Retire at 50(ish) possible?

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Topic Author
stocknoob4111
Posts: 815
Joined: Sun Jan 07, 2018 12:52 pm

Retire at 50(ish) possible?

Post by stocknoob4111 » Sat Oct 26, 2019 3:33 pm

Profile - 45 years, single, no kids
Portfolio - $605,000 (as of EOD Fri) : 35% Large, 28% Small, 19% International, 16% Bonds, 2% Cash [Portfolio split: 75% in Taxable, 25% in 401k]
Contribution rate - $65,000/yr
Debts - Car loan at 0%, $450/month, 25 mos. left, will be channeling this into my Portfolio after i'm done, no other debts

- Retirement goal - $1M by end of year 2024 (through end of the year I turn 50)

- I currently live in a VHCOL area (OC, CA). On retiring I plan to move to a LCOL, buy a 2bd townhouse (< $200k) there for cash. So that will leave me with a $800k portfolio.

- I will withdraw 3.5% ($28,000) and plan to spend 6 mos. out of the US and 6 mos. stateside. At age 65 I will reduce my withdrawals to SS + 1.5 - 2% from my portfolio for the rest of my life. I should have about 25 years of SS history by then with 95% of those years having contributed the SS max. SInce SS is calculated at the best 35 years I would have 10 years of zero contributions but should still have a decent payout.

- For Medical insurance from 51-64 I will rely partly on expat coverage for my time overseas and partly on ACA subsidies since my income should be pretty low.

I was initially going to work until 55 but now that I think about this I could possibly retire earlier. What odds of success do you give the above plan? Any surprises I am not taking into account?

Godot
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Location: Little Beirut

Re: Retire at 50(ish) possible?

Post by Godot » Sat Oct 26, 2019 3:41 pm

stocknoob4111 wrote:
Sat Oct 26, 2019 3:33 pm
Profile - 45 years, single, no kids
Portfolio - $605,000 (as of EOD Fri) : 35% Large, 28% Small, 19% International, 16% Bonds, 2% Cash [Portfolio split: 75% in Taxable, 25% in 401k]
Contribution rate - $65,000/yr
Debts - Car loan at 0%, $450/month, 25 mos. left, will be channeling this into my Portfolio after i'm done, no other debts

- Retirement goal - $1M by end of year 2024 (through end of the year I turn 50)

- I currently live in a VHCOL area (OC, CA). On retiring I plan to move to a LCOL, buy a 2bd townhouse (< $200k) there for cash. So that will leave me with a $800k portfolio.

- I will withdraw 3.5% ($28,000) and plan to spend 6 mos. out of the US and 6 mos. stateside. At age 65 I will reduce my withdrawals to SS + 1.5 - 2% from my portfolio for the rest of my life. I should have about 25 years of SS history by then with 95% of those years having contributed the SS max. SInce SS is calculated at the best 35 years I would have 10 years of zero contributions but should still have a decent payout.

- For Medical insurance from 51-64 I will rely partly on expat coverage for my time overseas and partly on ACA subsidies since my income should be pretty low.

I was initially going to work until 55 but now that I think about this I could possibly retire earlier. What odds of success do you give the above plan? Any surprises I am not taking into account?
Will your life overseas be in a LCOL country?
Estragon: I can't go on like this. | Vladimir: That's what you think. | ― Samuel Beckett, Waiting for Godot

retired@50
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Re: Retire at 50(ish) possible?

Post by retired@50 » Sat Oct 26, 2019 3:45 pm

I suppose if you can get by on $28,000 per year, then this plan has some hope. The potential snags I see are:

Medical coverage / expense. While ACA is current law, who can say if it will be here for another 20 years, which seems to be what you're relying on. This could change.

Paying cash for a home ~200K, may or may not be a wise move when the time comes. It might depend on what the current mortgage market looks like. If you can get a loan with low enough interest, you could theoretically be better off leaving the money in the market to work for you. Could be a tough call, plus you'd need approval from the mortgage granting organization (bank, credit union, Quicken Loans, whoever.)

Portfolio composition. Currently you hold less than 20% in bonds. This may need to change unless you like the riskiness of your portfolio. This level of equity at retirement time opens you up to all sorts of trouble if you get bad market returns in your early years of retirement. Sequence of returns risk, I believe is the technical term... Anyway, best of luck.

anonsdca
Posts: 230
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Re: Retire at 50(ish) possible?

Post by anonsdca » Sat Oct 26, 2019 3:56 pm

This is another "can I retire" post I just don't understand.

You will have an $800K portfolio when you retire.
You will withdraw 3.5% (28K per year). Why? Your $800K at 3% will earn you $24K per year. Why withdraw?

There is a CD thread running now, that can get you even more! I just don't understand this thinking.

