Thinking of Retiring at 52, Please Critique Plan

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Topic Author
travel424
Posts: 9
Joined: Sun Mar 20, 2011 10:02 am

Thinking of Retiring at 52, Please Critique Plan

Post by travel424 »

I've been a long time reader and appreciate everyone sharing their valuable knowledge to help others. I'd love to get some critique/insight into my plan.

Here goes:

My spouse (primary earner) is thinking of retiring at the age of 52. He is just fed up with the stress and office politics. I'd like him to enjoy life more especially before our last child leaves the nest and to spend time with our elderly parents while we can.

Plan: Carve out enough of his traditional IRA to begin substantially equal periodic payments (SEPP) using the amortization method to equal the amount of our total expenses. Should I start the SEPP in 2019 using 12/31/2018 balance at 3% withdrawal (current fed mid-term rate is 3.44%).

If large purchase items arise such as replace vehicle, withdraw from a combo of Roth IRA, HSA, car loan to cover the cost. Would I be better off with SEPP on another IRA account.

Age:
Spouse: 52
Me: 51
Child: age 13. Has a 529 which should be sufficient to cover college, if not, child makes up the rest in loans.

Annual Expenses: Average $40,000, includes $10,000 for health insurance though looking at christian health sharing accounts and/or tax subsidies.
Debt: None. Our 10 year mortgage was paid off long ago. House value about $250,000 (realtor said more but this is what houses sell for in our neighborhood). Home equity line of credit of $40,000 is available with no balance. No auto loans though 2009 Toyota likely needs to be replaced within next year, 2016 Toyota is good for a long time.

Investments: $1,760,000

Taxable: $124,000
Cash Account: $35,000, interest 1.8%
Inherited Savings Bonds: $20,000, interest rate 4%. Liquidate as they reach maturity
Marriott Individual Stock: $45,000, nominal dividends reinvested
Vanguard Primecap: $24,000, dividends and capital gains reinvested

Other: $35,000
HSA: $35,000, interest rate 1.5%. Have around $12,000 paid medical bills that we could use to withdraw.

His Retirement: $1,050,000
Traditional IRA Vanguard High Dividend Yield Index: $930,000
Roth IRA Vanguard High Dividend Yield Index: $120,000

Her Retirement: $523,000
Traditional IRA's:
Vanguard Intermediate-Term Invest Grade: $62,000
Vanguard Mid-Cap Index: $94,000
Vanguard Total Stock Market Index: $280,000
Roth IRA Vanguard Target Retirement: $87,000

Her Inherited IRA $28,000
Vanguard Total Stock Market Index $28,000.

Miscellaneous Income
* My income is very part time about $5,000/year though could do more if needed. (I use this as my fun money aka justify expenses such as my older daughter and I get a pedicure.)
* Spouse may pick up a non stressful part time to pass time and create fun money.
* Inherited RMD: $800/year
* Savings Bonds when reach maturity: $1,200/year[/list]

Footnote: The parent in final stages of cancer asked that monies inherited ($250,000 ish) be used for family travel and extra's in life. Our income and assets may increase though I didn't include above scenario as we are still hoping for a miracle cure.

Questions:
1. Is my plan good? What should I do differently?
2. Do I have too much in Vanguard High Dividend Yield? The portion I carve out for SEPP, could be moved to a different fund.
3. Should the Vanguard Intermediate-Term Investment Grade be in a different fund?
4. Should I increase the home equity line in case we need quick cash?
5. What opinion, suggestions, ideas do you have for me?


I hope I was clear and provided enough information. Thanks in advance!
Quaestner
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by Quaestner »

Quick impressions to my untrained eye: Yes, much too much in the high yield dividend index. You seem overweight stocks considering you are contemplating retirement. What is your desired asset allocation (stocks/bonds)? Its unclear why you don't want international diversification. I'd aim for 20-40% international. If you do want to rework things, doing so in the retirement accounts will avoid capital gains. Is 1.7 million enough to give you an after tax inflation adjusted income of 40K for decades? Likely yes. If you haven't, you should build social security into your plan. I see you have lots invested in Vanguard funds. Can you get one of their (free) financial plans? You could compare it with the suggestions of wiser Bogleheads than I! You might even pay for a few hours of expert advice?
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ChowYunPhat
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by ChowYunPhat »

Travel424, welcome to the forum and appreciate you posting the question. It can feel awkward sharing a lifetime of financial work and seeking feedback. In summary, it seems you and your family have done very well and currently live a somewhat frugal lifestyle which lines up well with early/semi-partial retirement. Many people on the forum can provide things to consider.
travel424 wrote: Sun Sep 16, 2018 12:58 pm 1. Is my plan good? What should I do differently?
You have a decent plan. House is paid off and no debt to speak of gives you flexibility. You have >40X expenses saved which is in great shape, however you also have inherited RMD income, side hustle pay, and social security to look forward too. Overall, you are in great shape financially and minor tweaks at most would be needed. Bravo
travel424 wrote: Sun Sep 16, 2018 12:58 pm 2. Do I have too much in Vanguard High Dividend Yield? The portion I carve out for SEPP, could be moved to a different fund.
I believe this is personal preference. This is a stock fund with higher yielding companies and I hold this same investment. As you are both presumably in your 50s, there is a long horizon to the money you're needing so a stock fund is not a bad investment. Other posters will suggest moving this to fixed income / less risk but this is probably more personal preference at your age. I would also consider your estate objectives....leaving $ to kids or non-profit vs. consuming capital.
travel424 wrote: Sun Sep 16, 2018 12:58 pm 4. Should I increase the home equity line in case we need quick cash?
Don't believe this is necessary. Your capital is your emergency cash tap as you have taxable $ available. I would consider moving some of your taxable money into a Prime Money Market fund or similar. Prefunding the money market fund can serve as your expense fund, and if you see yourself pulling from capital in the next year it's OK to start your SEPP process now and start moving into a money market in preparation for this change. It's better to do this in advance than realize you need capital on short notice and be forced into a tax-inefficient decision.
travel424 wrote: Sun Sep 16, 2018 12:58 pm 5. What opinion, suggestions, ideas do you have for me?
Again, great job preparing for this moment. What you've done reflects a lifetime of work and you can feel confident about moving forward. A couple of things I would do include (i) gradually drawing down the Marriott stock in a tax efficient manner and (ii) lay out a tax efficient withdrawal strategy for the next 5-10 years. If you are charitably inclined, I also recommend a donor advised fund and both Vanguard and Fidelity have excellent such funds.

