Author Topic: Best steps now to retire @ 55yo?  (Read 14361 times)

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Best steps now to retire @ 55yo?
« on: January 20, 2014, 07:21:55 PM »
Given the info below, what are the best steps I can take so I can retire in May 2015? Spouse will keep working, and we should be able to live on that salary alone.

Current age = 53.75

Income: me = $122K + annual bonus with target of $134K
             Spouse = about $60K

Current debt: me = $0
                     Spouse = some credit card debt, won't tell me total but should be <$10K

Updated 1/28/2014 re: 401k & 403b account values.  Also carried pension benefit value = $2300/month as of 12/31/2013

Current expenses: $25 - $50K/yr needs, more spent on wants (aka not saving everything over this)

Expected ER expenses: about the same as current.

Assets: me = 401k w/ $463k, previous 403b w/ $107K, managed investment acct $27K, CDs $10K, cash $210K, just started a health savings account at work (for retirement med option), life insurance that can be converted to an annuity (not sure of annuity value at this time)
House is paid off (no mortgage as of May 2013)

Liabilities: Spouse's credit card debt

Specific Question(s): Insane to consider retiring at 55?  What are the best steps I can take now to be able to retire ASAP?
« Last Edit: January 29, 2014, 07:39:50 PM by G-dog »

AccidentalMiser

  • Pencil Stache
  • ****
  • Posts: 659
  • Age: 51
  • Location: SE Tenn
Re: Best steps now to retire @ 55yo?
« Reply #1 on: January 20, 2014, 07:35:05 PM »
If your spouse is going to keep working, you can quit now!

You can get into your 401k without penalty at 55: http://www.forbes.com/sites/advisor/2012/05/09/did-you-know-you-can-access-your-401k-penalty-free-at-age-55

If you're going to keep working for a couple of years, max out your retirement and other savings.  Verify that your spouse doesn't have any scary debts hanging out that you don't know about.  Also, make sure your spending stays under control.

Do you rent or own your home?

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #2 on: January 20, 2014, 08:06:35 PM »
Thank you for your suggestion.  We own our home as of May 2013.  We have 2 cars, paid off.

One concern I have is my perception that I have to do all the saving for both of us.  Spouse was warned at least a year ago that I don't think I can keep working in this role long term.

And, of course, possible medical costs are a big boogeyman out there!  Right now, I have no med issues, and I would think the reduced stress would only improve the scenario!

Do you have thoughts on what to do with the large amount of cash (which gets a little 'interest' via two rewards checking accounts I am juggling)?  Other than my 401k, I haven't started an 'account' I manage - thoughts on vendor for index funds?

I am maxing out my 401k, and getting 6% employer match.

frugaldrummer

  • Pencil Stache
  • ****
  • Posts: 655
Re: Best steps now to retire @ 55yo?
« Reply #3 on: January 20, 2014, 08:53:56 PM »
Quote
Current debt: me = $0
                     Spouse = some credit card debt, won't tell me total but should be <$10K

Red flag!  Red flag!  Your spouse won't tell you what her credit card debt is?  What kind of marriage do you have???

Before you assume its <10k, I'd find out - for real.  Imagine if you retired and found out her credit card debt was really $50k?  Or 100k?  Sounds ridiculous, but this sh!t happens  - women with shopping additcions can get real sneaky about hiding it from their husbands.

If her credit card debt is less than $10k, why wouldn't she show it to you?  And with $200k in cash lying around, why wouldn't you pay it off?

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: Best steps now to retire @ 55yo?
« Reply #4 on: January 20, 2014, 10:18:25 PM »
I agree with Frugal drummer that you should know what your spouses credit card debt is, and with accidental miser that you should ask about other debts. But since you are asking for financial, not marital advice let's address your questions and add some more:

1) It's not insane to consider retiring now, or in 1 year. You have $625K and that will last quite a long time if you invest it appropriately.
2) What to do with cash - make catch up 401K/IRA contributions if you qualify (55 years old might be the cutoff). Open an account at Vanguard and put a large chunk (60-80% of that into a stock index fund). Keep the remainder in cash/bonds for ongoing use when you do retire, and make sure you maintain whatever allocation you decide is appropriate.

My questions: 1) Do you keep separate finances from your spouse? I ask because you didn't mention any assets for your spouse. Has he/she saved anything yet, and will you have access to it? 2) Why do you have life insurance, and what type is it? If you have dependents (other than spouse) you might want to keep it. Otherwise drop the coverage and if there is any cash benefit take it out and add it to your Vanguard account.

