Can I retire - single person version

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jingo
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Can I retire - single person version

Post by jingo » Mon May 13, 2013 4:47 pm

40 years old, single, no kids.

$1,000,000 in non-retirement accounts
$300,000 in retirement accounts
Home paid for (worth $300k+)
No debts

I’ve been tracking expenses for the last 10 years, and the last few years were around 16K annually.

Living in MA, getting individual health insurance is straight-forward. Monthly premium for a 40-year old is around 300-500. I’m budgeting 500 per month for health-related expenditures.

Tossing in the change, I’m expecting my annual expense once retired to be around 24K.

I’ve decided to quit my job in the next couple months. Given my fairly simple lifestyle, it seems that I may not have to work for money any more.

Does that sound right??

OverTheHill
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Re: Can I retire - single person version

Post by OverTheHill » Mon May 13, 2013 6:07 pm

Yep, it looks like you can do it as far as I can see. The question, of course, is whether it is a wise choice given all the uncertainties of the future. Only you can answer that question. Good luck.

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archbish99
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Re: Can I retire - single person version

Post by archbish99 » Mon May 13, 2013 6:15 pm

You're set, provided that your expense estimate is both accurate and sustainable. What do you intend to do with your time? If the answer is "travel," you've got a problem. If the answer is "start a small business that won't make huge profits but will excite and fulfill me," you'll be a happy man.
I'm not a financial advisor, I just play one on the Internet.

jingo
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Re: Can I retire - single person version

Post by jingo » Mon May 13, 2013 6:37 pm

I may actually look for another job, but the criteria will be different – fun, nice group of people, smaller/less stable companies, part-time.

clueless_dude
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Re: Can I retire - single person version

Post by clueless_dude » Mon May 13, 2013 6:52 pm

Congratulations! That is a great achievement.

BTW: Just out of curiousity... I imagine you will be switching the 1M you have in non-retirement accounts to some sort of investment that generates you income. What have you picked? Vanguard Target Retirement? Wellesley?

jingo
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Re: Can I retire - single person version

Post by jingo » Mon May 13, 2013 7:08 pm

I have a lazy portfolio + 5 years of living expenses in cash.

lwfitzge
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Re: Can I retire - single person version

Post by lwfitzge » Mon May 13, 2013 7:32 pm

yes..congrats and enjoy!

sadie wess
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Re: Can I retire - single person version

Post by sadie wess » Mon May 13, 2013 7:54 pm

I concur.

Congratulations. I look forward to the day when I can join you! (Re: in retirement and the type of part-time job you describe.)

Sadie

scrabbler1
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Re: Can I retire - single person version

Post by scrabbler1 » Tue May 14, 2013 12:14 am

Congrats, Jingo. I think you are in good shape, too.

I was 45 when I retired in 2008 (single, no kids, no debts). I now have about $800k in non-retirement accounts and $400k in an IRA. The non-retirement accounts generate much more than the $21k in annual expenses. My main goal is to get to age ~60 intact which is when I can begin tapping into the first of my "reinforcements" which are unfettered access to my IRA, my frozen company pension (do you have one?), and Social Security.

With your assets a little more than mine and your expenses a bit lower than mine, you should be just fine. You may also want to check out http://www.early-retirement.org/forums/ which is a website for early retirees and those who are striving for it.

thebogledude
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Re: Can I retire - single person version

Post by thebogledude » Tue May 14, 2013 12:25 am

jingo wrote:I have a lazy portfolio + 5 years of living expenses in cash.
I think one major test is to see if your portfolio would hold up to a 2009 type crash where S&P drops 48% and slowly recovers.

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kramer
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Re: Can I retire - single person version

Post by kramer » Tue May 14, 2013 1:24 am

Yes, you can retire as your withdrawal rate is around 2.0%

Also, since most of your assets are taxable, it makes it easier to manage your portfolio.

Don't forget to include things in your retirement expenses like some income taxes, dental work, vehicle depreciation, etc.

I think the caveat here is whether your future spending will change. Perhaps, you might want to get married and have kids (or accidentally make one) in the future. Your parents might need some financial help. Perhaps, you will want to travel extensively around the world. Maybe you will want to adopt an expensive hobby to occupy your time. Only you can really answer these questions.