Best of luck in the next season of life.
A wise man and his money are friends forever...
kd2008
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by kd2008 »

At your low income needs, you will get substantial ACA subsidy. It is good that you have budgeted significant amount for healthcare. No need for health sharing ministry at your low income. Educate yourself on ACA subsidies and improve your planning accordingly.
Ron Scott
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by Ron Scott »

Let me respectfully voice a dissenting opinion: I don't like the idea.

52 is young, leaving many years ahead. It is often difficult for those 10 years older to develop a comfort level around their finances as they prepare for retirement. (62 used to be early retirement!) More so for those your age; more things can happen in 35 years than in 25 to upset the apple cart. You've saved well but are exposing yourself to significant uncertainty.

The problem we all face is living with uncertainty. Unfortunately, the intellectual model usually followed is to assess uncertainty around finances in retirement using successive iterations of outcomes based on historical data sets, not unlike trusting the Wednesday weather report to predict afternoon showers on Saturday. Fill in the blanks and you can "know" that $X will last for Y years with Z% probability. This is inadequate because uncertainty, especially when dealing with long periods of time, requires that you face the potential that rare events will influence your life.

Such rare events can be personal or environmental, that affect us all. Some of them might not have happened before. You never know.

Nothing is certain. The best thing you can do to give yourself a better chance at having sufficient finances for living in retirement is to build a nest egg with additional protection for you and your family. My wife uses the seat belt in her car, but I feel much better knowing she's also got airbags and lane-change assist.

The most important financial asset your family has--or let's say, a 52 year-old has--is the ability to earn a living through work. Tossing that asset out the window, or exchaning it for some undefined ability to get a part time job somewhere, is a huge financial decision and I recommend against it.

It is unfortunately true that many people hate their jobs and that's a sad commentary on the 21st century workplace. But I would rather see your 52 year-old grin and bear it--or better yet, get the resume together and find another job--than walk away.

There is a growing population on the internet that live for FIRE (Financially Independent Retire Early). It sounds great and you can get your warm and fuzzies on the forums that are dedicated to them. "We've only got seat belts, but hey--we're doing fine." Not feeling it...
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.
Topic Author
travel424
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by travel424 »

Thank you for responding so quickly. (I'm not good at the quote thing so I'll just mention names I'm responding too.)

@ Quaestner: International stocks is something I had at one time but didn't really like the performance so I just starting dumping everything into Vanguard High Yield Dividend fund. I figured if the market was down at least I could still see it paying dividends. I'm open to any stock, bond, international combo. I almost think working & saving is easier than figuring out retirement.

I like the idea of ordering the Vanguard financial report especially since we are likely entering the next phase of life.

@ ChowYunPhat: Thank you for the complements, we've always tried to spend less than we make. Who figured it would add up so nicely. I pondered for a long time about listing so much personal information but figured the benefit of getting valuable feedback was worth it.

Great feedback too.

Estate objectives: My husband and I started out in debt (college loans) so we're fine spending our money, and have our kids save for themselves. (Is that mean?) I just want to make sure we have enough to last during retirement.

Marriott stock: We've held these shares for about 20 years in an ESOP. Can I gift $14,000/year to my 13 year old until as a work around for paying capital gains on the sale?

@kd2008: ACA subsidies. We've looked into that though it seems like it can be a touchy subject. Is it best to manage income under $62,000?

@ Ron Scott: I appreciate hearing from the opposing viewpoint too. Perhaps I'm being defensive, but I don't think it's just a matter of "grin and bear it". One of the factors listed above to retire early is to spend the last year helping our elderly parents. We're financially okay and able to help so we'd like to do that.

Thanks again. Really appreciate all feedback

edited: clarification and respond to kd2008
delamer
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by delamer »

kd2008 wrote: Sun Sep 16, 2018 2:40 pm At your low income needs, you will get substantial ACA subsidy. It is good that you have budgeted significant amount for healthcare. No need for health sharing ministry at your low income. Educate yourself on ACA subsidies and improve your planning accordingly.
I would not plan retirement around the assumption of good and inexpensive coverage through the ACA.

If it was just you and your husband, then that is your risk. But with a 13 year old, you have an obligation to prioritize her/his needs.

I understand that there are no guarantees with health insurance in the corporate world.

But your husband (or you) should be looking for another job that is lower stress but provides insurance, rather than bailing on work now.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
tibbitts
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by tibbitts »

I would be terrified about health insurance if I were you. If you had asked me years ago I would have said that what's happened to insurance would have been completely unsustainable and yet here we are. So what will it cost you? $10k this year, $20k next year... how long before $40k? Remember the cost rises dramatically as you age, even if there are no cost increases. Of course politics is a wildcard, maybe everyone will have supposedly-free insurance, or maybe nobody will be able to buy insurance at all, nobody knows.

I'm 60 now and terrified about health insurance. I have more investments than you do and yet I'm still working at my age, only because of insurance. I can work another fifteen months (which seemed like fifteen months fifteen months ago - time just does not move, it's so frustrating) and my public employer may - and I emphasize may - pick up the health insurance cost for me. It's very limited health insurance (geographically), but it's insurance. I'm very worried that I'm going to run out of time and miss out on things I'd always wanted to do. I'm lucky to have the job I do, but maybe I would be better off with a miserable job that would encourage me to retire now.
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scorcher31
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by scorcher31 »

Ron Scott wrote: Sun Sep 16, 2018 2:44 pm Let me respectfully voice a dissenting opinion: I don't like the idea.

52 is young, leaving many years ahead. It is often difficult for those 10 years older to develop a comfort level around their finances as they prepare for retirement. (62 used to be early retirement!) More so for those your age; more things can happen in 35 years than in 25 to upset the apple cart. You've saved well but are exposing yourself to significant uncertainty.