Topic Author
stocknoob4111
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Re: Retire at 50(ish) possible?

Post by stocknoob4111 » Sat Oct 26, 2019 4:05 pm

Godot wrote:
Sat Oct 26, 2019 3:41 pm
Will your life overseas be in a LCOL country?
I plan to travel around, but many of my bases will be in lower cost countries.
retired@50 wrote:
Sat Oct 26, 2019 3:45 pm
I suppose if you can get by on $28,000 per year, then this plan has some hope. The potential snags I see are:
These are good points, thanks.
anonsdca wrote:
Sat Oct 26, 2019 3:56 pm
Why withdraw?

There is a CD thread running now, that can get you even more! I just don't understand this thinking.
Not sure I follow, you're implying that 3.5% is too low or too high?

LittleMaggieMae
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Re: Retire at 50(ish) possible?

Post by LittleMaggieMae » Sat Oct 26, 2019 4:12 pm

Have you guesstimated the expense of keeping a townhouse (and car)for a year? You'll have Property Taxes, Insurance, HOA fees, and utilities. (you'll have to pay for utilites even when you aren't there...) Then there's your car - insurance, gas, repairs. And you haven't bought groceries or spent anything on entertainment(eating/drinking).

You will need a "spending plan" to determine if $28K per year is enough or not.

(As far as I can tell... many, many, many people are having trouble making ends meet (shelter, car, food, phone) working full time $13 an hour jobs which usually come without healthcare.)

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David Jay
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Re: Retire at 50(ish) possible?

Post by David Jay » Sat Oct 26, 2019 4:15 pm

There are only 3 issues to resolve for your plan to succeed. You need to understand:
1. Expenses
2. Expenses
3. Expenses
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

anonsdca
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Re: Retire at 50(ish) possible?

Post by anonsdca » Sat Oct 26, 2019 4:17 pm

There is a CD thread running now, that can get you even more! I just don't understand this thinking.
[/quote]

Not sure I follow, you're implying that 3.5% is too low or too high?
[/quote]

I am saying you could almost get your desired annual income on your money with a risk free CD. I am asking, why withdraw anything?

D-Dog
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Re: Retire at 50(ish) possible?

Post by D-Dog » Sat Oct 26, 2019 4:36 pm

anonsdca wrote:
Sat Oct 26, 2019 4:17 pm
There is a CD thread running now, that can get you even more! I just don't understand this thinking.
Not sure I follow, you're implying that 3.5% is too low or too high?
[/quote]

I am saying you could almost get your desired annual income on your money with a risk free CD. I am asking, why withdraw anything?
[/quote]

The CD strategy won’t keep up with inflation.

aristotelian
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Re: Retire at 50(ish) possible?

Post by aristotelian » Sat Oct 26, 2019 4:48 pm

anonsdca wrote:
Sat Oct 26, 2019 3:56 pm
This is another "can I retire" post I just don't understand.

You will have an $800K portfolio when you retire.
You will withdraw 3.5% (28K per year). Why? Your $800K at 3% will earn you $24K per year. Why withdraw?

There is a CD thread running now, that can get you even more! I just don't understand this thinking.
CDs would need to yield 3.5% plus the rate of inflation for this to work. Right now they arr yielding under 2%.

marcopolo
Posts: 2406
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Re: Retire at 50(ish) possible?

Post by marcopolo » Sat Oct 26, 2019 4:57 pm

anonsdca wrote:
Sat Oct 26, 2019 3:56 pm
This is another "can I retire" post I just don't understand.

You will have an $800K portfolio when you retire.
You will withdraw 3.5% (28K per year). Why? Your $800K at 3% will earn you $24K per year. Why withdraw?

There is a CD thread running now, that can get you even more! I just don't understand this thinking.
Taking that 3% ($24k) you earn in interest IS withdrawing from your portfolio.
Withdrawals are withdrawals, it does not matter whether it comes from Interest (from CDs), Dividends, or from selling holdings.
No matter where it comes from, once you spend it, you are withdrawing it from your portfolio.
Once in a while you get shown the light, in the strangest of places if you look at it right.

anonsdca
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Re: Retire at 50(ish) possible?

Post by anonsdca » Sat Oct 26, 2019 7:09 pm

The CD strategy won’t keep up with inflation.
[/quote]

Who cares? His post is about covering his expenses and running out of money? With a CD he has the assurance that his bills are covered AND he will not run out of money. After 5 years, 10 years he can always reevaluate and start taking withdrawls and set it up however he wants.
Last edited by anonsdca on Sat Oct 26, 2019 7:29 pm, edited 1 time in total.

anonsdca
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Re: Retire at 50(ish) possible?

