Too early to retire?

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Topic Author
GoldenRam2030
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Too early to retire?

Post by GoldenRam2030 »

Long time lurker, wonderful site. Thanks for the opportunity to post this. I want to get a read on your thoughts as to the portolio, allocation, resources to "test" retirement probability etc.

**Ages: 53/51/Child 13
**Residence-VA
**Income-$225k combined
**Debt-None
**Home- Paid off valued at $735,000
**Annual Expenses-$125000
**529 plan-$140k
**Current Portfolio: $3,350,000
**Allocation -60/40
**Exp Ratio- 0.18
**International-15% of Equity
**Small cap value tilted

We are both completely burned out and needing a change. This has been a long time coming. We recently moved into this house and figure we should be here for quite some time.

Questions:

1) If one of us finds a job making far less, but with medical and dental, is it feasible to have one of us retire?
2) We have used Firecalc and it gives us about a 90% chance of making it 40 years. Are there other calc one should use?
3) This is subjective, but I feel a real unease about having one of us stop working as this market seems at a crazy high. Im speaking out loud here, but contemplating going less equities, but if contemplating a long retirement possbility, is that short sighted?[/list]

Any comments are welcome, and thank you!
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JoeRetire
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Re: Too early to retire?

Post by JoeRetire »

GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm 1) If one of us finds a job making far less, but with medical and dental, is it feasible to have one of us retire?
Sure. Go for it. Which one is going to keep working despite being completely burned out?
2) We have used Firecalc and it gives us about a 90% chance of making it 40 years. Are there other calc one should use?
Chasing a calculator in search of one that give you a "better" answer is a mistake.
Either be comfortable with 90% or don't.
3) This is subjective, but I feel a real unease about having one of us stop working as this market seems at a crazy high. Im speaking out loud here, but contemplating going less equities, but if contemplating a long retirement possbility, is that short sighted?
You need to subjectively set your asset allocation so that you are comfortable.
Any comments are welcome, and thank you!
Other than "not working" what is one of you going to do in retirement while the other continues working?
Last edited by JoeRetire on Mon Apr 05, 2021 2:40 pm, edited 1 time in total.
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LukeHeinz57
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Re: Too early to retire?

Post by LukeHeinz57 »

I would have 0 concerns retiring early were I in your position. If you are looking for a financial reason to keep working you can find one I am sure...but you don't need to. This site skews very conservative, so I won't be surprised if someone posts immediately after me saying you'd be crazy and so much better off if you just keep at it a few more years until 4mm. :oops: Thing is you only go round once and your health isn't guaranteed. This is really more of a mental and emotional decision than a financial one at this point for you. :beer
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willthrill81
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Re: Too early to retire?

Post by willthrill81 »

Assuming your $125k of expenses includes income taxes that you would pay on portfolio withdrawals and the anticipated cost of health insurance, your withdrawal rate would be about 3.7%. That's not bad, but for a 40 year retirement, you should probably be aiming for something in the 3.25% to 3.50% range to start. The good news is that you only need about $10k of non-portfolio income to bring down your portfolio withdrawal rate to 3.5% and $17k to bring it down to 3.25%.

However, it doesn't seem that you're taking future SS benefits into account. Those could easily bring down your withdrawals significantly (e.g. 30-50%). So you might be in good shape to retire right now with no additional income.
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sailaway
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Re: Too early to retire?

Post by sailaway »

It looks like you have given us the actual portfolio value, not including the home? That puts you in good stead.

Will you have pensions or SS in the future? Have you included those in your calculations?

You have a lot more than us and you are a little older than us, but then you spend a lot more than us.
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David Jay
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Re: Too early to retire?

Post by David Jay »

Welcome to the forum!

In my opinion, someone in their early 50s should target a Withdrawal rate of 3%, which only provides about 100,000 a year. In order to retire, it would seem that some income is required or else a significant reduction in standard of living.
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JoeRetire
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Re: Too early to retire?