The problem we all face is living with uncertainty. Unfortunately, the intellectual model usually followed is to assess uncertainty around finances in retirement using successive iterations of outcomes based on historical data sets, not unlike trusting the Wednesday weather report to predict afternoon showers on Saturday. Fill in the blanks and you can "know" that $X will last for Y years with Z% probability. This is inadequate because uncertainty, especially when dealing with long periods of time, requires that you face the potential that rare events will influence your life.

Such rare events can be personal or environmental, that affect us all. Some of them might not have happened before. You never know.

Nothing is certain. The best thing you can do to give yourself a better chance at having sufficient finances for living in retirement is to build a nest egg with additional protection for you and your family. My wife uses the seat belt in her car, but I feel much better knowing she's also got airbags and lane-change assist.

The most important financial asset your family has--or let's say, a 52 year-old has--is the ability to earn a living through work. Tossing that asset out the window, or exchaning it for some undefined ability to get a part time job somewhere, is a huge financial decision and I recommend against it.

It is unfortunately true that many people hate their jobs and that's a sad commentary on the 21st century workplace. But I would rather see your 52 year-old grin and bear it--or better yet, get the resume together and find another job--than walk away.

There is a growing population on the internet that live for FIRE (Financially Independent Retire Early). It sounds great and you can get your warm and fuzzies on the forums that are dedicated to them. "We've only got seat belts, but hey--we're doing fine." Not feeling it...

I love bogleheads, and I feel like I fit here much more than Mr. Money Mustache, but I feel like as a group we are way to Anti FIRE. If expenses are expected to be 40k, they can take out 44k yearly at a 2.5% withdrawal rate and easily cover that. Not to mention social security down the road. I don't like the allocations, but the amount of money seems fine to me.
flyingaway
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by flyingaway »

You have enough to support an annual expenses pf $40,000. In fact, with your potential inheritance, you may have twice as much as needed.
But life may change in the future. Kids may need money for college education, etc.
If your spouse is really burnt out, it is possible to take a break. At 52, he can certainly make some money from time to time if needed. If he does not like the retirement, he can always come back to work.
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scorcher31
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by scorcher31 »

flyingaway wrote: Sun Sep 16, 2018 3:59 pm You have enough to support an annual expenses pf $40,000. In fact, with your potential inheritance, you may have twice as much as needed.
But life may change in the future. Kids may need money for college education, etc.
If your spouse is really burnt out, it is possible to take a break. At 52, he can certainly make some money from time to time if needed. If he does not like the retirement, he can always come back to work.
They reported they have enough in a 529 to pay for college expenses and that is not included into his listed assets. I agree they could give it a try and if insurance gets expensive or the market takes a nose dive then they could always go back to work. I would just make sure your husband has the kind of job that he could start back up doing a similar job relatively quickly if needed as a precaution.
student
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by student »

I would also hesitate to retire. Most expenses can be controlled but I am very concern about health care expense as ACA may or may not be affordable in the future. The job market is good. It may be wise to look for another lower paid job with benefit. I would not worry about college cost. You have money save up for this purpose. To lower the cost, go to a community college and then transfer to a low-cost state school.
TigerNest
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by TigerNest »

travel424 wrote: Sun Sep 16, 2018 12:58 pm includes $10,000 for health insurance though looking at christian health sharing accounts and/or tax subsidies.
Christian health sharing accounts aren't the same as health insurance. I would be really worried about relying on one in my 50s, when health risk start to rise.
KlangFool
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by KlangFool »

OP,

SEPP is the wrong answer for you. Roth conversion is a better answer for you. Please check the following URL for all the available options.

https://www.madfientist.com/how-to-acce ... nds-early/

KlangFool
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JBTX
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by JBTX »

Overall mathematically early retirement is very achievable for you. But I'm kind of conservative about throwing the towel in too early because the future is very uncertain.

If the market dropped 50% would you still be comfortable with your situation?

If he really hates his job you have the flexibility to do something different. That doesn't have to be full stop retirement. Maybe there is some part time job that will provide enough income to lessen the withdrawals on your investments.

Only spending $30k excluding health insurance is rather extraordinary. Kudos if you can keep it up. With both of you home full time will $30k be enough for you to do some of the things you want to do in retirement?

Health insurance is a wildcard.

Agree get rid of some of that high dividend fund. Those funds can actually be fairly risky, as value investments can fall pretty hard during a recession. Financial firms often have higher dividend yields. Look at what happened to the in 2008

Instead use index funds, or target date funds or balanced funds (vanguard balanced or Wellington). Vanguard dividend growth is probably a bit more stable than high dividend funds.

Your asset allocation portfolio is way too heavy in equities. Personally if retiring in early 50s I would only be between 60-70% equities. Your current allocation would likely lose 50% of its value if a 2000 or 2008 style event were to hit. Would you feel comfortable about having to live on $800-$900k for potentially 40 years?
ROIGuy
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by ROIGuy »

Do help extend your finances, what if your husband work for a couple more years but during that time you took a couple extra vacations help relieve the stress; and I don't mean it was Wisconsin Dells. Go to Europe or Maui. Have a really good relaxing time on vacation and see that can help you get through the stressfulness of work. Maybe even ada in an week or weekend of vacation here and there.

This way your savings gets to grow more, two less years of withdrawals on it, 2 years closer to Social Security,
Topic Author
travel424
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by travel424 »

Love everyone's feedback. I should provide more information to clarify the work situation. I put a lot of information out there though still wanted to stay somewhat anonymous. But It's only the internet. Who reads the internet. :?

My husband was diagnosed with early onset of Alzheimer's last year. As the diseases progresses, it's becoming increasingly difficult for him to perform his job - hence the stress. He does not want to claim SSDI as he feels that is admitting defeat to the disease. A part-time job would still feel like he's still in tact.

He doesn't not want ACA tax subsides as he feels that is for people that really need financial help. Since I manage the finances, I will likely keep our income in such a way to use these subsides.

My goal is to structure our investments so he can "retire" with his head held high and maintain a lifestyle where he does not feel like he let the family down.

