Would YOU retire

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smitcat
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Re: Would YOU retire

Post by smitcat » Fri Mar 09, 2018 3:48 pm

Saver2018 wrote:
Fri Mar 09, 2018 3:39 pm
Would you consider assuming you will need the entire health care plan deductible as part of your retirement budget be considered a WANT or a NEED
How about taking the past 10 years history of how much your health deductible was actually used and doubling it - that would be a need.
If you used it all or more than half each year than keep it all - if not reduce it accordingly for planning purposes.
Remembering it is just one more 'assumption' that gets added into the mix.

Dulocracy
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Location: Atlanta, GA

Re: Would YOU retire

Post by Dulocracy » Fri Mar 09, 2018 4:07 pm

I tend to be very conservative on these things, but consider what happens if your rentals no longer produce. Are you ok? If there is a horrible real estate crash and you have to liquidate all property at 50% value. Are you ok? You are basically testing for black swan events. If it were not for the black swans, even this overly-cautious individual would say go for it.

As far as bonds, most of your money is in tax advantaged accounts. Have you considered individual TIPs? They sound like they might work for you, and Vanguard can get you access. Essentially, you know that your money will not be influenced by the actions of others (fund prices), and you know you are gaining a small bit post-inflation (a very small bit). Still, it is better than cash, which almost guarantees loss due to inflation.

My suggestions are then:
1) Gut check against black swan events and look at your situation for worst-case and see if you will be ok (I think the answer is likely yes).
2) Consider individual TIPS instead of cash. My planned retirement asset allocation is 60 equities/40 fixed income, and there are good arguments for not dropping it too much at that point (especially with the amount you have saved), but that is a topic for other threads.
3) As others mentioned, your biggest issue is going to be health insurance. Keeping coverage through an employer will protect you from an unknown, erratic market, as well as the political unknowns we cannot discuss on this board. THAT is your biggest risk in my eyes.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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Nestegg_User
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Re: Would YOU retire

Post by Nestegg_User » Fri Mar 09, 2018 4:13 pm

smitcat

I know that I used (avg + 2 std dev) times a safety factor (twenty to twenty five percent) in my numbers when planning....(already retired three years). It’s unlikely to need the full deductible for all years, but if one is successful even considering that, it should lead to increased confidence that the plan is doable.

also, once in medicare with a supplement plan, the deductible will change and will likely not be as bad.

{as many threads like this have noted, you also have to look at the likelihood of portfolio failure, dual and singular survival probabilities, what “failure” even means (fewer international trips or cat food), not to mention changes in benefits or tax laws. That doesn’t even account for the rental properties, whether gains or occupancy failure or damage/losses... Too many moving parts)}

Bacchus01
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Re: Would YOU retire

Post by Bacchus01 » Fri Mar 09, 2018 4:16 pm

delamer wrote:
Fri Mar 09, 2018 10:59 am
Bacchus01 wrote:
Thu Mar 08, 2018 11:33 pm
delamer wrote:
Thu Mar 08, 2018 7:38 pm
Bacchus01 wrote:
Thu Mar 08, 2018 7:26 pm
I’m really surprised by the $9650 per month need. What for?

We own two houses and some investment land that we pay mortgage and taxes on every month. Home values are well above what yours are. We have three kids still at home and all their food and activities. We take two nice vacations every year including international. We have two newer $50K+ SUVs that we pay loans on.

And we still only spend $125-$135K. If the boys were gone and the houses paid off, I can’t see us spending more than $50K/year and that’s living very nicely.
In these types of posts, unless the OP asks for advice about expenses that could be cut back then I don’t see the point of asking “why” they need the income that they are targeting.

We Bogleheads are all over the place in terms of what we spend money on, how much we spend on those things, and how we prioritize different spending.

Your idea of “living very nicely” is probably nothing like mine or the OP’s.
Let me be more succinct. No, I would not retire on that amount if I was planning to spend $100K a year. But I can’t imagine what they are spending $100K a year on. I think it’s very Relevant.
We’ll just have to disagree on this. To me, the risk is that posters come here for advice on portfolio allocation and income streams and are put off when people criticize their spending.

Apparently, the OP on this thread dealt with it fine so no harm in this case.
Would you care to point out where I criticized their spending?

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HomerJ
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Re: Would YOU retire

Post by HomerJ » Fri Mar 09, 2018 4:31 pm

Bacchus01 wrote:
Fri Mar 09, 2018 4:16 pm
Would you care to point out where I criticized their spending?
Heh. Really? You (and me too) certainly questioned their spending.

But you don't think you had a negative tone?
Bacchus01 wrote:
Thu Mar 08, 2018 7:26 pm
I’m really surprised by the $9650 per month need. What for?

