Author Topic: I'm 51, can I do it (retire) ?  (Read 6550 times)

F313

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I'm 51, can I do it (retire) ?
« on: August 23, 2015, 02:11:18 PM »
This is my first post and Iím looking for guidance and opinions.

Iím 51. My wife is 50.  We have one child, a daughter in 8th grade. We live in coastal Southern California. We have a current gross income of about $158k. We have a mortgage, and living here is pretty expensive.

Iím sick of my job (been doing it for 26 years) and would like to retire one year from now.  I have a now 100% vested government pension through CalPers that will provide health benefits, and will receive a monthly pension amount of  $4000 a month gross (the longer I work, the higher the pension will go, but, again, Iím sick of my work and tired of Calif).  My wifeís pension will kick in at age 62 and be about $2000 a month. We both will qualify for SS. We have 401k/IRA savings of about $350,000, and other after tax savings of $80k.  We have home equity of about $530,000.  At some point, an inheritance of maybe $200-300k may happen,  but who knows...

We want to move out of So Cal, maybe to northwest Washington state, Boise or Southwest Florida  (we like all three, and have family or good friends in each).  We would buy a home outright for about $375k, and bank the rest of the California house equity money.  We have no other debt and no pricey hobbies (no boats, Harleys, country clubs, vacation homes, fancy vacations, or Cessnas, etc), but by the same token we are not bohemians and enjoy modest vacations/traveling.

We both want to work part time in retirement, but anticipate that the jobs likely will not pay well (ie, maybe work at a library, community center, garden store etc).  We anticipate our daughter going to a state university.

Anyone had a similar scenario and acted on it?  How is it turning out for you? All comments would be Greatly appreciated.

raikoi

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Re: I'm 51, can I do it (retire) ?
« Reply #1 on: August 23, 2015, 02:21:05 PM »
Short answer to the title: yes you can.

Do you have aby statistics about you expenses and projecte expenses when retired?

Cassie

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Re: I'm 51, can I do it (retire) ?
« Reply #2 on: August 23, 2015, 02:30:37 PM »
Everyone needs to know your expenses versus your spending & if you have any debts besides mortgage in order to help.

F313

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Re: I'm 51, can I do it (retire) ?
« Reply #3 on: August 23, 2015, 02:48:24 PM »
No other debt.  Expenses, there will be property tax of probably $4000 a year, income tax, maybe an HOA fee of $100 a month, and of course food, utilities, auto insurance, term life insurance about $550 a year, gas,  etc.  We have no unusual fixed expenses, or extravagant tastes. 

I suppose what I'm really looking for is whether anyone out there at a similar age, with a similar size family, and with similar assets and projected income, has given retirement a shot, and how its working out for you.  Has it been a squeeze?  Regrets?  Advice? 

ender

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Re: I'm 51, can I do it (retire) ?
« Reply #4 on: August 23, 2015, 03:49:50 PM »
No other debt.  Expenses, there will be property tax of probably $4000 a year, income tax, maybe an HOA fee of $100 a month, and of course food, utilities, auto insurance, term life insurance about $550 a year, gas,  etc.  We have no unusual fixed expenses, or extravagant tastes. 

I suppose what I'm really looking for is whether anyone out there at a similar age, with a similar size family, and with similar assets and projected income, has given retirement a shot, and how its working out for you.  Has it been a squeeze?  Regrets?  Advice?

When are you eligible for your pension of 4k/month? Is that immediate?

What do you spend each year? That's the real kicker. You guys have a $150k income but only a NW of about $950k - this to me suggests you have had a fairly high spending each year, but hard to say.

F313

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Re: I'm 51, can I do it (retire) ?
« Reply #5 on: August 23, 2015, 05:11:00 PM »
Yeah, the $4k/mo is available now. It'll also get COLAs.  Heck, if I work another 10 years at same job, it'll be over $10k a month.  But if punching a clock into your 60's is the answer to all the questions, this blog probably wouldn't exist, right?