If you keep separate finances and this is all yours, plus a paid off mortgage, retire yesterday. $625K *4% = $25K/year. With no mortgage, and if this is all yours you should be just fine. Add in social security in 8-12 years and you have a very nice safety margin. You mentioned spouse will keep working and you will live off that income, which makes this an even sweeter deal, but that also implies shared finances so the $625K is not all yours.

Khan

  • Pencil Stache
  • ****
  • Posts: 616
Re: Best steps now to retire @ 55yo?
« Reply #5 on: January 20, 2014, 10:27:01 PM »
Why oh why do you have 210k in -cash- cash? That's insane.

If you want to manage property, then put it towards that. Otherwise, that needs to be put into assets over the 1-2 years. Bonds, stocks, ROTH funding. Diversify it. Ladder some of it to ensure access to it when you need it.

Anything but -cash-.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #6 on: January 21, 2014, 07:38:35 PM »
@Khanjar - I agree, too much cash!  My fault, this is stupid but it just sort of happened.  I changed jobs which increased income 13 years ago, my mom also died in that time frame and I inherited everything, which wasn't much ( ~ $60K once her house sold).  We had bought a house a couple of year 's before, had car payments, etc. so I kept cash for flexibility/ emergency.  My job move also created a series of pay increases and bonuses that let me save more money.  We wanted to do some renovations on the house, I spaced those out and paid cash (no refinancing, etc.).  My husband considered changing jobs - again, I kept cash.  20:20 hindsight shows I missed LOTS of chances to invest.  Also, I just didn't know where/how to invest outside my work beased 401K (which I've maxed out since starting).  I was concerned about either tying up money or losing money.

@Cheddar Stacker - yes, my spouse's debt is a sore subject, and I do need to have the difficult conversation without sounding preachy.  We do have separate finances, I saw during dating our different behaviors and philosophies and so we never merged finances, not even a common bank account or credit card.  I meet with the agent re: insurance this week.  It is a non- standard policy that I bought for investment purposes.  They don't sell this policy type anymore.  More details end of week.  It can be converted to an annuity, so may be worth keeping.  No kids, and working spouse, so I don't need life insurance (IMHO).

@frugaldrummer - we have an imperfect but relatively solid marriage.  Like lots of folks, $$ is a touchy subject for us, so I want to be careful to approach with care.  Now, you challenged my marriage - I get to challenge your assumptions - my spouse = HE (not she) is the grasshopper to my ant re: finances. Guys find things to buy too - overspending is probably a pretty gender neutral trait.  But I agree there is some "red flag" (or at least yellow flag) elements at play.  I don't pay off his debt because our $$ is separate and I have paid almost all " common" bills over the years.  I have in the past offered to pay IF I got control of his paycheck in the future, but he passed on that option (May have been a good idea vs. fights in the future).

Any recommendations other than Vanguard?  Too bad Bogle left... But my thought it to follow his (and Cheddar Stacker's) advice re: low fee index fund(s)

iwasjustwondering

  • Bristles
  • ***
  • Posts: 436
Re: Best steps now to retire @ 55yo?
« Reply #7 on: January 21, 2014, 08:06:09 PM »
Does your husband have any savings, or are your retirement vehicles meant to fund retirement for both of you?  My first thought of course was that the credit card debt could be much higher than $10K, but I see that's already been covered.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #8 on: January 21, 2014, 08:25:07 PM »
Husband has started a savings account in the last few years.  I doubt there is much in there <$5K is a guess.  He does have a work retirement/ pension plan.  When I ask if he is paying in extra, I haven't gotten a clear answer.

Over time, when I have noticed he could afford a new significant purchase, he also got another household bill - so I've been moving the bills to him over time, but always kept the big ones of mortgage, gas/electric, and insurance. 

It is probably time to sit down to collect all the data under the auspices of retirement planning. 

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: Best steps now to retire @ 55yo?
« Reply #9 on: January 21, 2014, 09:35:16 PM »
G-dog, I have another thought for you if you don't mind since you're looking for ways to optimize for early retirement:

I once asked a financial advisor that I really trust to "Sell me" on the idea of an annuity because someone I know was considering getting into one and I had mostly negative feelings/knowledge about them. The advisor said: I can't sell you on the idea, because I can't advise any of my clients to buy them. How can I sell them something that gives me an up front commission of 8-16% when I typically earn around a 1% commission on mutual funds. They can't be in the best interest of my clients if they can afford to pay me that amount.

