Author Topic: Do I have enough to Retire? Advice and Recomendations are welcome!  (Read 1608 times)

My Financial Journey

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Hello everyone,

I'm looking for advice and input in reference to my financial goals. More specifically, I want to retire this year. So, with that said, please review my finances/goals and give me some feed back, good, bad or indifferent. Over the last 14 years I've increased my net worth from $375 to over $400,000. I'm looking to retire soon, so I can enjoy the fruits of my labor. Moreover, I'm really looing forward to having free time and doing all of the hobbies and things I've put off for the last 30 year of my working career. So, I'm querying everyone for advice on my finances to ensure that I'm heading in the right direction. Thanks in advance!

Personal Data
 46 years old
 Divorced/no children
 Salary of $37,000
 I live in South East Asia and plan on remaining here after retirement
 My monthly expenses are $1,600

Finances
 Taxable Brokerage Accounts $179,800 (60/40 split stock and bonds)
 Retirement Accounts TSP/Roth/Rollover $242,800 (60/40 split stock and bonds)
 At age 58 I will receive a defined benefit retirement of $2,900 per month
 I will draw Social Security at 62 at $1,100 per month
 My net worth is $420,000
 I have no debt

Facts/Assumptions
 If I retire now, I have 11 years until I can draw my defended benefit of $2,900 per month
 I will have to self fund 11 years of retirement until I receive my defined benefit
 I estimate my monthly expenses will remain about the same at $1,600
 I plan on renting and not owning a property overseas (rent is included above)
 I will purchase for an expat health insurance policy

Questions
 1. In my financial situation, would you feel comfortable leaving your job and retiring?
 2. If no, please explain why.
 3. Do you see any pitfalls or holes?
 4. Can you give any advice or shoring up my finances?

 I think I'm in pretty good shape, but I just need some reassurance before making the leap. Any and all constructive input is welcomed.

 Thanks again for your help.

 Paul




sokoloff

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #1 on: May 20, 2018, 05:39:01 PM »
Facts/Assumptions
 If I retire now, I have 11 years until I can draw my defended benefit of $2,900 per month
 I will have to self fund 11 years of retirement until I receive my defined benefit
 I estimate my monthly expenses will remain about the same at $1,600
 I plan on renting and not owning a property overseas (rent is included above)
 I will purchase for an expat health insurance policy

Questions
 1. In my financial situation, would you feel comfortable leaving your job and retiring?
 2. If no, please explain why.
 3. Do you see any pitfalls or holes?
 4. Can you give any advice or shoring up my finances?
1. I would not, but my expenses are well above $1600/mo. (That about covers my property taxes, utilities, and [other than health] insurance...)
3. Does the $1600/mo include the cost of the expat health insurance?
4. If you really can keep your expenses to $1600/mo including insurance, you're in fine (not great, but fine) shape. Your investments could give you a bit over $1100/mo indefinitely and you only need to bridge the $5-6K/yr gap for 11 years. Your investments are likely to more than cover that on their own, but in a multi-year bear market, you may need to trim back on spending some, or take some part time income-generating work.

If your expat insurance is $1000/mo on top of the $1600, that's an entirely different ballgame. Make sure you get that squared away before making the leap.

2Birds1Stone

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #2 on: May 20, 2018, 05:48:38 PM »
My only concern would be higher than normal inflation in SE Asia.

How hard would it be to get a job even part time to survive some sequence of returns risk or ultra high inflation period?

Is the pension adjusted for cost of living increases?

My Financial Journey

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #3 on: May 20, 2018, 06:05:29 PM »
Yes, the defined benefit has a COL adjustment.

The expat insurance will be about $90-110 UDS per month.

I assume the inflation rate in SE Asian will be between 2-4% per year.

Thanks,

Paul

lhamo

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #4 on: May 20, 2018, 06:23:59 PM »
I think your assumptions about inflation are a bit too optimistic.  I lived in China from 2002-2015.   I'm not sure what the official inflation statistics were, but our real-life spending on the basics probably went up about 8-10%/year, or roughly the official growth rate of the economy.  Most SE Asian economies are still in a growth phase, so I would predict much more rapid inflation, similar to what China experienced.

