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ScottieP
LSU Fan
Baton Rouge, LA
Member since Feb 2004
1931 posts

re: Am I early retirement ready? Updated
quote:

Survivor Benefit will cost $3650 or 6.5%. Surviving spouse recieves 55%. That's max coverage allowed. I need to look closer at whether or not to pay for it, take out more insurance, or go with the life insurance I have.



I've actually heard of a lot of people taking the no survivorship option then getting a term life insurance policy that would equal X number of years of the pension. At a young age that premium would be cheap yet you would probably have to go with a longer term. Interesting concept really that would need to be looked at case by case.


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StringedInstruments
Auburn Fan
Member since Oct 2013
10070 posts
 Online 

re: Am I early retirement ready? Updated
quote:

How long are most public school teaching careers to get pensions?


Ten years to get vested in most states. 25 years or age 62 to withdraw.

quote:

You could teach and have the great hours teachers have


Teachers get a lot of time off and he’d be working the same schedule as his kids. However, teaching is a very stressful job with lots of extracurricular responsibilities. Maybe if he can get into a nice private school that values his previous work experience it’d be okay, but the last thing I would want to do as a financially independent person is go into education.


baldona
Auburn Fan
Florida
Member since Feb 2016
8891 posts

re: Am I early retirement ready? Updated
quote:

Teachers get a lot of time off and he’d be working the same schedule as his kids. However, teaching is a very stressful job with lots of extracurricular responsibilities. Maybe if he can get into a nice private school that values his previous work experience it’d be okay, but the last thing I would want to do as a financially independent person is go into education.


I really think it depends on your situation and location. Also, when one doesn't have the stress about worrying about it being a career and just punching the clock and trying to enjoy yourself it is different. I also think if we had more retiree's going into the school system our school system would be better off. 25 year old's straight out of college are not the best for a lot of teaching positions.

Unless OP likes ROTC, just because he is military doesn't mean he has to do that. It would likely require a ton more time and effort over simply teaching something like history.


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21
TorchtheFlyingTiger
North Carolina St. Fan
FL
Member since Jan 2008
549 posts

re: Am I early retirement ready? Updated
My wife is on board. She's much less concerned than I am about whether we can afford it. She runs the household fiance's and is confident we can afford it. As stated before, I plan to work just don't want it to preclude more time w family and hobbies/travel. I want to be confident it's feasible without extra income just in case. We also have most of the kids college accounted for with GI Bill transfer and 529s.


NC_Tigah
LSU Fan
Carolinas
Member since Sep 2003
90330 posts

re: Am I early retirement ready? Updated
quote:

My wife is on board. She's much less concerned than I am about whether we can afford it. She runs the household fiance's and is confident we can afford it.
Sounds like you have the i's dotted and t's crossed.

Best advice would be to look forward at your family situation 15yrs down the road. You say 1°/2° school is pretty much on ice. that leaves college, weddings, etc. You sound like someone who's run those numbers already.

Presuming you'll lock up the $1.2M in a risk-reduced income-producing account, it will produce $35-50K/yr. If you worked 10 more years, and let the account grow, it would likely double in size. Roughly quadrupling if you worked 20yrs without drawing off of it. You sound like someone who's run those numbers too.

You'll just want to get to your 60's with no "lookback regrets". It would be ashame to find yourself wishing you had more funds for some purpose at that point. But being fairly conservative, you're obviously looking at ~$100K/yr in income in the meantime.


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30
CajunTiger92
LSU Fan
Member since Dec 2007
1719 posts

re: Am I early retirement ready? Updated
Kids get very expensive as they get older. It’s an order of magnitude change. In the teen years, activities can cost thousands of dollars. Add to that cars and insurance and it’s thousands more. Add to that a few wrecks and a speeding tickets then it’s over $10k. Per year. Just for insurance.


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40
Ace Midnight
LSU Fan
Between sanity and madness
Member since Dec 2006
66836 posts

re: Am I early retirement ready? Updated
quote:

No one I know has done it. They all keep working full-time. What am I missing? Why shouldn't I just do it?


What you're missing is, you're too young. I would find a job with Fedgov - using your veteran's pref points, keep stacking cash and work towards a FERS pension at about 55. That's still high QOL, you'll go in with a greatly enhanced leave posture (8 hours per pay period, with your military service credit, or 26 days per year, with federal holidays and potential of credit, you can probably leverage 7 or 8 weeks per year).

But, having said all of that, you did better than 90% or more of folks your age - just too young to retire, IMHO.


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72
kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
59439 posts

re: Am I early retirement ready? Updated
quote:

$56k annual military pension, $1.2m saved


Easily. Live the dream.


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30
13SaintTiger
Harvard Fan
Isle of Capri
Member since Sep 2011
16044 posts

re: Am I early retirement ready? Updated
quote:

It's a real concern


When I read the word retirement I think financial freedom. Anyone who thinks being financially independent doesn’t sound like fund is kidding themselves


notsince98
Missouri Fan
KC, MO
Member since Oct 2012
9812 posts

re: Am I early retirement ready? Updated
I'm way too conservative but I wouldn't call myself retirement ready if I had a mortgage. Getting rid of a mortgage is my first requirement.


its1999
LSU Fan
Member since Aug 2009
1017 posts

re: Am I early retirement ready? Updated
quote:

I'm way too conservative but I wouldn't call myself retirement ready if I had a mortgage. Getting rid of a mortgage is my first requirement.



