mobileagent wrote: ↑Wed Apr 07, 2021 2:46 pm
I am seeking some guidance from many seasoned Bogleheads in this forum on my retirement plans. Here are some details about me:
: Age 47, DW Age 43, 2 kids - 16, 12 years of age. Kids are expected to attend college in 2 and 6 years respectively. DW is a stay at home parent. We live in US coast and are US citizens.
: Total assets of $5.3M without any debt (Home - $1.6M, Taxable investments - $1.6M, Tax advantaged - $1.4M, International real estate - $0.7M)
: We expect the annual cost to be $90K including the health insurance. The upcoming college expenses can vary a lot, but we are prepared to set aside $400K in today's dollars.
: I work in a tech company with an annual compensation of $500K-$600K. The job is OK with enough political issues, long hours, and stress. It can be draining at times. I would not be in this job if I am not getting compensated this well.
Now, let me share more details about current thinking around retirement plans.
: I want to make sure that we enjoy the life while our bodies are still in a decent shape. We are already seeing some body pains that can limit our mobility as we age past sixty. The work stress is making me grumpy. I would like to spend more time with kids while they are still at home. DW and I enjoy our time together and doing simple things like cooking in a relaxed environment without stress. We also like to spend some time with our parents while their faculties are still in a good condition, who live in Asia. Once both kids are out of the house in 6 years, we would like to downsize/sell the current house and spend a few years travelling. We have an apartment in Asia which could also be used as a base so that our expenses are even lower. If money is not an issue, I would quit today, but want to be sure that our plans are sound.
: Here is the current thinking
- Retire in 2021 after saving additional $200K.
- Live in the current house for next 7 years until both kids leave for college.
- Prepared to spend $400K in today's dollars on kids education. Actual cost may vary.
- Health insurance is through ACA.
- Sell the current house in 7 years. Invest the proceedings in taxable account. Move to the apartment in Asia.
- Live in Asia in our paid off apartment and travel once a year to US; Alternatively pay for kids flight tickets for them to visit us.
- While in Asia, let the investments grow in US accounts for 10 years while the expenses are $50K a year.
- After 65 years of age, return to US. Buy a smaller house in US (<=$500K), ideally closer to at least one of the kids
- Spend traditional retirement years closer to kids and grandkids. Leverage Medicare and social security withdrawals after 67
I am ignoring the possibility of coming back to workplace in this evaluation. If our Asia plan doesn't work out, we could move to a LCOL town in US where our annual expense will still be lower than $90K in current dollars. I really appreciate your feedback on whether I am ready to retire this year without taking big risks or scarifying lifestyle for the family. Thank you!
You've got the money.
If it were me, on that kind of compensation, I'd aim for age 50 BUT that time can always move out and the lost time with your younger child, especially, is just gone forever.
Where do you want to retire to? Where are you happiest living?
That's really your key question.
Because for my Mum, who has occupied same house for over 60 years, it was to be in that 'hood. In which time, value of her house has risen by bout 90 times (not adjusted for inflation). It's gone up something like 4% real every year over the past 60 years (with at least 3 property crashes in that time). But as the area has become more affluent, it is less neighbourly (although still very much so compared to most comparable 'hoods of $2m per house) -- the younger inhabitants are 2 career couples, don't have the same time to just stop and chat, etc. Families are smaller so there are fewer kids playing ball hockey on the street etc.
I think that's the hardest thing to plan on - other than your health & health insurance. (and investment returns, of course).
You might find "home" in Asia too changed to enjoy it (Hong Kong comes to mind). So after a year or two, you might be hankering to move back to America.
There's a big difference, particularly if your origins are international, between high cost of living "coastal" places in America like California or New York or Boston, than Lower Cost of Living places. Which doesn't mean there are not nice places to live that are lower COL but you want to be sure you really want to live there. Rent for a year and make sure you see all 4 seasons - there are places in Florida which are the 9th circle of Dante's Inferno (Hell) in summer or during college Spring Break time.
The house is not a good "investment" as such, despite past performance, due to all the usual reasons. Property taxes, maintenance etc. But, as a way of preserving your opportunity to live in that area again, it has value.
Assuming you are of the male gender, it's quite possible for your spouse to live to be over 100, these days.
Andrew Scott and Lynda Gratton's "The 100 Year Life" is quite thought provoking in this regard.