Author Topic: Scared to retire at 53  (Read 4753 times)

yavenay

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Scared to retire at 53
« on: August 29, 2017, 10:40:01 AM »
Hello Everyone

I have been working since I was 16. Through some hard work, discipline, and good fortune I find that I may be able to quit corporate america. Howver for some strange reason, it terrifies me to just up and quit for fear of making a huge financial mistake if I do so.
Here are the numbers

Single Female - 53 years of age
Yearly salary 86,000.00
Mortgage including taxes and insurance 700 - downsized from a 300k home to a smaller home. Home is value at 157,000 and I have 94,000 left on the mortgage.
Utilities - about 150.00 (includes, heat, electric, water and trash)
Misc (everything else) - 250.00 (includes groceries, pet care, car insurance etc)
Total about 1100 a month
Savings, retirement and taxable investments 277,000.00
Penison at age 59 - about 600.00 before taxes
Social Sec at 67 (maybe later or sooner) - if I quit working now, should expect around 2300 at the age of 67
According to my numbers, I have enough money to last about 20 years without pension or social security. Obviously with my pension and social security, I have enough money to last well into my 90's and beyond.
My pension will be able to cover the mortgage when I turn 59 or if i move again closer to my family, I plan on paying cash for the my last house (my final resting place so to speak...lol). My expenses are very low and I live in a low cost of living area. The only unknown is medical insurance

My dilemma is I want to quit working right now and feel that I am in a good position to quit working and go into semi retirement where I only work when I want to but I guess the thought of it terrifies me. I have never been more than a few weeks without a job since the age of 26. I work in IT so jobs were plentiful. Now that I am older, I no longer have the motivation or the drive to stay up to date with my skill set as working in corporate america is just getting to stressful.

The only unknown is medical. I'm not sure what is going to happen with the ACA and I find that as you get older, things start breaking down which is what's happening with me right now. Why am  I so scared to just pull the trigger?

Looking at the numbers, does my plan seem doable? I think because of my age, I am being extra cautious. If I make a financial mistake now, I will not have the time to recover and could possibly end up working by entire life.

Am I over thinking this? Are all of my bases covered? I want out of corporate america but I want to be strategic about it. Is there anyone else in the same position? I have talked to a financial advisor and he says that I am in an excellent position but I am still a little scared and nervous. I have not lived without a steady paycheck in over 20 years. Any words of encouragement would be greatly appreciated.


JoJo

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Re: Scared to retire at 53
« Reply #1 on: August 29, 2017, 01:08:59 PM »
I'm not one to really ask because I'm over saving, but your numbers look really low.

The 1100 per month - do you really not spend anything on hobbies, travel, gifts, etc?  And you haven't mentioned health car - even if you get subsidized premiums you still have deductibles to pay. 

Other one-off expenses - some day you will need a new car.  Home will need work (I'm in a condo and just had a $7000 assessment).  Appliances need fixing.  Medical.

When you consider your mortgage debt, your savings is really only $183,000.  That's enough to get you to age 67?  (sure, you get the $600 but you've got 6 years until that).

Sorry to be negative.  Maybe you can make it work if your expenses are really as low as you say they are.

honeybbq

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Re: Scared to retire at 53
« Reply #2 on: August 29, 2017, 01:15:27 PM »
I agree with Jojo. Is this right?

Misc (everything else) - 250.00 (includes groceries, pet care, car insurance etc)

IF so, that's amazing!

yavenay

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Re: Scared to retire at 53
« Reply #3 on: August 29, 2017, 01:37:18 PM »
Yup that's correct. It's just me and I live in a 1300 sq ft home. I have never been a big eater. I may only eat once a day, my pets eat better than I do.

My car insurance full coverage is only 800 a year.
Here's the miscellaneous
Car insurance - I pay yearly but monthly its about 66.00. I usually pay my car insurance for the year with my refund from taxes (mortgage deduction - which I will still have)
Pet insurance - 43.00
Pet food - 60.00
Groceries -this fluctuates. I could go months without grocery shopping. When I do, I will spend between 200 and 300 and that can last me for a several months. I'm not a big eater and usually only eat once a day
Internet - 49.00 I live in a rural area and they only have DSL which is remarkably reliable. Since I live alone, when I stream movies I typically can get 1080p so no need for cable (thankfully)
Neflix, Amazon and Hulu - 24.00
Gas for commuting to work - about 60.00 a month. I fill up about every two weeks. However, that will drop once I no longer have to commute to work.