My wife actually thinks we're stingy.  All I can say is, paying off student loans, paying Calif state income tax, buying and maintaining vehicles to get back and forth from work, living in an area with good schools in southern California, it all adds up. I have friends who make upwards of $300k a year, and don't have a pot to....well, you know. It goes fast around here if you've got multiple kids and don't pay attention constantly. Considering that we have vested health insurance benefits for life upon retirement right now, zero debt other than a mortgage (which can be eliminated if we move out of Calif), and a $4k a month pension available right now upon retirement, it could be worse, I think.  I'm just trying to figure out what is possible, and what's worked for others who want to make a big change for mental well-being.  Thanks for responding!


use2betrix

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Re: I'm 51, can I do it (retire) ?
« Reply #6 on: August 23, 2015, 05:33:52 PM »
Sounds like you need to figure out exactly how much you spend each month then do the math. The "we aren't over spenders" means entirely different things to different people.

mxt0133

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Re: I'm 51, can I do it (retire) ?
« Reply #7 on: August 23, 2015, 05:46:05 PM »
How would your daughter feel about moving now?  She is about to start high school and starting freshman year at a new school would be tough for most kids, especially if she is not a social butterfly.

What about finding work now that you actually want to be doing.  With 4k a month, health benefits and 80k in the bank, with a working spouse.  It seems like you could live of those savings for 2-3 years while you get your earnings up to where you would not  have to move and still save and pay of the mortgage.  Then your wife can do the same after you have made the transition.

Is there a possibility of taking a sabbatical so give you some time off to clear your head and research out other careers.  If you find something you like great, if not then you keep working until you do find something tolerable until your pension and investments can cover your expenses based on the 4% rule.

But seriously with 48K a year in pension benefits, I don't think you have much time until you reach FIRE. Unless of course your expenses are up wards of 65K.

F313

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Re: I'm 51, can I do it (retire) ?
« Reply #8 on: August 23, 2015, 07:59:24 PM »
Yes, the school change issue is a very significant one.  The places we are considering relocating to have good schools, which would also likely be somewhat smaller than our huge, shockingly competitive, local high school, so that may help.

If we stay put here in SoCal, there is no way I can retire from my current "real" job.  It will only work if we can get rid of our mortgage and reduce our property taxes through moving to a lower cost state/area.  I think a lot of people in Southern California are in our position at this point in time. They'd like to leave, but the numbers don't quite work and family consideration lean against it....so they suffer on.  As an aside,  I really don't know how most young people will be able to get a foot hold here, at least if they ever want to own a home in a respectable area and don't have a parent that can lend them $400k for a down payment.   Renters forever, and a different way of life maybe...

ender

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Re: I'm 51, can I do it (retire) ?
« Reply #9 on: August 24, 2015, 06:08:11 AM »
Yes, the school change issue is a very significant one.  The places we are considering relocating to have good schools, which would also likely be somewhat smaller than our huge, shockingly competitive, local high school, so that may help.

If we stay put here in SoCal, there is no way I can retire from my current "real" job.  It will only work if we can get rid of our mortgage and reduce our property taxes through moving to a lower cost state/area.  I think a lot of people in Southern California are in our position at this point in time. They'd like to leave, but the numbers don't quite work and family consideration lean against it....so they suffer on.  As an aside,  I really don't know how most young people will be able to get a foot hold here, at least if they ever want to own a home in a respectable area and don't have a parent that can lend them $400k for a down payment.   Renters forever, and a different way of life maybe...

What are your expenses every year?

Honestly no one can give meaningful insight into your situation without that information. If your family is spending $100k a year then you will have to work a lot of years yet. But if you are spending $50k (which is still high by the way for most on this forum, even in high COL areas) then it's much more manageable.

StockBeard

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Re: I'm 51, can I do it (retire) ?
« Reply #10 on: August 24, 2015, 09:49:47 AM »
As others have stated, the first step for you is to write down as precisely as you can how much you spend every year. Only then can you know for sure if you can already retire.

Given what you've described, in your money situation with my family, I would retire, as your $4000 a month + withdrawals on 401k  would be enough for my family to live (and we have 2 kids. With "only" one we'd probably need even less). also if your wife is keeping her job, that would be a bonus for us at this point (so would the extra $2000 a month once she reaches 62) But everyone's situation is different.

