Thank you so much for all the responses, encouragement, cautions and questions. I suppose I'll have to work on a resignation letter! Seriously, I thank the Bogleheads who responded here and those who posted info and advice in the past. Though I rarely post, I have been an avid reader of this forum for over 10 years, and I have read and re-read several Boglehead books. While I was always inspired to "live below my means," the Boglehead community gave me several specific ideas on money management. And the community gave me the confidence to keep pouring money into the market when it crashed.
Some asked what I plan to do in retirement. I don't have any grand plan but I am certain I won't be bored. There are a lot of things I want to do: Exercise more. Spend more time with my wife and my aging parents. Re-learn (or actually learn) history. Work on family genealogy. Travel (it's already in the budget). Put a lot more miles on my motorcycle (I just upgraded to a lightly used Goldwing). Spend time floating in my pool. Do deferred projects around the house. Sell accumulated crap on eBay. Maybe set up an eBay business or other hobby business for beer money. Read the rest of the internet. Really go fishing. Be that sweet old couple that goes to McDonald's once a week to split a hamburger and coffee.
Some specific responses to comments/questions:
ExitStageLeft wrote: ↑
Mon Jun 18, 2018 6:20 pm
Does your budget involve remaining in your existing COL location? If things end up not-so-rosy, is geographical arbitrage something to consider?
My existing budget assumes we stay in place -- so it covers a living in a high Cost of Living area. In reality I think we may eventually move to a lower COL area, but I want to enjoy this place for a few years. We might move to a condo-like place where we'll have fees that we don't have now, but our property tax will likely never be higher than it is here.
bubbadog wrote: ↑
Mon Jun 18, 2018 6:36 pm
It looks like you are in great shape to retire. Your initial post shows that you have given the financials a lot of thought. Well done and enjoy!
Yes, I've given this a lot of thought. I spent all day yesterday gathering my data and writing the original post. Early retirement morphed from a dream into a plan when I got a layoff scare about 10 years ago. The scare made me realize early retirement was doable, and I've been pretty focused on the goal ever since.
TX_Drew wrote: ↑
Mon Jun 18, 2018 6:45 pm
... The only real gotcha could be in the long term disability. I don’t know how much that costs, but it might be nice to get a 10 or 20 year term in case of outlier situation. There are some threads here that go into the costs.
By "disability," did you mean Long-Term Care? Over time, I'll re-examine the decision not to take Long Term Care insurance.
BobbiInBrooklyn wrote: ↑
Mon Jun 18, 2018 7:09 pm
i did it five years ago at a similar age with very similar financial numbers to yours. i keep my drawdown under 3%. My biggest surprise was the cost of health insurance, much higher than i originally budgeted when ACA first came out. But you obviously ran the numbers (in your third bullet under budget) and they match up with my reality, so i'd join all the others saying "go for it!".
That's an especially useful data point. Thank you. Same to jimmyq and marcopolo and many others.
Jack FFR1846 wrote: ↑
Mon Jun 18, 2018 9:22 pm
Today was your last day of work. Shut off the alarm clock and sleep in. If you feel like it, tell someone at your work sometimes that you've retired. Or not.
LOL! Also made my wife laugh. Thanks! Responses from mancich and others also made me laugh.
JBTX wrote: ↑
Tue Jun 19, 2018 12:39 am
By any reasonable calculation it is doable. But just to play contrarian...
Is it absolutely necessary to stop working completely, right now? Go from 100mph to zero? Is there the potential for an extended "soft landing"? Restructure your job and make less work less? Part time consulting? Take extended leave of a absence? Find some arrangement where you keep your medical benefits? Negotiate a stay on bonus and extended health care. It's at least worth a conversation.
Thanks for the contrarian view. I am in management of big ticket engineering contracts, and in a customer-facing position. It will be hard to re-define my job as a lower stress or part-time job. I do plan to offer to continue part-time, but I doubt my boss will be interested. I think I have to do 30 hours to be eligible for health care and to me that's not much of a retirement.
patriciamgr2 wrote: ↑
Tue Jun 19, 2018 1:52 am
You're assuming ACA or other health coverage will be available to you at some price. That's the serious risk--together with no Long Term Care coverage--I see with your plan. Other financial aspects look fine IMO although I didn't run sensitivities for lower returns.
