Should we retire in 4 years?

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theplayer11
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Should we retire in 4 years?

Post by theplayer11 » Sun Jun 16, 2019 11:32 am

Wife and I own a small business, I'm 54, she's 52. The work is physical, but seasonal.(Crazy busy in spring, summer, slow in fall and not much to do at all in winter) We are in good health, but the work seems to get a little harder and more aches and pains every year. I don't want us to work to we drop physically, want to do a lot more traveling and have the freedom to do so at any time of year.
Hiring help might be an option but the work is not steady every day and can't simply be explained in the morning to someone. So, we would have to be there.
I'm leaning towards just calling it quits in 4 years.
We should have around 1.2M-1.4m in retirement savings in 4 years(including 100K in HSA). Roughly 30% would be in Roths, rest in i401k's. Minimal savings not in retirement accounts. No debt and current expenses of about 45K/yr.
ACA for healthcare until 65 is the plan.
With our expenses and 4% draw, I realize we are right at the cusp.
Thoughts?

Goal33
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Re: Should we retire in 4 years?

Post by Goal33 » Sun Jun 16, 2019 11:40 am

Seems reasonable. What about social security?
A man with one watch always knows what time it is; a man with two watches is never sure.

Tdubs
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Re: Should we retire in 4 years?

Post by Tdubs » Sun Jun 16, 2019 11:51 am

What will your ACA costs be? If you kept at it another 6 or 7 years, what would you save?

Do you have long-term care insurance? What would you do if one of you had a debilitating illness?

JGoneRiding
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Re: Should we retire in 4 years?

Post by JGoneRiding » Sun Jun 16, 2019 11:53 am

If you retire and travel more will expenses go up? Are you considering down sizing? Is this a business you could sell? Even a basic service oriented business that has built up a good name and clientele is worth something. Especially if it includes a lot if special tools you have. People get loans for this thing. Might it be worth taking on and training an employee that is driven and might want to buy it in 4 years?

dknightd
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Re: Should we retire in 4 years?

Post by dknightd » Sun Jun 16, 2019 11:57 am

It really depends on your expenses. And what happens in the next 4 years. I cant predict either one.

veindoc
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Re: Should we retire in 4 years?

Post by veindoc » Sun Jun 16, 2019 12:07 pm

What kind of work do you do? You don’t think you can hire someone to work 9 months of the year? Teachers do it. We jus had someone come out and fix our irrigation system. The company is run by the owner. I say he’s late 60s and he has a 20+ year old helper. If I had to guess that kind of work is seasonal as well. Every time Tom comes, Vince is with him. When you work, he works.

I think it’s cutting it a bit close based on what you have now.

randomguy
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Re: Should we retire in 4 years?

Post by randomguy » Sun Jun 16, 2019 10:13 pm

Check back in 3 years. Realistically you could have like 700k to 2 million dollars and ACA may or may not exist. At a high level 45k with 1.2 million is plenty. I assume in 16 years SS will cover 50%+ of expenses.

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willthrill81
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Re: Should we retire in 4 years?

Post by willthrill81 » Sun Jun 16, 2019 10:38 pm

It sounds like you'll be fine, although, as others have noted, more details are needed. My guess is that SS benefits, especially if you can defer until age 70, will cover a large portion of your annual expenses. If that's true, then you should be golden, even if you have to pay for an ACA plan for 7 years.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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theplayer11
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Re: Should we retire in 4 years?

Post by theplayer11 » Mon Jun 17, 2019 5:34 am

yes, SS should be about $40k between wife and I at full retirement age of 67. I guess the bottom line is that we are getting burnt out and we want to get out before we physically wear out. We have never been able to travel except for Winter months, would love the freedom to go places at any time.
IF the ACA still exists in 4 years, that should provide inexpensive insurance until medicare.

Housedoc
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Re: Should we retire in 4 years?

Post by Housedoc » Mon Jun 17, 2019 5:42 am

I retired at 52 10 years ago. No regrets. Go for it.

JoeRetire
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Re: Should we retire in 4 years?

Post by JoeRetire » Mon Jun 17, 2019 7:37 am

theplayer11 wrote:
Mon Jun 17, 2019 5:34 am
yes, SS should be about $40k between wife and I at full retirement age of 67. I guess the bottom line is that we are getting burnt out and we want to get out before we physically wear out. We have never been able to travel except for Winter months, would love the freedom to go places at any time.
IF the ACA still exists in 4 years, that should provide inexpensive insurance until medicare.
If you don't want to work then you should retire.
If you don't want the physical work, then you should find a less physical job.