Dicey

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Re: I'm 51, can I do it (retire) ?
« Reply #11 on: August 24, 2015, 10:06:49 AM »
To all the other good and essential questions that have been posed and must be answered, I'll add - Can you do something part-time that combined with your pension and your wife's income will let you stay in your current home until DD graduates from HS? This will buy you time to decide where you really want to live. Arrange for summer home swaps in some of those places over the next few years so you can make a solid decision. If you really set your mind to it, you can develop your mustachian chops and get used to living on less before you pull up stakes in CA so you can be sure you only move once, as leaving CA tends to be a one-way ticket.

It looks to me like you can, as I live very comfortably on less in CA, but I have a black belt in frugality, so I do it with ease and confidence. Developing your mustachian skills will probably lead you to the same happy place.

SunshineGirl

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Re: I'm 51, can I do it (retire) ?
« Reply #12 on: August 24, 2015, 10:09:21 AM »
I think you should either do it this year or after your daughter finishes high school. If this year, I'd suggest keep working while getting the house ready to sell and then sell it, renting if need be to make the timing work -- i.e. be liquid/free of your house when you give your notice. If it were me and the spouse was on board, I'd take the money and run.

AZDude

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Re: I'm 51, can I do it (retire) ?
« Reply #13 on: August 24, 2015, 10:21:52 AM »
You could probably just downsize your home in SoCal and retire right now. I lived in LaJolla, so I know how expensive it is and is not. It sounds like you are are making excuses for spending so much. If you really want to FIRE, then either cut down on expenses or find a LCOL area and live reasonable lives.

Expatriate

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Re: I'm 51, can I do it (retire) ?
« Reply #14 on: August 24, 2015, 10:30:20 AM »
Go through your bank and credit card statements for the past two years to know exactly how much you've spent and on what.

With an owned home and 4k monthly income anyone can technically retire, but it all depends on your 'needs'.

Dicey

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Re: I'm 51, can I do it (retire) ?
« Reply #15 on: August 24, 2015, 10:37:48 AM »
Go through your bank and credit card statements for the past two years to know exactly how much you've spent and on what.

With an owned home and 4k monthly income anyone can technically retire, but it all depends on your 'needs'.
OP clearly stated that he has a mortgage. He did not, however, reveal how much it is, so 4k may not be enough in his current circumstances.

Rosy

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Re: I'm 51, can I do it (retire) ?
« Reply #16 on: August 24, 2015, 11:06:42 AM »
Do it now, before your daughter enters high school, that way it is a clean break for her. You are obviously ready, so all you need to do is make the numbers work in your favor and that depends entirely on income and expenses.
Selling your home now also might turn out to be a good move - at some point even in SoCal the housing bubble may burst. If the numbers are in your favor, work out all the nitty gritty details, take a deep breath and go for it.

Expatriate

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Re: I'm 51, can I do it (retire) ?
« Reply #17 on: August 24, 2015, 11:26:56 AM »

OP clearly stated that he has a mortgage. He did not, however, reveal how much it is, so 4k may not be enough in his current circumstances.

OP has stated to have 530k in home equity, i.e. the excess of home value over mortgage. In addition they have already seen houses of 375k in the area they could imagine themselves living in.

So unless the house doesn't sell, this is not a restriction.

Dicey

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Re: I'm 51, can I do it (retire) ?
« Reply #18 on: August 24, 2015, 12:14:08 PM »

OP clearly stated that he has a mortgage. He did not, however, reveal how much it is, so 4k may not be enough in his current circumstances.

OP has stated to have 530k in home equity, i.e. the excess of home value over mortgage. In addition they have already seen houses of 375k in the area they could imagine themselves living in.

So unless the house doesn't sell, this is not a restriction.
I responded to your comment to gently suggest that owned home does not equal no mortgage.

Funny thing about that home equity number. Until the escrow closes, it's simply a wild-ass guess. There are costs to ready the house for market, selling costs, closing costs, moving costs, ad infinitum. Plus, this assumes a buyer would be willing to pay his asking price. The OP's net profit could easily be lower. Same thing goes for buying that imaginary $375k home in a new location. Even if he found the perfect home in the perfect place at that perfect price, it would cost him more than $375k to get in.