I think the way I look at it, a mortgage is currently around-- 3.85%? At most, 5%? I haven't checked rates lately, but those were numbers several months back. Money in an index fund is typically going to grow at a better rate than that. I'd rather have money in an index fund growing than have all or most of my assets tied into a house with little or no savings set aside. It would be one thing if there wasn't a pension coming in, but that's not the case.

If emergency cash is the concern, there's always the option of a refi or heloc down the road.

Then again, we're not talking about a McMansion. The OP lives frugally enough, he's not going crazy and buying a 600+k house.


NC_Tigah
LSU Fan
Carolinas
Member since Sep 2003
90330 posts

re: Am I early retirement ready? Updated
quote:

I'm way too conservative but I wouldn't call myself retirement ready if I had a mortgage. Getting rid of a mortgage is my first requirement.


I think the way I look at it, a mortgage is currently around-- 3.85%?
Right. Home loans have the advantage of an interest tax write-off as well, at least up to a point. So a low rate mortgage can essentially serve as low-cost leverage money plus function as an inflation hedge. Needless to say though, that assumes the portfolio is not sitting with large cash positions.


notsince98
Missouri Fan
KC, MO
Member since Oct 2012
9812 posts

re: Am I early retirement ready? Updated
Like i said, i'm conservative. People around here get too obsessed with capitlizing on every aspect instead of having financial freedom (debt free) for my comfort.

When I'm retired, I'm not going to be exposed to volatility. so 5% mortage interest would be a really big deal to my portfolio not to mention constraining my budget by a significant amount every month. Also, mortgage interest won't be a write off for most people these days given the change in standard deduction.

With no mortgage, I could retire sooner, on less savings and have less risk. The time for capitalizing on every dollar is "before" retirement for me.


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31
Teddy Ruxpin
LSU Fan
TX
Member since Oct 2006
32916 posts

re: Am I early retirement ready? Updated
Of course it sounds fun. I think it will be fun.

But a lot of people underestimate the social aspects that work provides. That doesn't mean don't retire early, it means make sure you replace it with something else.

You can find plenty of people and studies on the issue. I'm not making it up from whole cloth. You have to be self aware and know yourself.
This post was edited on 7/29 at 9:19 am


Quatre Pot
LSU Fan
Member since Jan 2015
798 posts

re: Am I early retirement ready? Updated
I’m new to this board so forgive me if I say something out of line.
Do you currently pay a mortgage? If not, there’s no way I’d dive into a mortgage as I retire.


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20
Nawlens Gator
Florida Fan
louisiana
Member since Sep 2005
3934 posts

re: Am I early retirement ready? Updated

Retiring and continuing to work are two different things. I would not retire with the numbers you posted until the mortgage is paid off.

I suggest you keep working, pay off the mortgage, and retire when you're debt free.



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20
brian_wilson
LSU Fan
Member since Oct 2016
3581 posts

re: Am I early retirement ready? Updated
quote:


But a lot of people underestimate the social aspects that work provides. That doesn't mean don't retire early, it means make sure you replace it with something else.

You can find plenty of people and studies on the issue. I'm not making it up from whole cloth. You have to be self aware and know yourself.



We plan to early retire in about 18 months or so, maybe a bit longer or a bit sooner depending on the market / income / job satisfaction.

yeah, I am not worry about occupying myself but I am worried my wife is going to drive me nuts. She has a hard time occupying herself, and needs constant stimuli. Hopefully a few volunteer gigs will keep her engaged.


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WHATDOINO
LSU Fan
Member since Dec 2008
5731 posts

re: Am I early retirement ready? Updated
No way are you ready for retirement...

You're expecting 56k pension and will have 15- 20k of that gone easy with mortgage, home insurance and upkeep

Edit... I see you have insurance set up



Sounds like youre able to live comfortably and not have many worries but you need a job man.

It doesnt have to be a great job, but you need a job with health insurance would be great for you and set you up even better.

Its all in how you want to go seems like to me.

Go for it. Worst thing to happen is you go back to work when you're 69. Lol

This post was edited on 7/31 at 2:11 pm


hiltacular
Georgia Tech Fan
CHI
Member since Jan 2011
14864 posts

re: Am I early retirement ready? Updated
I think the more important question is what on earth are you going to do everyday if you retired tomorrow?

Unless your job is just extremely stressful by nature I would just ride it out a few more years. Knowing you could retire tomorrow should alleviate most of the stress that comes with life but IMO you are just too young unless you think you can occupy your time successfully.


hungryone
LSU Fan
river parishes
Member since Sep 2010
8488 posts
 Online 

re: Am I early retirement ready? Updated
quote:

I think the more important question is what on earth are you going to do everyday if you retired tomorrow?

I really am struck by how many responses are emphasizing "but what will you do all day" rather than any financial objections to early retirement. Reading, painting, hobbies, starting a microbusiness based on a hobby, hiking the Appalachian trail, meeting your old great uncle every Tuesday for coffee and an hour of conversation, coaching your kids' sports teams, coaching other kids' sports teams, volunteering with RSVP, being a mentor at a disadvantaged school near you, dog-walker at the local animal shelter, substitute teacher or lunchroom monitor, Sunday school teacher...Driver for elderly people in your neighborhood or church who can't get to a dr or to the grocery store, serve on a organization's board....

There is SO MUCH MORE to life than working a few more years to pile up a stack of cash to spend on something like a wedding. Hell, your kids may not get married, or they may run off to Vegas.

Sorry for my rant, my 38 year old neighbor died of cancer this week. Life is way bigger than whatever identity you are deriving from your work, and many worthy things in life are not paid work.


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