Charlie Sheen - maybe I got the quote wrong :D ) that only have one skill and once thats gone, we are toast. Part of life is being flexible and having multiple skills since anything can happen that would need you to adjust/pivot or get passed over and forgotten.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by max12377 » Sat Mar 17, 2018 6:38 am

I'm curious about the housing issue. Yes, you could buy a house and pay it off to reduce monthly expenses. However, the $$ used to pay off the house could probably pay your rent for quite a long time.

That said, having a paid off house with a lower payment would likely make it easier to stay in a lower tax bracket since you'd need to withdraw less each month.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by R. ANDERSON » Sat Mar 17, 2018 7:08 am

I can only speak for myself. Yes, the arithmetic cited by so many in their replies is important. But stress in a job you hate can become debilitating. Certainly the questioner has "enough" to leave that job now if he is convinced that will make him a lot happier. Perhaps the only thing he should weigh is whether the benefits of being free of the rat race would warrant cutting back on spending if that became necessary to keep that freedom. Money isn't everything.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by simas » Sat Mar 17, 2018 7:35 am

I think you have made a fair decision (for you) to wait and see another year.
As others in this thread mentioned you should pay real attention to your stress as impact to your health and major input into your (quality of) life.

As for 4%,3%,2%, etc - a lot of this is us smart monkeys who are trying to predict the unpredictable and search for false assurances where there are none.
40 years ago I know a different land (USSR) where people including my family were similarly thinking of retirements, savings, put it into the future vs living now discussions. where is that country and what happened to their savings? it devalued 10000x
40 years prior the best economy in Europe was that of Germany (1938), do you want to discuss what happened to savings and everything else of Germans in the next 5-10 years?
40 years prior France was the dominant economy , major empire and force . do you want to remember two world wars, loss of the empire (same for British) and major adjustments in the country's wealth

and yes , each one of the nations always stated that
a. this time it is different
b. the sun will never set over <insert your preference>

and they were all wrong, each time.
US is no different, our time will come as well

assumptions change, things change, multiple decades is a large amount of time, subjecting yourself to real and immidiate stress so you can have imaginary X% better change 40-50 years from now... I am not sure it is a wise bet.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by PhilosophyAndrew » Sat Mar 17, 2018 11:15 am

simas wrote:
Sat Mar 17, 2018 7:35 am
.... subjecting yourself to real and immidiate stress so you can have imaginary X% better change 40-50 years from now... I am not sure it is a wise bet.
This is an excellent point.

To mitigate the risk of unlikely hypothetical events, many recommend growing otherwise acceptable assets by taking on the certain stress of (at least) one more year of unwanted work. The cost of this stress is tangible, certain, and can be profound.

Waiting (at least) one more year can’t mitigate catastrophes, and yet there are other ways to handle less serious negative events that might occur (or might not), for example varying spending or increasing income with part-time work. There’s a certain fetishization here of “bulletproof” plans that desperately try to mitigate unknown and unpredictable risks. For those who prefer work, it might make sense to chase safety in this way But those to whom work is unwanted are in a different position, and the certain stress of taking on unwanted work is significant for deciding when to retire.

If, as it seems, OP has just about sufficient assets for retirement, I recommend seeking to develop a plan for handling potential non-catastrophic problems without remaining in the unwanted job. This would allow OP to deal with those risks without taking on the stress of unwanted work, and a sensible and strong plan could help justify a decision to retire now.
Last edited by PhilosophyAndrew on Sat Mar 17, 2018 1:29 pm, edited 2 times in total.

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Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by michaeljc70 » Sat Mar 17, 2018 11:45 am

PhilosophyAndrew wrote:
Sat Mar 17, 2018 11:15 am
simas wrote:
Sat Mar 17, 2018 7:35 am
.... subjecting yourself to real and immidiate stress so you can have imaginary X% better change 40-50 years from now... I am not sure it is a wise bet.
This is an excellent point.

To mitigate the risk of unlikely hypothetical events, many recommend growing otherwise acceptance assets by taking on the certain stress of (at least) one more year of unwanted work. The cost of this stress is tangible, certain, and can be profound.

Waiting (at least) one more year can’t mitigate catastrophes, and yet there are other ways to handle less serious negative events that might occur (or might not), for example varying spending or increasing income with part-time work. There’s a certain fetishization here of “bulletproof” plans that desperately try to mitigate unknown and unpredictable risks. It makes good sense to chase safety in way for those who enjoy work more than alternatives. But those to whom work is unwanted are in a different position, and the certain stress of taking on unwanted work is significant for deciding when to retire.