Freedomin5

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #5 on: May 21, 2018, 04:21:25 AM »
Will your expat health insurance policy premiums increase as you age? Or have you factored that in already?

Are you going to remain in SE Asia until you die? In China, they kick us expats out at age 55 (for women) and I think age 60 for men (by not renewing our visas). If you donít get your visa renewed, and have to go back to your home country, will you have enough to live?

I probably would retire in your position but I would also make sure I have a back up plan(e.g. tutoring English) if anything went wrong.

Rubic

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #6 on: May 21, 2018, 02:23:34 PM »
Is there any reason you wouldn't consider deferring SS benefits until later,
beyond age 62?  Waiting until age 67-70 might help with some of the potential
issues others have responded to in this thread.

https://www.kitces.com/blog/the-asymmetric-value-of-delaying-social-security-benefits-as-the-ultimate-hedge/

https://www.kitces.com/blog/how-delaying-social-security-can-be-the-best-long-term-investment-or-annuity-money-can-buy/

marty998

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #7 on: May 21, 2018, 03:32:44 PM »
My only concern would be higher than normal inflation in SE Asia.

How hard would it be to get a job even part time to survive some sequence of returns risk or ultra high inflation period?

Is the pension adjusted for cost of living increases?

Yes but since his investments and pension are in USD, inflation doesn't matter much because his USD investments will be worth more when he converts it back to the currency of the SE Asia country he is living in.


lhamo

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #8 on: May 21, 2018, 04:02:16 PM »
My only concern would be higher than normal inflation in SE Asia.

How hard would it be to get a job even part time to survive some sequence of returns risk or ultra high inflation period?

Is the pension adjusted for cost of living increases?

Yes but since his investments and pension are in USD, inflation doesn't matter much because his USD investments will be worth more when he converts it back to the currency of the SE Asia country he is living in.

Not necessarily true. In addition to local price inflation, we were hit hard by currency rate changes in China ~ went from 8.2 RMB to $1 to under 6.0.

ThaiSmile

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Re: Do I have enough to Retire? Advice and Recomendations are welcome!
« Reply #9 on: May 22, 2018, 07:14:49 AM »

Personal DataMy monthly expenses are $1,600 (=19,200/year)

FinancesMy net worth is $420,000 (=16,800/year @ 4% withdrawal rate)

Facts/Assumptions I will have to self fund 11 years of retirement until I receive my defined benefit

Questions
 1. In my financial situation, would you feel comfortable leaving your job and retiring?
TS>> In one word: NO. If you look above at your desired spend (19.2k/year), you would be way exceeding a 4% WD rate (16.8k/year). Unless the market goes UP UP UP in the next 11 years, your nest egg will have shrunk too much, especially on a 60/40 AA split.
 2. If no, please explain why.
TS>> In addition to the above point, you are cutting it razor thin. I live in SEA as well (Thailand) and plan to retire here, and I am personally risk averse to getting caught in a difficult situation in a foreign country. Remember, when you quit you will lose your employment visa and working will be a risk. Yes, you can always get an Internet-based gig, but know the limitations.
 3. Do you see any pitfalls or holes?
TS>> You don't say which country, but likely at age 46 you will not qualify for any retirement visas. Most countries like Thailand require age 50+. If you end up having to live on a short-term visa, you might end up making expensive visa runs.
 4. Can you give any advice or shoring up my finances?
TS>> You have done well to get to where you are. I am not really going to give financial advice, but I would recommend to check out the retirement visa requirements for the country you are targeting to retire. If it happens to be Thailand, I would recommend you buck it out until 50. It will give you a bit more time to bump your nest egg to a point where 4% WDs are possible and closer to getting your DB payout.
Hi Paul, Congratulations on getting to where you are. Not easy to do on a modest salary. You are clearly looking to LeanFIRE, so you might be interested in this guy living in Chiang Mai, Thailand (https://fourletternerd.wordpress.com/). I have embedded my views in the post quote above. Good luck.