These are the only bills I have besides my mortgage, taxes and utilities. I have no other bills. The only unknown will be medical insurance.
My goal is to established some kind of online income that pays enough to cover my expenses and my hobbies so that I don't have to live off of savings. However it could take some time to reach that point. I've already started working on an online business venture. I hope it works out but if not, I'm sure I can find an part time online job if I absolutely had too.

My pension kicks in at 59 and that will add an extra 600 a month before taxes (not much but it can cover most of my expenses). And then social security a few years later.

No cable bills but I do have streaming
No credit card bills
No car payment
No student Loans

Am I ready to FIRE yet?


yavenay

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Re: Scared to retire at 53
« Reply #4 on: August 29, 2017, 01:43:37 PM »
I'm not one to really ask because I'm over saving, but your numbers look really low.

The 1100 per month - do you really not spend anything on hobbies, travel, gifts, etc?  And you haven't mentioned health car - even if you get subsidized premiums you still have deductibles to pay. 

Other one-off expenses - some day you will need a new car.  Home will need work (I'm in a condo and just had a $7000 assessment).  Appliances need fixing.  Medical.

When you consider your mortgage debt, your savings is really only $183,000.  That's enough to get you to age 67?  (sure, you get the $600 but you've got 6 years until that).

Sorry to be negative.  Maybe you can make it work if your expenses are really as low as you say they are.

Actually I did mention mortgage, taxes and homeowners insurance is 700 a month
Car insurance runs about 66.00 a month for full coverage.  If I paid off my mortgage, than my expenses would be 700.00 less a month dropping my expenses to below 500.00 month making my expenses only 6,000 a year. According to my calculations, wouldn't that last me about 30 years?

As for hobbies and travel. My goal is to semi retire still earning money to cover whatever hobbies. But honestly my expenses are so low, that I am hoping that could earn enough money doing something that can cover everything including hobbies without touching savings at all.

jim555

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Re: Scared to retire at 53
« Reply #5 on: August 29, 2017, 01:53:22 PM »
With all the uncertainty about the ACA possibly going away aren't you cutting things too close?  What if you want to travel in the future?  Your numbers just seem way low to me.

JoJo

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Re: Scared to retire at 53
« Reply #6 on: August 29, 2017, 02:06:47 PM »

My car insurance full coverage is only 800 a year.
Here's the miscellaneous
Car insurance - I pay yearly but monthly its about 66.00. I usually pay my car insurance for the year with my refund from taxes (mortgage deduction - which I will still have)
Pet insurance - 43.00
Pet food - 60.00
Groceries -this fluctuates. I could go months without grocery shopping. When I do, I will spend between 200 and 300 and that can last me for a several months. I'm not a big eater and usually only eat once a day
Internet - 49.00 I live in a rural area and they only have DSL which is remarkably reliable. Since I live alone, when I stream movies I typically can get 1080p so no need for cable (thankfully)
Neflix, Amazon and Hulu - 24.00
Gas for commuting to work - about 60.00 a month. I fill up about every two weeks. However, that will drop once I no longer have to commute to work.


OK.  So you said all of this is $250.  Adding it all up except gas and food, you're already at $242.  So you'll spend $8 on gas + food when you retire?


You won't get a tax refund if you're retired early to pay your car insurance so you can't count on the mortgage deduction.  Although if you can find a way to make some income you may be eligible for and earned income tax credit, but it's very small for a single person.


Dicey

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Re: Scared to retire at 53
« Reply #7 on: August 29, 2017, 02:22:59 PM »
I started reading with interest, because I retired at 54, and earned about the same amount, but the rest of your stats have my Inner Bag Lady quaking in her shoes. No way would I even consider retiring with only $277k saved. That's only 3.22x your salary! Pensions have been known to go away, or be reduced. You say yours is bulletproof? I wouldn't be so confident. IMO, you're attempting to cut it way too close. Sorry, unless that number is a typo or you forgot something, I vote no. Sabbatical perhaps, but that's as far as I'd go.

Sure, it looks okay-ish from a certain angle, but do you want to lock yourself into such a tight corner for the rest of your life?  My biggest questions are if your salary has been so high and your expenses so low, where did the rest of your money go? Also it matters not how many years you've been working, but how much you've saved. The math just doesn't work for me. YMMV.

bacchi

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Re: Scared to retire at 53
« Reply #8 on: August 29, 2017, 02:29:09 PM »
How do you spend $13k/year, earn $86k, and only have $277k saved? Did you just start earning that salary or did your lifestyle recently become a lot simpler?