That being said, what does everyone think is the best path to create an income stream of $40,000 to cover day to day expenses, with the option to tax efficiently pull extra money?

Thank you.
danaht
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by danaht »

Sorry about the diagnosis. Given the new information - I think early retirement is an OK plan as long as you can limit your expenses a little. Have fun and enjoy life while you can!
Last edited by danaht on Sun Sep 16, 2018 5:43 pm, edited 1 time in total.
KlangFool
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by KlangFool »

travel424 wrote: Sun Sep 16, 2018 5:20 pm Love everyone's feedback. I should provide more information to clarify the work situation. I put a lot of information out there though still wanted to stay somewhat anonymous. But It's only the internet. Who reads the internet. :?

My husband was diagnosed with early onset of Alzheimer's last year. As the diseases progresses, it's becoming increasingly difficult for him to perform his job - hence the stress. He does not want to claim SSDI as he feels that is admitting defeat to the disease. A part-time job would still feel like he's still in tact.

He doesn't not want ACA tax subsides as he feels that is for people that really need financial help. Since I manage the finances, I will likely keep our income in such a way to use these subsides.

My goal is to structure our investments so he can "retire" with his head held high and maintain a lifestyle where he does not feel like he let the family down.

That being said, what does everyone think is the best path to create an income stream of $40,000 to cover day to day expenses, with the option to tax efficiently pull extra money?

Thank you.
travel424,

That is the wrong way to look at this. You do not need 40K of income stream to spend 40K per year.

A) You have an emergency fund, Roth IRA, taxable account distribution, and so on to spend from. This is your spending pool.

B) You can refill your spending pool from Roth conversion and so on. Aka, you can generate whatever amount of taxable income every year.

C) The first thing that you should do is to keep 1 year to 2 years of expense in cash or cash equivalent. Then, you have total flexibility for (B).

In summary,

1) Keep 40K to 80K in cash. Keep this as your spending pool

2) Refill your spending pool from Roth contribution and so on.

By doing this, you do not have to generate exactly 40K of income every year. You can do more or do less depending on tax efficiency.

KlangFool
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delamer
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by delamer »

travel424 wrote: Sun Sep 16, 2018 5:20 pm Love everyone's feedback. I should provide more information to clarify the work situation. I put a lot of information out there though still wanted to stay somewhat anonymous. But It's only the internet. Who reads the internet. :?

My husband was diagnosed with early onset of Alzheimer's last year. As the diseases progresses, it's becoming increasingly difficult for him to perform his job - hence the stress. He does not want to claim SSDI as he feels that is admitting defeat to the disease. A part-time job would still feel like he's still in tact.

He doesn't not want ACA tax subsides as he feels that is for people that really need financial help. Since I manage the finances, I will likely keep our income in such a way to use these subsides.

My goal is to structure our investments so he can "retire" with his head held high and maintain a lifestyle where he does not feel like he let the family down.

That being said, what does everyone think is the best path to create an income stream of $40,000 to cover day to day expenses, with the option to tax efficiently pull extra money?

Thank you.
I am very sorry to hear about your husband’s diagnosis.

Unfortunately, that makes it even more imperative that he has adequate health insurance.

People who qualify for SSDI become eligible for Medicare after a waiting period.

You really need to delve into your options. Qualifying for SSDI may be the best financial thing he can do for your family. You have very unpredictable costs for healthcare, given his condition.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
student
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by student »

You should consider SSDI. You have paid into the system. So you should use it when you are in need of it.
Last edited by student on Sun Sep 16, 2018 6:40 pm, edited 1 time in total.
KyleAAA
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by KyleAAA »

Yeah, you can afford to retire. The main wildcard is health insurance, as noted above, but a LOT would have to go wring for you to run into trouble. You should also figure our when and how much to expect from SDDI. It makes no sense not to claim it, none whatsoever.
DC3509
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by DC3509 »

danaht wrote: Sun Sep 16, 2018 5:37 pm Sorry about the diagnosis. Given the new information - I think early retirement is an OK plan as long as you can limit your expenses a little. Have fun and enjoy life while you can!
I am very sorry to hear about this.

Respectfully, I think this is the wrong advice. Your husband needs to try to keep health insurance as long as he possibly can with this diagnosis so he should be working as long as he can -- not thinking about early retirement. Moreover, while he is gainfully employed, he will likely have access to disability insurance -- both short term and long term. The chances that he will get another job down the road are slimmer with this sort of diagnosis.

I agree with others who posted that he should apply for SSDI too. These are programs that are designed to help people in this circumstance. There is nothing morally wrong with trying to use them.

I also think you should really be thinking about long-term care and more than most people, Medicaid asset protection planning. I understand it's a morbid subject but the bottom line is -- at this age and with this diagnosis, it is highly likely that your husband will need some form of long-term care and also highly likely that you will outlive him. You have some assets, but a few years in a nursing home is going to demolish all of these assets -- you will have to go through all of his retirement accounts and the taxable account, and then if you go on Medicaid without having done the correct planning -- you could very well lose your house in the long run (you can stay there as long as you live there, but Medicaid will put a lien on it, so they get the money when you sell it, not you). Asset protection planning could ensure that you still at leas some assets in the long-run, since, again, statistically there is a very high chance that you are going to outlive him by many years.

I am sorry again about this. I hope that you approach these decisions in a way to try to maximize all available resources.
tibbitts
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by tibbitts »

So sorry about the diagnosis; obviously whatever we said before knowing that may not apply at all.
Topic Author
travel424
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by travel424 »

Thank you everyone for your kind words and advise. It was more of a relief getting the diagnosis as it explained a lot of the odd behavior instead of me always being wondering why he was late, getting lost, putting syrup in the Keurig, etc.

I appreciate the push to get SSDI as I was going with his request to not claim it though he's in a little denial still. I'm hoping he'll swallow his pride, accept it's not a defeat and welcome the idea the extra money would be helpful. In the meantime, I thought I'd give it a whirl to see if we can live without it. His hospital has a person on staff that said they'll help us with any paperwork needed.
KlangFool wrote: Sun Sep 16, 2018 5:38 pm

travel424,

That is the wrong way to look at this. You do not need 40K of income stream to spend 40K per year.

