Can I retire at 50?

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max12377
Posts: 293
Joined: Tue Jul 15, 2008 4:02 pm

Re: Can I retire at 50?

Post by max12377 »

Just read the thread and will follow along. I am single and close to retirement myself. It is hard to make the jump so kudos to you for taking the leap.

At the moment my job is pretty low stress so I keep going, but I know that can change at any time.

I think what has kept me from retiring so far is the crazy inflation of the past couple years. It has been pretty scary. However, when I run the numbers they look good. So much to think about.. But I do agree that time is way more important than money. I feel time much more acutely now that I am older. How many more nice summer days to I want to forego for a paycheck when I could be out on my bike.. hmmm..

Please keep us updated OP. Hope you have an awesome retirement!

-Max
YeahBuddy
Posts: 2483
Joined: Tue Oct 31, 2017 12:55 pm

Re: Can I retire at 50?

Post by YeahBuddy »

No. I would wait at least a few more years of max retirement contributions. My biggest concern for early retirement is healthcare.
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longinvest
Posts: 5672
Joined: Sat Aug 11, 2012 8:44 am

Re: Can I retire at 50?

Post by longinvest »

UU37CN13 wrote: Fri Jun 02, 2023 9:39 am UPDATE: I pulled the trigger and retired yesterday on my 50th birthday with an $830k portfolio. Wish me luck!
UU37CN13, congratulations.

Just for fun, I've entered the following into the Retirement sheet of the VPW Worksheet:
  • Information For 2023
  • Age: 50
  • Portfolio Balance: $830,000
  • Portfolio Allocation: 80/20 stocks/bonds (based on numbers in your first post)
  • Portfolio Withdrawal Frequency: Monthly
  • Defined Benefit Pension #1
  • Name: Social Security
  • Already Started: No
  • Start Age: 67
  • Monthly Payment: $2,391 (based on the first post's $2,200, adjusted with the 8.7% 2023 increase)
  • Cost of Living Adjustments: Yes
I got the following projections:
  • Annual income for 2023 available for taxes and expenses: $51,327.
  • Annual income after loss available for taxes and expenses: $32,027
I conservatively translated this into after-tax monthly income as explained in this post using the smartasset.com calculator (state: IL) to estimate taxes ($4,365 in 2023, $2,049 after loss). This resulted into:
  • (($51,327 - $4,365) / 12) = $3,914 for expenses in the current month (based on a $830,000 portfolio balance)
  • (($32,027 - $2,049) / 12) = $2,498 if the portfolio drops to $498,000 (possibly due to a -50% stock loss)
That's a ($2,498 - $3,914) = -$1,416/month (-36%) reduction in spending due to normal (even if infrequent) big market fluctuations. (See this post for explanations).

Changing, just for fun again, the asset allocation to a conservative 30/70 stocks/bonds gave me the following projections:
  • Annual income for 2023 available for taxes and expenses: $44,649.
  • Annual income after loss available for taxes and expenses: $38,605
This conservatively translates into the following after-tax monthly income:
  • (($44,649 - $3,563) / 12) = $3,424 for expenses in the current month (based on a $830,000 portfolio balance)
  • (($38,605 - $2,838) / 12) = $2,981 if the portfolio drops to $705,500 (possibly due to a -50% stock loss)
That's a significantly milder ($2,981 - $3,424) = -$443/month (-13%) reduction in spending due to normal (even if infrequent) big market fluctuations.

The VPW Worksheet is very easy to use. It can be used online (in Google Sheets) or on a computer (in Microsoft Office Excel or in the free LibreOffice Calc).
Variable Percentage Withdrawal (bogleheads.org/wiki/VPW) | One-Fund Portfolio (bogleheads.org/forum/viewtopic.php?t=287967)
Topic Author
UU37CN13
Posts: 47
Joined: Sun Jun 12, 2022 6:49 am

Re: Can I retire at 50?

Post by UU37CN13 »

longinvest wrote: Tue Jun 06, 2023 8:07 am
UU37CN13 wrote: Fri Jun 02, 2023 9:39 am UPDATE: I pulled the trigger and retired yesterday on my 50th birthday with an $830k portfolio. Wish me luck!
UU37CN13, congratulations.