What's your savings rate? Another year would allow you to save another $40-50k, which would make the numbers look a lot better.


Bicycle_B

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Re: Scared to retire at 53
« Reply #9 on: August 29, 2017, 02:47:04 PM »
Interesting case as presented!  Very curious as to the answer to Dicey's questions.  Could be relevant to the underlying conundrum of "Is this spend rate sustainable?"

Yavenay, based on the data that you do present, it seems you are close but not at FI. 

Simple analysis:  Do your investments support your spending, assuming that the 4% rule pertains, with pension/Social Security as the backup to make sure everything's okay?  $277,000 x .04 = $11,080 /year.  That's less than spend rate ($1100/mo = $13,200/year).   So save another $56,000.

Analysis of key uncertainties:  Health care is indeed a large cost compared to everything else.  Social Security is a large factor - if it stays strong, you have a lot of income coming compared to your current spend; if not, you have little backup because your investment base leaves no room for error.  Pension value depends on reliability of pension source.  Your accounting does not appear to account for replacement of vehicle.  Does it include ongoing replacement/repair of home?  Adding these uncertainties together, it is hard to be sure of whether you have enough.  Each of these items could have a big effect relative to a 13k spend rate.

Unsolicited food remarks (forgive me):  I hope you're a canning genius or gardening whiz or something.  Please tell me that "pets eat better than I do" is metaphorical.  Specifically I hope you're eating enough vegies and proteins to stay healthy, not just eating biscuits and beans because they keep well.  (Beans are great, I'm just new to that part.) 

One thought on ACA is to approximate the cost of uncertainty as similar to "what if ACA subsidies disappeared and I had to pay full premium for an ACA Silver Plan (supposedly the most cost effective)"?  Obviously this doesn't cover all cases, it's just a way of quantifying part of the risk.  Where I live, such premiums for an over-50 person like you and I are about $5000/year.  12 years x $5000 = $60,000 so add that to your budget.

If you've been working all these years at W-2 jobs and you're in a LCOL area making a first foray into part time business, no offense but don't count on that income.  IMHO you're better off grinding out a few more years on the Big Spigot of Corporate Money if you can.  After all, if your investments cover all but $2k of your spending, three years at 86k income would almost double your financial assets.  Big difference.

braje

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Re: Scared to retire at 53
« Reply #10 on: August 29, 2017, 08:04:25 PM »
If your yearly expenses are really only 13,200 per year why not just look for some fun job?

Finances_With_Purpose

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Re: Scared to retire at 53
« Reply #11 on: August 29, 2017, 10:44:22 PM »
If your yearly expenses are really only 13,200 per year why not just look for some fun job?

My thought, too.  I'll stay away from the direct numbers issue/questions.  (If anything, I'm impressed by your frugality on expenses!)  But would there be anything else that interests you, even part time?  Or side gigs?  That kind of thing?  It could supplement you mightily and reduce your worries. 

koshtra

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Re: Scared to retire at 53
« Reply #12 on: August 29, 2017, 11:27:55 PM »
Technically you could FIRE. I'd be scared too, though, because you have so little margin for error: you already live incredibly cheaply, so that it's not easy to see how you could cut your spending much if something did go wrong.

However however however... being at the threshold of financial independence means that at the very least you can afford to take big career chances. You can look for something you like better, or come up with your own freelance gig of some kind.

If you have any vacation time -- I'd say the first thing to do is to take a real vacation, and take some long walks, and get all the way out of your work frame of mind. I suspect that right now you're just plain worn out, so that at the moment you want to be done with working completely and forever... but after a couple weeks' rest things might look a bit different.

I hear you about getting tired of keeping up. But there's plenty of jobs where a reasonable facility with spreadsheets (for instance) makes you the amazing wonder of the office, who can do what no one else can do. They might not pay much, but you don't really need much.

yavenay

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Re: Scared to retire at 53
« Reply #13 on: August 30, 2017, 07:10:12 AM »
How do you spend $13k/year, earn $86k, and only have $277k saved? Did you just start earning that salary or did your lifestyle recently become a lot simpler?

What's your savings rate? Another year would allow you to save another $40-50k, which would make the numbers look a lot better.