A) You have an emergency fund, Roth IRA, taxable account distribution, and so on to spend from. This is your spending pool.

B) You can refill your spending pool from Roth conversion and so on. Aka, you can generate whatever amount of taxable income every year.

C) The first thing that you should do is to keep 1 year to 2 years of expense in cash or cash equivalent. Then, you have total flexibility for (B).

In summary,

1) Keep 40K to 80K in cash. Keep this as your spending pool

2) Refill your spending pool from Roth contribution and so on.

By doing this, you do not have to generate exactly 40K of income every year. You can do more or do less depending on tax efficiency.

KlangFool

Interesting. Didn't think of just using the savings pool and pulling money when needed. I was just thinking of generating steady income to partial offset the steady employment income. Perhaps this is the way to go instead of messing with an SEPP. I could always reevaluate when we go with SSDI.


@ DC3509: Can I obtain long term care insurance with his existing diagnosis? I'm going to delve into this a little more.
DC3509
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by DC3509 »

travel424 wrote: Sun Sep 16, 2018 8:56 pm Thank you everyone for your kind words and advise. It was more of a relief getting the diagnosis as it explained a lot of the odd behavior instead of me always being wondering why he was late, getting lost, putting syrup in the Keurig, etc.

I appreciate the push to get SSDI as I was going with his request to not claim it though he's in a little denial still. I'm hoping he'll swallow his pride, accept it's not a defeat and welcome the idea the extra money would be helpful. In the meantime, I thought I'd give it a whirl to see if we can live without it. His hospital has a person on staff that said they'll help us with any paperwork needed.
KlangFool wrote: Sun Sep 16, 2018 5:38 pm

travel424,

That is the wrong way to look at this. You do not need 40K of income stream to spend 40K per year.

A) You have an emergency fund, Roth IRA, taxable account distribution, and so on to spend from. This is your spending pool.

B) You can refill your spending pool from Roth conversion and so on. Aka, you can generate whatever amount of taxable income every year.

C) The first thing that you should do is to keep 1 year to 2 years of expense in cash or cash equivalent. Then, you have total flexibility for (B).

In summary,

1) Keep 40K to 80K in cash. Keep this as your spending pool

2) Refill your spending pool from Roth contribution and so on.

By doing this, you do not have to generate exactly 40K of income every year. You can do more or do less depending on tax efficiency.

KlangFool

Interesting. Didn't think of just using the savings pool and pulling money when needed. I was just thinking of generating steady income to partial offset the steady employment income. Perhaps this is the way to go instead of messing with an SEPP. I could always reevaluate when we go with SSDI.


@ DC3509: Can I obtain long term care insurance with his existing diagnosis? I'm going to delve into this a little more.
Almost a guarantee that he will be denied for long-term care insurance now. Re-reading your asset description -- you need to consider this potential inheritance as well in terms of asset protection too. I would suggest contacting an elderlaw attorney to work through these issues -- also make sure he has wills, advanced health directives, power of attorney, etc. If you don't do these things now, it can become very difficult should things worsen (which I hope does NOT happen for a VERY long time!)
furikake
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by furikake »

I may be wrong, but if he does collect SSDI, he will be able to get onto Medicare 24 months later, so he doesn't have to deal with individual insurance. If I could do that, I would do it. Individual insurance is a mess!
Nissanzx1
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by Nissanzx1 »

Your families health/health car cost is the real wild card here. You have saved well!

Don't take your foot off the gas now, get rid of that high stress job and help him find something he likes to do. Something that has benefits and who cares if it pays less if the stress is lower. You guys will be so bored retiring this young and your rich- but not crazy rich. Wouldn't want to outlive your nest egg...
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by delamer »

furikake wrote: Sun Sep 16, 2018 9:57 pm I may be wrong, but if he does collect SSDI, he will be able to get onto Medicare 24 months later, so he doesn't have to deal with individual insurance. If I could do that, I would do it. Individual insurance is a mess!
That is my understanding too, but they will still need insurance for the rest of the family.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
furikake
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by furikake »

delamer wrote: Sun Sep 16, 2018 10:57 pm
furikake wrote: Sun Sep 16, 2018 9:57 pm I may be wrong, but if he does collect SSDI, he will be able to get onto Medicare 24 months later, so he doesn't have to deal with individual insurance. If I could do that, I would do it. Individual insurance is a mess!
That is my understanding too, but they will still need insurance for the rest of the family.
Yeah, but at least one person's health insurance would be taken care of - the person who needs it most.
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Hawaiishrimp
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by Hawaiishrimp »

I am 42, simply situation as you. Except I have more in taxable, less in ax adv account. I think you are in a good shape given that you only spend $40k annual.
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
mrgeeze
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by mrgeeze »

tibbitts wrote: Sun Sep 16, 2018 3:36 pm I would be terrified about health insurance if I were you. If you had asked me years ago I would have said that what's happened to insurance would have been completely unsustainable and yet here we are. So what will it cost you? $10k this year, $20k next year... how long before $40k? Remember the cost rises dramatically as you age, even if there are no cost increases. Of course politics is a wildcard, maybe everyone will have supposedly-free insurance, or maybe nobody will be able to buy insurance at all, nobody knows.

I'm 60 now and terrified about health insurance. I have more investments than you do and yet I'm still working at my age, only because of insurance. I can work another fifteen months (which seemed like fifteen months fifteen months ago - time just does not move, it's so frustrating) and my public employer may - and I emphasize may - pick up the health insurance cost for me. It's very limited health insurance (geographically), but it's insurance. I'm very worried that I'm going to run out of time and miss out on things I'd always wanted to do. I'm lucky to have the job I do, but maybe I would be better off with a miserable job that would encourage me to retire now.

Based on your required income the ACA, as mentioned by others, should be a great benefit to you.
Assuming you are healthy and require minimal medical stuff, your costs can be almost zero.
If you need more, you can adjust the plan to suit your needs.
Its pretty phenomenal, if you use it right
Manage your income AND stay under the cliff!