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theplayer11
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Re: Should we retire in 4 years?

Post by theplayer11 » Mon Jun 17, 2019 10:50 am

JoeRetire wrote:
Mon Jun 17, 2019 7:37 am
theplayer11 wrote:
Mon Jun 17, 2019 5:34 am
yes, SS should be about $40k between wife and I at full retirement age of 67. I guess the bottom line is that we are getting burnt out and we want to get out before we physically wear out. We have never been able to travel except for Winter months, would love the freedom to go places at any time.
IF the ACA still exists in 4 years, that should provide inexpensive insurance until medicare.
If you don't want to work then you should retire.
If you don't want the physical work, then you should find a less physical job.
if it was only that simple..lol

cherijoh
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Re: Should we retire in 4 years?

Post by cherijoh » Mon Jun 17, 2019 11:52 am

theplayer11 wrote:
Mon Jun 17, 2019 5:34 am
yes, SS should be about $40k between wife and I at full retirement age of 67. I guess the bottom line is that we are getting burnt out and we want to get out before we physically wear out. We have never been able to travel except for Winter months, would love the freedom to go places at any time.
IF the ACA still exists in 4 years, that should provide inexpensive insurance until medicare.
You don't just need to worry about if it is available in 4 years unfortunately. Any possibility to moving to a lower cost location when you retire?

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tyrion
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Re: Should we retire in 4 years?

Post by tyrion » Mon Jun 17, 2019 11:59 am

I would try to figure out how you can transition the work to someone else, either an assistant or someone who might buy the business from you.

What you dislike about your work (physical nature of it, slow winters) may appeal to someone else. As someone who sits in front of a computer for much of the day, it sounds kind of nice.

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willthrill81
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Re: Should we retire in 4 years?

Post by willthrill81 » Mon Jun 17, 2019 12:01 pm

theplayer11 wrote:
Mon Jun 17, 2019 5:34 am
yes, SS should be about $40k between wife and I at full retirement age of 67. I guess the bottom line is that we are getting burnt out and we want to get out before we physically wear out. We have never been able to travel except for Winter months, would love the freedom to go places at any time.
IF the ACA still exists in 4 years, that should provide inexpensive insurance until medicare.
In that case, the primary need for your portfolio is to fund the gap between when you retire and begin SS benefits. Depending on how much the ACA premiums are, you could very likely do that in 4 years even if your portfolio experienced 0% real returns during that gap period. And if it does grow, you could probably defer SS benefits beyond age 67. Deferring to age 70 would increase your benefits by about 24% (i.e. ~$50k).

You're going to be just fine. :beer
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

JoeRetire
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Re: Should we retire in 4 years?

Post by JoeRetire » Mon Jun 17, 2019 12:54 pm

theplayer11 wrote:
Mon Jun 17, 2019 10:50 am
JoeRetire wrote:
Mon Jun 17, 2019 7:37 am
theplayer11 wrote:
Mon Jun 17, 2019 5:34 am
yes, SS should be about $40k between wife and I at full retirement age of 67. I guess the bottom line is that we are getting burnt out and we want to get out before we physically wear out. We have never been able to travel except for Winter months, would love the freedom to go places at any time.
IF the ACA still exists in 4 years, that should provide inexpensive insurance until medicare.
If you don't want to work then you should retire.
If you don't want the physical work, then you should find a less physical job.
if it was only that simple..lol
Things worth having are often not simple.
Last edited by JoeRetire on Tue Jun 18, 2019 7:10 am, edited 1 time in total.

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Watty
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Re: Should we retire in 4 years?

Post by Watty » Mon Jun 17, 2019 1:31 pm

How much could you sell your business for?

Topic Author
theplayer11
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Re: Should we retire in 4 years?

Post by theplayer11 » Mon Jun 17, 2019 3:14 pm

Watty wrote:
Mon Jun 17, 2019 1:31 pm
How much could you sell your business for?
I don't think we could sell. It's a wholesale flower business. The land will be passed to our kids, been in the family a long time.

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willthrill81
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Re: Should we retire in 4 years?

