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Old 10-09-2016, 08:00 AM
 
Location: Forests of Maine
30,687 posts, read 49,469,539 times
Reputation: 19134

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Quote:
Originally Posted by MCNE View Post
... Not sure where the 70-80% replacement of your current salary comes from but in my case it would never happen.
My military pension is less than even 30% of my working salary. I hit their mandatory retirement mark [High Year Tenure] and I was forced onto pension. I found that it actually works just fine.



Quote:
... LIST][*]Currently own two homes[*]Call it 1 mil in 401k[*]Selling primary home that will net 500k[*]150k on second home but other than that debt free[*]Need about 70,000 per yr in retirement[*]In the end about 1.6mil but need to deal with the retirement home in San Antonio (150k). 500k in cash.[/list]
So two of the three firms say I need more to retire at 54. Doing it anyway . Or yeah Married.

Rant over.
It looks to me like you have a reasonable assortment of assets.
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Old 10-09-2016, 08:01 AM
 
Location: Forests of Maine
30,687 posts, read 49,469,539 times
Reputation: 19134
Quote:
Originally Posted by FREE866 View Post
The need for $70,000 after tax yearly is what really hurts you
I agree.
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Old 10-09-2016, 09:01 AM
 
8,204 posts, read 11,921,160 times
Reputation: 18019
Quote:
Originally Posted by Submariner View Post
My military pension is less than even 30% of my working salary. I hit their mandatory retirement mark [High Year Tenure] and I was forced onto pension. I found that it actually works just fine.
Yeah, that "works just fine" for anyone who wants to live in the middle of a forest, produce 90% of their own food, and live off-grid for the most part.

I'm glad that works great for you, but it is disingenuous, if not downright dishonest, to suggest to others who come here seeking retirement advice that living on less than 30% of one's working income works just fine without mentioning exactly how you accomplish that feat.
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Old 10-09-2016, 09:14 AM
 
Location: NE Mississippi
13,686 posts, read 8,589,783 times
Reputation: 19898
Quote:
Originally Posted by MCNE View Post
Well in a few yrs (2019) I'd like to retire and utilize my 401k with the age of 55 rule. With that I tried to validate my plan with a couple (3) retirement planning firms. Not sure where the 70-80% replacement of your current salary comes from but in my case it would never happen. Nor do I believe that I need it but is that really viable? Sorry probably more of a rant than a question.
  • Currently own two homes
  • Call it 1 mil in 401k
  • Selling primary home that will net 500k
  • 150k on second home but other than that debt free
  • Need about 70,000 per yr in retirement
  • In the end about 1.6mil but need to deal with the retirement home in San Antonio (150k). 500k in cash.

So two of the three firms say I need more to retire at 54. Doing it anyway . Or yeah Married.

Rant over.
It's kind of a one-way door. You are going to retire and then find that there is no way back into the work force with a salary & working conditions that you can live with.

Military people - especially retired officers - are notorious for believing their skills are in great demand. Fact is, retired military people can be darn hard to place, and that gets impossible if they don't work for a couple of years. When I lived in San Diego, the place was crawling with retired captains looking for work. Meanwhile retired Chiefs found work - work that most senior officers would not do, like driving a truck.

All of this is not limited to retired military. I have friends who retired on an early buy-out and have now lived long enough to regret it. You're a little different in that your pension is assured, and you seem to have good spending habits. So, I'm betting you'll make it. Keep your cash close, though. Don't try to invest. And be aware that you may be passing through a one-way door.
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Old 10-09-2016, 09:32 AM
 
Location: Albuquerque NM
1,661 posts, read 1,527,824 times
Reputation: 3650
I ran Firecalc on the OP's numbers and got a 100% success rate for a spending level of $75K a year (to include taxes) but Firecalc does not allow for cash - all the money has to be in portfolio which is where I added the cash. Also I used the default asset allocation of 75% in equities which may be too high for retirement. I assumed the spouse's SS would be 1/2 of the OP. The OP should explore how retiring at 54 will impact their SS. If they started working early and made a high salary most of their working life, the effect should be minimal. But if the OP does not have 35 years of earnings (e.g., has several years of zero earnings) and/or much lower earnings early in their career, there could be a more significant impact.

My main concern would be the $70K a year spending. It sounds like the OP has a current salary in the mid $100K range and transitioning to $70K budget seems extreme. Is the $70K based on actual past spending and does it include taxes? If not, I would be concerned That figure also needs to take into account periodic large expenditures (e.g., new cars, major house repairs, expensive dental work such as implants and other medical costs not covered by Medicare). Early retirement sounds doable but I would recommend that the OP start tracking their expenses now to ensure no surprises later. Also the OP has a big advantage with the cash in that the OP may be able to get a large ACA subsidy and make Roth conversions while remaining in the 15% tax bracket.
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Old 10-09-2016, 09:32 AM
 
Location: Forests of Maine
30,687 posts, read 49,469,539 times
Reputation: 19134
Quote:
Originally Posted by MadManofBethesda View Post
Yeah, that "works just fine" for anyone who wants to live in the middle of a forest, produce 90% of their own food, and live off-grid for the most part.