If, as it seems, OP has just about sufficient assets for retirement, I recommend seeking to develop a plan for handling potential non-catastrophic problems without remaining in the unwanted job. This would allow OP to deal with those risks without taking on the stress of unwanted work, and a sensible and strong plan could help justify a decision to retire now.
Well said.

invst65
Posts: 644
Joined: Thu Nov 27, 2014 11:04 am

Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by invst65 » Sat Mar 17, 2018 12:52 pm

michaeljc70 wrote:
Fri Mar 16, 2018 11:21 pm
invst65 wrote:
Fri Mar 16, 2018 6:04 pm
Something you might not be factoring in is that at age 52 it's not necessarily a permanent retirement decision like it would be if you were, say 60+. You still have a fairly long window to go back to work if it's not working out the way you want it to.

I semi-retired for a couple of years at age 50 after my first wife died and then re-married and went back to work. It was like a second wind, recharging my batteries. I didn't have enough money to keep it going like you might very well have but if you are feeling that burnt out you might not have a lot to lose by going into it as an experiment to see how it goes.

(Oh, and BTW, I just said "screw it" on the health insurance aspect and went without. And I was still raising a child. She broke her arm once and I got a lot of hospital bills but it still wasn't even close to what the insurance premiums would have been just for that year. And a lot of the doctors gave significant discounts for paying cash).
As someone mentioned above, this depends on your job/field. I work in IT and once I retire in my 50s, it is very unlikely I would be able to go back after more than a year or two at similar pay if at all. Look at women who take 5 or 10 years off to raise kids and try to go back to work. And they aren't typically 50+ years old. They often start at a much lower level than they were previously.
I also worked in IT as a software developer and did, in fact, go back to work in my 50's after taking a few years off. Actually, my former employer eventually re-hired me and I worked there for another 10 years before they laid me off a year and a half ago at age 67 (It did help that I was the original architect of their system which hadn't changed much).

Going back into the field at my age (now almost 69) is probably another story but I have had another former employer reach out to me for some help, at least on a part-time contract basis. I eventually had to put him on ignore because I think I am truly done with it. Can't imagine ever writing another line of code, at least for pay.

michaeljc70
Posts: 3926
Joined: Thu Oct 15, 2015 3:53 pm

Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by michaeljc70 » Sat Mar 17, 2018 1:07 pm

invst65 wrote:
Sat Mar 17, 2018 12:52 pm
michaeljc70 wrote:
Fri Mar 16, 2018 11:21 pm
invst65 wrote:
Fri Mar 16, 2018 6:04 pm
Something you might not be factoring in is that at age 52 it's not necessarily a permanent retirement decision like it would be if you were, say 60+. You still have a fairly long window to go back to work if it's not working out the way you want it to.

I semi-retired for a couple of years at age 50 after my first wife died and then re-married and went back to work. It was like a second wind, recharging my batteries. I didn't have enough money to keep it going like you might very well have but if you are feeling that burnt out you might not have a lot to lose by going into it as an experiment to see how it goes.

(Oh, and BTW, I just said "screw it" on the health insurance aspect and went without. And I was still raising a child. She broke her arm once and I got a lot of hospital bills but it still wasn't even close to what the insurance premiums would have been just for that year. And a lot of the doctors gave significant discounts for paying cash).
As someone mentioned above, this depends on your job/field. I work in IT and once I retire in my 50s, it is very unlikely I would be able to go back after more than a year or two at similar pay if at all. Look at women who take 5 or 10 years off to raise kids and try to go back to work. And they aren't typically 50+ years old. They often start at a much lower level than they were previously.
I also worked in IT as a software developer and did, in fact, go back to work in my 50's after taking a few years off. Actually, my former employer eventually re-hired me and I worked there for another 10 years before they laid me off a year and a half ago at age 67 (It did help that I was the original architect of their system which hadn't changed much).

Going back into the field at my age (now almost 69) is probably another story but I have had another former employer reach out to me for some help, at least on a part-time contract basis. I eventually had to put him on ignore because I think I am truly done with it. Can't imagine ever writing another line of code, at least for pay.
I think going back to where they know you is key. I took 18 months off (by choice). I am going back to work Monday. At the same place. Other places didn't bother responding to my resumes or when they realized how long I was off, said that wasn't going to work.