I made some bad money decisions while I was younger and I needed to recoup from that. Also, I didn't make 86k my entire career. This is just my savings. My plan is to either work part time plus I have already started an online business. My goal is to make 2-3k a month which would prevent me from touching savings. Since I have very low expenses, I can switch to semi retirement

yavenay

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Re: Scared to retire at 53
« Reply #14 on: August 30, 2017, 07:12:29 AM »
Technically you could FIRE. I'd be scared too, though, because you have so little margin for error: you already live incredibly cheaply, so that it's not easy to see how you could cut your spending much if something did go wrong.

However however however... being at the threshold of financial independence means that at the very least you can afford to take big career chances. You can look for something you like better, or come up with your own freelance gig of some kind.

If you have any vacation time -- I'd say the first thing to do is to take a real vacation, and take some long walks, and get all the way out of your work frame of mind. I suspect that right now you're just plain worn out, so that at the moment you want to be done with working completely and forever... but after a couple weeks' rest things might look a bit different.

I hear you about getting tired of keeping up. But there's plenty of jobs where a reasonable facility with spreadsheets (for instance) makes you the amazing wonder of the office, who can do what no one else can do. They might not pay much, but you don't really need much.

That's pretty much my plan.....to either semi retired or generate an online income. I've have started an online business and if I get generate 2-3k a month, that would pay all of mine expense without having to touch savings.

aperture

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Re: Scared to retire at 53
« Reply #15 on: August 30, 2017, 07:29:20 AM »
That's pretty much my plan.....to either semi retired or generate an online income. I've have started an online business and if I get generate 2-3k a month, that would pay all of mine expense without having to touch savings.

If you can generate more than living expenses from online income - then this is not a $ question, but a "how do I leap" question.  Eventually, you have to take risks.  You can mitigate risk, but avoiding risk to the extent that you do not pursue your dream is probably the greatest risk of all.  I suggest you do what you need to do to 'prove' that you have potential to make the money you expect through online income.  Once you are satisfied that the opportunity is there and that all is needed is to be un-tethered from your 9 - 5 so that you can pursue, then come back with those details if you want encouragement.  But perhaps then you will not need/want encouragement - you will just jump.  Best wishes, ap.

yavenay

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Re: Scared to retire at 53
« Reply #16 on: August 30, 2017, 07:31:50 AM »
After reading over the comments. I've decided that you guys are right. It is cutting it a little too close for comfort. I've decided to wait until the age of 55. Meanwhile, i will be banking about 3500 a month plus, I've started an online business. My hope is that I can add at least another 75k plus (hopefully) my online business will generate an income as well.

Thanks for your insightful comments.
yavenay

yavenay

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Re: Scared to retire at 53
« Reply #17 on: August 30, 2017, 07:41:32 AM »
That's pretty much my plan.....to either semi retired or generate an online income. I've have started an online business and if I get generate 2-3k a month, that would pay all of mine expense without having to touch savings.

If you can generate more than living expenses from online income - then this is not a $ question, but a "how do I leap" question.  Eventually, you have to take risks.  You can mitigate risk, but avoiding risk to the extent that you do not pursue your dream is probably the greatest risk of all.  I suggest you do what you need to do to 'prove' that you have potential to make the money you expect through online income.  Once you are satisfied that the opportunity is there and that all is needed is to be un-tethered from your 9 - 5 so that you can pursue, then come back with those details if you want encouragement.  But perhaps then you will not need/want encouragement - you will just jump.  Best wishes, ap.

Thank you. Not taking risk is perhaps the greatest risk of all. What I have decided to do was to stay in the full time job while developing the online income. I've given myself a deadline of 2 years to do so. During that time, I will sock away as much money as I possibly can. I just hope the stress doesn't cause me to quit before I reach my goal. However if it does, I can always go find a less stressful job if need be until I reach my goal. I HATE CORPORATE AMERICA! I have to get out before it eventually kills me.

koshtra

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Re: Scared to retire at 53
« Reply #18 on: August 30, 2017, 09:39:04 AM »
When I first was realizing I could actually get OUT of corporate America, my plan was to take nine months, finish up all my projects, tie up all the loose ends. I met with my manager and figured it all out.

And two days later I walked back into his office to say, "Man, I'm really sorry, but this is my two week notice."

That was ten years ago, when I was 49, and I haven't regretted it once, even though the great recession hit a few months later and things were touch and go for a while.

Bicycle_B

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Re: Scared to retire at 53
« Reply #19 on: August 30, 2017, 10:59:24 AM »
After reading over the comments. I've decided that you guys are right. It is cutting it a little too close for comfort. I've decided to wait until the age of 55. Meanwhile, i will be banking about 3500 a month plus, I've started an online business. My hope is that I can add at least another 75k plus (hopefully) my online business will generate an income as well.