Colorado13
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Re: Can I retire - single person version

Post by Colorado13 » Tue May 14, 2013 7:49 am

archbish99 wrote:... you'll be a happy man.
Or woman? I don't believe the OP specified gender in this post.

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archbish99
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Re: Can I retire - single person version

Post by archbish99 » Tue May 14, 2013 9:00 am

Colorado13 wrote:
archbish99 wrote:... you'll be a happy man.
Or woman? I don't believe the OP specified gender in this post.
A happy being, then. :D No intention to discriminate.
I'm not a financial advisor, I just play one on the Internet.

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VictoriaF
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Re: Can I retire - single person version

Post by VictoriaF » Tue May 14, 2013 9:12 am

.
Last edited by VictoriaF on Tue May 14, 2013 3:43 pm, edited 2 times in total.

jingo
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Re: Can I retire - single person version

Post by jingo » Tue May 14, 2013 10:21 am

I’m a woman, and my future plan doesn’t involve accidentally making a kid :wink:

I’ve set aside a ‘cushion’ for my parents, though they are currently living comfortably on half of their pension, and offered to take me in if I so wish...

rec7
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Re: Can I retire - single person version

Post by rec7 » Tue May 14, 2013 10:50 am

16k In MA that is very good. That is one of the best budgets I have heard for MA. SS would cover a lot of your bills. I can hit 16k but I live in the midwest.

thebogledude
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Re: Can I retire - single person version

Post by thebogledude » Tue May 14, 2013 11:05 am

jingo wrote:I’m a woman, and my future plan doesn’t involve accidentally making a kid :wink:

I’ve set aside a ‘cushion’ for my parents, though they are currently living comfortably on half of their pension, and offered to take me in if I so wish...
That is great. Can I ask what is your motivation to quit your job and retire?

Call_Me_Op
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Re: Can I retire - single person version

Post by Call_Me_Op » Tue May 14, 2013 11:10 am

I am surprised that you can keep your expenses to 16K. Taxes on the house are probably 4k. If you spend 200 bucks per week on food (modest), that's another 10.5k. Then gas at 12k miles per year, 20 mpg is 2.1k. Right there you are over 16k. No car repairs, cable, homeowner's insurance, telephone, entertainment, home repair, clothing, etc?
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

thebogledude
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Re: Can I retire - single person version

Post by thebogledude » Tue May 14, 2013 11:19 am

Call_Me_Op wrote:I am surprised that you can keep your expenses to 16K. Taxes on the house are probably 4k. If you spend 200 bucks per week on food (modest), that's another 10.5k. Then gas at 12k miles per year, 20 mpg is 2.1k. Right there you are over 16k. No car repairs, cable, homeowner's insurance, telephone, entertainment, home repair, clothing, etc?
Hi, OP stated average expenses for last few years ~16K. But expects to be 24K in retirement. I think if you manage your food shopping (things are on sale, coupons, wholesale clubs, cooking at home, etc,), you can get under $200/week. Having a cup a day Starbucks habit doesn't help.

Call_Me_Op
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Re: Can I retire - single person version

Post by Call_Me_Op » Tue May 14, 2013 11:24 am

thebogledude wrote:
Call_Me_Op wrote:I am surprised that you can keep your expenses to 16K. Taxes on the house are probably 4k. If you spend 200 bucks per week on food (modest), that's another 10.5k. Then gas at 12k miles per year, 20 mpg is 2.1k. Right there you are over 16k. No car repairs, cable, homeowner's insurance, telephone, entertainment, home repair, clothing, etc?
Hi, OP stated average expenses for last few years ~16K. But expects to be 24K in retirement. I think if you manage your food shopping (things are on sale, coupons, wholesale clubs, cooking at home, etc,), you can get under $200/week. Having a cup a day Starbucks habit doesn't help.
Indeed. I consider myself relatively frugal, but can always learn something. I am in a similar situation to Jingo, but spend roughly twice as much per year.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

stan1
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Re: Can I retire - single person version

Post by stan1 » Tue May 14, 2013 11:35 am

If you have a relatively new home and a relatively new car you may not have maintenance expenses over the past few years that are included in the $16K/yr estimate, but eventually things like new tires and brakes on cars and new roofs, heaters, and paint on a house catch up with you. Perhaps the $24K/yr number reflects more of these occasional expenses -- or maybe the number is closer to $27-30K (?).