Post by anonsdca » Sat Oct 26, 2019 7:11 pm

CDs would need to yield 3.5% plus the rate of inflation for this to work. Right now they arr yielding under 2%.
[/quote]

Just wrong. I even mentioned a current thread running right here that says you are wrong.

whunter3333
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Re: Retire at 50(ish) possible?

Post by whunter3333 » Sat Oct 26, 2019 8:10 pm

OP, Can I ask a somewhat tangential question? Currently $65K/year is being contributed to the portfolio (which to me says you have a much higher income than your proposed expenses of $28K/ year). It's not really any of my/our business, but are you currently living a lifestyle similar to what $28K/year will buy?

Thanks,

WH

Topic Author
stocknoob4111
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Re: Retire at 50(ish) possible?

Post by stocknoob4111 » Sat Oct 26, 2019 8:29 pm

whunter3333 wrote:
Sat Oct 26, 2019 8:10 pm
are you currently living a lifestyle similar to what $28K/year will buy?
I have no issues revealing my expenses...

I spend $3300/month (including once annual expenses amortized monthly), but a large part of that is rent ($1420), my car payment of $450 (and a monthly travel budget of $416 ($5K/yr) which is rather flexible.

My rent should be drastically reduced in a LCOL area (property taxes/maintenance) and my car payment is going away in 2 years. I am happy with my current lifestyle and don't feel I miss anything at all, i'm very comfortable.

anonsdca
Posts: 230
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Re: Retire at 50(ish) possible?

Post by anonsdca » Sat Oct 26, 2019 9:50 pm

stocknoob4111 wrote:
Sat Oct 26, 2019 8:29 pm
whunter3333 wrote:
Sat Oct 26, 2019 8:10 pm
are you currently living a lifestyle similar to what $28K/year will buy?
I have no issues revealing my expenses...

I spend $3300/month (including once annual expenses amortized monthly), but a large part of that is rent ($1420), my car payment of $450 (and a monthly travel budget of $416 ($5K/yr) which is rather flexible.

My rent should be drastically reduced in a LCOL area (property taxes/maintenance) and my car payment is going away in 2 years. I am happy with my current lifestyle and don't feel I miss anything at all, i'm very comfortable.
If this is true, why withdraw? Why not just live on the income your $752K can produce? Plus your other income?

marcopolo
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Joined: Sat Dec 03, 2016 10:22 am

Re: Retire at 50(ish) possible?

Post by marcopolo » Sat Oct 26, 2019 10:09 pm

anonsdca wrote:
Sat Oct 26, 2019 9:50 pm
stocknoob4111 wrote:
Sat Oct 26, 2019 8:29 pm
whunter3333 wrote:
Sat Oct 26, 2019 8:10 pm
are you currently living a lifestyle similar to what $28K/year will buy?
I have no issues revealing my expenses...

I spend $3300/month (including once annual expenses amortized monthly), but a large part of that is rent ($1420), my car payment of $450 (and a monthly travel budget of $416 ($5K/yr) which is rather flexible.

My rent should be drastically reduced in a LCOL area (property taxes/maintenance) and my car payment is going away in 2 years. I am happy with my current lifestyle and don't feel I miss anything at all, i'm very comfortable.
If this is true, why withdraw? Why not just live on the income your $752K can produce? Plus your other income?
How can OP live on the "income" if they don't withdraw it?
Once in a while you get shown the light, in the strangest of places if you look at it right.

anonsdca
Posts: 230
Joined: Mon Jun 01, 2015 11:47 pm

Re: Retire at 50(ish) possible?

Post by anonsdca » Sat Oct 26, 2019 10:12 pm

marcopolo wrote:
Sat Oct 26, 2019 10:09 pm
anonsdca wrote:
Sat Oct 26, 2019 9:50 pm
stocknoob4111 wrote:
Sat Oct 26, 2019 8:29 pm
whunter3333 wrote:
Sat Oct 26, 2019 8:10 pm
are you currently living a lifestyle similar to what $28K/year will buy?
I have no issues revealing my expenses...

I spend $3300/month (including once annual expenses amortized monthly), but a large part of that is rent ($1420), my car payment of $450 (and a monthly travel budget of $416 ($5K/yr) which is rather flexible.

My rent should be drastically reduced in a LCOL area (property taxes/maintenance) and my car payment is going away in 2 years. I am happy with my current lifestyle and don't feel I miss anything at all, i'm very comfortable.
If this is true, why withdraw? Why not just live on the income your $752K can produce? Plus your other income?
How can OP live on the "income" if they don't withdraw it?
Oh my, this is starting to be irritating. You DONT need to withdraw anything in your nest egg with an acceptable yield.

marcopolo
Posts: 2406
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Re: Retire at 50(ish) possible?

