Pondering Retirement

K9Torro · 07-18-2009, 04:18 AM

Hello guy's / gal's,

I know that this is a topic that has had alot of input over time, I did a search on the "off topic" section and read over alot of the old posts and tried to absorb as much input as I could but never found a post which quite fit my situation.

Without going into too much details here is my situation, I am soon to be 48 (wife is 45) both of us are in good health. We have been married to each other almost 30 years now. We have both worked from the time we were 17-18 years old, non stop, steady earnings not earth shaking money but not bad for the times either. We both work in high stress jobs and have for years, she has cut back to working 24 hours a week which is the lowest that she can at her position, I work the standard 40 hour a week thing.

We have been debt free for approximately five and one half years now, the only bills we have are the standard food, utilities and taxes/insurance ones.

We own a home which in todays market might be worth 350K on a short sale. We also own way to many vehicles for two people, two P-Cars, one Lotus, one Honda M/C, one Ford truck (brand new) added to this is the worlds largest collection of stuff known to man as we have never sold anything we got interested in some of this stuff could be liquidated for decent money.

On the financial side we have 250K in liquid assets (this is available right now), I have two retirements but both are age based, both are government and I know the numbers they will pay out. One kicks in at age 55 the other at age 60. After that we have both contributed to social security which we could draw at 62 until the government runs out of money lol. Wife has a small 401K which has really taken a beating over the past few years and is age based as everyone knows.

On the health side, right now I have a fully funded health plan at my work, for her we pay 1/3 an my employer pays the other 2/3 of her plan. If I leave my employer this would of course end. At age 60 we both receive full health coverage when one of my retirements kicks in, course that is a long way off.

We have figured up our expenses and it is really a low amount, but this does not include any unforseen items or any entertainment/travel.

We are also thinking about downsizing/moving, our current house is a 4/3 and 4500 sq ft monster and we are mowing a 3 acre yard with a riding mower, this is alot for two people.

Wife's current earnings at her 2 day a week gig is about double our projected monthly expenses but not sure about how much longer she would want to do this, my job is the primary one which ties us down or so it seems. She also has a hobby that she really enjoys which brings her in some decent spending money.

The reason I say tie us down is that we would really like to begin to travel some and see more of the U.S. and Europe.

So thats it in a nut shell, I am sorry for the length of the post but would like your thoughts/advice.

Todd

mb911 · mb911's Garage

wow sounds like nice options I can tell you that I have bascially 2 jobs. I own my business (endless hours) and also teach at a local college. at 55 I am out of the teaching thinf for sure and will hopefully have positioned the business by then to sell and I want to travel as well. do it if you can afford it. you only live once

74-911 · 07-18-2009, 05:11 AM

The biggest issue you will eventually face is "what am I going to do today?". At your age you can expect to live 30-40 more years. From my personal experience, you w'ont miss the work but you will very probably miss the daily interaction, BSing, etc with co-workers. Traveling gets old eventually.

As to the financials? Who knows what the future holds. Your finances are based mainly on govt retirement checks, both for income and health insurance. If you worked for a private Co. I would be very concerned about that. I would definitely downsize. If you plan on doing a lot of traveling, I would consider downsizing to an apartment or condo, you can always buy another house when the traveling gerts old.

Just some random thoughts.

ruf-porsche · ruf-porsche's Garage

Quote:

Originally Posted by K9Torro

We also own way to many vehicles for two people, two P-Cars, one Lotus, one Honda M/C, one Ford truck (brand new) added to this is the worlds largest collection of stuff known to man as we have never sold anything we got interested in some of this stuff could be liquidated for decent money.

Todd

Wow only 1 LOTUS and 2 P-Car. My advice is to sell one of the P-Car and buy yourself another LOTUS.

OOP this is the P-car forum.

LOL

Dottore · 07-18-2009, 05:36 AM

IMO those are pretty slim numbers on which to consider retirement. I know your neck of the woods is much less expensive to live in than where I live—but still.