I'm glad that works great for you, but it is disingenuous, if not downright dishonest, to suggest to others who come here seeking retirement advice that living on less than 30% of one's working income works just fine without mentioning exactly how you accomplish that feat.
It is not disingenuous nor dishonest. I freely admit that I live in a low COL lifestyle in a low COL state. I am an organic farmer [my farm income is really tiny ] What I present to this forum is entirely genuine and honest.

We are on solar-power. We have been heating with wood [though we are in the process of shifting to solar-thermal heating]. We produce the majority of our food. I see nothing dishonest in any of this.

I have explained my lifestyle many times, as you yourself have just explained.
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Old 10-09-2016, 09:51 AM
 
110 posts, read 133,699 times
Reputation: 54
Quote:
Originally Posted by ABQ2015 View Post
Is the $70K based on actual past spending and does it include taxes? If not, I would be concerned That figure also needs to take into account periodic large expenditures (e.g., new cars, major house repairs, expensive dental work such as implants and other medical costs not covered by Medicare).

Also the OP has a big advantage with the cash in that the OP may be able to get a large ACA subsidy and make Roth conversions while remaining in the 15% tax bracket.
Thanks for the reply, yes that 70k does assume I will be paying taxes when I move down to San Antonio. The ACA subsidy is also a strategy I'm exploring.
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Old 10-09-2016, 10:20 AM
 
110 posts, read 133,699 times
Reputation: 54
Quote:
Originally Posted by Listener2307 View Post
It's kind of a one-way door. You are going to retire and then find that there is no way back into the work force with a salary & working conditions that you can live with.
And be aware that you may be passing through a one-way door.
This is a very good point and the primary reason I'm still in the work force. I need to be very careful when I do this because not only can it be tough to go back but when I'm done I'm done and not going back. Although I am willing to work part-time doing whatever as long as it's just a few months a yr.
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Old 10-09-2016, 10:48 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,614 posts, read 39,986,663 times
Reputation: 23762
Quote:
Originally Posted by Submariner View Post
It is not disingenuous nor dishonest. I freely admit that I live in a low COL lifestyle in a low COL state. I am an organic farmer [my farm income is really tiny ] What I present to this forum is entirely genuine and honest.

We are on solar-power. We have been heating with wood [though we are in the process of shifting to solar-thermal heating]. We produce the majority of our food. I see nothing dishonest in any of this.

I have explained my lifestyle many times, as you yourself have just explained.
Very similar here:
Retired @ age 49 from a 32 yr career of single hourly earner.

We live on far less than previous salary, probably 30% most yrs. last year was 10 + month Round-the-world travel, and it is still much less than previous annual salary. ($10/ night guesthomes + 3 hotels + 8 Air B&B (ick), ate via grocery / local fresh markets, Ryanair €12 flights, free mileage for 3 intercontinental flights)

So simple.... (except HC, which we now use a legal alternative to ACA ($300/ month vs $1700/ month ACA))
  • $100/ month food (as per last 40 yrs, eat well, cedar smoked salmon today! Oatmeal for beakfast <$0.10, fresh veggies and produce daily). Produce guy gives us 'culls' for free. We are growers, so used to eating bruised fruit.
  • $35 car that gets 50 mpg on free waste cooking oil, as we have since 1976
  • Cheap car insurance
  • Utilities. $70/ mo (electric only) 'free' well water, septic, trash, wood heat
  • Dial-up internet (no HS available in Federal restricted National Scenic Area)
  • Plenty of savings for travel (50%+ of time and budget)
  • Volunteer usher and teach at colleges for free cultural entertainment
  • Use boarders / renters in seperate guest homes to pay 100% of property expenses +extra cash flows + maint. (They love to live in view properties and very happy to watch the place while we travel, feed the dog, mow, and garden)

plans had to change
Since short term evil CEO took our pensions, sick leave, and HC while raping the company and disposing of 300,000 engineers. (Incuding selling 20+ company retreat centers which would have provided 50% of annual housing as retired employees)

30% of NW in investment props
30% in growth equities
30% in home equity & secure cash equiv.
10% speculative / high growth / usually commercial or view props that I rezone / spiff and sell.

Retire early, retire often

Priority spending to tractors, dozers, diggers (excavators), tools (machine and cabinet shop). Yes, I make my own furniture, from my own trees... DS will get $100k from my estate auction.... already has plans to spend it on another yr travel!

Last edited by StealthRabbit; 10-09-2016 at 11:01 AM..
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Old 10-09-2016, 10:56 AM
 
71,667 posts, read 71,801,099 times
Reputation: 49256
i think if i had to retire and first work as a farmer i wouldn't have retired .heck i don't even want to mow the lawn at this stage . to bad i still have to take the garbage to the incinerator room lol
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