Post by willthrill81 » Mon Jun 17, 2019 3:18 pm

theplayer11 wrote:
Mon Jun 17, 2019 3:14 pm
Watty wrote:
Mon Jun 17, 2019 1:31 pm
How much could you sell your business for?
I don't think we could sell. It's a wholesale flower business. The land will be passed to our kids, been in the family a long time.
Do you mean that you want to keep the business in the family, or do you believe that you could not sell the business for what you believe to be a fair price?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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DanMahowny
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Re: Should we retire in 4 years?

Post by DanMahowny » Mon Jun 17, 2019 3:22 pm

Investment returns for the next 4 years will answer the question, I think. The market could be down 50%, or more in 4 years. Or maybe reach new highs.

It's nice to see a "can I retire?" thread where the OP doesn't have $80 million dollars, a $200k pension, with only $28k annual expenses.
Funding secured

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theplayer11
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Re: Should we retire in 4 years?

Post by theplayer11 » Mon Jun 17, 2019 3:50 pm

willthrill81 wrote:
Mon Jun 17, 2019 3:18 pm
theplayer11 wrote:
Mon Jun 17, 2019 3:14 pm
Watty wrote:
Mon Jun 17, 2019 1:31 pm
How much could you sell your business for?
I don't think we could sell. It's a wholesale flower business. The land will be passed to our kids, been in the family a long time.
Do you mean that you want to keep the business in the family, or do you believe that you could not sell the business for what you believe to be a fair price?
I'm not even sure it's a salable business. The lot is worth quit a bit because of a water view, but I want to keep it in the family. It's worth more as a buildable lot with a view than the actual flower business I believe.

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theplayer11
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Re: Should we retire in 4 years?

Post by theplayer11 » Mon Jun 17, 2019 3:51 pm

DanMahowny wrote:
Mon Jun 17, 2019 3:22 pm
Investment returns for the next 4 years will answer the question, I think. The market could be down 50%, or more in 4 years. Or maybe reach new highs.

It's nice to see a "can I retire?" thread where the OP doesn't have $80 million dollars, a $200k pension, with only $28k annual expenses.
yes, you are probably spot on with this assessment.

Beehave
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Re: Should we retire in 4 years?

Post by Beehave » Mon Jun 17, 2019 3:52 pm

Find a strong smart PhD student in a field directed at becoming a professor. Many years ago I studied philosophy. One of my friends took on a job servicing/selling fire extinguishers. Within months (as I recall) the owner was in heaven with his work ethic and morals and made an arrangement for him to eventually take over the business.

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tyrion
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Re: Should we retire in 4 years?

Post by tyrion » Mon Jun 17, 2019 4:02 pm

Are you sure you can't hire/train someone to take over the manual labor tasks while you and your wife concentrate on the business side of things?

bhsince87
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Re: Should we retire in 4 years?

Post by bhsince87 » Mon Jun 17, 2019 4:06 pm

Does the $45k expenses include health insurance?

For example for DW and me, age 54 and 52, ACA insurance is $28k, and has a $4k deductible. So we're looking at $32k min for healthcare alone!

If we can get our income down below about $65k per year, that drops to about $7k per year with a subsidy.

Having $400k or so in Roth would help you keep your income low, assuming you can access most of it. But things might be tight before you hit 59.5.
Retirement: When you reach a point where you have enough. Or when you've had enough.

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HomerJ
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Re: Should we retire in 4 years?

Post by HomerJ » Mon Jun 17, 2019 4:06 pm

You could probably retire today.

I assume you have around $1 million and spend $45k a year. Only 15 years until you can get enough SS to cover that easily and then some.

So the $1 million only has to last 15 years or so. Easy peasy lemon squeasy
Last edited by HomerJ on Mon Jun 17, 2019 4:08 pm, edited 2 times in total.
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HomerJ
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Re: Should we retire in 4 years?

Post by HomerJ » Mon Jun 17, 2019 4:07 pm

bhsince87 wrote:
Mon Jun 17, 2019 4:06 pm
Does the $45k expenses include health insurance?

For example for DW and me, age 54 and 52, ACA insurance is $28k, and has a $4k deductible. So we're looking at $32k min for healthcare alone!

If we can get our income down below about $65k per year, that drops to about $7k per year with a subsidy.

Having $400k or so in Roth would help you keep your income low, assuming you can access most of it. But things might be tight before you hit 59.5.
Their expenses are only $45k, so keeping their income below $65k should be super easy even without a ROTH.
The J stands for Jay

Topic Author
theplayer11
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Re: Should we retire in 4 years?