Just for fun, I've entered the following into the Retirement sheet of the VPW Worksheet:
  • Information For 2023
  • Age: 50
  • Portfolio Balance: $830,000
  • Portfolio Allocation: 80/20 stocks/bonds (based on numbers in your first post)
  • Portfolio Withdrawal Frequency: Monthly
  • Defined Benefit Pension #1
  • Name: Social Security
  • Already Started: No
  • Start Age: 67
  • Monthly Payment: $2,391 (based on the first post's $2,200, adjusted with the 8.7% 2023 increase)
  • Cost of Living Adjustments: Yes
I got the following projections:
  • Annual income for 2023 available for taxes and expenses: $51,327.
  • Annual income after loss available for taxes and expenses: $32,027
I conservatively translated this into after-tax monthly income as explained in this post using the smartasset.com calculator (state: IL) to estimate taxes ($4,365 in 2023, $2,049 after loss). This resulted into:
  • (($51,327 - $4,365) / 12) = $3,914 for expenses in the current month (based on a $830,000 portfolio balance)
  • (($32,027 - $2,049) / 12) = $2,498 if the portfolio drops to $498,000 (possibly due to a -50% stock loss)
That's a ($2,498 - $3,914) = -$1,416/month (-36%) reduction in spending due to normal (even if infrequent) big market fluctuations. (See this post for explanations).

Changing, just for fun again, the asset allocation to a conservative 30/70 stocks/bonds gave me the following projections:
  • Annual income for 2023 available for taxes and expenses: $44,649.
  • Annual income after loss available for taxes and expenses: $38,605
This conservatively translates into the following after-tax monthly income:
  • (($44,649 - $3,563) / 12) = $3,424 for expenses in the current month (based on a $830,000 portfolio balance)
  • (($38,605 - $2,838) / 12) = $2,981 if the portfolio drops to $705,500 (possibly due to a -50% stock loss)
That's a significantly milder ($2,981 - $3,424) = -$443/month (-13%) reduction in spending due to normal (even if infrequent) big market fluctuations.

The VPW Worksheet is very easy to use. It can be used online (in Google Sheets) or on a computer (in Microsoft Office Excel or in the free LibreOffice Calc).
Thanks! I really appreciate the time you spent to pull thus together for me. You have definitely given me something to think about!
Topic Author
UU37CN13
Posts: 47
Joined: Sun Jun 12, 2022 6:49 am

Re: Can I retire at 50?

Post by UU37CN13 »

RobLyons wrote: Tue Jun 06, 2023 6:07 am No. I would wait at least a few more years of max retirement contributions. My biggest concern for early retirement is healthcare.
Healthcare was always the concern for me as well until obamacare. If you are don't have much income on paper, take a look at it. You will be surprised. You might pay $0 premium.
Topic Author
UU37CN13
Posts: 47
Joined: Sun Jun 12, 2022 6:49 am

Re: Can I retire at 50?

Post by UU37CN13 »

Lou SL wrote: Mon Jun 05, 2023 10:50 am
Thanks for the feedback. I've signed up for obamacare. My premium will be $170/mo for the rest of the year based upon my income of approximately 60k before I retired. My plan is to work a part time fun job next year for a day or 2 per week. Figure I can make 10k or so. Then I will do roth conversion in order to have enough income to qualify for obamacare which is about 21k of income. My premium will be zero...at least under current rules.
[/quote]

First off congratulations and best of luck with your retirement. I know it takes a lot of guts to pull the trigger but I certainly hope it goes well.

But my question is about your $170 month ACA premium for the rest of this year as that seems unusually low to me based on the roughly 60k in income you state for 2023. Which state are you in? And is your ACA plan the cheapest bronze plan the ACA offered? And what is deductible and max oop?

Thanks.
[/quote]

I'm in the great stat of illinois. Not! Property taxes are ridiculous here! I pay 3,700 for a house worth maybe $150k. But retirement income is tax free, so there's that. Anyways, yes im in the cheapest bronze plan. I believe max out of pocket is 9k. Deductible is maybe 8k. Not positive, but I can't look it up right now. The way I've always looked at Healthcare is to go the cheap premium route. If you pay higher premium to get lower out of pocket, you are locking in that higher expense. Whereas if you select lower premium, there's a chance you may come out ahead if you don't have alot of medical expenses that particular year. You never pay less all-in, with the higher premium plans.
Topic Author
UU37CN13
Posts: 47
Joined: Sun Jun 12, 2022 6:49 am

Re: Can I retire at 50?