Post by JoeRetire »

willthrill81 wrote: Mon Apr 05, 2021 2:38 pm Assuming your $125k of expenses includes income taxes that you would pay on portfolio withdrawals and the anticipated cost of health insurance, your withdrawal rate would be about 3.7%. That's not bad, but for a 40 year retirement, you should probably be aiming for something in the 3.25% to 3.50% range to start.
Without knowing how much the working spouse is earning, there's no way to come to this conclusion.
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willthrill81
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Re: Too early to retire?

Post by willthrill81 »

JoeRetire wrote: Mon Apr 05, 2021 2:43 pm
willthrill81 wrote: Mon Apr 05, 2021 2:38 pm Assuming your $125k of expenses includes income taxes that you would pay on portfolio withdrawals and the anticipated cost of health insurance, your withdrawal rate would be about 3.7%. That's not bad, but for a 40 year retirement, you should probably be aiming for something in the 3.25% to 3.50% range to start.
Without knowing how much the working spouse is earning, there's no way to come to this conclusion.
I was assuming that if they completely retired that neither would be working since the OP said that they are both burned out. That's how I came to that conclusion.
“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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JoeRetire
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Re: Too early to retire?

Post by JoeRetire »

willthrill81 wrote: Mon Apr 05, 2021 2:44 pm
JoeRetire wrote: Mon Apr 05, 2021 2:43 pm
willthrill81 wrote: Mon Apr 05, 2021 2:38 pm Assuming your $125k of expenses includes income taxes that you would pay on portfolio withdrawals and the anticipated cost of health insurance, your withdrawal rate would be about 3.7%. That's not bad, but for a 40 year retirement, you should probably be aiming for something in the 3.25% to 3.50% range to start.
Without knowing how much the working spouse is earning, there's no way to come to this conclusion.
I was assuming that if they completely retired that neither would be working since the OP said that they are both burned out. That's how I came to that conclusion.
"1) If one of us finds a job making far less, but with medical and dental, is it feasible to have one of us retire?"
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
Topic Author
GoldenRam2030
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Re: Too early to retire?

Post by GoldenRam2030 »

As for social security if we see the 24% cut that is anticipated if Congress does nothing and we stop working altogether right now we would get 24,000 annually total at 67
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willthrill81
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Re: Too early to retire?

Post by willthrill81 »

JoeRetire wrote: Mon Apr 05, 2021 2:45 pm
willthrill81 wrote: Mon Apr 05, 2021 2:44 pm
JoeRetire wrote: Mon Apr 05, 2021 2:43 pm
willthrill81 wrote: Mon Apr 05, 2021 2:38 pm Assuming your $125k of expenses includes income taxes that you would pay on portfolio withdrawals and the anticipated cost of health insurance, your withdrawal rate would be about 3.7%. That's not bad, but for a 40 year retirement, you should probably be aiming for something in the 3.25% to 3.50% range to start.
Without knowing how much the working spouse is earning, there's no way to come to this conclusion.
I was assuming that if they completely retired that neither would be working since the OP said that they are both burned out. That's how I came to that conclusion.
"1) If one of us finds a job making far less, but with medical and dental, is it feasible to have one of us retire?"
It's feasible that they could retire now. But we need more information. I don't understand the tenor to your posts.
“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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willthrill81
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Re: Too early to retire?

Post by willthrill81 »

GoldenRam2030 wrote: Mon Apr 05, 2021 2:46 pm As for social security if we see the 24% cut that is anticipated if Congress does nothing and we stop working altogether right now we would get 24,000 annually total at 67
Combined? I think that your estimate may be low unless you haven't been earning anywhere close to your current income for long.
“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
striker79
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Re: Too early to retire?

Post by striker79 »

Why dont you both go part time. Part time work is easy.
desiderium
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Re: Too early to retire?

Post by desiderium »

In your early 50's your planning horizon is long and uncertainty therefore higher.
Don't give up your human capital yet. Find a way to maintain your earning potential. Work part time, consult, do something voluntary that exercises your skills. Sure, you can take a year off before developing this. Keeping some earnings or earning potential will provide extra flexibility should your income needs increase or the math become difficult.
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Watty
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Re: Too early to retire?