It's made being "retired" but too young for medicare (just turned 60) a much easier ride.
EnjoyIt
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by EnjoyIt »

Financially you are in great shape and have more money than you need. Here is my advice:
1) Yes, I think you plan to do SEPP withdrawals is a great one. You will have $24k standard deduction and will only have to pay taxes on $16k worth of withdrawals. At 10% that is $1,600/yr.

2) One thing I would consider doing is actually doing Roth conversions up to the 12% tax bracket which is $77,400 every year. If you include the standard deduction you can withdraw $24k+$77,400 = $101,400k paying minimal taxes and very quickly liquidating your pre-tax retirement accounts and having Roth funds instead which you will never have to pay taxes on again. Going this extreme is worth it if your future taxes will be 12% or higher in the years to come. This may be the case once you start collecting SS and being forced to pay taxes on 80% of the income.

3) You really should consider social security. It will be there for you and the amount is not insignificant compared to your desired spending. It very likely will be over $40k/yr for the both of you if you wait long enough to start collecting. Check out sea.gov to see where you stand.

4) Enjoy your retirement
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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FrugalInvestor
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by FrugalInvestor »

A few things to think about. This comes from someone who retired at about the age you are planning and has been retired for 15 years.....

You'll may very well end up wanting to spend more than you think in retirement. It's hard to project because you really don't know what your expenses will be with a new lifestyle. You may very well decide that you want to change some things in your life that seem just fine now.

Make sure you research the shared expense insurance plans very carefully because the ACA could change substantially or disappear completely. Understand the ACA too because what it offers varies widely from state to state. Also consider that even if you're perfectly healthy today that can change in an instant. What if that happens? Will you be comfortable with (possibly) very limited choices of insurance plans that have very high annual deductibles? Will you be comfortable with very limited choices of doctors and hospitals? It's easy to ignore the ramifications of limited insurance coverage until it's needed.

If you decide to utilize ACA coverage do your homework here and elsewhere and make sure you understand how to control your income. Having the right investments and types of accounts available to withdraw from can help tremendously. Plan ahead for this because $1 too much of income can impact your health insurance costs to the tune of thousands of dollars per year - that's why it's called a "cliff."

Just like ACA subsidies, taxes can be influenced greatly by how your investments are structured. Educate yourself and get things in order before retiring to keep taxes from impacting you more than necessary.

Be prepared financially and mentally to deal with large market swings because they will happen. 2008-9 was a very difficult time for early retirees living off of investments. Are you prepared to see your portfolio value drop by 25%-50%? What would you do if it did? Doing the wrong thing could be catastrophic. Doing the right thing is extremely difficult. Have a plan for tough times.

If you haven't already, look into Social Security and how retiring early will impact your benefits. There are critical "bend points" at which retiring early has less of an impact. You can learn about those here. Social Security is even more important to those who rely on their investments for retirement.
Have a plan, stay the course and simplify. Then ignore the noise!
dkb140
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by dkb140 »

Great advice in this thread. My biggest concern retiring in my 50s would be healthcare expenses. I'd want to have that 100% figured out before giving up my company coverage. I'm also concerned about your diversity & asset allocation, but I think others have better suggestions there. I'd also suggest calculating your social security benefits & seeing what a couple more years of work would do to your expected benefit. Do you both have 35 years of earnings history already? If not, a couple more years might make a noticeable impact on your PIA when you do file.

The first age I personally have considered retiring is 54. I have a good chuck of my retirement savings in my 401k & I believe I can start taking "substantially equal" payments from my active 401k if I retire in the year I turn 55. Where would your retirement income come from before 59.5 and would you have to pay penalties on it?

I personally would probably tough it out a couple more years to: increase my taxable savings to fund retirement until 59.5, continue maxing out retirement plan savings, and increase my social security benefit. When I had enough taxable savings to fund retirement until 59.5 without dipping into my emergency fund, I might reconsider. I'd probably also look for a job I enjoyed more.
mrgeeze
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by mrgeeze »

Honestly I was a bit apprehensive when I stopped "working for the man" 3 years ago.
I did my research, my ducks were in a row.
My financial advisor assured me I was ready.
But I was nervous

I wasn't overjoyed at my job back then but I did not hate it. Indifference would be a good term.
I dug the $$$, liked some of my cohorts, and could tolerate both management and administrivia.

What I can say after a couple of years is I don't miss it at all.

Now I pursue multiple income earning hobbies including offshore sportfishing, playing guitar, and woodworking.
Nothing that pays more than $20-40 an hour but most of it transacts in that most desirable form- cash.



In other words I pretty much do what I want. Almost every day.
That feeling is hard to explain till you wake up one day and realize you are doing it.

I recommend you try it sooner rather than later.
SuzBanyan
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by SuzBanyan »

OP: so sorry to hear about your husband’s diagnosis. I have a co-worker going through similar issues, although her husband is 20+ years older than yours, so this was not an early onset case. She really feels the lack of having a partner in this journey. In addition to dealing the the financial and legal issues, now is the time to develop a support network for you and your family.

As already posted, now is also the time to make sure your legal documents are in order.

Along these lines, do you have life insurance on your life? Among many of the other imponderables you are facing is what would happen to your family if you were to pass away unexpectedly.

Finally, before your husband retires, he needs to apply for any disability coverage he may have through work. While you have substantial financial resources, your family is likely to see your expenses rise substantially as the disease progresses.
DC3509 wrote: Sun Sep 16, 2018 9:52 pm
travel424 wrote: Sun Sep 16, 2018 8:56 pm “Thank you everyone for your kind words and advise. It was more of a relief getting the diagnosis as it explained a lot of the odd behavior instead of me always being wondering why he was late, getting lost, putting syrup in the Keurig, etc.

I appreciate the push to get SSDI as I was going with his request to not claim it though he's in a little denial still. I'm hoping he'll swallow his pride, accept it's not a defeat and welcome the idea the extra money would be helpful. In the meantime, I thought I'd give it a whirl to see if we can live without it. His hospital has a person on staff that said they'll help us with any paperwork needed.”