Keep in mind too the coming inflation. Those $250K in liquid assets could start to look a lot less very quickly.

ruf-porsche · ruf-porsche's Garage

Quote:

Originally Posted by Dottore

Those $250K in liquid assets could start to look a lot less very quickly.

That a lot of LIQUOR.

LMAO

K9Torro · 07-18-2009, 06:11 AM

Ruf at one point I was up to four P-cars and the Lotus, don't need any more cars of any brand.

Todd

K9Torro · 07-18-2009, 06:15 AM

Dot - that is my way of thinking as well on the numbers, however all I am trying to cover are the years before I can draw my retirement money. It is hard to figure out and I dont want to make any mistakes that I will regret in the long run.

Todd

Seahawk · 07-18-2009, 06:17 AM

Quote:

Originally Posted by 74-911

The biggest issue you will eventually face is "what am I going to do today?". At your age you can expect to live 30-40 more years. From my personal experience, you w'ont miss the work but you will very probably miss the daily interaction, BSing, etc with co-workers. Traveling gets old eventually.

Precisely correct: I never plan on not working...I'll either make the farm profitable (there are lots of opportunities), continue with my main business or up my volunteer hours. Or a combination of the three. My father (79) still works about a week a month with his consulting gig, travels extensively and also volunteers as a math tutor.

His mix of work, vocation(s) and avocation(s) is ideal and one I am working towards.

Quote:

Originally Posted by Dottore

IMO those are pretty slim numbers on which to consider retirement. I know your neck of the woods is much less expensive to live in than where I live—but still.

Keep in mind too the coming inflation. Those $250K in liquid assets could start to look a lot less very quickly.

I had the same thought. Your key would be to have enough principle to live off the interest/dividends, etc. with a 50% margin after expenses and taxes. I know that is ambitious, but it is a good rule of thumb.

Is there anyway to take a six month sabbatical/leave of absence and return to your jobs? A good six month cleansing may be just the tonic

In any event, all the best and good luck.

targa911S · 07-18-2009, 07:14 AM

I got out at 55 with a LOT less impressive numbers than that. But I have NO bills what so ever, no mortgage nothing just day to day expenses and taxes. I gig full time now and restore shotguns, sell one occasionally. 4 more years and I get SS.

Dottore · 07-18-2009, 08:15 AM

Quote:

Originally Posted by targa911S

4 more years and I get SS.

Just out of interest, how much is SS is the US?

Does it depend on how much you paid in, or is it the same for everyone?

Zeke · 07-18-2009, 08:23 AM

Quote:

Originally Posted by Dottore

Just out of interest, how much is SS is the US?

Does it depend on how much you paid in, or is it the same for everyone?

based entirely on your earnings record. max is now about 2300/mo., but you would have had to pay SS on a large income for all your working years. for example, in 2009 you need to make $106,800 and pay SS on that amount. don't factor in your business deductions, or make more money until your adjusted gross is 106K.

most that I know are drawing a lot less. more like 500 to 1200.

74-911 · 07-18-2009, 08:46 AM

Quote:

Originally Posted by milt

based entirely on your earnings record. max is now about 2300/mo., but you would have had to pay SS on a large income for all your working years. for example, in 2009 you need to make $106,800 and pay SS on that amount. don't factor in your business deductions, or make more money until your adjusted gross is 106K.

most that I know are drawing a lot less. more like 500 to 1200.

and that Max amount is based on your filing for SS at full retirement age (66+ depending on when you were born). Start drawing at 62 and you take a significant hit.

Dottore · 09:04 AM

Quote:

Originally Posted by Seahawk

Precisely correct: I never plan on not working...I'll either make the farm profitable (there are lots of opportunities), continue with my main business or up my volunteer hours. Or a combination of the three.
.

That's also been my approach. Back when I was still in the law, my partners used to sit around over drinks and talk endlessly about how much money they needed before they could "check out" of the firm. The assumption was always that they would never earn another dime after they left, and of course many of them didn't (and don't) and are drinking themselves to death on the 19th hole.