Thanks for your insightful comments.
yavenay

Good for you!

And yes, once you actually have this online income coming in, risk goes down a lot.

In the meantime, here's hoping that the stress can go down the closer you get.  Really, once you have the other income going, you could sort of loaf Office Space style until they fire you.  Or just do the parts of the job that you like (if any) without worrying, because once you're ready to leave, what is there to worry about?  Obviously it's better to get 2 or 3 more big money years, but your stress level can go down before you officially quit or get fired.

JoJo

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Re: Scared to retire at 53
« Reply #20 on: August 30, 2017, 12:12:16 PM »
After reading over the comments. I've decided that you guys are right. It is cutting it a little too close for comfort. I've decided to wait until the age of 55. Meanwhile, i will be banking about 3500 a month plus, I've started an online business. My hope is that I can add at least another 75k plus (hopefully) my online business will generate an income as well.

Thanks for your insightful comments.
yavenay

Awesome idea!  Agree that showing the online business is making money is a great idea before you quit will give lots of comfort.  I think some, especially the MLMs, cost alot to get started and very few make money in the long run.  Blogging is another story - I've decided there isn't real money in this unless you invest smartly and dedicate alot of resources, real talent is needed.

Good luck in your endeavor!

yavenay

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Re: Scared to retire at 53
« Reply #21 on: August 30, 2017, 01:03:33 PM »
When I first was realizing I could actually get OUT of corporate America, my plan was to take nine months, finish up all my projects, tie up all the loose ends. I met with my manager and figured it all out.

And two days later I walked back into his office to say, "Man, I'm really sorry, but this is my two week notice."

That was ten years ago, when I was 49, and I haven't regretted it once, even though the great recession hit a few months later and things were touch and go for a while.

I guess the reason why I am being extra cautions is because of my age. If i make the wrong financial moves, there would be no time to recover. I could potentially end up working my entire life. I've made huge financial mistakes when I was younger so I had time to recover some of my loses. I certainly don't want to go that route again.

yavenay

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Re: Scared to retire at 53
« Reply #22 on: August 30, 2017, 01:07:33 PM »
After reading over the comments. I've decided that you guys are right. It is cutting it a little too close for comfort. I've decided to wait until the age of 55. Meanwhile, i will be banking about 3500 a month plus, I've started an online business. My hope is that I can add at least another 75k plus (hopefully) my online business will generate an income as well.

Thanks for your insightful comments.
yavenay

Awesome idea!  Agree that showing the online business is making money is a great idea before you quit will give lots of comfort.  I think some, especially the MLMs, cost alot to get started and very few make money in the long run.  Blogging is another story - I've decided there isn't real money in this unless you invest smartly and dedicate alot of resources, real talent is needed.

Good luck in your endeavor!

The one thing in my favor is that my expenses are extremely low. If I can generate between 2 and 3k, that would be perfect. The come from jobs or a business but the only criteria is that it has to be online. That would allow me to travel and enjoy everything in my bucket list. The income could pay all of my bills plus give me the extra money without touching savings.......that would be the perfect scenario. I've already marked FIRE Day on my birthday 2019......woohoo.

koshtra

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Re: Scared to retire at 53
« Reply #23 on: August 30, 2017, 01:40:46 PM »
When I first was realizing I could actually get OUT of corporate America, my plan was to take nine months, finish up all my projects, tie up all the loose ends. I met with my manager and figured it all out.

And two days later I walked back into his office to say, "Man, I'm really sorry, but this is my two week notice."

That was ten years ago, when I was 49, and I haven't regretted it once, even though the great recession hit a few months later and things were touch and go for a while.

I guess the reason why I am being extra cautions is because of my age. If i make the wrong financial moves, there would be no time to recover. I could potentially end up working my entire life. I've made huge financial mistakes when I was younger so I had time to recover some of my loses. I certainly don't want to go that route again.

Oh, absolutely. I think you're doing this exactly right.

T-Rex

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Re: Scared to retire at 53
« Reply #24 on: September 01, 2017, 01:07:09 AM »
One small thing... I saw that you said you don't eat a lot. That isn't something you should count on staying the same forever.

markbike528CBX

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Re: Scared to retire at 53
« Reply #25 on: September 01, 2017, 10:10:53 AM »
Posting to follow.   I'm also "Scared to retire at 53" (3 months till B-Day), with far larger amounts than OP.  But I have a wife and an aging mom to think about also.