F313

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Re: I'm 51, can I do it (retire) ?
« Reply #19 on: August 24, 2015, 12:27:24 PM »
Thanks for all the replies.  Many of the comments mirror what's been on our minds, so it feels good to have confirmation of the important considerations from others who ponder these issues. 

Of course I'll crunch our specific numbers before making any move.  What I've been interested in is simply getting people's take on is whether, given the numbers and scenario I provided, it "could" reasonably be done if a family was so inclined. As I noted above, a lot of this is driven by my own desire to be done with my "real" job, which I've been doing for 26 years here.   

In answer to the above questions,, yes we are interested in part time work going forward.  And no, we are not interested in downsizing locally.  It's either stick with the real job until next summer, and then sell and move before daughter's high school starts, or stick it out here for four more years until she finishes HS here.  Our current mortgage, which has a good % rate on it, is about $2000 a month.  Property tax is about $9800 a year here, ouch.  But on a good note, the orthodontics are now finished and paid for...  ; )

Thanks again to everyone for taking the time to reply.

Mntngoat

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Re: I'm 51, can I do it (retire) ?
« Reply #20 on: August 24, 2015, 12:47:23 PM »
we what we spend that  more than doable.  In fact we could do it on 1/2 that much and are looking at exiting so cal as well for ID.

ML

Dicey

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Re: I'm 51, can I do it (retire) ?
« Reply #21 on: August 24, 2015, 01:36:49 PM »
F313, What's your wife's income? Inquiring minds need to know...

Now that you've revealed your mortgage and taxes, expect a lot of SELL NOW! pile-on. I'm not one of those voices. Depending on your wife's income, and your willingness to live black-belt frugally, you just might be able to pull off retiring without moving just yet.

I've known several people who pulled up stakes for one out-of -CA place, then moved to another place, then another and then wanted to get back into CA. My sister actually did this with three moves in between. It sounds like you are not 100% sure where you want to go yet and obviously they weren't either, they just didn't realize that. Obviously, this costs/wastes a metric crap-ton of money or just plain can't be done.

Since your daughter has a whole year left before High School, you could plan on moving between Jr. Hi and HS. Very doable. I somehow thought she was about to enter HS, as in this school year.

If you waited until she was out of high school to move, you could sell your house and take your time before buying your next one. Travel, visit friends, try a year here or a year there until you really were sure you were making the best choice, not just a get-the-hell-out-of-Dodge decision.

What are your wife and daughter's feelings on this topic?

Jakejake

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Re: I'm 51, can I do it (retire) ?
« Reply #22 on: August 24, 2015, 02:06:04 PM »
I had to read this a few times to make sure I wasn't missing something. The question seems to be whether a family of 3 can exist comfortably on 48k a year, which is pretty darned close to the average income of a family of 3 in the US - plus your health insurance is covered, and you can downsize and not have a mortgage payment.

This seems like a nobrainer to me, unless you have some serious spendy habits you can't get under control.

Cole

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Re: I'm 51, can I do it (retire) ?
« Reply #23 on: August 24, 2015, 02:14:54 PM »
How would your daughter feel about moving now?  She is about to start high school and starting freshman year at a new school would be tough for most kids, especially if she is not a social butterfly.

This is what happened to me and honestly it was the best thing that could have possibly happened. I definitely was not a social butterfly but it helped me figure out who I wanted to be earlier than almost everyone else and gave me confidence in my ability to create a life for myself no matter where I reside.
« Last Edit: August 24, 2015, 02:17:40 PM by Cole »

Mother Fussbudget

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Re: I'm 51, can I do it (retire) ?
« Reply #24 on: August 24, 2015, 04:18:14 PM »
Hi F313 - welcome to the forums.   

I recommend taking a step back, and reading the topic "How to write a case study"

Write your request as a case-study, and you'll give the experts here much more information to work with prior to making a recommendation.  And... yes, you can do it.