Post by Watty »

GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm **Annual Expenses-$125000
Your expenses will be different at different phases of life. What do you think your expenses will be once the kid is launched and you are on Medicare?

People do spend $125K a year(including taxes) but with a paid off house that is somewhere in the top couple of percent of spending. That would not be the lifestyles of the rich and famous but that is still on the high end. If that does not feel right to you then be sure to take a hard look at your numbers to make sure that they are reasonable.

Also consider that at some point like your mid 70s you will likely slow down and spend less on things like travel.
GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm 2) We have used Firecalc and it gives us about a 90% chance of making it 40 years.
Keep in mind that a 10% chance of failure does not mean that you spend mindlessly until you are broke and homeless. It likely means that you might need to reduce your spending to something like $100K a year if your portfolio is being drawn down faster than expected.

You likely also did not include your home equity in that calculation. There are lots of ways to tap your home equity if you really need to and at some point you may want to downsize to a smaller house or condo anyway.
GoldenRam2030 wrote: Mon Apr 05, 2021 2:46 pm As for social security if we see the 24% cut that is anticipated if Congress does nothing and we stop working altogether right now we would get 24,000 annually total at 67
See this web site for a suggested Social Security claiming strategy

https://opensocialsecurity.com/
ut2sua
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Re: Too early to retire?

Post by ut2sua »

GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm Long time lurker, wonderful site. Thanks for the opportunity to post this. I want to get a read on your thoughts as to the portolio, allocation, resources to "test" retirement probability etc.

**Ages: 53/51/Child 13
**Residence-VA
**Income-$225k combined
**Debt-None
**Home- Paid off valued at $735,000
**Annual Expenses-$125000
**529 plan-$140k
**Current Portfolio: $3,350,000
**Allocation -60/40
**Exp Ratio- 0.18
**International-15% of Equity
**Small cap value tilted

We are both completely burned out and needing a change. This has been a long time coming. We recently moved into this house and figure we should be here for quite some time.

Questions:

1) If one of us finds a job making far less, but with medical and dental, is it feasible to have one of us retire?
2) We have used Firecalc and it gives us about a 90% chance of making it 40 years. Are there other calc one should use?
3) This is subjective, but I feel a real unease about having one of us stop working as this market seems at a crazy high. Im speaking out loud here, but contemplating going less equities, but if contemplating a long retirement possbility, is that short sighted?[/list]

Any comments are welcome, and thank you!
1- Make sure your $125K expense includes HI
2- If after that the $125K has about 20->25K of non-essential spending $
Then I think you can both retire.
Good luck
Escapevelocity
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Re: Too early to retire?

Post by Escapevelocity »

Not saying this is directly relevant to you, but here is a "data point"

I am retiring next year at 55. Spouse does not work and has not worked (for pay that is - she raised our 3 kids).

I have saved approx. 22x our projected initial annual spend including taxes. It is invested at 50/50 allocation mostly in index funds. I have a small pension that I've backed out of the spending figure for this calculation.

On the surface, 22x expenses seems fairly aggressive in a risk sense, but that calculation completely ignores social security benefits! I plan to defer claiming SS benefits to Age 70. This could change in some adverse situation financially. I expect our expenses to drop 10-20% around age 62 mostly because my Mega-corp retiree health insurance is paid for 100% by the company from 62 to 65 when Medicare kicks in. Also, the planned spend has about $20-25k in travel and other discretionary spend that could be trimmed significantly if needed.

Once SS kicks in, I will only be drawing $10-20k annually from whatever portfolio I have at that point. Basically, I am just needing to fund the 15 years from 55-70 and then I am "home free". No LTC insurance is planned (self insure from portfolio). I might reconsider that around age 62 if the value proposition improves.
flyingaway
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Re: Too early to retire?

Post by flyingaway »

You could both retire if you don't like to make more money. Your social security estimate is probably too light. I would guess it is about $16k at 62 for each of you. Which is likely to be around $60k combined if claimed at 70.

I don't know what is the definition of burnout. But I really don't want to go to work anymore, and I don't like my supervisor. Is that a burnout? If it is, I plan to retire this year or next year and will make what size of a portfolio work.