Post by marcopolo » Sat Oct 26, 2019 10:20 pm

anonsdca wrote:
Sat Oct 26, 2019 10:12 pm
marcopolo wrote:
Sat Oct 26, 2019 10:09 pm
anonsdca wrote:
Sat Oct 26, 2019 9:50 pm
stocknoob4111 wrote:
Sat Oct 26, 2019 8:29 pm
whunter3333 wrote:
Sat Oct 26, 2019 8:10 pm
are you currently living a lifestyle similar to what $28K/year will buy?
I have no issues revealing my expenses...

I spend $3300/month (including once annual expenses amortized monthly), but a large part of that is rent ($1420), my car payment of $450 (and a monthly travel budget of $416 ($5K/yr) which is rather flexible.

My rent should be drastically reduced in a LCOL area (property taxes/maintenance) and my car payment is going away in 2 years. I am happy with my current lifestyle and don't feel I miss anything at all, i'm very comfortable.
If this is true, why withdraw? Why not just live on the income your $752K can produce? Plus your other income?
How can OP live on the "income" if they don't withdraw it?
Oh my, this is starting to be irritating. You DONT need to withdraw with an acceptable income amount nest egg
It seems you don't quite understand how a portfolio works.
The interest, dividend, capital gains, and any other distribution from a portfolio is a part of that portfolio. If you then decide to take that out and spend it, you are withdrawing from the portfolio. It makes no difference whether the money you take from the portfolio came from interest payments, dividends, or selling some of your holdings, it is all the same.

Think about what happens with a fund that is tax efficient and does not make any distributions, but gains 5% a year, compare that to a different fund that is throwing off 5% in interest every year. If you sell 5% of the fund that had no payouts and take that out, it is no different then taking the interest form the paying fund and spend it.
Once in a while you get shown the light, in the strangest of places if you look at it right.

anonsdca
Posts: 230
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Re: Retire at 50(ish) possible?

Post by anonsdca » Sat Oct 26, 2019 10:23 pm

marcopolo wrote:
Sat Oct 26, 2019 10:20 pm
anonsdca wrote:
Sat Oct 26, 2019 10:12 pm
marcopolo wrote:
Sat Oct 26, 2019 10:09 pm
anonsdca wrote:
Sat Oct 26, 2019 9:50 pm
stocknoob4111 wrote:
Sat Oct 26, 2019 8:29 pm


I have no issues revealing my expenses...

I spend $3300/month (including once annual expenses amortized monthly), but a large part of that is rent ($1420), my car payment of $450 (and a monthly travel budget of $416 ($5K/yr) which is rather flexible.

My rent should be drastically reduced in a LCOL area (property taxes/maintenance) and my car payment is going away in 2 years. I am happy with my current lifestyle and don't feel I miss anything at all, i'm very comfortable.
If this is true, why withdraw? Why not just live on the income your $752K can produce? Plus your other income?
How can OP live on the "income" if they don't withdraw it?
Oh my, this is starting to be irritating. You DONT need to withdraw with an acceptable income amount nest egg
It seems you don't quite understand how a portfolio works.
The interest, dividend, capital gains, and any other distribution from a portfolio is a part of that portfolio. If you then decide to take that out and spend it, you are withdrawing from the portfolio. It makes no difference whether the money you take from the portfolio came from interest payments, dividends, or selling some of your holdings, it is all the same.

Think about what happens with a fund that is tax efficient and does not make any distributions, but gains 5% a year, compare that to a different fund that is throwing off 5% in interest every year. If you sell 5% of the fund that had no payouts and take that out, it is no different then taking the interest form the paying fund and spend it.
LOL, I understand exactly how a portfolio works. It seems you dont.

marcopolo
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Re: Retire at 50(ish) possible?

Post by marcopolo » Sat Oct 26, 2019 10:29 pm

anonsdca wrote:
Sat Oct 26, 2019 10:23 pm
marcopolo wrote:
Sat Oct 26, 2019 10:20 pm
anonsdca wrote:
Sat Oct 26, 2019 10:12 pm
marcopolo wrote:
Sat Oct 26, 2019 10:09 pm
anonsdca wrote:
Sat Oct 26, 2019 9:50 pm


If this is true, why withdraw? Why not just live on the income your $752K can produce? Plus your other income?
How can OP live on the "income" if they don't withdraw it?
Oh my, this is starting to be irritating. You DONT need to withdraw with an acceptable income amount nest egg
It seems you don't quite understand how a portfolio works.
The interest, dividend, capital gains, and any other distribution from a portfolio is a part of that portfolio. If you then decide to take that out and spend it, you are withdrawing from the portfolio. It makes no difference whether the money you take from the portfolio came from interest payments, dividends, or selling some of your holdings, it is all the same.