Post by theplayer11 » Mon Jun 17, 2019 4:34 pm

bhsince87 wrote:
Mon Jun 17, 2019 4:06 pm
Does the $45k expenses include health insurance?

For example for DW and me, age 54 and 52, ACA insurance is $28k, and has a $4k deductible. So we're looking at $32k min for healthcare alone!

If we can get our income down below about $65k per year, that drops to about $7k per year with a subsidy.

Having $400k or so in Roth would help you keep your income low, assuming you can access most of it. But things might be tight before you hit 59.5.
paying under $3k/yr for ACA now with subsidy. So yes, $45k includes health insurance.

bltn
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Re: Should we retire in 4 years?

Post by bltn » Mon Jun 17, 2019 8:50 pm

4% of 1.2 million is 48k. Does your current expense of 45k/yr include taxes? Does your 45k include budgeting for occasional high priced expenses like roof or hvac replacement? Will your expenses remain 45k/yr for the next 4 years?
These are the kind of things I think about. For me the numbers are a little tight
In four years things may look better or worse depending on investment returns and changes in your expenses. Right now it seems as though you would be better figuring to work a couple of additional years.

One other thought. If you retire and close your business, will the land just remain unused? That seems to be a big asset not making any money for you. Is there any way to lease the land for at least a bit of additional income?

bhsince87
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Re: Should we retire in 4 years?

Post by bhsince87 » Mon Jun 17, 2019 8:57 pm

theplayer11 wrote:
Mon Jun 17, 2019 4:34 pm
bhsince87 wrote:
Mon Jun 17, 2019 4:06 pm
Does the $45k expenses include health insurance?

For example for DW and me, age 54 and 52, ACA insurance is $28k, and has a $4k deductible. So we're looking at $32k min for healthcare alone!

If we can get our income down below about $65k per year, that drops to about $7k per year with a subsidy.

Having $400k or so in Roth would help you keep your income low, assuming you can access most of it. But things might be tight before you hit 59.5.
paying under $3k/yr for ACA now with subsidy. So yes, $45k includes health insurance.
OK then, that's great!

I think you are in good shape. You just need to think about how much you can withdrawal from your retirement accounts without triggering excess penalties before age 59.5.
Retirement: When you reach a point where you have enough. Or when you've had enough.

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theplayer11
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Re: Should we retire in 4 years?

Post by theplayer11 » Tue Jun 18, 2019 6:29 am

bhsince87 wrote:
Mon Jun 17, 2019 8:57 pm
theplayer11 wrote:
Mon Jun 17, 2019 4:34 pm
bhsince87 wrote:
Mon Jun 17, 2019 4:06 pm
Does the $45k expenses include health insurance?

For example for DW and me, age 54 and 52, ACA insurance is $28k, and has a $4k deductible. So we're looking at $32k min for healthcare alone!

If we can get our income down below about $65k per year, that drops to about $7k per year with a subsidy.

Having $400k or so in Roth would help you keep your income low, assuming you can access most of it. But things might be tight before you hit 59.5.
paying under $3k/yr for ACA now with subsidy. So yes, $45k includes health insurance.
OK then, that's great!

I think you are in good shape. You just need to think about how much you can withdrawal from your retirement accounts without triggering excess penalties before age 59.5.
right, we will be able to draw from the roths penalty free(not touching earnings) for the first 2 years then switch to 401k's.

Topic Author
theplayer11
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Re: Should we retire in 4 years?

Post by theplayer11 » Tue Jun 18, 2019 6:51 am

bltn wrote:
Mon Jun 17, 2019 8:50 pm
4% of 1.2 million is 48k. Does your current expense of 45k/yr include taxes? Does your 45k include budgeting for occasional high priced expenses like roof or hvac replacement? Will your expenses remain 45k/yr for the next 4 years?
These are the kind of things I think about. For me the numbers are a little tight
In four years things may look better or worse depending on investment returns and changes in your expenses. Right now it seems as though you would be better figuring to work a couple of additional years.

One other thought. If you retire and close your business, will the land just remain unused? That seems to be a big asset not making any money for you. Is there any way to lease the land for at least a bit of additional income?
good point..not only not making money, but will be paying property tax on it. Definitely something I need to think about

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