Please re-read MMM's post about insurance being a tax on people who are bad at math (no offense intended, I'm sure most of us have over-insured and I know I have). I understand the security annuities seem to provide (they are an insurance product after all), but all you are doing is paying the insurance company a very large commission to take on the inherent risk in the stock market rather than you handling that risk. I also understand, and I hope you do, that a financial advisor who openly encourages people to purchase annuities either doesn't understand, or doesn't care why it's not in the best interest of their client. If it's something the advisor is pushing hard for, it's likely in their best interest, not yours. If you are really wanting to do this, that's a different story and they will likely not try to talk you out of it.

If that's what you ultimately decide to do, never look back, but I'd run the numbers on all your options before you decide on anything. You'll likely come out way ahead by cashing out the value of that policy, investing it in an S&P 500 index and earning 7%/year on average over the next 30-40 years of retirement.

Good luck having "the talk" with your husband.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #10 on: January 22, 2014, 07:00:51 PM »
@cheddar stacker: thanks for your thoughts, I may very well be engaged in a sunk cost fallacy here.  I will check on fees, terms, rules, options, etc.  as well as the return so far.  In my first job, with some student loan debt and low-paying job in early 80's this was the only 'investment' I found where I could pay each month vs. already having a nest egg of thousands of dollars.

Live and learn...

davisgang90

  • Handlebar Stache
  • *****
  • Posts: 1255
  • Location: Roanoke, VA
    • Photography by Rich Davis
Re: Best steps now to retire @ 55yo?
« Reply #11 on: January 23, 2014, 04:30:01 AM »
I see some red flags with a plan to rely on a spouse's income which is half of yours with the unknowns of debt/current spending of said spouse.  Sounds fraught with peril.

Could you get a less stressful job that doesn't pay as much and make that work?

Long term, you and your spouse need to be on the same page with regard to spending or you will have many problems.  Time for a long talk about priorities and plans.

My wife and I each get a generous allowance to spend however we want.  It has to cover any meals I buy at work (consequently I bring my lunch).  Works for us.

quilter

  • Stubble
  • **
  • Posts: 149
Re: Best steps now to retire @ 55yo?
« Reply #12 on: January 23, 2014, 05:02:44 AM »
What does your spouse expect you to contribute once you are retired?  How much do you contribute now?  Are there expenses that will go down if you retire?

For instance, many people find that commute costs, dry cleaning, lawn mowing, housecleaning, house repair, and food costs go down.  Maybe you have a hobby that will increase your costs.  Are you willing to do mustache an things like bike, use the library and have Frugal energy use? Or maybe being home you will want to eat out more or get an expensive gym membership.

you need to track all your expenses to determine how much you really spend. There is a huge difference in a budget of $25,000 and $50,000 and how much you need for each lifestyle.   If you  really spend $25,000 I think your money stash would be much higher with almost $200,000 in income. You have a year and a half to figure this out, and with your high salary you could significantly add to the pot.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #13 on: January 27, 2014, 07:14:10 PM »
Re: life insurance/annuity
Cash value = $69k
Death benefit = $209k

4.5% guaranteed return
Purchased in 1989
Flexible universal life policy
Features of whole life and term life
I can also convert this to a different account, sounds like there are more than one option here. The agent mentioned some fund where you invest for 1/2/5 years - at the end if the period they assess the performance of each element of the mix, drop the lowest performer out of the calculation, average the rest then take 20% of the gain as fees! the you cycle through again.  The agent made it sound like you cannot lose as the "loser" is always out of the calculation, but RED FLAG - if it sounds too good to be true, it is!  He made it sound like you would never lose $.

The agent is having some scenarios run and getting answered to questions on max can pay into rider and fees (if fees are flat, I can increase the rider to the max and functionally decrease the expense ratio).

I just pulled together a spreadsheet of cash (bank accts, CDs, managed funds), retirement accounts, and other.  I plan to pull the same for my husband and also start specifically tracking my spending.

I also am going to put $$ in index fund(s).

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: Best steps now to retire @ 55yo?
« Reply #14 on: January 27, 2014, 08:49:56 PM »
You don't have any real need for life insurance. If you're still paying premiums that should factor into your decision as to how to proceed. If I were paying premiums on this I would cash out the policy right away. If I were no longer paying premiums and just letting the cash value grow I wouldn't be as concerned, but you could likely do better.

The new fund your agent mentioned sounds overly complicated, and the fees sounds silly. If you put the $69K cash value into an index fund with a 0.25% fee you would only pay a fee of about $175/year. If you put it in that fund and it made $1,000 the 20% fee would be $200/year. And a $1K return on a $69K investment is only a 1.45% gain, so this is a very conservative estimate of what the fee would be. If the $69K made a 7% return ($4,830) your 20% of gain fee would be $966 vs. the $175 index fund fee.