Agree one can eat for less than $200/week (no dining out, no expensive items like seafood, simple dishes, small portions).

I think the key is what you want to do with your time. If you want to travel or partake in most hobbies, expenses will be higher. If you want to do research and write or volunteer you can do these at little to no cost.

jingo
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Re: Can I retire - single person version

Post by jingo » Tue May 14, 2013 12:06 pm

I don’t keep a budget, just track my expenses and understand where money goes.

- No car – live in Boston and public transportation is decent
- Property tax with residential exemption comes under 2000 per year, though do have a non-trivial condo fee (which includes all major maintenance and utility)
- Food – fairly small appetite, average around 2-300 a month
- Cheap hobbies, e.g., reading (pretty much free given public libraries)

So the ‘fixed cost’ portion of my monthly expense is around 1k/month. 4k/year for ‘variable cost’ which includes travel, entertainment, gifts, etc.

Call_Me_Op
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Re: Can I retire - single person version

Post by Call_Me_Op » Tue May 14, 2013 12:07 pm

jingo wrote:I don’t keep a budget, just track my expenses and understand where money goes.

- No car – live in Boston and public transportation is decent
- Property tax with residential exemption comes under 2000 per year, though do have a non-trivial condo fee (which includes all major maintenance and utility)
- Food – fairly small appetite, average around 2-300 a month
- Cheap hobbies, e.g., reading (pretty much free given public libraries)

So the ‘fixed cost’ portion of my monthly expense is around 1k/month. 4k/year for ‘variable cost’ which includes travel, entertainment, gifts, etc.
Hi Jingo,

Nice. No car and small appetite make a big difference - and you are probably healthier for it!
Last edited by Call_Me_Op on Tue May 14, 2013 12:09 pm, edited 1 time in total.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

thebogledude
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Re: Can I retire - single person version

Post by thebogledude » Tue May 14, 2013 12:08 pm

I'm not a finance whiz but this is how I would go about with the calculations, assuming you spend 24K/year, at the age of 60 (in 20 years) you will have spent 480K (roughly half) in your after-tax account at 0% with no additional principal.
I know you're suppose to factor in inflation, portfolio ebb and flow, etc. hence I'm not a finance whiz (I don't know how to use monte-carlo).
If you factor in S&P 500 20 year average return at 8.22, and input this into a compounding calculator for your pre-tax portfolio @300K with no additional principal, you will have 1,456,370.41 at the age of 60.

ieee488
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Re: Can I retire - single person version

Post by ieee488 » Tue May 14, 2013 3:50 pm

Just wanted to say congrtulations!

Impressive achievement.

If you are certain you can get a parttime job in your profession, I say go for it.
Dell Optiplex 3020 (Win7 Pro), Dell Precision M6300 (Ubuntu Linux 12.04), Dell Precision M6300 (Win7 Pro), Dell Latitude D531 (Vista)

Colorado13
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Re: Can I retire - single person version

Post by Colorado13 » Tue May 14, 2013 8:12 pm

Ditto on the congrats! Enjoy the next phase of your life.

bb
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Re: Can I retire - single person version

Post by bb » Sat May 18, 2013 6:23 am

No dissenting opinions?

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archbish99
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Re: Can I retire - single person version

Post by archbish99 » Sat May 18, 2013 9:28 am

bb wrote:No dissenting opinions?
Just caveats, not dissent. OP's spending seems really low to me to be sustainable indefinitely. But if it truly is, the numbers work.
I'm not a financial advisor, I just play one on the Internet.

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EternalOptimist
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Re: Can I retire - single person version

Post by EternalOptimist » Sat May 18, 2013 9:51 am

If this is what you truly want, then go for it. You can always get a job when the need arises. :beer
Last edited by EternalOptimist on Sat May 18, 2013 6:30 pm, edited 1 time in total.
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enderland
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Re: Can I retire - single person version

Post by enderland » Sat May 18, 2013 9:51 am

I hope you are including additional costs of health insurance as you get older somewhere.