Think about what happens with a fund that is tax efficient and does not make any distributions, but gains 5% a year, compare that to a different fund that is throwing off 5% in interest every year. If you sell 5% of the fund that had no payouts and take that out, it is no different then taking the interest form the paying fund and spend it.
LOL, I understand exactly how a portfolio works. It seems you dont.
Ok. Maybe you could explain it to me...
Once in a while you get shown the light, in the strangest of places if you look at it right.

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willthrill81
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Location: USA

Re: Retire at 50(ish) possible?

Post by willthrill81 » Sat Oct 26, 2019 10:32 pm

anonsdca wrote:
Sat Oct 26, 2019 10:12 pm
marcopolo wrote:
Sat Oct 26, 2019 10:09 pm
anonsdca wrote:
Sat Oct 26, 2019 9:50 pm
stocknoob4111 wrote:
Sat Oct 26, 2019 8:29 pm
whunter3333 wrote:
Sat Oct 26, 2019 8:10 pm
are you currently living a lifestyle similar to what $28K/year will buy?
I have no issues revealing my expenses...

I spend $3300/month (including once annual expenses amortized monthly), but a large part of that is rent ($1420), my car payment of $450 (and a monthly travel budget of $416 ($5K/yr) which is rather flexible.

My rent should be drastically reduced in a LCOL area (property taxes/maintenance) and my car payment is going away in 2 years. I am happy with my current lifestyle and don't feel I miss anything at all, i'm very comfortable.
If this is true, why withdraw? Why not just live on the income your $752K can produce? Plus your other income?
How can OP live on the "income" if they don't withdraw it?
Oh my, this is starting to be irritating. You DONT need to withdraw anything in your nest egg with an acceptable yield.
Pulling interest from one's portfolio IS withdrawing. Interest and dividends are not special.

Besides, you're focusing on a nominal return like 3%, but that is more like 1% after current inflation. So if the OP did what you're suggesting, the inflation-adjusted size of his portfolio will shrink every year.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

22twain
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Re: Retire at 50(ish) possible?

Post by 22twain » Sat Oct 26, 2019 11:09 pm

Half this thread is arguing over the definition of the word “withdraw”. Can you all please agree to disagree and move on? :annoyed
My investing princiPLEs do not include absolutely preserving princiPAL.

StealthRabbit
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Re: Retire at 50(ish) possible?

Post by StealthRabbit » Sat Oct 26, 2019 11:31 pm

OP is quite light on total assets for sustained LT retirement.
Consider doubling to $1.6 - $2m

Consider some options.

I would NOT buy a personal residence, but instead a cash flowing rental that has a spare apartment / cabin / RV site for myself, as well as providing 10% Income.

LCOL overseas js fine, but you need to commute back and forth, and you will likely desire 'side trips' each direction. See where you can best get RT fares <$500 to a LCOL destination with (free) stopovers in desirable places. Dividing up time annually = MORE costs, even in lower cost destinations.

HC coverage will be tight. BEST you can hope for is $300 / month (subsidized or HC sharing) + a large deductible

Can OP get some high paying PT assignments in highest cost areas of destinations? OR international gigs that pay housing, food, and taxes? (war zones?) Travel in free time.

My PAID international gigs really enhance retirement (for those who like to travel / be overseas).

I would grab some really fun (high salary) PT gigs.

Reduce spending to NOTHING (no house, unless fully rented / paying it's own way).

I left employment at age 49 FIRE (from factory job, not high wealth)
My father left employment at age 49 (on a stretcher) I cared for him for the next 32 yrs)

Choose wisely and keep your options open.

smectym
Posts: 575
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Re: Retire at 50(ish) possible?

Post by smectym » Sun Oct 27, 2019 12:32 am

Under “no circumstances” (OK, there are always outliers) should someone relatively young consider retiring with a small portfolio, when there is the option of working 5 or 10 more years to create a more robust portfolio. This is especially the case because a 45-year-old who has always worked, and has always been told he (“or she,” incorporated by reference in the pronouns that follow) is great, finds it difficult to grasp the reality that once he quits, his marketability immediately starts to plunge and he soon becomes unemployable (sure—always exceptions).

Don’t do it, absent exigent circumstances. In other words, not on a whim, on a vague sense of “because I can,” or based on petty quibbles and minor resentments about the job. Rather, stick to it, continue to pare spending and bulk up savings. Retire at 55 in a much stronger position.

blahblahsunshine
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Re: Retire at 50(ish) possible?

Post by blahblahsunshine » Sun Oct 27, 2019 10:45 am

smectym wrote:
Sun Oct 27, 2019 12:32 am
Under “no circumstances” (OK, there are always outliers) should someone relatively young consider retiring with a small portfolio, when there is the option of working 5 or 10 more years to create a more robust portfolio. This is especially the case because a 45-year-old who has always worked, and has always been told he (“or she,” incorporated by reference in the pronouns that follow) is great, finds it difficult to grasp the reality that once he quits, his marketability immediately starts to plunge and he soon becomes unemployable (sure—always exceptions).