It's a no brainer to me. Cash it out, and dump it in an index fund. It WILL lose value at times, but it will be worth a lot more in 5/10/15 years than your cash value of the life insurance, or any other investment vehicle the agent wants to sell you. The agent doesn't appear to have your best interest in mind.

curler

  • Stubble
  • **
  • Posts: 111
Re: Best steps now to retire @ 55yo?
« Reply #15 on: January 27, 2014, 10:39:34 PM »
I'm going to be slightly contrarian to what has been said here, and say you very well might want to keep the life insurance.  I don't know exactly what product you have, but I the product I am familiar with has 2 things going for it:
1.  It is all front-load, you pay the fees when you contribute money (you but in $1.00, they add $0.90 to your account).  At this point, you have already paid those fees, so cashing out doesn't save you anything in that regard.
2.  They have ridiculously high (by today's standards) interest rates.  Guaranteed returns of 3-5%, for product that were bought in the high-interest rate environment of the 70's and early 80's.  There is nowhere else that you can get that kind of risk-free return.
At least to the extent that you would have cash in your asset allocation, this might be a good vehicle to hold it in.

 Of course, you will want to look closely at what your plan says (and I agree with Cheddar Stacker, that new investment product sounds crazy).

oldtoyota

  • Magnum Stache
  • ******
  • Posts: 3141
Re: Best steps now to retire @ 55yo?
« Reply #16 on: January 28, 2014, 06:15:10 PM »
Hm...spouse was "warned" you can't keep your job long term, and spouse won't tell you their credit card debt?

I think you have some other issues that need addressing.

Aside from the above, what about if your spouse dies? Can you live without that income if you cancel life insurance? What if your spouse leaves you? What if the cc debt is higher than you think?



« Last Edit: January 28, 2014, 06:18:15 PM by oldtoyota »

oldtoyota

  • Magnum Stache
  • ******
  • Posts: 3141
Re: Best steps now to retire @ 55yo?
« Reply #17 on: January 28, 2014, 06:17:08 PM »
Quote
Current debt: me = $0
                     Spouse = some credit card debt, won't tell me total but should be <$10K

Red flag!  Red flag!  Your spouse won't tell you what her credit card debt is?  What kind of marriage do you have???

Before you assume its <10k, I'd find out - for real.  Imagine if you retired and found out her credit card debt was really $50k?  Or 100k?  Sounds ridiculous, but this sh!t happens  - women with shopping additcions can get real sneaky about hiding it from their husbands.

If her credit card debt is less than $10k, why wouldn't she show it to you?  And with $200k in cash lying around, why wouldn't you pay it off?

WOW. You are assuming the debt belongs to a woman? And it's caused by shopping? Talk about red flags...

OP did not mention gender, but you sure made some assumptions.

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: Best steps now to retire @ 55yo?
« Reply #18 on: January 28, 2014, 06:45:05 PM »
Hm...spouse was "warned" you can't keep your job long term, and spouse won't tell you their credit card debt?

I think you have some other issues that need addressing.

Aside from the above, what about if your spouse dies? Can you live without that income if you cancel life insurance? What if your spouse leaves you? What if the cc debt is higher than you think?


It seems like OP will have a very healthy financial situation without the income or life insurance proceeds from spouse. G-Dog is the frugal one with the large nest egg. Spouse is simply continuing to work because spouse can't afford to retire on his own. They have separate finances, but for some reason spouse's income would fund expenses which is a bit confusing, but it's also not really necessary for OP.

Regarding the Credit Card Debt, if OP has no idea how much it is, then OP is likely not listed on the credit card. This is not OP's responsibility during the spouse's life, or the spouse's death. I agree there are some issues here, but I think G-Dog is fine retiring very soon.

Also OldToyota, I agree on your other recent post about assuming spouse was a woman. I've made this mistake before on this forum and I'm always very careful now when reading/writing to avoid this in the future. Quite frankly it's sexist and embarrassing, and I'm a man so it shouldn't be offending me, but somehow it does. I think the "default" men have that the woman is the spender is just plain wrong in many cases, so I hope the fellas all start to see this.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #19 on: January 28, 2014, 07:06:33 PM »
Hm...spouse was "warned" you can't keep your job long term, and spouse won't tell you their credit card debt?

I think you have some other issues that need addressing.