Yeah, it's a real risk. Mitigation is difficult. Choice 1: Work longer now to accumulate bigger nest egg in case ACA goes away. Choice 2: Wait and see if ACA goes away and if it does and there are no alternatives, go back to work (at lower pay) to be eligible for insurance. Choice 1 means work for indeterminate amount of time, whether or not ACA goes away. Choice 2 means more work only if ACA goes away. I'll begrudgingly choose Choice 2. And I'll vote.
Dandy wrote: ↑
Tue Jun 19, 2018 8:03 am
I think you need to take a look at your allocation. No pension, no SS for a long time, buy health insurance, fund retirement longer than you have worked. How would you fare if/when the equity market takes a big hit and stays down for a few years while you are withdrawing? Do you have skills that you could likely get decent reemployment?
I do get uncomfortable when the stock market drops, but I know I can stick to the plan, and the plan should accommodate large drops. In the worst case, I am sure I could get a job, probably at half my current pay, which is still good money. Thanks for sharing your thoughts.
bhsince87 wrote: ↑
Tue Jun 19, 2018 10:44 am
I was in a similar situation when I turned 50 (DW was 48), but only had about $2mil in assets. ... In our case ACA policies were about $18k per year three years ago. Now they are $28k, with a 4k deductible. So we need to budget $32k per year. If we stay under the $64k ish cap, that would drop to $2k in premiums and the $4k out of pocket, or a $6k healthcare budget. ...
Wow! Just wow! I will do more research on unsubsidized premiums, but probably won't change my plan.
uncaD wrote: ↑
Tue Jun 19, 2018 10:54 am
EricJ wrote: ↑
Mon Jun 18, 2018 5:56 pm
If I aim for $64,000 of income through dividends, Roth conversions and capital gains, I think my federal taxes will be about $4500.
How did you come up with this estimate? You should be able to manage your fed taxes down $0 at this income level
That was from a the taxfoundation.org online calculator. I think 4x FPL for a couple is just under $65,000, so I used $64K as my income goal. I anticipate about $20K in dividends and cap gains and I would probably do Roth conversions up to $65K. Online calculators are fairly simple, so I plugged $64,000 in as wages. I just did that using the TaxAct calculator and it estimates a $3800 federal tax bill. Taxfoundation.org estimates $4400 for the same scenario. I haven't spent much time on tax strategy. Do you have a hint or pointer?
Ben Mathew wrote: ↑
Tue Jun 19, 2018 12:12 pm
Assume: [...snipped for brevity...] Under these assumptions, you would have $1,853,031 left at age 100. So, yes, you can retire with a high degree of confidence. Congratulations!
I like your conclusion and I like your tool. Thanks for running the scenario for me! I also like how firecalc shows so many scenarios where I die filthy rich. But I have to plan for the worst and re-evaluate in a decade or so if I want to live like a filthy rich person.
hand wrote: ↑
Tue Jun 19, 2018 1:54 pm
Is the cash balance pension really worth $294k when you are 50? I've seen plans where the "value at retirement / 62 / 65" is publicized, but where actual liquidation value is substantially less if accessed prior to a predefined date or age aligned with a more traditional retirement.
Thanks for checking. Yes, I'm certain of it. Due to a divestiture, the pension is not with my current employer, so there are no recent contributions, but the balance continues to grow at 4%. They keep trying to persuade me to roll it into an IRA but I like their terms.
A big thank you again to everyone who responded. I actually teared up reading the encouraging messages. I can't believe I'm at this point in life. I was not born with a silver spoon in my mouth. I've been working since age 12 (paper route) and age 15 (in retail) to pay my own way through college and grad school, I busted my hump to get ahead in the professional world ever since college, invested methodically, and now I'm rich. Rich enough anyway. I took a few action items from your collective wisdom (double check health insurance assumptions, check income tax forecast, re-visit LTC insurance, be sure not to get bored), but I will probably be packing things from my office into a cardboard box next week. Well, at least I'll tell my boss my intentions and work out a date. Thank you!