My approach was always that I would be doing something interesting (and remunerative) as long as I live, so the question of how much I needed to "check out" was always largely moot for me.

I also second what Jack says about retiring without any clear plans about how you intend to fill your time. I have seen many of my former colleagues do this, and it is often a sad sight. One of my former partners, one of the brightest litigators I've ever met, now sits in a large pile in the south of France, cursing the weather (too cold in winter, too hot in summer), the French (because they don't speak English), the tradespeople working on his pile (because they don't speak English), the lack of golf courses (compared to the UK), the fact that the frogs drive on the wrong side of the road, the absence of pubs etc. etc. In just a few years he's gone from "master of the universe" to "lonely and miserable git with a drinking problem". There are people who should never, ever retire.

K9Torro · 07-18-2009, 10:17 AM

SeaHawk - good words, I plan on staying active doing something, just not the daily grind. I am pretty handy when it comes to cars and houses, even though the market is tough in both those areas I thought about working on some flip's, either car's or houses. I have been watching a show out of the UK called "wheeler dealers" it is on the streetfire video blog site all the episodes it is great.

I think part of the problem is that the wife and I just took our first vacation in four years (two weeks) we both have tons of time saved up at work we just need to start using it to get a break from the place, ref the leave of absence thingy, cant do it at my job, she can at hers.

On the money end, if we down size our house we would plug another 150K into our assets by going with a smaller/less expensive house.

I would take a hit if I draw the SS early at 62 for me it would be about 600 a month less if my report I get from them is somewhat accurate.

Todd

PS. have you ever heard of HAL-4 they used to haul me around some

Hugh R · 07-18-2009, 10:54 AM

Does Georgia have income tax on retirement funds? If so consider another state. Income taxes will be one of your biggest drains on your funds. I'm considering retiring in Idaho, Nevada, Oregon or Washington (I'm in CA now).

In ten years I used the same scenario for all five states $90K retirement funds (income taxes), $400K paid for house (property taxes), 430K in taxable purchases (sales taxes) , and a 2 and a 5 year old car (vehicle taxes/registration). The hypothetical results for taxes in those five states were as follows:

CA $24,000
OR $21,000
ID $17,000
NV $ 8,000
WA $ 5,000

Sure there are local taxes, special assessments, cost of utilities, gas tax, etc. But that is a good start. I'll guarantee that with about $90K in retirement funds, the difference between CA and WA of over $19,000 gives me pause to think, that's about 20% of my retirement income in the difference in taxes.

pwd72s · 07-18-2009, 11:02 AM

Hugh...keep in mind that the Oregon legislature just raised the income tax rate on "high income" folks...There is a referendum effort going, but because the Governor delayed signing the tax hike bill, they will have only 60 days to gather the signatures.

Definitely consider Washington State to be the better deal for you...

Hugh R · 07-18-2009, 11:33 AM

Yeah Paul, I really like OR, but the taxes, like CA, give me pause to think. I'm taking Island911's suggestion and am going up to Sequim, WA in mid-September to look around. Already contact a realtor, and she's going to spend the weekend with us looking around. She's already sent me some pics of places and I'm impressed.

Porsche-O-Phile · Porsche-O-Phile's Garage

Now is not the time to walk away from a job - ANY job. Even one you're "done" with. I'd stay one more year and see what happens economy-wise. One year won't kill ya.

Also, don't count on being able to sell/liquidate assets to raise cash right now. You'll take a beating and won't make nearly as much as you might think.

Sit tight. Just my $0.02.

LakeCleElum · 02:21 AM

I retired at 52, with a retirement that kicked in then. Paid medical for life and a good 401K.

My advice: You keep working until the age 55 retirement check kicks in. That way, you have 7 more years to build up your investments and at 55, you will have an income of some sort.....

Your wife should be good at staying with her 24 hrs? Unless you really hate your job, the years will pass quickly.