Aside from the above, what about if your spouse dies? Can you live without that income if you cancel life insurance? What if your spouse leaves you? What if the cc debt is higher than you think?

Well, I can keep my job long-term (as far as I know), I just don't want to.  I am a bit burned out and more than disappointed in the current dept leadership.  If i can get myself in a good financial position, 'retiring' (from this job) becomes a rational / not bad choice.  Continuing to work is always a choice, as is leaving.  Thanks to everyone for challenging assumptions, identifying gaps, pointing out sloppy thinking, and sharing expertise.  I needed an objective gut check on whether I was/am fooling myself.  This all makes me feel more in control of my destiny, which makes staying in my job less onerous (at least most of the time), it also gives me a better defined goal to work toward.

foobar

  • Pencil Stache
  • ****
  • Posts: 731
Re: Best steps now to retire @ 55yo?
« Reply #20 on: January 28, 2014, 07:20:54 PM »
1) figure out that budget and make sure your husband is ok with it. Otherwise your going to have a constant irratant. And divorce will destroy your finances.

2) Save a ton of cash over the next 18 months.  You should be able to save like 75k+ over the next 18 months if your budget estimates are right.

3)figure out an investment strategy. You are going to need cash for 30+ years.  I will pimp out vanguard and suggest buy a target date fund (pick one well past your retirement age. I use 20 years but I plan on living a long time) and dollar cost average into it. Not the perfect system by any stretch but it is a simple one.

Will you be able to retire? Sure your good until your husband retires/dies. At that point will you have enough income to generate 50-60k (in todays dollars) to cover your high end estimate? Your savings would be good for like 25k today which might not be enough. But if your hubby works for 10 years and you don't have to touch this money then you have a chance for it to double which should be close to what you need. And then at some point you should get SS. You would have to go online to try and figure out what that would be worth (and how much you lose by not having 35+ years of service).

And finally you need to talk to the husband about this. One person retiring while the other one keeps working could make someone cranky. For example he might think that is reasonable that you both keep working til your 60 and then you both retire. It is easy to pretend that you both have separate finances and since you can cover your half, your good to go but that is an illlusion. You are partners and your lives are intertwined.

Given the info below, what are the best steps I can take so I can retire in May 2015? Spouse will keep working, and we should be able to live on that salary alone.

Current age = 53.75

Income: me = $122K + annual bonus with target of $134K
             Spouse = about $60K

Current debt: me = $0
                     Spouse = some credit card debt, won't tell me total but should be <$10K

Current expenses: $25 - $50K/yr needs, more spent on wants (aka not saving everything over this)

Expected ER expenses: about the same as current.

Assets: me = 401k w/ $300K, previous 503b w/ $80k, managed investment acct $27K, CDs $10K, cash $210K, just started a health savings account at work (for retirement med option), life insurance that can be converted to an annuity (not sure of annuity value at this time)
House is paid off (no mortgage as of May 2013)

Liabilities: Spouse's credit card debt

Specific Question(s): Insane to consider retiring at 55?  What are the best steps I can take now to be able to retire ASAP?

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo? Update
« Reply #21 on: May 30, 2014, 07:58:09 PM »
In April I finally started moving some cash into Vanguard funds. I moved $40K in April, $20K each into VFIAX and VTSAX, each is now at ~$21.5K. Today I got $20K in VIMAX, $10K in VFICX, and $10K in VSMAX.  I am just guessing here, these are my attempts to have some diversification, and keep fees down.  Some funds have a minimum of $50K to get the Admiral fund reduced expense ratio. I can't quite pull the trigger to sink that much in one place yet.  It's probably more an emotional issue than rational... I welcome any comments and ideas to improve my "strategy".

I've also been working on tracking expenses, including everything I spent on a recent vacation. I don't have my husband's data on what he spent, some I can estimate.  I can post a summary if folks would be interested.


G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo? - update - 1 year later
« Reply #22 on: January 29, 2015, 06:33:06 PM »
Update - 1 year later
Ok
Tracked expenses for last year - spent about $1200/ month
Moved some cash into investments
NW over 1M
Collecting data on 'retirement' benefits from current job

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #23 on: January 29, 2015, 06:38:57 PM »
And from the NW increase thread:
End 2013: about $822000
End 2014: about $1015000
Change: about $193000

Finally did some work to update my tracking sheets I just started this year. The above does not include house in the total (the value of which is not going to change drastically).

h2ogal

  • Stubble
  • **
  • Posts: 232
  • Location: FingerLakes
Re: Best steps now to retire @ 55yo?
« Reply #24 on: January 29, 2015, 07:03:46 PM »
Quote
Well, I can keep my job long-term (as far as I know), I just don't want to.  I am a bit burned out and more than disappointed in the current dept leadership.