We own two houses and some investment land that we pay mortgage and taxes on every month. Home values are well above what yours are. We have three kids still at home and all their food and activities. We take two nice vacations every year including international. We have two newer $50K+ SUVs that we pay loans on.

And we still only spend $125-$135K. If the boys were gone and the houses paid off, I can’t see us spending more than $50K/year and that’s living very nicely.
But I can’t imagine what they are spending $100K a year on.
"How could anyone possibly be spending that much money?" is a negative statement implying criticism of their choices.

delamer
Posts: 4738
Joined: Tue Feb 08, 2011 6:13 pm

Re: Would YOU retire

Post by delamer » Fri Mar 09, 2018 4:47 pm

Bacchus01 wrote:
Fri Mar 09, 2018 4:16 pm
delamer wrote:
Fri Mar 09, 2018 10:59 am
Bacchus01 wrote:
Thu Mar 08, 2018 11:33 pm
delamer wrote:
Thu Mar 08, 2018 7:38 pm
Bacchus01 wrote:
Thu Mar 08, 2018 7:26 pm
I’m really surprised by the $9650 per month need. What for?

We own two houses and some investment land that we pay mortgage and taxes on every month. Home values are well above what yours are. We have three kids still at home and all their food and activities. We take two nice vacations every year including international. We have two newer $50K+ SUVs that we pay loans on.

And we still only spend $125-$135K. If the boys were gone and the houses paid off, I can’t see us spending more than $50K/year and that’s living very nicely.
In these types of posts, unless the OP asks for advice about expenses that could be cut back then I don’t see the point of asking “why” they need the income that they are targeting.

We Bogleheads are all over the place in terms of what we spend money on, how much we spend on those things, and how we prioritize different spending.

Your idea of “living very nicely” is probably nothing like mine or the OP’s.
Let me be more succinct. No, I would not retire on that amount if I was planning to spend $100K a year. But I can’t imagine what they are spending $100K a year on. I think it’s very Relevant.
We’ll just have to disagree on this. To me, the risk is that posters come here for advice on portfolio allocation and income streams and are put off when people criticize their spending.

Apparently, the OP on this thread dealt with it fine so no harm in this case.
Would you care to point out where I criticized their spending?
“I’m really surprised by the $9650 per month need. What for?” followed by “I can’t see us spending more than $50K/year and that’s living very nicely.”

You do not see that as criticism?

Also see HomerJ’s note above.

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LadyGeek
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Re: Would YOU retire

Post by LadyGeek » Fri Mar 09, 2018 5:30 pm

New member oldone90b has a question which I've moved into a stand-alone post. See: [Just retired, would like help with portfolio]
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

moehoward
Posts: 12
Joined: Mon Mar 05, 2018 10:16 am

Re: Would YOU retire

Post by moehoward » Fri Mar 09, 2018 5:58 pm

I retired two years ago and my wife 4 years ago (She is two years older). First piece of advise, there is never enough money or the right time to retire. You will drive yourself crazy thinking about it. You've done your homework and saved your money, congratulations.
IMHO
-Let your wife retire first while you still work. My wife did this and it was kind of like dipping your toe in the pool.
-Take your SS at 66 or when you need it.
-Health insurance is kind of stumbling block. My wife was on my insurance when she retired so no problem. After I retired, we were using Cobra via my company insurance. I highly recommend using the Cobra. (They didn't even change our insurance card) We budgeted about $15K per year and came in at about 13K with deductibles, etc. I went on the exchanges after my wife went on Medicare. I paid about $9K for my coverage. (I paid for a very good plan that was for the entire US). For 2018 (65 in May) I got a high deductible insurance. (I haven't had to use it, so it was a good idea)
-We kept track of our expenses for 2 years before retirement so we knew our monthly nut. We have stayed in budget (we like to travel).
-If you want to take the stress out, retire at 58 or 59. Have your wife retire now if possible.

Good luck

Bacchus01
Posts: 1641
Joined: Mon Dec 24, 2012 9:35 pm

Re: Would YOU retire

Post by Bacchus01 » Fri Mar 09, 2018 6:53 pm

delamer wrote:
Fri Mar 09, 2018 4:47 pm
Bacchus01 wrote:
Fri Mar 09, 2018 4:16 pm
delamer wrote:
Fri Mar 09, 2018 10:59 am
Bacchus01 wrote:
Thu Mar 08, 2018 11:33 pm
delamer wrote:
Thu Mar 08, 2018 7:38 pm


In these types of posts, unless the OP asks for advice about expenses that could be cut back then I don’t see the point of asking “why” they need the income that they are targeting.

We Bogleheads are all over the place in terms of what we spend money on, how much we spend on those things, and how we prioritize different spending.