The bottom line is, if you don't want to work, do retire and make the finance work. You do have a respectful portfolio.
just1question
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Re: Too early to retire?

Post by just1question »

GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm
Questions:

1) If one of us finds a job making far less, but with medical and dental, is it feasible to have one of us retire?
2) We have used Firecalc and it gives us about a 90% chance of making it 40 years. Are there other calc one should use?
3) This is subjective, but I feel a real unease about having one of us stop working as this market seems at a crazy high. Im speaking out loud here, but contemplating going less equities, but if contemplating a long retirement possbility, is that short sighted?[/list]

Any comments are welcome, and thank you!
1. IMO, you are not going to get a consensus of opinion on this forum. If you drop your spending, then yes (to a consensus). But this forum is very conservative. If you post the same question on a FIRE-centric forum, you will probably get your consensus.

2. I really like the Flexible Retirement Planner. It's free and downloadable.

3. Sounds like market timing to me. But you also need to be able to sleep at night without worrying about your portfolio. Try plugging both AA's into your calculator before making any changes.

You should check your SS numbers. Even if there is a 25% decrease in benefits across the board (thanks Congress), I would think your combined benefits would be higher given your ages.

Best of luck.
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GoldenRam2030
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Re: Too early to retire?

Post by GoldenRam2030 »

willthrill81 wrote: Mon Apr 05, 2021 2:50 pm
JoeRetire wrote: Mon Apr 05, 2021 2:45 pm
willthrill81 wrote: Mon Apr 05, 2021 2:44 pm
JoeRetire wrote: Mon Apr 05, 2021 2:43 pm
willthrill81 wrote: Mon Apr 05, 2021 2:38 pm Assuming your $125k of expenses includes income taxes that you would pay on portfolio withdrawals and the anticipated cost of health insurance, your withdrawal rate would be about 3.7%. That's not bad, but for a 40 year retirement, you should probably be aiming for something in the 3.25% to 3.50% range to start.
Without knowing how much the working spouse is earning, there's no way to come to this conclusion.
I was assuming that if they completely retired that neither would be working since the OP said that they are both burned out. That's how I came to that conclusion.
"1) If one of us finds a job making far less, but with medical and dental, is it feasible to have one of us retire?"
It's feasible that they could retire now. But we need more information. I don't understand the tenor to your posts.

Whose tenor?
Wanderingwheelz
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Re: Too early to retire?

Post by Wanderingwheelz »

I know there’s a lot of comparisons that are made on a site like this, but my wife and I are a bit younger than you with a portfolio about equal in size. Also a home that is valued about the same that is paid for. Our kid is finished college though, so that’s perhaps a big difference since she’s got a job and appears to be well on her way to being self sufficient. You’ve still go a lot of work ahead of you on that front.

I quit working last year due to burnout. My wife still loves running her business, though. It affords her a lot of free time which is nice so we do get to spend a lot of time together- were about to leave for a 4 to 6 week trip on our RV. Her income more than covers our expenses which are considerable lower than yours, but the business pays for a lot of what you’re paying for out of pocket.

I think you can easily do what you’re wishing for. Give it a shot and see how it goes. You’re still young enough that if it isn’t what you had planned for it to be you can always find something that will bring in an income even if it’s now what you’re used to earning. At least it won’t make you miserable. Life is short so go make the most of it.
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Normchad
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Re: Too early to retire?

Post by Normchad »

To answer your question, yes, I think one of you can stop working now.

You’re close to the point where you could both stop working. (You might be there, might not).

But certainly, one of you could.

You’re also a great candidate to CoastFIRE. Just stop saving money. Either reduce your role, or get some other job that just covers current expenses while you let your nest egg continue to grow.

I was in a similar position when the pandemic started. Wife works in education and was very frustrated by everything. We looked at the numbers, and figured it wouldn’t hurt us one bit for her to walk away. So she did. She didn’t want to quit yet, it it’s really nice to have that option when you feel you need it.
Freddobbs
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Re: Too early to retire?