G-DOG - we could almost be twins!  Im 51, and I jumped into a '1000 days to Freedom' plan (880 days left).  Our salary, assets, spending, reluctant (male) spouse, etc.... so similar!

Even 'disappointment in leadership' comment.  Are you an IT PM by the way?  (if so maybe I am your clone).

I would be happy to share plans and progress along the way!

I have my assets mostly in low cost total market index funds.  I also think your cash is too high. I plan to have $750K in my financial accounts when I FIRE in 2017. I figured my 4% SWR rate, and I recently adjusted my payroll deductions so that everything above that gets shunted off to various staches before i see it.  This is the acid test of whether I can FIRE myself.

In the mean time Im looking for part - time jobs to replace my FT job.

My plan is to stuff the stache til spring 2017, transition to part-time somewhere before or around then, live off part time earnings and let the stache grow til I decide even part time is too much time.






G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #25 on: January 29, 2015, 08:28:27 PM »
Quote
Well, I can keep my job long-term (as far as I know), I just don't want to.  I am a bit burned out and more than disappointed in the current dept leadership.

G-DOG - we could almost be twins!  Im 51, and I jumped into a '1000 days to Freedom' plan (880 days left).  Our salary, assets, spending, reluctant (male) spouse, etc.... so similar!

Even 'disappointment in leadership' comment.  Are you an IT PM by the way?  (if so maybe I am your clone).

I would be happy to share plans and progress along the way!

I have my assets mostly in low cost total market index funds.  I also think your cash is too high. I plan to have $750K in my financial accounts when I FIRE in 2017. I figured my 4% SWR rate, and I recently adjusted my payroll deductions so that everything above that gets shunted off to various staches before i see it.  This is the acid test of whether I can FIRE myself.

In the mean time Im looking for part - time jobs to replace my FT job.

My plan is to stuff the stache til spring 2017, transition to part-time somewhere before or around then, live off part time earnings and let the stache grow til I decide even part time is too much time.

While I started as a computer major, that did not work out. :(
I am a patent agent (degrees and certifications are BS, MBA, patent bar, PMP)
I plan to 'retire' from FT, take my pension and healthcare benefits.
Then get a PT job so that I have earned income to put into a Roth, HSA, and other investments, all the while letting the current stache continue to grow.
I also plan to get more fit, get more organized, decrapify the house, travel some, read more......
Spouse will keep working, I figure if I contine to cover the bills I pay now - he's got no reason to complain (not like that stops folks).

I wish I had figured this out earlier... I've been unhappy with my job for awhile - but decided to stick it out until 55 so I could capture some retirement benefits.  It gets harde everyday - I am getting impatient.

mxt0133

  • Handlebar Stache
  • *****
  • Posts: 1559
  • Location: San Francisco
Re: Best steps now to retire @ 55yo?
« Reply #26 on: January 29, 2015, 09:09:12 PM »
So your almost 55 now right?  Are you still going to retire?  Numbers wise your there and then some.

What are you plans if you do pull the plug on work?  And having no plan is even better.

Sid Hoffman

  • Pencil Stache
  • ****
  • Posts: 743
  • Location: Southwest USA
Re: Best steps now to retire @ 55yo? - update - 1 year later
« Reply #27 on: January 29, 2015, 09:23:23 PM »
Tracked expenses for last year - spent about $1200/ month

Is that just for you, or for both you and your husband?  It was a little unclear, since it sounded like you two maintain separate finances and that your husband will keep working and paying whatever his own bills are.  From my quick and dirty math, your annual expenses are thus $14,400 on NW of $1M.  So you'd need a AWR of 1.44% in order to pay your bills, which is way below the 3-4% that most people are comfortable with.  That should leave a good buffer for any possible change in health insurance costs, travel, hobbies, and so on.  I'm guessing you're going to stick it out until you're 55 in order to qualify for the penalty-free withdrawals from your 401k, or were you planning to withdraw from your after-tax money from age 55 to 59.5?