Your idea of “living very nicely” is probably nothing like mine or the OP’s.
Let me be more succinct. No, I would not retire on that amount if I was planning to spend $100K a year. But I can’t imagine what they are spending $100K a year on. I think it’s very Relevant.
We’ll just have to disagree on this. To me, the risk is that posters come here for advice on portfolio allocation and income streams and are put off when people criticize their spending.

Apparently, the OP on this thread dealt with it fine so no harm in this case.
Would you care to point out where I criticized their spending?
“I’m really surprised by the $9650 per month need. What for?” followed by “I can’t see us spending more than $50K/year and that’s living very nicely.”

You do not see that as criticism?

Also see HomerJ’s note above.
No, I don’t.

I see them as legitimate questions to understand the situation.

simas
Posts: 179
Joined: Wed Apr 04, 2007 5:50 pm

Re: Would YOU retire

Post by simas » Sat Mar 10, 2018 10:50 am

ReadyToRetire wrote:
Fri Mar 09, 2018 9:18 am
Simas, I am interested in learning more about your situation. As someone who wants to retire soon - even this year - I am always on the hunt for people who've made the leap prior to me. I'll go back and search your posts, but anything more you can share? You are right that certainty doesn't exist and probably a need to be flexible is important. I think I am somewhere between where you might have been mentally when you made the retirement leap and where the current OP is. He appears to be on the more fearful side. I don't think I am there, but not quite brave enough to just pull the rip cord. I'm stuck with a case of one more year syndrome.

How about your spending? I know everyone is different, but was it higher or lower than what you projected? Any particular areas of spending surprise you?

How about your level of nervousness? I would guess the first year or two without a steady paycheck would be a bit of a stressor. How long before the feeling subsided? Or did you have it at all?

Thanks!
The forum ate my response yesterday so here is summarized form


Length of transition - think ~6 months
-longer transitions
-- if you lack good support (buy-in) from your partner, family, and do not have emotional support net to fall back to
-- if you are making significant change (i.e. high powered executive to unemployed bum)
-- if you lack goals and purpose and understanding of what you are doing, and why. You now have time, what are you doing with it?
-- if you allow emotional state (depression, resentment, self loathing ,etc) to overtake you. You will feel it (which is ok), but always have to remember that it is temporary, natural, and very transitory. see points above (having goals, knowing purpose, and having support)
-- this ties directly with low self esteem. transitions are hard, and if you do not love/like yourself, you make them even harder.


-faster and better transitions
-- if you spouse (critical!) and family understands, and ideally supports your choices
-- if you have something you are looking forward to (running towards something and not just running away from stress/toxic environment/etc)
-- being honest with yourself, being confident in our decisions , and being able to answer who am I and why am I here? Is it really to deliver some budget improvement, vendor contract renegotiation, this alignment or that strategy? do i live to work or work(ed) so I can live? what does it mean for me to live?

in my case it was significant jump (financial service executive with control over 8 digit annual budgets, 75%+ travel cross country, culmination of 20 year career to stay at home father). I knew I really wanted to be with my kids now and not later, and knew extremely well that no amount of money would ever make them 4,5,6 year olds again. If I miss that time, if I missed being with them, I missed it, no redo.

i went through all of the stages of mourning (including bargaining), dealt with fears of 'we don't have enough!" which now looking back were crazy. if one thing I regret is not doing that earlier and being with my kids (who are still very small) more..

finances are the easiest thing compare to mental and emotional state
- the calculations are extremely conservative and believe you will not earn a penny in your life, ever again, for the rest of your life. this is simply not true. there is always work if you want work or income.
- the fears of money coming out and no money coming in therefore we will starve soon, are irrational. i looked at my monthly spend , looked at investment portfolio, divided second by the first and stared at high triple digit number. math works, even in worst case scenario, it is much more likely I would be dead before I run out of money

stevekozak2
Posts: 40
Joined: Sun Dec 25, 2016 12:38 pm

Re: Would YOU retire

Post by stevekozak2 » Sat Mar 10, 2018 12:44 pm

In a heartbeat!

Saver2018
Posts: 8
Joined: Thu Mar 08, 2018 12:07 pm

Re: Would YOU retire

Post by Saver2018 » Mon Mar 12, 2018 3:13 pm

THANK YOU everyone for all of your responses.
I am feeling alot better about our decision to retire.
I already told my wife she can retire in the fall. (Although I am still encouraging her to find a part time job with health insurance :) )
I will likely retire Q1 next year although I will still probably plan on doing some part time engineering consulting or some teaching to ease into things.
Also, FYI just realocated the 401K's to 60% equities and 40% capital preservation last Friday. (Still cant be talked into bonds funds just yet, maybe next year after this years feds 3-4 interest rate increases.
Very close to turning the page to the next chapter of our lives.
Thank you ALL; your comments were extremely helpful in making the decision. (since I really cant talk to anyone else about this topic, especially sharing numbers!)
Bogleheads are the best !

deikel
Posts: 518
Joined: Sat Jan 25, 2014 7:13 pm

Re: Would YOU retire

Post by deikel » Mon Mar 12, 2018 4:08 pm

delamer wrote:
Fri Mar 09, 2018 10:59 am
Bacchus01 wrote:
Thu Mar 08, 2018 11:33 pm
delamer wrote:
Thu Mar 08, 2018 7:38 pm
Bacchus01 wrote:
Thu Mar 08, 2018 7:26 pm
I’m really surprised by the $9650 per month need. What for?