Employers tend to rely on HR to hire IT people and they know little about it. Sometimes they insist on having SQL Server (fill in whatever tool) 2016 when the difference between 2015 and 2016 is almost nil. Some expect you to have 12 skills which no one could possibly be an expert in all of them and only 2 are key. I see an extreme concentration on what products/versions you've worked with rather than real experience solving problems and industry work. I've had most companies hire me multiple times (I mostly do contracting). This is my 4th time back at the same company. Other companies are more concerned about minute details rather than that multiple people thought you were good enough to hire you 3 or 4 different times. I explained to a friend that is a realtor it is like someone interviewing you to sell their house but they want you to have sold one on that same block within 6 months and want it to be a ranch (like theirs) and not a bi-level. It's as if they think none of the skills are transferable.

invst65
Posts: 644
Joined: Thu Nov 27, 2014 11:04 am

Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by invst65 » Sat Mar 17, 2018 1:15 pm

michaeljc70 wrote:
Sat Mar 17, 2018 1:07 pm
invst65 wrote:
Sat Mar 17, 2018 12:52 pm
michaeljc70 wrote:
Fri Mar 16, 2018 11:21 pm
invst65 wrote:
Fri Mar 16, 2018 6:04 pm
Something you might not be factoring in is that at age 52 it's not necessarily a permanent retirement decision like it would be if you were, say 60+. You still have a fairly long window to go back to work if it's not working out the way you want it to.

I semi-retired for a couple of years at age 50 after my first wife died and then re-married and went back to work. It was like a second wind, recharging my batteries. I didn't have enough money to keep it going like you might very well have but if you are feeling that burnt out you might not have a lot to lose by going into it as an experiment to see how it goes.

(Oh, and BTW, I just said "screw it" on the health insurance aspect and went without. And I was still raising a child. She broke her arm once and I got a lot of hospital bills but it still wasn't even close to what the insurance premiums would have been just for that year. And a lot of the doctors gave significant discounts for paying cash).
As someone mentioned above, this depends on your job/field. I work in IT and once I retire in my 50s, it is very unlikely I would be able to go back after more than a year or two at similar pay if at all. Look at women who take 5 or 10 years off to raise kids and try to go back to work. And they aren't typically 50+ years old. They often start at a much lower level than they were previously.
I also worked in IT as a software developer and did, in fact, go back to work in my 50's after taking a few years off. Actually, my former employer eventually re-hired me and I worked there for another 10 years before they laid me off a year and a half ago at age 67 (It did help that I was the original architect of their system which hadn't changed much).

Going back into the field at my age (now almost 69) is probably another story but I have had another former employer reach out to me for some help, at least on a part-time contract basis. I eventually had to put him on ignore because I think I am truly done with it. Can't imagine ever writing another line of code, at least for pay.
I think going back to where they know you is key. I took 18 months off (by choice). I am going back to work Monday. At the same place. Other places didn't bother responding to my resumes or when they realized how long I was off, said that wasn't going to work.

Employers tend to rely on HR to hire IT people and they know little about it. Sometimes they insist on having SQL Server (fill in whatever tool) 2016 when the difference between 2015 and 2016 is almost nil. Some expect you to have 12 skills which no one could possibly be an expert in all of them and only 2 are key. I see an extreme concentration on what products/versions you've worked with rather than real experience solving problems and industry work. I've had most companies hire me multiple times (I mostly do contracting). This is my 4th time back at the same company. Other companies are more concerned about minute details rather than that multiple people thought you were good enough to hire you 3 or 4 different times. I explained to a friend that is a realtor it is like someone interviewing you to sell their house but they want you to have sold one on that same block within 6 months and want it to be a ranch (like theirs) and not a bi-level. It's as if they think none of the skills are transferable.
Very true. I contracted for 10 years before I took my hiatus and all of my work was for former associates who started their own businesses or got hired into upper management positions. If you build a good reputation people don't care what is on your resume or even what your age is. I was actually still highly productive and up on current technology when I got laid off. The reason I was chosen was because I had been volunteering to take one for the team for a long time. So when the time came I took my severance and rode off into the sunset.

gotester2000
Posts: 598
Joined: Sun Nov 12, 2017 1:59 am

Re: Do I have enough saved to pull the trigger now? Or wait 1? 3? years?

Post by gotester2000 » Sat Mar 17, 2018 2:12 pm

invst65,michaeljc70,

Those are really great real life experiences that you have shared. I am 42 and dont want to write code again - the problem is that I am finding it hard in deciding what to do next. I am out of regular work for 3 years - contracting with online work. I want to work on something in individual capacity - any ideas on what a software developer should do that would be less stressful?

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