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo? - update - 1 year later
« Reply #28 on: January 29, 2015, 09:39:52 PM »
Tracked expenses for last year - spent about $1200/ month

Is that just for you, or for both you and your husband?  It was a little unclear, since it sounded like you two maintain separate finances and that your husband will keep working and paying whatever his own bills are.  From my quick and dirty math, your annual expenses are thus $14,400 on NW of $1M.  So you'd need a AWR of 1.44% in order to pay your bills, which is way below the 3-4% that most people are comfortable with.  That should leave a good buffer for any possible change in health insurance costs, travel, hobbies, and so on.  I'm guessing you're going to stick it out until you're 55 in order to qualify for the penalty-free withdrawals from your 401k, or were you planning to withdraw from your after-tax money from age 55 to 59.5?
That is just what I spent on insurance, electric+gas, groceries, gasoline, eating out, vacation, gifts, car registrations, income tax owed (joint filing), some other miscellaneous items.  My employer-supported insurance comes right out of my pay pre-tax and I just realized I wasn't smart enough to track that. I only tracked what I paid directly.
I don't know what my husband spent, he covers water/sewer/garbage,Netflix,  phones, Internet, cable (min local), his car maintenance, his gasoline, some groceries, eating out, property tax, landscaping, etc.
I am not planning to withdraw from any investments for awhile - but will take pension early, and retiree healthcare from employer since I can retire at 55 to get these benefits. If I want to opt in to the healthcare, I have to take pension payout.
I am thinking some pt work to fill any gaps and put into Roth or into HSA.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #29 on: January 29, 2015, 09:42:52 PM »
So your almost 55 now right?  Are you still going to retire?  Numbers wise your there and then some.

What are you plans if you do pull the plug on work?  And having no plan is even better.
OMG yes!
At least from current job, thinking I will do some pt work for fun money or just something interesting.
I will likely de stress for a bit first.

mxt0133

  • Handlebar Stache
  • *****
  • Posts: 1559
  • Location: San Francisco
Re: Best steps now to retire @ 55yo?
« Reply #30 on: January 29, 2015, 10:09:57 PM »
Sounds absolutely awesome, enjoy!

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #31 on: January 30, 2015, 05:17:55 PM »
Correction - I averaged ~ $1600/month.
Ugh- I should have checked my spreadsheet first.
So that's $19200/year.

Once I started tracking and saw where money was going, I made some course corrections and should have a lower monthly average this year. One major change was drastically decreasing eating out (lunch at work).  Indirectly this reduced fuel costs via one less trip per workday.
« Last Edit: February 18, 2015, 06:46:42 AM by G-dog »

Mortgage Free Mike

  • Stubble
  • **
  • Posts: 129
  • Age: 34
    • Save on Almost Everything
Re: Best steps now to retire @ 55yo?
« Reply #32 on: January 30, 2015, 05:29:52 PM »
I've been following this thread. Just wanted to say that I'm very excited for your future. I hope you enjoy retirement!

h2ogal

  • Stubble
  • **
  • Posts: 232
  • Location: FingerLakes
Re: Best steps now to retire @ 55yo?
« Reply #33 on: January 31, 2015, 03:18:42 PM »
G-DOG - Definitely keep us in the loop on your retirement!  Im very interested in hearing how things work out for you.

You mentioned the difficulty in planning for health insurance costs.  I have a hard time too with figuring out how to calculate what my future expenses will be in this area.  I've seen some posts about Obamacare/ACA and FIRE.  I plan to do some research into this so I can better account for this.  I live in NY State.




G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #34 on: February 18, 2015, 06:49:41 AM »
There is a 'class of 2015' thread in the 'throw down the gauntlet' sub-forum.
My target date is July 3, 2015.  I could go mid-April if I can't take it any more.  But likely need to avoid moving target from July to August to September to.......

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: Best steps now to retire @ 55yo?
« Reply #35 on: February 18, 2015, 07:00:41 AM »
There is a 'class of 2015' thread in the 'throw down the gauntlet' sub-forum.
My target date is July 3, 2015.  I could go mid-April if I can't take it any more.  But likely need to avoid moving target from July to August to September to.......

Just give your 2 weeks today. That will fix your problem. : )

jms493

  • Stubble
  • **
  • Posts: 118
Re: Best steps now to retire @ 55yo?
« Reply #36 on: February 18, 2015, 07:10:49 AM »
Did you and your husband get on the same page regarding finances/investments/goals yet?  IMO this would be the most important thing to work on.  All that other work will get flushed down the toilet if things go south because of money fights.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #37 on: February 18, 2015, 04:58:28 PM »
There is a 'class of 2015' thread in the 'throw down the gauntlet' sub-forum.
My target date is July 3, 2015.  I could go mid-April if I can't take it any more.  But likely need to avoid moving target from July to August to September to.......

Just give your 2 weeks today. That will fix your problem. : )

Ah yes - I am dreading " the notice" conversation with the boss.  I still feel like I need an 'excuse'.  Ugh...