Post by Freddobbs »

If you can throttle back spending a bit, yes.

Only on bogleheads is that not a lot of money 🙄
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Re: Too early to retire?

Post by AlohaJoe »

GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm 2) We have used Firecalc and it gives us about a 90% chance of making it 40 years. Are there other calc one should use?
Why did you pick 40 years? There's a greater than 50% chance at least one of you will live longer than that. There's a 20% chance one of you will longer than 47 years. There's a 5% chance one of you will live longer than 51 years.

IMHO you should be planning for a longer retirement than 40 years.
am
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Re: Too early to retire?

Post by am »

GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm Long time lurker, wonderful site. Thanks for the opportunity to post this. I want to get a read on your thoughts as to the portolio, allocation, resources to "test" retirement probability etc.

**Ages: 53/51/Child 13
**Residence-VA
**Income-$225k combined
**Debt-None
**Home- Paid off valued at $735,000
**Annual Expenses-$125000
**529 plan-$140k
**Current Portfolio: $3,350,000
**Allocation -60/40
**Exp Ratio- 0.18
**International-15% of Equity
**Small cap value tilted

We are both completely burned out and needing a change. This has been a long time coming. We recently moved into this house and figure we should be here for quite some time.

Questions:

1) If one of us finds a job making far less, but with medical and dental, is it feasible to have one of us retire?
2) We have used Firecalc and it gives us about a 90% chance of making it 40 years. Are there other calc one should use?
3) This is subjective, but I feel a real unease about having one of us stop working as this market seems at a crazy high. Im speaking out loud here, but contemplating going less equities, but if contemplating a long retirement possbility, is that short sighted?[/list]

Any comments are welcome, and thank you!
How are you going to spend your nest egg? I assume some of it is in tax deferred accounts?
Topic Author
GoldenRam2030
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Re: Too early to retire?

Post by GoldenRam2030 »

The nest Egg will need to be drawn down with some Tax guidance as it is about 50/50 Taxable/Tax Deferred.

My biggest concern is payong for health care for the next ten years plus. Im guessing we are not the only ones in that position.

No pensions but as some have posted, SS is closer to 32k annualy as i did not factor spouses work history correctly.
sailaway
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Re: Too early to retire?

Post by sailaway »

AlohaJoe wrote: Mon Apr 05, 2021 7:50 pm
GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm 2) We have used Firecalc and it gives us about a 90% chance of making it 40 years. Are there other calc one should use?
Why did you pick 40 years? There's a greater than 50% chance at least one of you will live longer than that. There's a 20% chance one of you will longer than 47 years. There's a 5% chance one of you will live longer than 51 years.

IMHO you should be planning for a longer retirement than 40 years.
I find that with FIREcalc, the success rate tends to go up once you exceed 40 years. It has been suggested that this is because we just don't have very many independent 50 year periods to pull from.
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willthrill81
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Re: Too early to retire?

Post by willthrill81 »

GoldenRam2030 wrote: Tue Apr 06, 2021 8:18 am My biggest concern is payong for health care for the next ten years plus. Im guessing we are not the only ones in that position.
Check out medical insurance premiums beforehand. They might not be as bad as you think. Also, you might find it worthwhile to reduce some of your spending in other areas rather than work for additional years when you're burned out. And spending down your portfolio somewhat between now and when you start SS benefits is not a bad idea at all since your withdrawals would go down at least 20% once that happens.
“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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HMSVictory
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Re: Too early to retire?

Post by HMSVictory »

Your annual spending of $125k is 3.7% of your portfolio value. This is very doable. The only drag might be if the majority of the $3.3M is in tax deferred retirement account since neither of you are 59.5 yet. Hopefully you have taxable accounts within the $3.3 to carry you till your 59.5 and can start drawing on IRAs or have 401k with the 55 age exception.

There is no question one of you can quit today. You can easily live on one income plus the portfolio. Go for it.

Your net worth is north of $4M you have done very well with money and earned the right to do whatever you want. :sharebeer
Stay the course!
basspond
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Re: Too early to retire?