Don’t do it, absent exigent circumstances. In other words, not on a whim, on a vague sense of “because I can,” or based on petty quibbles and minor resentments about the job. Rather, stick to it, continue to pare spending and bulk up savings. Retire at 55 in a much stronger position.
Out of curiousity what would you consider to be a bulked up stronger position? Either in absolute terms, or relative ones.

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Wiggums
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Re: Retire at 50(ish) possible?

Post by Wiggums » Sun Oct 27, 2019 10:55 am

stocknoob4111 wrote:
Sat Oct 26, 2019 3:33 pm
Profile - 45 years, single, no kids
Portfolio - $605,000 (as of EOD Fri) : 35% Large, 28% Small, 19% International, 16% Bonds, 2% Cash [Portfolio split: 75% in Taxable, 25% in 401k]
Contribution rate - $65,000/yr
Debts - Car loan at 0%, $450/month, 25 mos. left, will be channeling this into my Portfolio after i'm done, no other debts

- Retirement goal - $1M by end of year 2024 (through end of the year I turn 50)

- I currently live in a VHCOL area (OC, CA). On retiring I plan to move to a LCOL, buy a 2bd townhouse (< $200k) there for cash. So that will leave me with a $800k portfolio.

- I will withdraw 3.5% ($28,000) and plan to spend 6 mos. out of the US and 6 mos. stateside. At age 65 I will reduce my withdrawals to SS + 1.5 - 2% from my portfolio for the rest of my life. I should have about 25 years of SS history by then with 95% of those years having contributed the SS max. SInce SS is calculated at the best 35 years I would have 10 years of zero contributions but should still have a decent payout.

- For Medical insurance from 51-64 I will rely partly on expat coverage for my time overseas and partly on ACA subsidies since my income should be pretty low.

I was initially going to work until 55 but now that I think about this I could possibly retire earlier. What odds of success do you give the above plan? Any surprises I am not taking into account?
Assuming you hit the 1 million goal by retirement, the numbers work out. I would continue to build up your account and focus on your retirement expenses (including travel and costs related to TH) to make sure your estimates are realistic.

Good luck to you.

Topic Author
stocknoob4111
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Re: Retire at 50(ish) possible?

Post by stocknoob4111 » Sat Nov 09, 2019 12:49 am

thanks for all the replies, after some thinking about this I've decided to stick to my original plan to work until 55. Not only would this enable me to have a hugely stronger portfolio but additionally I may end up being a bit bored retiring that early since I do enjoy working in my field.

BlueCable
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Re: Retire at 50(ish) possible?

Post by BlueCable » Sat Nov 09, 2019 6:46 am

stocknoob4111 wrote:
Sat Nov 09, 2019 12:49 am
thanks for all the replies, after some thinking about this I've decided to stick to my original plan to work until 55. Not only would this enable me to have a hugely stronger portfolio but additionally I may end up being a bit bored retiring that early since I do enjoy working in my field.
Will your Social Security cover your expenses? If so, I think $1M is enough to retire at 50 with lots of safety built in. You'd only need to make your portfolio last 20 years until 70, at which point your withdrawal rate would drop significantly.

Maybe $1M plus a paid off house if you want extra margin.

That's all financially speaking of course. There are many other reasons to not retire early.

Also, remember that your choices aren't 50 or 55. Anywhere inbetween might be the best choice for you.

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BogleFanGal
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Re: Retire at 50(ish) possible?

Post by BogleFanGal » Sat Nov 09, 2019 3:24 pm

I see a lot of responses to "can I retire?" threads that talk about counting on social security as part of expected income stream at 70+. I don't understand how anyone under 60 could count on this as part of expected income w/any reasonable confidence if they expect to have a decent nest egg as well.

While a 1 million nest egg is certainly not a big sum to many high earners on this forum, in the real world, many people define that as "substantial".

I am NOT intending to wade into political waters here - but I could easily see SS morph into a means tested program if someone decides that's a safe way to bail out fund shortages- which could penalize anyone who saved a decent sum via LBYM.

To me, relying on any SS income as part of the "can I retire?" answer is as risky as counting on ACA - and I see many here caution against that. These 2 programs are basically out of our control - it's too easy to get blindsided, with no legal assurances of getting anything.

(Hope I didn't break any forum rules with the above post! :D If so, just delete.)
"Life would be infinitely happier if we could only be born at the age of eighty and gradually approach eighteen." Mark Twain

HomeStretch
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Re: Retire at 50(ish) possible?