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #38 on: February 18, 2015, 05:16:14 PM »
Did you and your husband get on the same page regarding finances/investments/goals yet?  IMO this would be the most important thing to work on.  All that other work will get flushed down the toilet if things go south because of money fights.

Work in progress...  But yes, there is still some risk in the plan.

Earthling

  • Guest
Re: Best steps now to retire @ 55yo?
« Reply #39 on: February 18, 2015, 05:54:32 PM »
Quote
Current debt: me = $0
                     Spouse = some credit card debt, won't tell me total but should be <$10K

Red flag!  Red flag!  Your spouse won't tell you what her credit card debt is?  What kind of marriage do you have???

Before you assume its <10k, I'd find out - for real.  Imagine if you retired and found out her credit card debt was really $50k?  Or 100k?  Sounds ridiculous, but this sh!t happens  - women with shopping additcions can get real sneaky about hiding it from their husbands.

If her credit card debt is less than $10k, why wouldn't she show it to you?  And with $200k in cash lying around, why wouldn't you pay it off?

+1

A "marriage" without transparency is a roommate scenario. If you don't know what your "spouse" is spending, you are merely cohabitating and setting up the impending divorce. You are either together or you aren't. Don't mean to sound harsh, but it is what it is.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #40 on: February 18, 2015, 06:51:14 PM »
Quote
Current debt: me = $0
                     Spouse = some credit card debt, won't tell me total but should be <$10K

Red flag!  Red flag!  Your spouse won't tell you what her credit card debt is?  What kind of marriage do you have???

Before you assume its <10k, I'd find out - for real.  Imagine if you retired and found out her credit card debt was really $50k?  Or 100k?  Sounds ridiculous, but this sh!t happens  - women with shopping additcions can get real sneaky about hiding it from their husbands.

If her credit card debt is less than $10k, why wouldn't she show it to you?  And with $200k in cash lying around, why wouldn't you pay it off?

+1

A "marriage" without transparency is a roommate scenario. If you don't know what your "spouse" is spending, you are merely cohabitating and setting up the impending divorce. You are either together or you aren't. Don't mean to sound harsh, but it is what it is.

Your world view and you are entitled to it. But, frankly, you don't know enough about me, my spouse, etc. to be able to apply this nice simplistic heuristic to the situation.

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: Best steps now to retire @ 55yo?
« Reply #41 on: February 18, 2015, 08:20:02 PM »
There is a 'class of 2015' thread in the 'throw down the gauntlet' sub-forum.
My target date is July 3, 2015.  I could go mid-April if I can't take it any more.  But likely need to avoid moving target from July to August to September to.......

Just give your 2 weeks today. That will fix your problem. : )

Ah yes - I am dreading " the notice" conversation with the boss.  I still feel like I need an 'excuse'.  Ugh...

Your good friend cheddar was in a horrible accident and desperately needs you. And he lives in another city. You must go immediately and you don't want to ask them to hold your position, so you understand if they need to replace you. No hard feelings, it's been a pleasure yada yada.

G-dog

  • Senior Mustachian
  • ********
  • Posts: 13808
Re: Best steps now to retire @ 55yo?
« Reply #42 on: February 18, 2015, 09:11:58 PM »
There is a 'class of 2015' thread in the 'throw down the gauntlet' sub-forum.
My target date is July 3, 2015.  I could go mid-April if I can't take it any more.  But likely need to avoid moving target from July to August to September to.......

Just give your 2 weeks today. That will fix your problem. : )

Ah yes - I am dreading " the notice" conversation with the boss.  I still feel like I need an 'excuse'.  Ugh...

Your good friend cheddar was in a horrible accident and desperately needs you. And he lives in another city. You must go immediately and you don't want to ask them to hold your position, so you understand if they need to replace you. No hard feelings, it's been a pleasure yada yada.

Hahahahahaha - I will keep this option in mind, just in case.
I know I am completely replaceable, but of course we all want to be missed. But truthfully, in a couple of weeks after I leave, half the folks won't even remember me!  How can I gloat if they don't remember me!

kathrynd

  • Bristles
  • ***
  • Posts: 413
Re: Best steps now to retire @ 55yo?
« Reply #43 on: February 18, 2015, 09:57:35 PM »
Good luck G-Dog with your impending retirement.

I also need to agree with another poster.
If you don't have an open dialogue with your partner on finances...chances are it won't be a smooth transition.
You may be putting your financial security at risk, by  not knowing the answers.