Post by UU37CN13 »

Lou SL wrote: Mon Jun 05, 2023 10:50 am
Thanks for the feedback. I've signed up for obamacare. My premium will be $170/mo for the rest of the year based upon my income of approximately 60k before I retired. My plan is to work a part time fun job next year for a day or 2 per week. Figure I can make 10k or so. Then I will do roth conversion in order to have enough income to qualify for obamacare which is about 21k of income. My premium will be zero...at least under current rules.
[/quote]

First off congratulations and best of luck with your retirement. I know it takes a lot of guts to pull the trigger but I certainly hope it goes well.

But my question is about your $170 month ACA premium for the rest of this year as that seems unusually low to me based on the roughly 60k in income you state for 2023. Which state are you in? And is your ACA plan the cheapest bronze plan the ACA offered? And what is deductible and max oop?

Thanks.
[/quote]

I'm in the great stat of illinois. Not! Property taxes are ridiculous here! I pay 3,700 for a house worth maybe $150k. But retirement income is tax free, so there's that. Anyways, yes im in the cheapest bronze plan. I believe max out of pocket is 9k. Deductible is maybe 8k. Not positive, but I can't look it up right now. The way I've always looked at Healthcare is to go the cheap premium route. If you pay higher premium to get lower out of pocket, you are locking in that higher expense. Whereas if you select lower premium, there's a chance you may come out ahead if you don't have alot of medical expenses that particular year. You never pay less all-in, with the higher premium plans.
Lou SL
Posts: 28
Joined: Fri Oct 28, 2022 10:51 am

Re: Can I retire at 50?

Post by Lou SL »

longinvest wrote: Tue Jun 06, 2023 8:07 am
UU37CN13 wrote: Fri Jun 02, 2023 9:39 am UPDATE: I pulled the trigger and retired yesterday on my 50th birthday with an $830k portfolio. Wish me luck!
UU37CN13, congratulations.

Just for fun, I've entered the following into the Retirement sheet of the VPW Worksheet:
  • Information For 2023
  • Age: 50
  • Portfolio Balance: $830,000
  • Portfolio Allocation: 80/20 stocks/bonds (based on numbers in your first post)
  • Portfolio Withdrawal Frequency: Monthly
  • Defined Benefit Pension #1
  • Name: Social Security
  • Already Started: No
  • Start Age: 67
  • Monthly Payment: $2,391 (based on the first post's $2,200, adjusted with the 8.7% 2023 increase)
  • Cost of Living Adjustments: Yes
I got the following projections:
  • Annual income for 2023 available for taxes and expenses: $51,327.
  • Annual income after loss available for taxes and expenses: $32,027
I conservatively translated this into after-tax monthly income as explained in this post using the smartasset.com calculator (state: IL) to estimate taxes ($4,365 in 2023, $2,049 after loss). This resulted into:
  • (($51,327 - $4,365) / 12) = $3,914 for expenses in the current month (based on a $830,000 portfolio balance)
  • (($32,027 - $2,049) / 12) = $2,498 if the portfolio drops to $498,000 (possibly due to a -50% stock loss)
That's a ($2,498 - $3,914) = -$1,416/month (-36%) reduction in spending due to normal (even if infrequent) big market fluctuations. (See this post for explanations).

Changing, just for fun again, the asset allocation to a conservative 30/70 stocks/bonds gave me the following projections:
  • Annual income for 2023 available for taxes and expenses: $44,649.
  • Annual income after loss available for taxes and expenses: $38,605
This conservatively translates into the following after-tax monthly income:
  • (($44,649 - $3,563) / 12) = $3,424 for expenses in the current month (based on a $830,000 portfolio balance)
  • (($38,605 - $2,838) / 12) = $2,981 if the portfolio drops to $705,500 (possibly due to a -50% stock loss)
That's a significantly milder ($2,981 - $3,424) = -$443/month (-13%) reduction in spending due to normal (even if infrequent) big market fluctuations.

The VPW Worksheet is very easy to use. It can be used online (in Google Sheets) or on a computer (in Microsoft Office Excel or in the free LibreOffice Calc).
Hi longinvest,

Are you sure the social security calculation is how you have it above and now below?

Monthly Payment: $2,391 (based on the first post's $2,200, adjusted with the 8.7% 2023 increase

Or is that just using a back of envelope shortcut? As since OP is currently 50 I had thought his calculation(and for everyone under 60) for yearly increase in SS is done using average wage index which is not the same as CPI which is used after 60. Now I don't think the numbers will be crazy far off ultimately but I am just asking as maybe I am misunderstanding how SS calculation is made.

Thanks.
longinvest
Posts: 5672
Joined: Sat Aug 11, 2012 8:44 am

Re: Can I retire at 50?