Post by basspond »

Since you are younger then 59.5 I would suggest a portfolio at least 35 x yearly costs. But you could still probably pull the trigger now with the value of your paid off house as insurance just in case. Good luck.
GoneCamping
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Re: Too early to retire?

Post by GoneCamping »

We're in a similar boat, a little older (55/56) with a couple hundred thousand less and lower annual expenses. We also have no children. We are both retiring in July. I am comfortable with where we stand but the biggest driver for me in achieving that level of comfort is knowing how much flexibility we have with annual expenses i.e. how much of them are discretionary. You don't mention that but I am sure you know or have a good idea. That is key in my opinion along with determining healthcare costs as they can be a very significant expense increase, especially if you cannot manage income to get ACA subsidies. Can you reduce expenses and withdrawals as needed in a down market or do you otherwise have a strategy to deal with that, and a plan for minimizing taxes?

There are plenty of calculators to help you crunch the numbers and I agree that getting the right answer shouldn't be the goal. I found that if the numbers work, they will all put you in the same ballpark but getting those results from a few different ones is comforting. And getting the good folks on this forum to weigh in on your specific situation (I did the same) can help sooth any anxieties too. If you can manage the expenses and vary your withdrawals as needed, have factored in health care costs, it looks to me like you should be able to successfully manage an early retirement. Good luck!
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JoeRetire
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Re: Too early to retire?

Post by JoeRetire »

flyingaway wrote: Mon Apr 05, 2021 3:43 pmBut I really don't want to go to work anymore, and I don't like my supervisor. Is that a burnout?
Probably not.

It's probably more that you don't like working for your current supervisor. And that could be cured with a new job.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
wolf359
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Re: Too early to retire?

Post by wolf359 »

Basically, you have enough to retire if you really had to. However, you're relatively young, and although you're burnt out, you don't really have to retire right now.

I suggest that instead of retiring, you take the opportunity to PREPARE to retire. Start exploring activities for how you'll fill your day.

Fund home improvements, so you don't have to pay for them out of savings.

Replace your cars and make big repairs just before you retire.

Start practicing living off your savings, and save your entire salary. This is to work out the logistics of how you'll actually do it.

You don't have to feel burnt out -- you have enough to retire if you get pushed. So don't feel trapped at work. You have choices. You can even find something else if you really have to.

You have an emergency buffer that will sustain you for 30 years. That's a heck of a safety net. If nothing is pushing you out right now, start yourself on a 5 year plan (or whatever's appropriate for you) to build your ideal retirement life.
Tamalak
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Re: Too early to retire?

Post by Tamalak »

You have 25x expenses right now.. and a paid off house.. and your kid isn't gonna be dependent on you forever. It would be irresponsible for you to sacrifice any health and sanity for your job.. you have a lot more money than you have time left.. go retire!
Jack FFR1846
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Re: Too early to retire?

Post by Jack FFR1846 »

I think you're in reasonably good shape. Let me break down the good and bad I see:

good
About 25X spending saved not counting SS
SS of some sort will come
529 pretty well funded for in state public college (maybe a little light)
Your state has GREAT state public colleges. Virginia Tech and that Boarding school in Charlottesville...I forget the name (go Hokies).
House paid off.
Plan includes one spouse working to get discounted health insurance (income also)
Question...would the other spouse work maybe part time? That would help.

bad
$125k is a LOT of spending. Have you done a mock "in retirement" budget?
College expense may exceed 529.

In short, going to lower paying jobs and/or part time with insurance in mind should be fine. For *me*, the safety factor is low, but I'm not retired with 50X spending, paid off house and 4 cars and both kids done with college and working. I plan to retire this year. I do plan to work part time for short spurts.
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LMK5
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Re: Too early to retire?

Post by LMK5 »

I'm wondering if people include their car depreciation in their spending. I'll be 60 in June and my finances are much like the OP (wife is 10 years younger). Also, like the OP, my expenses are about 125k/yr. and must be brought down. I have been able to work out a planned budget of about 100k. I have also included $3100 per car per year in depreciation. Does anyone else do that?

