I'm getting ready to retire in about 3 months when I will have just turned 47. I thought I'd create this thread as a place to post updates, keep track of progress, note anything I learn along the way, and invite feedback or suggestions. MODERATORS -- if you feel this would more appropriately belong in the Journals section, please feel free to move it. I put it here for now because I want it to be more of a feedback and tips post than a "my personal journey" kind of story.
Background: Age = 46, divorced 7 years ago with 2 kids, now remarried with a stepdaughter (3 kids total, 2 in grade school and 1 in junior high). I have shared custody of my kids and pay child support. The divorce set back my net worth by at least $700k at the time, plus ongoing child support and other costs.
Finances: Live in a high cost of living area, earn over $150k, wife earns about $55k. Been at my current employer for 17 years. At age 60 I will get a small-ish, highly guaranteed pension that will be split with my ex. My share will equal about $17,000 annually in today's dollars, indexed for inflation. Social security is currently estimated at $25,000 annually at age 67. Don't know wife's SS, probably about $15,000 annually. So, old age fixed income (barring changes to SS) should be ~$57,000.
Otherwise, we've got $650k in 401k's, $190k in taxable accounts, $170k in home equity, and $120k equity in a non-cash flowing rental house that I expect to sell next summer. If you add it all up it's somewhere around $1.1mm.
Expenses: $6150/month, of which $3200 is housing (PITI + Utilities + Maintenance). I'd love to move to a lower cost area with a paid off house, but that's a different topic
What I've done so far: This week I had a conversation with my boss and HR about taking a year-long sabbatical, but really will be just a quiet exit. It keeps my health insurance and life insurance in place, and gives me a guaranteed position for one year if I wanted to return (I don't foresee that). It's a nice safety net as I see it.
The usual challenges I foresee:
- Making the "young man" money last long enough until the old man money is accessible
- Relying on market returns to be high enough such that the old man money is what I forecast it to be when I'm older
- Health insurance
- Walking away from a lucrative career, finding the "enough" point (I feel like I've hit it)
Other: My wife is not a spendthrift at all, but she's definitely in the "why would you want to retire this early?" camp. I do have a great, high earning job with awesome benefits, so she sees leaving early as pretty dumb and throwing away a great opportunity. She's also generally pessimistic and prone to all the typical naysaying you'd see in MMM comments (What about insurance?! We'll go broke! What would you do all day, you'll become lazy!). So that will be a challenge, I wish she was more on board with this kind of major life goal. She intends to keep working, which keeps us in a high cost of living area, but also provides income to cover the housing costs.
I'll post updates along the way, but please feel free to offer suggestions or poke holes in my planning.