—snip—
Almost a guarantee that he will be denied for long-term care insurance now. Re-reading your asset description -- you need to consider this potential inheritance as well in terms of asset protection too. I would suggest contacting an elderlaw attorney to work through these issues -- also make sure he has wills, advanced health directives, power of attorney, etc. If you don't do these things now, it can become very difficult should things worsen (which I hope does NOT happen for a VERY long time!)
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beyou
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by beyou »

SDDI is there to help those that need it, if you qualify take it.
I would find out more about whether you qualify.

Best of luck.
ponyboy
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by ponyboy »

It amazes me how afraid people are of retiring early for the sole reason of health care.

When doing calculations...why not just double the health care cost, just to be safe? Is it really impossible to retire early and have to pay $25k/year in health insurance? If you have the money whats the big deal? All these people with fear of the unknown. With that mentality you'll have to work until medicare kicks in...have fun with that.

For those who were responsible their whole lives and saved accordingly..retire early and pay up for health care.
TravelGeek
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by TravelGeek »

blevine wrote: Tue Sep 18, 2018 10:25 am SDDI is there to help those that need it, if you qualify take it.
I would find out more about whether you qualify.

Best of luck.
Indeed. The I in SDDI stands for Insurance. It's not charity. Definitely, if you are entitled to coverage, use it. You paid for this insurance (of course, hoping that it wouldn't be needed, like any insurance).
ponyboy wrote: Tue Sep 18, 2018 10:58 am It amazes me how afraid people are of retiring early for the sole reason of health care.

When doing calculations...why not just double the health care cost, just to be safe? Is it really impossible to retire early and have to pay $25k/year in health insurance? If you have the money whats the big deal? All these people with fear of the unknown. With that mentality you'll have to work until medicare kicks in...have fun with that.
That is certainly what I am doing, but the risk that is more difficult to assess and plan for is the availability of useful insurance. There is no guarantee that ACA is available with current rules (preexisting coverage) at all for the time that I need it. (and of course, there is also no guarantee that employer insurance with those features would be available to me either if I chose to not retire instead)
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beyou
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by beyou »

ponyboy wrote: Tue Sep 18, 2018 10:58 am It amazes me how afraid people are of retiring early for the sole reason of health care.

When doing calculations...why not just double the health care cost, just to be safe? Is it really impossible to retire early and have to pay $25k/year in health insurance? If you have the money whats the big deal? All these people with fear of the unknown. With that mentality you'll have to work until medicare kicks in...have fun with that.

For those who were responsible their whole lives and saved accordingly..retire early and pay up for health care.
There is a compromise. Retiring 10 years vs 5 years before Medicare could have a significant impact on your retirement savings.
You will have much more in savings and less years to spend it, don't have to wait until 65 to retire. But there is a big difference between
55, 60 or 65. I am nearing 55 myself, and I think about retiring but like the idea of having "a few more years of employer paid healthcare".
I have a truly outstanding policy that gives me peace of mind, and I only pay for part of it. I realize I can buy my own policy but paying for 5 vs 10 years could be another six figures in retirement savings spent..... Some can afford that, others cannot.
c1over8
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by c1over8 »

+1 to the advice to make sure you and he both have legal documents in place (estate planning, poa, amd). You do not want to wait until you need a document only to find out your husband no longer has capacity to sign it.
bhsince87
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by bhsince87 »

ponyboy wrote: Tue Sep 18, 2018 10:58 am It amazes me how afraid people are of retiring early for the sole reason of health care.

When doing calculations...why not just double the health care cost, just to be safe? Is it really impossible to retire early and have to pay $25k/year in health insurance? If you have the money whats the big deal? All these people with fear of the unknown. With that mentality you'll have to work until medicare kicks in...have fun with that.

For those who were responsible their whole lives and saved accordingly..retire early and pay up for health care.
Here are some real world numbers: 4 years ago ACA coverage for my wife and I was $14k, me age 50 her 48.
The following year it went to $22k
The next year it went to $28k
This year, $32k.

How are we supposed to predict what it wee be over the next 11 years until I hit 65, or 13 years for her?

I'm budgeting $48k on average. And we can probably afford that.

But the reality is we will probably try to keep our income low enough to qualify for a subsidy.

And I'm actually OK with paying $48-50k if need be. Uncancellable insurance with pre-exiting coverage has only been available to individuals for maybe 10% of my life time, at any price.
Time is what we want most, but what we use worst. William Penn
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travel424
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by travel424 »

Wanted to provide everyone with an update in case anyone ends up in a similar situation and thank you for helping me think through this process.

[*]We are not going the SEPP route.

[*]Our attorney will proceed with filing for social security disability insurance. Although the process from application to first check can be long, an Alzheimer's diagnosis falls under the compassionate allowance program meaning the process can move along quicker. Given his historical earnings, he should receive the maximum amount and our 13 year old daughter will likely receive 50% of his amount until she turns 18 or graduates high school.

[*]We met with his employer and they agreed to allow him to work part-time at a substantially reduced pay so he can "retire". This small business company does not offer disability insurance. (We were aware of reduced benefits when he joined them two years ago but he traveled every week for his previous company and really needed to stay off the road.)

[*]Until SSDI payments begin, we will live off savings, Roth IRA, savings, etc. Eventually we will be able to make withdrawal from his Traditional IRA penalty free to supplement income when SSDI begins.

[*]As far as health insurance, I'll manage our income to maximize tax credits as part of the affordable care act. After being on SSDI for 2 years, my husband should be eligible for medicare.

I think we have a better handle on managing our finances now, well at least until the next curveball pops into our lives.
iamblessed
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by iamblessed »

It looks like you would spend all your taxable if he quits. Which might not be a bad thing. Less income to tax at 59.5 If I were him I would quit life goes by so quick. Time is the most valuable thing you can buy. You both have more than enough money.
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bligh
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by bligh »

With the amount of money you have I would get the ball rolling on retirement right away. You will never get back the time you will miss spending with your kid and your parents. You already know in your heart what is more important. Having said that, before retirement I'd likely do the following:

1) Make sure I had replaced my old car to a new one and paid it off completely before retiring.
2) Do a thorough inventory of the house and make sure there aren't any major(ish) expenses lurking there. Roof. Appliances. etc. I would get any remodeling/upgrading done and out of the way.
3) Figure out approximately what my and my spouses social security check would look like @62,65,67 and 70. So I'd know what my fallback plan would look like

The basic goal would be to be set up such that I have put off most foreseeable major expenses for the first decade of retirement. After that I will have the safety of the option of social security even if I choose not to take it.

