Author Topic: Do you think this friend of mine retire now?  (Read 6487 times)

spartana

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Do you think this friend of mine retire now?
« on: December 22, 2015, 02:39:59 PM »
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« Last Edit: August 16, 2017, 10:54:28 AM by spartana »

JLee

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Re: Do you think this friend of mine retire now?
« Reply #1 on: December 22, 2015, 02:55:39 PM »
$12k tax free plus $14k/yr, free medical puts him at $26k with minimal tax and no health care costs. With a LCOL area he should be fine.

Gone Fishing

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Re: Do you think this friend of mine retire now?
« Reply #2 on: December 22, 2015, 03:19:43 PM »
It could certainly work if he has the right mindset.  Is he generally frugal?  Any alimony payments due? Is the $800 a month in rent the total or his portion?  If it is his portion, it would seem like the first place to cut some expense.

frugaldrummer

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Re: Do you think this friend of mine retire now?
« Reply #3 on: December 22, 2015, 04:48:15 PM »
Another option:
$1,000 a month from his disability pension, $1,000 a month from 4% withdrawal rate on $300k investments.  Take the extra $50k from investments and buy a house or duplex in a low cost of living area, such that rental income from a roommate or roommates will pay off the rest of his mortgage and cover taxes and maintenance.  (Say perhaps a $150k house in an area where 2 roommates would each pay $600 a month or some such).

He could then decide if he wants to take a part-time job to earn a little extra cash, or just live comfortably on his $2k per month without mortgage or rent expenses.

If he's wedded to staying in SoCal - he could continue renting and just work some easy part-time job to make up $500-1,000 a month.

thd7t

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Re: Do you think this friend of mine retire now?
« Reply #4 on: December 23, 2015, 08:10:15 AM »
Will he be eligible for Social Security when he reaches "traditional retirement age"?  If so, I think he has a pretty great situation.  He's protected from health insurance costs and he has an income stream (that might be supplemented, later). 

Fishindude

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Re: Do you think this friend of mine retire now?
« Reply #5 on: December 23, 2015, 08:17:39 AM »
It would be tough, but people do it.
Would probably want to have a side gig job for some spending / fun money.

onlykelsey

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Re: Do you think this friend of mine retire now?
« Reply #6 on: December 23, 2015, 08:23:08 AM »
Is the more immediate question whether your friend should look for another full-time job?  I think the answer to that is that he doesn't have to, and should maybe look in to half-time work he finds less stressful or more fulfilling.

zephyr911

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Re: Do you think this friend of mine retire now?
« Reply #7 on: December 23, 2015, 08:25:17 AM »
Another option:
$1,000 a month from his disability pension, $1,000 a month from 4% withdrawal rate on $300k investments.  Take the extra $50k from investments and buy a house or duplex in a low cost of living area, such that rental income from a roommate or roommates will pay off the rest of his mortgage and cover taxes and maintenance.  (Say perhaps a $150k house in an area where 2 roommates would each pay $600 a month or some such).

He could then decide if he wants to take a part-time job to earn a little extra cash, or just live comfortably on his $2k per month without mortgage or rent expenses.

If he's wedded to staying in SoCal - he could continue renting and just work some easy part-time job to make up $500-1,000 a month.
+1 to this approach.
In my area there are plenty of duplexes for $60-80K that rent for $400-600 a side - we have 2 and are looking at buying 1-2 more soon. Even at higher prices, enough equity could make it a net-zero housing cost situation, which would improve his NW over time as the loan amortizes using the tenant's money.

If I were single and looking for a low-cost living situation this is absolutely the route I'd take - unless of course, I could find a 4-plex I could afford, which makes the math work out even better.

DividendMoney

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Re: Do you think this friend of mine retire now?
« Reply #8 on: December 23, 2015, 08:44:17 AM »

If I were single and looking for a low-cost living situation this is absolutely the route I'd take - unless of course, I could find a 4-plex I could afford, which makes the math work out even better.

If I were single with no kids, I would absolutely buy a 4-plex and live in one unit while renting out the others. 

Trudie

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Re: Do you think this friend of mine retire now?
« Reply #9 on: December 23, 2015, 01:09:30 PM »
I think your friend can do it, since it seems he has enough steady income and health care to secure his future.

I have no idea what your friend's interests are and how far he is willing to move.  If he were to consider a move further afield I could vouch for Des Moines, Iowa.  It is consistently rated as a top place to live, with very low COL, and excellent VA health care.  There is an extensive VA Clinic system in/around Des Moines and the nearest VA Hospital is in Iowa City, about 100 miles away.  The IC VA Hospital is located right next to the University of Iowa Hospitals and Clinics -- which is top-rated in many specialties.  If transportation should ever become an issue for your pal, the public transit system runs between Des Moines and Iowa City several times a week and he could make the trip for next-to-nothing (like $15).

The whole Central Iowa corridor is booming, and there are smaller towns and cities around Des Moines that your friend may also like.

ynotme

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Re: Do you think this friend of mine retire now?
« Reply #10 on: December 23, 2015, 01:56:34 PM »
Rent aside, how much is he currently spending a month?

I'd suggest asking him to track what he's spending money on (if he isn't already) and assess all his expenses. He may find he can live on ~$2k per month or may be able to if he reduces his rent or cuts out certain expenses. He may also decide he's wiling to work another job to pay for the lifestyle he wants.

Ultimately he needs to feel comfortable about the decision and assessing the numbers may help him with that.

Gone Fishing

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Re: Do you think this friend of mine retire now?
« Reply #11 on: January 19, 2016, 01:01:10 PM »
Any update?  Is he going to do it?

iris lily

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Re: Do you think this friend of mine retire now?
« Reply #12 on: January 19, 2016, 05:52:08 PM »
Please, the I80 iowa corridor, no, just--no.

Its my old stomping grounds coulnt wait to get out. But I do  love Iowa City.

arebelspy

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Re: Do you think this friend of mine retire now?
« Reply #13 on: January 21, 2016, 09:55:24 AM »
IMO, he should look for a job, track his spending for awhile, saving as much as he can, and investing as much as he can, especially right now during this market dip.  That will let him see his average spending, and see if it's feasible.

Alternatively he could just go for it, and if he ER fails, look for a job then.  If he's okay with that possibility, and he doesn't think there will be a significant difference in his ability to find a job now versus after an employment gap, that could be okay.
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Cassie

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Re: Do you think this friend of mine retire now?
« Reply #14 on: January 30, 2016, 04:12:43 PM »
Sounds like he has a good plan to take some time off now and consider his options. I don't blame him as that would not be enough $ for me either. However, until he tracks his expenses he really doesn't know how much $ he needs to retire happily.

frugaliknowit

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Re: Do you think this friend of mine retire now?
« Reply #15 on: February 03, 2016, 09:40:31 AM »
Is his "disability benefit" forever (till death)?  Is he allowed to work (on the books) while receiving it?

SwordGuy

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Re: Do you think this friend of mine retire now?
« Reply #16 on: February 03, 2016, 08:54:15 PM »
I think he's very wise to work for a few more years, particularly if it would be difficult to get a job after being off the market for awhile.

I like big buffers, I cannot lie! :) 

arebelspy

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Re: Do you think this friend of mine retire now?
« Reply #17 on: February 03, 2016, 09:25:49 PM »
I like big buffers, I cannot lie! :)

Baby got cash!
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.