Post by longinvest »

Lou SL wrote: Tue Jun 06, 2023 11:37 am Hi longinvest,

Are you sure the social security calculation is how you have it above and now below?

Monthly Payment: $2,391 (based on the first post's $2,200, adjusted with the 8.7% 2023 increase

Or is that just using a back of envelope shortcut? As since OP is currently 50 I had thought his calculation(and for everyone under 60) for yearly increase in SS is done using average wage index which is not the same as CPI which is used after 60. Now I don't think the numbers will be crazy far off ultimately but I am just asking as maybe I am misunderstanding how SS calculation is made.

Thanks.
Lou SL, it was just an imprecise back of the envelope shortcut (and I didn't think about the different indexing rules when doing it). I didn't use a Social Security calculator and I didn't have the OP's earnings history to fill it. My goal was to illustrate how to use the VPW Worksheet to analyze scenarios (before and after loss) and the impact of asset allocation.

Thanks for highlighting the importance of properly estimating future payments (in today's dollars) using a calculator like the Social Security Administration's Online Benefits Calculator.
Variable Percentage Withdrawal (bogleheads.org/wiki/VPW) | One-Fund Portfolio (bogleheads.org/forum/viewtopic.php?t=287967)
matthewbarnhart
Posts: 132
Joined: Sat Feb 25, 2017 3:05 pm

Re: Can I retire at 50?

Post by matthewbarnhart »

UU37CN13 wrote: Tue Jun 06, 2023 10:32 am I'm in the great stat of illinois. Not! Property taxes are ridiculous here! I pay 3,700 for a house worth maybe $150k. But retirement income is tax free, so there's that. Anyways, yes im in the cheapest bronze plan.
Unrelated to property taxes, but my wife and I are also in Illinois (Chicago).

Due to our relatively low cost of living (no car, cheap rent) and maxed-out pre-tax savings we manage to get our AGI down into the four-digit range most years.

As such, we've been paying $1/month for a (admittedly not-amazing) Silver plan while also going buck-wild on Roth conversions, which aren't taxed in Illinois as they are considered retirement income. Our Federal income tax due has been $0 for years, and state income tax is usually negligible.

Just a reminder that you should be doing Roth conversions in Illinois if you can!
Topic Author
UU37CN13
Posts: 47
Joined: Sun Jun 12, 2022 6:49 am

Re: Can I retire at 50?

Post by UU37CN13 »

matthewbarnhart wrote: Thu Jun 08, 2023 8:13 am
UU37CN13 wrote: Tue Jun 06, 2023 10:32 am I'm in the great stat of illinois. Not! Property taxes are ridiculous here! I pay 3,700 for a house worth maybe $150k. But retirement income is tax free, so there's that. Anyways, yes im in the cheapest bronze plan.
Unrelated to property taxes, but my wife and I are also in Illinois (Chicago).

Due to our relatively low cost of living (no car, cheap rent) and maxed-out pre-tax savings we manage to get our AGI down into the four-digit range most years.

As such, we've been paying $1/month for a (admittedly not-amazing) Silver plan while also going buck-wild on Roth conversions, which aren't taxed in Illinois as they are considered retirement income. Our Federal income tax due has been $0 for years, and state income tax is usually negligible.

Just a reminder that you should be doing Roth conversions in Illinois if you can!
Thanks for the tip. Yes I'm planning to do roth coversions to qualify for obamacare at the minimum. Maybe up to the 12% tax bracket threshold. Not sure.
Vanguard User
Posts: 2133
Joined: Wed May 26, 2021 5:46 pm
Location: Sugar Land, Texas

Re: Can I retire at 50?

Post by Vanguard User »

Just do food delivery after 50 for like 10 hours a week. That will get you $10k a year.

I do DoorDash now for side hustle and you get 65.5 cents a mile tax deduction too. It’s fun.
Last edited by Vanguard User on Thu Jun 15, 2023 1:23 am, edited 1 time in total.
Vanguard User
Posts: 2133
Joined: Wed May 26, 2021 5:46 pm
Location: Sugar Land, Texas

Re: Can I retire at 50?

Post by Vanguard User »

lane7068 wrote: Fri Jun 02, 2023 10:20 am You can 100%. I'm exactly the same boat with a little less cash/investments. Single guy, no kids, currently 47. Recommend sell house (as I just did mine), sell crap you no longer need. Move overseas where your dollars will go much further. Thats my plan in 3 years.

My buddy just retired from the Air Force at 43. Sold everything, moved to Thailand. Living his best life.
Beautiful Thai ladies for date?
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