Post by HomeStretch » Sat Nov 09, 2019 4:55 pm

BogleFanGal wrote:
Sat Nov 09, 2019 3:24 pm
To me, relying on any SS income as part of the "can I retire?" answer is as risky as counting on ACA - and I see many here caution against that. These 2 programs are basically out of our control - it's too easy to get blindsided, with no legal assurances of getting anything.
There is risk for sure in those areas (and others). IMO when doing a retirement financial projection, it’s good to model all income and expenses (including SS income and healthcare expenses) based on current best estimates. From there one can do “what if’s” with assumptions (like market returns, inflation rates, SS benefit reductions, healthcare cost increases, tax rates). This allows one to gauge the sensitivity of these factors on one’s portfolio and ultimate decision on “do I have enough to retire.”

I don’t plan to retire on a rosy projection. But I am not going to base my retirement decision on a projection using all the most pessimistic assumptions - such as SS benefit goes away entirely, markets return zero, tax rates increase to never-before-seen levels, and that I can’t get healthcare insurance for $35k per year in premiums. I would never be able to retire...

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BogleFanGal
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Re: Retire at 50(ish) possible?

Post by BogleFanGal » Sat Nov 09, 2019 5:21 pm

HomeStretch wrote:
Sat Nov 09, 2019 4:55 pm
BogleFanGal wrote:
Sat Nov 09, 2019 3:24 pm
To me, relying on any SS income as part of the "can I retire?" answer is as risky as counting on ACA - and I see many here caution against that. These 2 programs are basically out of our control - it's too easy to get blindsided, with no legal assurances of getting anything.
There is risk for sure in those areas (and others). IMO when doing a retirement financial projection, it’s good to model all income and expenses (including SS income and healthcare expenses) based on current best estimates. From there one can do “what if’s” with assumptions (like market returns, inflation rates, SS benefit reductions, healthcare cost increases, tax rates). This allows one to gauge the sensitivity of these factors on one’s portfolio and ultimate decision on “do I have enough to retire.”

I don’t plan to retire on a rosy projection. But I am not going to base my retirement decision on a projection using all the most pessimistic assumptions - such as SS benefit goes away entirely, markets return zero, tax rates increase to never-before-seen levels, and that I can’t get healthcare insurance for $35k per year in premiums. I would never be able to retire...
Agreed. Personally, I actually have more confidence that there will be average market returns (over the long haul), somewhat reasonable tax rates for most people, even if higher than I like and some sort of health insurance solution, even if not ideal. I have big concerns about the possibility of means testing for SS - just based upon human psychology. I feel that savers are an easy and convenient target for a nation and population who likes to spend beyond their means.
"Life would be infinitely happier if we could only be born at the age of eighty and gradually approach eighteen." Mark Twain

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Re: Retire at 50(ish) possible?

Post by kramer » Sat Nov 09, 2019 7:24 pm

Just to be clear, you will be a US resident and will have to have year around health coverage in the US. This is in addition to any coverage you buy for your time overseas. The idea of part time US health insurance is not supported by the ACA.

The traveling part of your plan, even in LCOL countries, sounds a lot more expensive than just staying put in the US most of the time. So hopefully you have accounted for that in your budget.

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Re: Retire at 50(ish) possible?

Post by willthrill81 » Sat Nov 09, 2019 8:24 pm

kramer wrote:
Sat Nov 09, 2019 7:24 pm
Just to be clear, you will be a US resident and will have to have year around health coverage in the US.
The individual mandate to have health insurance was removed in the last major tax law. That being said, U.S. residents getting health insurance for (1) less than a year and (2) for care received in the U.S. is not currently an option, TMK.
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Re: Retire at 50(ish) possible?

Post by JoeRetire » Sat Nov 09, 2019 9:19 pm

BogleFanGal wrote:
Sat Nov 09, 2019 3:24 pm
I am NOT intending to wade into political waters here - but I could easily see SS morph into a means tested program if someone decides that's a safe way to bail out fund shortages- which could penalize anyone who saved a decent sum via LBYM.

To me, relying on any SS income as part of the "can I retire?" answer is as risky as counting on ACA - and I see many here caution against that. These 2 programs are basically out of our control - it's too easy to get blindsided, with no legal assurances of getting anything.
You can imagine all sorts of wild future scenarios you like and act accordingly. But I suspect most folks expect future Social Security to be pretty much like current Social Security.

Comparing the extremely popular Social Security program to health care rules that have only existed for less than 10 years and have been threatened with repeated repeal seems silly to me.
Don't be a lemming.

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Re: Retire at 50(ish) possible?