Also, do you include income taxes in your budget? I realized that my 100k budget does not include them. I'll have to revise that by figuring that half the budget will come from after-tax accounts and then getting an effective tax rate on that amount for both federal and state (CA).
Golf maniac
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Re: Too early to retire?

Post by Golf maniac »

If one person continues to work for medical and health benefits you should be fine. As others have stated your SS benefits seem low but maybe that is because you are being conservative at 78%. I retired at 56 and have been retired 5 years. I absolutely love it and so glad I did it. I would only suggest to deep dive on your annual expenses. What I found was some budget items went down significantly and others went up. Best of luck.
Kingpin
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Re: Too early to retire?

Post by Kingpin »

Wow more than I thought need healthcare before Medicare.

It seems every “can I retire” thread I’ve seen has someone getting a pension or company paid health benefits.
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willthrill81
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Re: Too early to retire?

Post by willthrill81 »

Kingpin wrote: Tue Apr 06, 2021 5:56 pm It seems every “can I retire” thread I’ve seen has someone getting a pension or company paid health benefits.
That certainly won't be true for me. I'll probably have a 13 gap between retirement and Medicare. As of now, I would personally lean toward a health share ministry.
“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
Pinotage
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Re: Too early to retire?

Post by Pinotage »

wolf359 wrote: Tue Apr 06, 2021 2:09 pm Basically, you have enough to retire if you really had to. However, you're relatively young, and although you're burnt out, you don't really have to retire right now.

I suggest that instead of retiring, you take the opportunity to PREPARE to retire. Start exploring activities for how you'll fill your day.

Fund home improvements, so you don't have to pay for them out of savings.

Replace your cars and make big repairs just before you retire.

Start practicing living off your savings, and save your entire salary. This is to work out the logistics of how you'll actually do it.

You don't have to feel burnt out -- you have enough to retire if you get pushed. So don't feel trapped at work. You have choices. You can even find something else if you really have to.

You have an emergency buffer that will sustain you for 30 years. That's a heck of a safety net. If nothing is pushing you out right now, start yourself on a 5 year plan (or whatever's appropriate for you) to build your ideal retirement life.
Great post and excellent advice.
Normchad
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Re: Too early to retire?

Post by Normchad »

willthrill81 wrote: Tue Apr 06, 2021 6:00 pm
Kingpin wrote: Tue Apr 06, 2021 5:56 pm It seems every “can I retire” thread I’ve seen has someone getting a pension or company paid health benefits.
That certainly won't be true for me. I'll probably have a 13 gap between retirement and Medicare. As of now, I would personally lean toward a health share ministry.
It won’t be true for me either. Healthcare insurance is just another expense, like taxes. It would be great if you didn’t have to pay for it, but if you do, just have to account for it. Like Will, I also expect a 13 year gap between retirement and Medicare. That’s an opportunity to do a lot of Roth conversions and other tax minimization steps......

I’m going ACA plans and Premium Tax Credits to offset the costs. I can do this, because I started planning for an early retirement years ago, and funding a taxable account.

But man, it would be sweet to have a nice pension, or retiree health benefits.
flyingaway
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Re: Too early to retire?

Post by flyingaway »

willthrill81 wrote: Tue Apr 06, 2021 6:00 pm
Kingpin wrote: Tue Apr 06, 2021 5:56 pm It seems every “can I retire” thread I’ve seen has someone getting a pension or company paid health benefits.
That certainly won't be true for me. I'll probably have a 13 gap between retirement and Medicare. As of now, I would personally lean toward a health share ministry.
I don't know if that one (health share ministry) can be counted on when you really need it.
flyingaway
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Re: Too early to retire?

Post by flyingaway »

LMK5 wrote: Tue Apr 06, 2021 3:50 pm I'm wondering if people include their car depreciation in their spending. I'll be 60 in June and my finances are much like the OP (wife is 10 years younger). Also, like the OP, my expenses are about 125k/yr. and must be brought down. I have been able to work out a planned budget of about 100k. I have also included $3100 per car per year in depreciation. Does anyone else do that?

