Financially comfortable but scared to Retire

[Desigirl]

Hello,

We are in late 40s. 2 Kids - One in college, other will leave in 4 years. Here is how our numbers look like :

Household Income : $200K+
Expenses : $25-30K (5-10K is Vacation and really discretionary , can be eliminated easily)
Investible Net Worth : $1.5 Million

We want to retire next year and continue spending $25-30K. Approximately $350K in Retirement account (Not included in $1.5 mil)  will provide annuity of $15K. We Also have interest income of $10K coming in every year for next 4 years , then capital will be used for College expenses of younger child.

4 years down the road once we are empty-nesters we want to take start withdrawing 3-3.5% of the portfolio and use that along with annuity (approximately $60K per annum income) to start a nomadic life-style for next 10-15 years and then slow down whenever we feel like.

We live in a developing country so medical is self insured but we will take $500K travel / medical insurance while on road.

Even though values look OK but our income and saving potential is extremely high for our country. We are probably in top 0.5 % in terms of income. Anybody who we present this plan to in our friends / family / colleagues would consider us to be completely crazy. We would not find a single person we personally know to support this plan. So this scares us, we are nervous if we are making a life-altering mistake. So good time to get opinion of strangers on Internet :-)

Any ideas, suggestions, thoughts , critique appreciated.

Regards,
DesiGirl

[Bucksandreds]

If even half of your investible money is in US equities then you should have nothing to worry about. Having said that, I don’t know your country nor it’s political/economic situation. It’s not reasonable for Americans to give FIRE advice to people that live in 2nd or 3rd world countries. Hyperinflation, confiscation, war,etc, etc have effected wealth accumulation for centuries in developing countries. If your country is like Costa Rica then you’re probably good. If it’s like Argentina then maybe not.

[Accidental Fire]

Yes, many/most people would consider it crazy to retire in your 40's.  But you have to do what your heart is telling you.  If you don't want to work full time anymore and want some of your time back, then you have to go for it and ignore what others think of you.   You can't buy more time, they'll figure that out one day but you know it now.

[Desigirl]

Thanks for your responses Bucksandreds and Accidental Fire.

Country is India so high inflation yes but Hyperinflation - never so far ( Our personal inflation rate with growing kids has been 6% pa for last 12 years). No incidents of confiscation or impacting war. High growth rate to go with higher inflation so real return of  4-5% I think. 35% Exposure to US Equities.

Yes in Indian culture most people retire at 60 and look for another job to stay busy so ER is very weird concept. Apart from that In a country of 1.4 Billion people less than 100K legally claimed to make > $140K . ( According to Income Tax data) so this kind of income is extremely high and with moderate life-style savings potential even more so. People would literally try to beat some sense into us. Its a matter of finding balance between money and time. We can comfortably live on 20K and 1.5 Mil folio will generate 60K income at 3% rate. ( + 15K from SEPP ).

[Bucksandreds]

From knowing several families of people with Indian heritage and talking with them I would feel comfortable retiring in India with $1.5 million. I also understand the culturally typical Indian expectation for professional and financial success so I also understand the reactions that you’re receiving. I will leave you with something to ponder. What would bother you more, knowing that people close to you might talk privately about you being lazy and foolish or missing out on chance to live your dream? I’m not suggesting that in every instance the answer to that question is the same.

[CowboyAndIndian]

Desigirl, go for it!

At $1.5M in your FIRE fund, you can generate $60k/year. Which is well above your spend rate.

Yes, Inflation in India is high, but it is going to have explosive growth in the next 20 years. Think about China in the late 90's. in your portfolio, I assume 65% is in Indian funds and 35% in the US. That is hedging your bets since my expectation is that portfolio returns from India are going to be larger than that from Europe and US.
So, if you own your own home, you are going to do well.

Being of desi origin, I can imagine the pressure you will go thru when you talk about RE plans with your family.

Keep us updated!