Post by bltn » Sat Nov 09, 2019 9:54 pm

smectym wrote:
Sun Oct 27, 2019 12:32 am
Under “no circumstances” (OK, there are always outliers) should someone relatively young consider retiring with a small portfolio, when there is the option of working 5 or 10 more years to create a more robust portfolio. This is especially the case because a 45-year-old who has always worked, and has always been told he (“or she,” incorporated by reference in the pronouns that follow) is great, finds it difficult to grasp the reality that once he quits, his marketability immediately starts to plunge and he soon becomes unemployable (sure—always exceptions).

Don’t do it, absent exigent circumstances. In other words, not on a whim, on a vague sense of “because I can,” or based on petty quibbles and minor resentments about the job. Rather, stick to it, continue to pare spending and bulk up savings. Retire at 55 in a much stronger position.
Good advice.

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Re: Retire at 50(ish) possible?

Post by tibbitts » Sat Nov 09, 2019 10:07 pm

stocknoob4111 wrote:
Sat Oct 26, 2019 3:33 pm
Profile - 45 years, single, no kids
Portfolio - $605,000 (as of EOD Fri) : 35% Large, 28% Small, 19% International, 16% Bonds, 2% Cash [Portfolio split: 75% in Taxable, 25% in 401k]
Contribution rate - $65,000/yr
Debts - Car loan at 0%, $450/month, 25 mos. left, will be channeling this into my Portfolio after i'm done, no other debts

- Retirement goal - $1M by end of year 2024 (through end of the year I turn 50)

- I currently live in a VHCOL area (OC, CA). On retiring I plan to move to a LCOL, buy a 2bd townhouse (< $200k) there for cash. So that will leave me with a $800k portfolio.

- I will withdraw 3.5% ($28,000) and plan to spend 6 mos. out of the US and 6 mos. stateside. At age 65 I will reduce my withdrawals to SS + 1.5 - 2% from my portfolio for the rest of my life. I should have about 25 years of SS history by then with 95% of those years having contributed the SS max. SInce SS is calculated at the best 35 years I would have 10 years of zero contributions but should still have a decent payout.

- For Medical insurance from 51-64 I will rely partly on expat coverage for my time overseas and partly on ACA subsidies since my income should be pretty low.

I was initially going to work until 55 but now that I think about this I could possibly retire earlier. What odds of success do you give the above plan? Any surprises I am not taking into account?
The issue to me is that you have to have some reasons to retire, and for many of us those reasons include spending money on hobbies or activities we enjoy but don't have time for while working full-time. You don't mention anything like that, you just seem to be planning for bare survival, the only benefit being not having to work. Maybe you need to find a different job.

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BogleFanGal
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Re: Retire at 50(ish) possible?

Post by BogleFanGal » Sun Nov 10, 2019 10:28 am

JoeRetire wrote:
Sat Nov 09, 2019 9:19 pm
BogleFanGal wrote:
Sat Nov 09, 2019 3:24 pm
I am NOT intending to wade into political waters here - but I could easily see SS morph into a means tested program if someone decides that's a safe way to bail out fund shortages- which could penalize anyone who saved a decent sum via LBYM.

To me, relying on any SS income as part of the "can I retire?" answer is as risky as counting on ACA - and I see many here caution against that. These 2 programs are basically out of our control - it's too easy to get blindsided, with no legal assurances of getting anything.
You can imagine all sorts of wild future scenarios you like and act accordingly. But I suspect most folks expect future Social Security to be pretty much like current Social Security. Comparing the extremely popular Social Security program to health care rules that have only existed for less than 10 years and have been threatened with repeated repeal seems silly to me.
Guess we have to agree to disagree - doesn't seem "wild" to me at all. As a demographically aging population who didn't or couldn't save depends ever more on SS to survive, hard choices may have to be made to meet their needs.

But I don't want to send this thread on a tangent. Main actionable thing tying back to OP is perhaps consider SS in the "can I retire"? equation, but keep a little healthy skepticism about it in the back of your mind - better to be wrong than blindsided.
"Life would be infinitely happier if we could only be born at the age of eighty and gradually approach eighteen." Mark Twain

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Re: Retire at 50(ish) possible?

Post by supersecretname » Sun Nov 10, 2019 10:51 am

StealthRabbit wrote:
Sat Oct 26, 2019 11:31 pm
OP is quite light on total assets for sustained LT retirement.
Consider doubling to $1.6 - $2m
Oh sure add another million to the portfolio like it’s a pack of gum at the store.

It would require working many extra years for money that is unnecessary. If OPs expenses are what they are, tradings years of life for that unneeded cash is a waste.

Sub 3% WR are an emotional choice, and as such are often sub-optimal.

OP: if your expenses are truly accurate, you’ll be fine. Tomorrow is guaranteed to no one, and I am of the mindset of not working a day longer than is necessary.

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