Now to your questions:
1) Looks great to me, but consider and see if the approach above makes sense to you.
2) Yes. You are just not diversified enough in my opinion. I would go total market and I am a believer in holding international stocks too but it is fine if you do not want to go that route.
3) Personally, I would not be comfortable with holding it. I would recommend that you look at Vanguard Intermediate-Term Bond Index Fund Admiral Shares (VBILX) as an option. I hold this bond fund along side Vanguard Total Bond fund (BND) .
4) Yes. Is there a downside to this that I am missing? In an emergency it is always good to have more options that less
5) See above

Good luck with your early retirement. Enjoy and savor the time you have with your family. I am sure you are already aware of how fortunate you are.
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by jharkin »

travel424 wrote: Fri Oct 26, 2018 8:16 am Wanted to provide everyone with an update in case anyone ends up in a similar situation and thank you for helping me think through this process.

[*]We are not going the SEPP route.

[*]Our attorney will proceed with filing for social security disability insurance. Although the process from application to first check can be long, an Alzheimer's diagnosis falls under the compassionate allowance program meaning the process can move along quicker. Given his historical earnings, he should receive the maximum amount and our 13 year old daughter will likely receive 50% of his amount until she turns 18 or graduates high school.

[*]We met with his employer and they agreed to allow him to work part-time at a substantially reduced pay so he can "retire". This small business company does not offer disability insurance. (We were aware of reduced benefits when he joined them two years ago but he traveled every week for his previous company and really needed to stay off the road.)

[*]Until SSDI payments begin, we will live off savings, Roth IRA, savings, etc. Eventually we will be able to make withdrawal from his Traditional IRA penalty free to supplement income when SSDI begins.

[*]As far as health insurance, I'll manage our income to maximize tax credits as part of the affordable care act. After being on SSDI for 2 years, my husband should be eligible for medicare.

I think we have a better handle on managing our finances now, well at least until the next curveball pops into our lives.
Nothing else to add to all the financial advice you got, sounds like you havea good plan in place. I just want to add my regards - my grandfather had Alzheimers. You are absolutely doing the RIGHT thing by taking retirement early to make the most of the time you have together. Dont ever let anyone tell you otherwise, and don't be afraid to lean on friends and family for the emotional support you will need as time goes on.
helloeveryone
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by helloeveryone »

scorcher31 wrote: Sun Sep 16, 2018 4:04 pm
flyingaway wrote: Sun Sep 16, 2018 3:59 pm You have enough to support an annual expenses pf $40,000. In fact, with your potential inheritance, you may have twice as much as needed.
But life may change in the future. Kids may need money for college education, etc.
If your spouse is really burnt out, it is possible to take a break. At 52, he can certainly make some money from time to time if needed. If he does not like the retirement, he can always come back to work.
They reported they have enough in a 529 to pay for college expenses and that is not included into his listed assets. I agree they could give it a try and if insurance gets expensive or the market takes a nose dive then they could always go back to work. I would just make sure your husband has the kind of job that he could start back up doing a similar job relatively quickly if needed as a precaution.
+1
3funder
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by 3funder »

TigerNest wrote: Sun Sep 16, 2018 4:20 pm
travel424 wrote: Sun Sep 16, 2018 12:58 pm includes $10,000 for health insurance though looking at christian health sharing accounts and/or tax subsidies.
Christian health sharing accounts aren't the same as health insurance. I would be really worried about relying on one in my 50s, when health risk start to rise.
+1. Religion and finance = one terrible combination.
Global stocks, US bonds, and time.
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Re: Thinking of Retiring at 52, Please Critique Plan

Post by Dottie57 »

scorcher31 wrote: Sun Sep 16, 2018 3:58 pm
Ron Scott wrote: Sun Sep 16, 2018 2:44 pm Let me respectfully voice a dissenting opinion: I don't like the idea.

52 is young, leaving many years ahead. It is often difficult for those 10 years older to develop a comfort level around their finances as they prepare for retirement. (62 used to be early retirement!) More so for those your age; more things can happen in 35 years than in 25 to upset the apple cart. You've saved well but are exposing yourself to significant uncertainty.

The problem we all face is living with uncertainty. Unfortunately, the intellectual model usually followed is to assess uncertainty around finances in retirement using successive iterations of outcomes based on historical data sets, not unlike trusting the Wednesday weather report to predict afternoon showers on Saturday. Fill in the blanks and you can "know" that $X will last for Y years with Z% probability. This is inadequate because uncertainty, especially when dealing with long periods of time, requires that you face the potential that rare events will influence your life.

Such rare events can be personal or environmental, that affect us all. Some of them might not have happened before. You never know.

Nothing is certain. The best thing you can do to give yourself a better chance at having sufficient finances for living in retirement is to build a nest egg with additional protection for you and your family. My wife uses the seat belt in her car, but I feel much better knowing she's also got airbags and lane-change assist.

The most important financial asset your family has--or let's say, a 52 year-old has--is the ability to earn a living through work. Tossing that asset out the window, or exchaning it for some undefined ability to get a part time job somewhere, is a huge financial decision and I recommend against it.

It is unfortunately true that many people hate their jobs and that's a sad commentary on the 21st century workplace. But I would rather see your 52 year-old grin and bear it--or better yet, get the resume together and find another job--than walk away.

There is a growing population on the internet that live for FIRE (Financially Independent Retire Early). It sounds great and you can get your warm and fuzzies on the forums that are dedicated to them. "We've only got seat belts, but hey--we're doing fine." Not feeling it...

I love bogleheads, and I feel like I fit here much more than Mr. Money Mustache, but I feel like as a group we are way to Anti FIRE. If expenses are expected to be 40k, they can take out 44k yearly at a 2.5% withdrawal rate and easily cover that. Not to mention social security down the road. I don't like the allocations, but the amount of money seems fine to me.
It is always good to look for possible problems in an scenario. Caution is a good and not negative thing.
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