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fatlittlepig
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Re: Can I retire - single person version

Post by fatlittlepig » Wed May 22, 2013 9:36 pm

so what do you plan on doing. sorry i just don't see the point (in retiring) when you are still so young- need to find something productive, meaningful and enjoyable to do with your life.
fatlittlepig

stlutz
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Re: Can I retire - single person version

Post by stlutz » Wed May 22, 2013 10:00 pm

I know other people who've "retired" in their early 40s on less than the OP has. They are all very happy. "Retirement" does tend to become "semi-retirement"--as the OP indicates, they usually find pursuits that result in generating additional income--just not as much as they were making pre-retirement.

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tc101
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Re: Can I retire - single person version

Post by tc101 » Wed May 22, 2013 10:43 pm

Jingo, what kind of work are you doing now, and what kind of part time work do you want to do after you retire?
. | The most important thing you should know about me is that I am not an expert.

Wricha
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Re: Can I retire - single person version

Post by Wricha » Thu May 23, 2013 7:22 am

No dissenting opinion here BUT double the cost of healthcare in 5 years it just very expensive and reform is unlikely to change that trend as population ages. (No political statement intended)

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frugaltype
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Re: Can I retire - single person version

Post by frugaltype » Thu May 23, 2013 8:06 am

enderland wrote:I hope you are including additional costs of health insurance as you get older somewhere.
I spend about $8,000 on medical expenses a year - that's premiums associated with Medicare/Medigap and prescription expenses for basically maintenance meds for various things normal for an older person. So I was rather stunned by the OP's $16,000 annual expenses.

However, the OP has other big savings compared to me - no insurance on a house, flood, car, and apparently no liability insurance? No car expenses for repair or gas. Plus I've $14,000 property tax I was complaining about in another thread.

That certainly is a money-saving lifestyle.

Mitchell777
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Re: Can I retire - single person version

Post by Mitchell777 » Thu May 23, 2013 9:09 am

frugaltype wrote:
enderland wrote:I hope you are including additional costs of health insurance as you get older somewhere.
I spend about $8,000 on medical expenses a year - that's premiums associated with Medicare/Medigap and prescription expenses for basically maintenance meds for various things normal for an older person. So I was rather stunned by the OP's $16,000 annual expenses.

However, the OP has other big savings compared to me - no insurance on a house, flood, car, and apparently no liability insurance? No car expenses for repair or gas. Plus I've $14,000 property tax I was complaining about in another thread.

That certainly is a money-saving lifestyle.
I have been trying to estimate what I might spend on medical care once 65+, if I may ask, are you spending $8K a year for medical expenses at Medicare age? I did not think it would be that high but I want to plan accordingly (conservatively). Thank you

HongKonger
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Re: Can I retire - single person version

Post by HongKonger » Thu May 23, 2013 1:50 pm

Well done!

Also single with no kids age 41 and after a couple of months off work, decided last month to pull the plug myself.

:sharebeer

jingo
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Re: Can I retire - single person version

Post by jingo » Thu May 23, 2013 2:12 pm

My current 16k annual expense includes at most ~100 on health-related expenditures (deductible) as my employer pays all premiums. I have budgeted 6000 extra each year for health insurance once I need to pay for my own (and this is based on current individual plans offered in MA). I’m curious to see what will happen to health care cost given the current reform, and I may qualify for low-income subsidies if I ‘retire’.

Small condo, not having a car, and not procreating contribute to overall low spending – I didn’t buy the largest house I could afford, just what I needed. Other than that I probably don’t even qualify as ‘frugal’, per ‘That frugal thing you do’ thread.

In terms of next steps, I’m still contemplating, I’m hoping to maximize the ‘fun’ portion and not worry too much about money when it comes to the next gig.
Last edited by jingo on Thu May 23, 2013 2:33 pm, edited 2 times in total.

Quickfoot
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Re: Can I retire - single person version

Post by Quickfoot » Thu May 23, 2013 2:23 pm

I think if you manage your food shopping (things are on sale, coupons, wholesale clubs, cooking at home, etc,), you can get under $200/week
200 a week for a single person is generous. Our weekly food budget is $125 and that's for a family of 5 and we eat pretty normally. We are selective where we shop but don't shop at Costco or use coupons.

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