Early retirement possible?

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Atretes1
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Early retirement possible?

Post by Atretes1 » Sun Jan 14, 2018 2:28 am

A little about me. Live in Midwest. Base pay is $50,000. My minimal living expenses a year are $17,345 (no travel included and not including rental property expenses). I am single and I am 42 years old. My net worth is $425.000. Of this $140,000 is in retirement plans. The rest is a personal home and 2 rentals.

A plan that I was thinking about to retire at 45 would be to work overtime (it's unlimited for me) untill I am 45. During this time I would max my IRA and 457 out and try to make enough to buy and pay off 2 more rentals. With 4 rentals paid for free and clear I then would retire. 4 rentals in my area would bring me $33,600 after property taxes and insurance are paid this is not accounting for vacancies and paying the tax man at the end of the year for Income. A sizeable non retirement emergency fund would also be there for me or the rentals.

Is this a crazy plan or possibly feasible.?

On a side note if I stay at my government job for 14.5 years I can draw a $60,000 pension for life at 55.5 years old. If I leave the job now or at 45 and take my portion of the pension I could invest about $66,000 more in an IRA.
Last edited by Atretes1 on Sun Jan 14, 2018 2:49 am, edited 3 times in total.

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catdude
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Re: Early retirement possible?

Post by catdude » Sun Jan 14, 2018 2:39 am

What's your plan for health insurance? At age 45 you'll be 20 years away from Medicare eligibility.
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Atretes1
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Re: Early retirement possible?

Post by Atretes1 » Sun Jan 14, 2018 2:48 am

catdude wrote:
Sun Jan 14, 2018 2:39 am
What's your plan for health insurance? At age 45 you'll be 20 years away from Medicare eligibility.
$7,200 for insurance premiums are figured into the 17,348 for minimal living expenses. This does not include deductables for going to the Dr. or the Hospital.

bob60014
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Re: Early retirement possible?

Post by bob60014 » Sun Jan 14, 2018 5:19 am

I would like to know what goverment agency is paying or would allow someone to have unlimited overtime on the taxpayers dime?

Atretes1
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Re: Early retirement possible?

Post by Atretes1 » Sun Jan 14, 2018 5:27 am

bob60014 wrote:
Sun Jan 14, 2018 5:19 am
I would like to know what goverment agency is paying or would allow someone to have unlimited overtime on the taxpayers dime?
I work in a Jail there is minimum staffing requirements and a huge turnover rate which equals unlimited overtime. As a matter of fact they make people work 2 extra shifts a month because we are so short.

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dwickenh
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Re: Early retirement possible?

Post by dwickenh » Sun Jan 14, 2018 8:16 am

You have not mentioned if you hate your current job? It is hard to pass up that great pension, but if it requires you to work an extra 10 years at a job you hate, I would look for employment elsewhere. The job market is as good as it will get for a while. I don't think you are in a great position to retire at 45 due to the unknowns of healthcare and no pension.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

MrJones
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Re: Early retirement possible?

Post by MrJones » Sun Jan 14, 2018 12:50 pm

Since your income is coming from the rentals, do you have a fund saved for unexpected repairs and such?

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tainted-meat
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Re: Early retirement possible?

Post by tainted-meat » Sun Jan 14, 2018 12:54 pm

That pension is valuable, very valuable. I'd work until 55.5 if you can then retire for good - it's only 13 more years.

Traveler
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Re: Early retirement possible?

Post by Traveler » Sun Jan 14, 2018 1:50 pm

I don't know if you can or can't do it, but I would make sure I have accurately planned for capex items on the rentals such as new appliances every 10-15 years, new roofs every 15-20 years, new water heaters every 7-12 years, new flooring every so often, new paint and/or siding, etc. All of those real estate assets have to last you at least until SS and Medicare kick in (also note, your SS will be lower than if you work longer), and are aging in the process.

Lonestarz
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Re: Early retirement possible?

Post by Lonestarz » Sun Jan 14, 2018 1:58 pm

Less than $1k a month is very sparse living and healthcare for sure could end up being much more than 7k in your elder years.

I don’t see how that budged accrues for car replacements or other expenses as well. I think there are 2 separate parts; one is the SWR or rental income calculation (average of income - repairs and expenses). The other parts is a realistic budget that considers not just your steady state financial needs but also the one off purchases or life events that aren’t so transparent in a monthly budget.

Heck, does your budget include car insurance?

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Artful Dodger
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Re: Early retirement possible?

Post by Artful Dodger » Sun Jan 14, 2018 2:24 pm

Atretes1 wrote:
Sun Jan 14, 2018 2:48 am
catdude wrote:
Sun Jan 14, 2018 2:39 am
What's your plan for health insurance? At age 45 you'll be 20 years away from Medicare eligibility.
$7,200 for insurance premiums are figured into the 17,348 for minimal living expenses. This does not include deductables for going to the Dr. or the Hospital.
We're lucky enough to have Health insurance through my wife's state pension. We pay about 15% of the full cost. If we were to pay the full cost equivalent to COBRA, it would be over $18,000; if we paid for individual plans through the healthcare exchange, it would be over $24,000. If sticking around that 10'years means you can qualify for some type of future subsidized health care, I would certainly try and do it. The $600 you have budgeted may be fine for a year or two, but that cost will escalate, plus what ever out of pocket costs you experience.

According to above, you have $10,148 budgeted for "minimal" living expenses; everything other than health insurance. This is $850 a month which is below the federal poverty level. I think your long term plan may well provide enough money to live on, as long as you come up with a plan for health care, but I think you should spend more time coming up with a realistic budget.

Golf maniac
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Re: Early retirement possible?

Post by Golf maniac » Sun Jan 14, 2018 3:56 pm

As a retired federal employee I would suggest you try to hold on and work until 55.5 if at all possible. The pension benefit is big, but the lifetime health benefits are huge. You get this great insurance for a very reasonable price. When you go on Medicare at 65 you need no supplemental insurance. When you get to 55.5 you will have your pension, health insurance, a nice TSP Account, and your rental properties. You would definitely be set for life.

ColoRetiredGirl
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Re: Early retirement possible?

Post by ColoRetiredGirl » Sun Jan 14, 2018 4:08 pm

Golf maniac wrote:
Sun Jan 14, 2018 3:56 pm
As a retired federal employee I would suggest you try to hold on and work until 55.5 if at all possible. The pension benefit is big, but the lifetime health benefits are huge. You get this great insurance for a very reasonable price. When you go on Medicare at 65 you need no supplemental insurance. When you get to 55.5 you will have your pension, health insurance, a nice TSP Account, and your rental properties. You would definitely be set for life.
I totally agree. Keep working.

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