Author Topic: Employer Offering Early Retirement - How to prepare?  (Read 2171 times)

pga

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Employer Offering Early Retirement - How to prepare?
« on: December 28, 2014, 11:09:02 AM »
MMM,

My wife and I are on schedule for a debt-free retirement starting in 2020.  But our employer is making noises about offering early retirement.  The offer will probably be extended sometime in '16 or '17. 
What should we do to prepare with only 2 or 3 years left?
Here's our situation:
  • Current/Expected Debt:
    $125/month car payment at 1.85% with a little over $4K remaining.   
    About $600/month on a ~$70K business loan at 4.5% used to purchase a rental property.  We're paying off the business loan as quickly as we can.  Should be paid off in 2017 w/o early retirement.
    ~$40K HELOC at 2.75%.
    ~$7000/year property taxes for home and rentals.
    ~$2500/year insurance for home and rentals.

    Kid starting college in 2015, with at least 80% tuition covered.
    Kid starting college in 2019, with probably the same deal as above.

  • Current/Expected Income:
    ~ $48K/year from rental properties, before expenses.
    ~$175K/year currently.  This drops to just over $65K/year if retirement was offered today, before expenses.


  • Other Savings:
    401K with ~$1M, but inaccessible until 2020 :(   
    ~$10K cash.

Gin1984

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Re: Employer Offering Early Retirement - How to prepare?
« Reply #1 on: December 28, 2014, 11:12:48 AM »
Why do you think the 401k is unaccessible?
Though I am confused, what is your monthly spending now?

APowers

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Re: Employer Offering Early Retirement - How to prepare?
« Reply #2 on: December 28, 2014, 11:18:34 AM »
Will the "early retirement offer" include the means to pay off your $70k loan? If so, then take the offer, pay off your two loans and you're bringing in $100k/yr debt free. I think you can probably "suffer" along for a couple or three years on that until your 401(k) comes online.

lhamo

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Re: Employer Offering Early Retirement - How to prepare?
« Reply #3 on: December 28, 2014, 11:26:28 AM »
Can't give meaningful feedback without knowing what your expenses are.  The fact that you had to take out a business loan, a HELOC and a car loan lead me to guess they are probably higher than they could be/should be if you want to retire early.  Bringing monthly expenses down is probably the best way to ensure you can FIRE.

sol

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Re: Employer Offering Early Retirement - How to prepare?
« Reply #4 on: December 28, 2014, 11:27:52 AM »
Hard to offer meaningful advice without knowing your expenses.

If you currently spend $50k/yr outside of your debt service, then you're set.  If you currently spend $100k/yr then you're going to struggle with this plan.

pga

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Re: Employer Offering Early Retirement - How to prepare?
« Reply #5 on: December 31, 2014, 09:18:30 AM »
My 401K is in TSP.  I can withdraw sooner, but taxes are higher.

Expenses ebb and flow.  Current outflow per month is $7300. 

This includes $1000/month for IRAs & Investments, $275 for kid activities and Orthodontist (Which will be paid off in 2015 with FSA Health), $650 for travel, and $1750 savings for upcoming College Tuition and current Private School.  Yes, we could use public skool, but the current tuition is helping take care of 80% of the college tuition mentioned in my previous post :)

In addition to car payment, HELOC, insurance, and business loan we spend roughly $3500 on (car) gas, utilities, phones, internet, food/groceries (includes eating out too much), health & car insurance, dumb dog, church, & repairs.

Gone Fishing

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Re: Employer Offering Early Retirement - How to prepare?
« Reply #6 on: December 31, 2014, 09:47:23 AM »
Follow the directions detailed here:

http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/

It'll take a few minutes but you will get a lot of good advice out of it.