Also, do you include income taxes in your budget? I realized that my 100k budget does not include them. I'll have to revise that by figuring that half the budget will come from after-tax accounts and then getting an effective tax rate on that amount for both federal and state (CA).
One can always "bring down" a budget by trimming discretionary spending.

The question is: do you really want to live on that budget?
Last edited by flyingaway on Tue Apr 06, 2021 10:18 pm, edited 1 time in total.
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willthrill81
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Re: Too early to retire?

Post by willthrill81 »

flyingaway wrote: Tue Apr 06, 2021 7:55 pm
willthrill81 wrote: Tue Apr 06, 2021 6:00 pm
Kingpin wrote: Tue Apr 06, 2021 5:56 pm It seems every “can I retire” thread I’ve seen has someone getting a pension or company paid health benefits.
That certainly won't be true for me. I'll probably have a 13 gap between retirement and Medicare. As of now, I would personally lean toward a health share ministry.
I don't know if that one (health share ministry) can be counted on when you really need it.
Sadly, the same can be true of insurance.
“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
t24b350
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Re: Too early to retire?

Post by t24b350 »

I am at the same age of yours. My networth is about 700-800K less than yours but I spend a little less than you. Kid is a little older than yours.
I work in tech so I feel stressful daily. In addition, my company keeps on doing layoffs every 6 months.
I do not think I can afford retiring any time soon. The way I try to overcome the challenge is to do running. If you do exercise regularly, you may feel less stressful.
t24b350
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Re: Too early to retire?

Post by t24b350 »

I am at the same age of yours. My networth is about 700-800K less than yours but I spend a little less than you. Kid is a little older than yours.
I work in tech so I feel stressful daily. In addition, my company keeps on doing layoffs every 6 months.
I do not think I can afford retiring any time soon. The way I try to overcome the challenge is to do running. If you do exercise regularly, you may feel less stressful.
Tal-
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Re: Too early to retire?

Post by Tal- »

Normchad wrote: Mon Apr 05, 2021 4:29 pm To answer your question, yes, I think one of you can stop working now.

You’re close to the point where you could both stop working. (You might be there, might not).

But certainly, one of you could.

You’re also a great candidate to CoastFIRE. Just stop saving money. Either reduce your role, or get some other job that just covers current expenses while you let your nest egg continue to grow.

I was in a similar position when the pandemic started. Wife works in education and was very frustrated by everything. We looked at the numbers, and figured it wouldn’t hurt us one bit for her to walk away. So she did. She didn’t want to quit yet, it it’s really nice to have that option when you feel you need it.
This.
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Wanderingwheelz
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Re: Too early to retire?

Post by Wanderingwheelz »

flyingaway wrote: Tue Apr 06, 2021 7:55 pm
willthrill81 wrote: Tue Apr 06, 2021 6:00 pm
Kingpin wrote: Tue Apr 06, 2021 5:56 pm It seems every “can I retire” thread I’ve seen has someone getting a pension or company paid health benefits.
That certainly won't be true for me. I'll probably have a 13 gap between retirement and Medicare. As of now, I would personally lean toward a health share ministry.
I don't know if that one (health share ministry) can be counted on when you really need it.
It’s easier to say you’d go that route when you’re younger and healthy and your net worth isn’t as high then it will be when your older and your health care needs are greater and you’ve got a lot more to lose financially right when it would be truly catastrophic.

Normchad nailed it with his comment further up the thread. Plan early by building a sizable taxable account.
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mrspock
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Re: Too early to retire?

Post by mrspock »

You need to have enough and have “had enough”. I think you check both boxes. Congrats!
flyingaway
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Re: Too early to retire?

Post by flyingaway »

t24b350 wrote: Tue Apr 06, 2021 9:29 pm I am at the same age of yours. My networth is about 700-800K less than yours but I spend a little less than you. Kid is a little older than yours.
I work in tech so I feel stressful daily. In addition, my company keeps on doing layoffs every 6 months.
I do not think I can afford retiring any time soon. The way I try to overcome the challenge is to do running. If you do exercise regularly, you may feel less stressful.
Looks like I should resume my gambling activities soon, since that surely reduces my stress.
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