We own two houses and some investment land that we pay mortgage and taxes on every month. Home values are well above what yours are. We have three kids still at home and all their food and activities. We take two nice vacations every year including international. We have two newer $50K+ SUVs that we pay loans on.

And we still only spend $125-$135K. If the boys were gone and the houses paid off, I can’t see us spending more than $50K/year and that’s living very nicely.
In these types of posts, unless the OP asks for advice about expenses that could be cut back then I don’t see the point of asking “why” they need the income that they are targeting.

We Bogleheads are all over the place in terms of what we spend money on, how much we spend on those things, and how we prioritize different spending.

Your idea of “living very nicely” is probably nothing like mine or the OP’s.
Let me be more succinct. No, I would not retire on that amount if I was planning to spend $100K a year. But I can’t imagine what they are spending $100K a year on. I think it’s very Relevant.
We’ll just have to disagree on this. To me, the risk is that posters come here for advice on portfolio allocation and income streams and are put off when people criticize their spending.

Apparently, the OP on this thread dealt with it fine so no harm in this case.
-1

They were relevant questions to the scenario presented as evidenced by the OP answer. If posters are too prickly to understand that blog posts are lousy in transmitting subtlety, than maybe they should not post. Asking for 'why is your number so high' does not need to be read as criticism and neither do others need to butt in to police the web... other than you claim moderator/admin rights.

As to the original question, you are way ready to go and IMO over funded. You could easily scale back on spending to make it work even in bad market times.

As to the AA: I would suggest to keep the first 5-10 years of retirement expenses in cash or cash like positions, this should take out any risk from a market crash early in your retirement - your current 70/30 actually does that for you.
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immidiatly and destroy any copy or remembrance of it.

WhiteMaxima
Posts: 1070
Joined: Thu May 19, 2016 5:04 pm

Re: Would YOU retire

Post by WhiteMaxima » Mon Mar 12, 2018 4:40 pm

Yes you can

book lover
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Joined: Thu Aug 23, 2012 4:01 pm

Re: Would YOU retire

Post by book lover » Tue Mar 13, 2018 11:32 am

Since your spouse is a P.T., have you considered instead of part time having her work self employed/ independent contractor. Many benefits to that including being able to control your MAGI so as to be able to qualify for A.C.A. and be able to get health insurance for less money in premiums. In addition, you also deduct your premiums for health insurance on your tax return. I am an OT and have been doing this since 2014.

Saver2018
Posts: 8
Joined: Thu Mar 08, 2018 12:07 pm

Re: Would YOU retire

Post by Saver2018 » Tue Mar 13, 2018 3:30 pm

Please elaborate more how that works

UncleBen
Posts: 271
Joined: Wed Feb 19, 2014 8:43 pm

Re: Would YOU retire

Post by UncleBen » Tue Mar 13, 2018 6:19 pm

You seem to be in excellent financial shape to retire early.

I will share some observations about medical expenses having seen my parent through heart surgery, arthritis, diabetes, dialysis, and long term care. The cost of dialysis makes long term care and heart surgery look like a trip to Starbucks. The monthly bill was $50k-$60k. Yes, monthly. Being on Medicare there was very little out of pocket. I do not know what medical expenses would have been for dialysis with private insurance or ACA. Even a 20% copay would be devastating if the bill wasn't drastically reduced by the insurance companies. So the likelihood of needing dialysis before 65 would weigh on my decision. And if that would be a concern, I would ask for the experience of those who had to pay for dialysis prior to Medicare.

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midareff
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Location: Biscayne Bay, South Florida

Re: Would YOU retire

Post by midareff » Tue Mar 13, 2018 6:46 pm

Medical + Dental... me - Medicare + AARP United Plan F, her - former employers plan as spouse of retiree. Insurance cost of both about the same.
2013 - $16,337
2014 - $22,832
2015 - $29,466 (extractions, implants and crowns all X 3)
2016 - $16,009
2017 - $18,564

5 years - $103,208.

I prefer to insure so co-pays are minimal to zero and major issues are 100% covered.

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