Too early to retire?

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congruentsea
Posts: 8
Joined: Sat Dec 15, 2018 1:01 pm

Re: Too early to retire?

Post by congruentsea »

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

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

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

Questions:

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

Any comments are welcome, and thank you!
Thanks for posting GodenRam2030

I feel like I could have written your post. You have 100k more in your portfolio, similar aged child and 529, identical AA, lost the fire at work, BUT your house is paid off. Assuming you are not including house value in your portfolio, you look in pretty good shape to me. I am almost 56, and am now looking to downshift to minimize draw on portfolio and to keep mentally engaged. Do you want to be completely retired, or are you willing to go part time as others have suggested.

Congratulations
Metsfan91
Posts: 134
Joined: Sat Jan 11, 2020 12:33 pm

Re: Too early to retire?

Post by Metsfan91 »

You are 53/51. I think little too early. A couple of years of work for both of you should put you in better position. Your portfolio should grow, and as a result, you will be able to manage with lower withdrawal rate - about 3%.
SnowBog
Posts: 1143
Joined: Fri Dec 21, 2018 11:21 pm

Re: Too early to retire?

Post by SnowBog »

GoldenRam2030 wrote: Mon Apr 05, 2021 2:20 pm 2) We have used Firecalc and it gives us about a 90% chance of making it 40 years. Are there other calc one should use?
I'm curious what inputs you used... I plugged in your key numbers, and based on later posts added $20k in '38 and $12k in '40 for social security (complete random guess against your $32k number). I'm getting 99.1% success on 40 years: https://firecalc.com/index.php?wdamt=12 ... ersion=3.0&

And a 94.5% when I plug in the data to cFIREsim: https://www.cfiresim.com/df148db2-8fc2- ... 4c7cb6d51c

We are several years younger but similar aged child, smaller portfolio, potentially similar expenses (roughly $100k without taxes or healthcare, but I use around $135k for planning purposes leaving some room for unknown medical costs and/or extra taxes on Roth conversions). We have the benefit of higher expected social security, and some small pensions - which maybe help our estimates more than I would have thought.

But your 90% seemed awfully low to me... So I'm curious if you didn't include SS, or if I'm using these tools wrong...

For my two cents, with greater than $3M saved, and assuming you have the spending discipline to cut back if needed (bad markets), I think you've earned the right to scale back and enjoy more of life.

That said, I'd recommend getting a "plan" in place if you haven't first, specifically covering health care (do you use Cobra? ACA? Other?), penalty free access to your funds before 59.5, withdraw strategies (recommend taking a look at the VPW and it's forward test if you haven't viewtopic.php?t=284519) and potentially things like getting a HELOC (while still employed to use as an extra emergency fund if needed).

Enjoy!
SnowBog
Posts: 1143
Joined: Fri Dec 21, 2018 11:21 pm

Re: Too early to retire?

Post by SnowBog »

just1question wrote: Mon Apr 05, 2021 4:14 pm 2. I really like the Flexible Retirement Planner. It's free and downloadable.
+1

I like FRP as well. I use it in combination with others (FireCalc, cfiresim, iORP, VPW, Retirement Portfolio Model [Excel file here on BH], etc.).

But make sure to understand the inputs and outputs of these. Some (like FireCalc, cfiresim, and VPW) expect your "expenses" includes taxes. Others (like FRP, RPM, iORP) expect base expenses without taxes as they attempt to calculate those (and/or help optimize them such as with Roth conversion).
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