Pick apart my retirement plan

[eamyrick]

I’m not 60, but this is my community and I’m hesitant to post on reddit or another forum. I’m in LE and work for a dept than has one of the last pretty decent pensions. I moved to Texas at 22 for work because of the job and the idea of early retirement. I’m 7 years away.

Details:

Current plan is to retire at 46 with 23.5 years in. I love family time and don’t want to give any up but would love to spend several months a year skiing, fly fishing, and hunting multiple tags in multiple states.

My pension is a 3.2 multiplier by years of service. My plan is to have my two boys college funded prior to retirement and my house paid off in the next few years. After taxes and health insurance (guaranteed access to current plan) my monthly should be approximately $8500 a month. I also participate in the deferred comp plan which I will have penalty free access to upon separation. Since my pension does not have a COLA I plan to leave the def comp money (S&P 500 Index) alone until 55 to offset inflation. Should be 1-1.5 million at 55. Lastly, my leave bank check will equal a year of pay pre tax upon retirement and the plan would be to spread that over the first 6-7 years to really enjoy traveling. My current monthly spend is less than I would be making in retirement by over 1k but I still have the house and college savings which should be going away.

What am I missing? I’m fairly money responsible now but still enjoy travel and hunting but am just limited by time away from family.

Appreciate any informed responses from those of you who have retired.

 

[jimh406]

Kids are expensive until they are gone, and you need to factor insurance and other medical costs.

You also need to budget for your entertainment and tags/hunting in other states is not cheap.

 

[Ross]

A couple of things we did, prior to my retirement.

1. We are staying in this home we built 29 years ago till dead. It was paid off, but as we know things wear out. We replaced the roof, siding, ac, furnace and water heater, along with all appliances. Then created a fund for anything that could come up which isn’t much. The chance for a big expense is pretty small and the fund would cover it.

2. Created two separate accounts for my fun stuff and hers, to include for my misc vehicle repair, and hunting expenses.

3. Paid off two new rigs, and have an older truck for my excursions replacing anything needed on it, again like the home negating any likely possible large repair expense to them for a long time.

4. We have always lived within a budget and had it in place with a new budget when I retired, and further when the Mrs retires with a good buffer line for the unexpected.

You are set well when the time comes, many are not. The one thing we can’t buy is more time and at your planned age the sky will be the limit Good luck retirement is let’s say, Mighty Fine

 

[Wheels]

I retired about 3 years ago at 55, draw 2 pensions and have a 401 plan that I can draw on without penalty prior to 59.5. I have been drawing $2500 a month from that since retirement and the principal is larger now than when I retired. Granted, the market influences that, but so far things have been good.
House is paid for, kids education is covered, have ample savings and health care is cheap for the family thru my union.
Recently bought a new truck and actually financed it because the rate is 1.9% and I’m getting 4.25 on my money in a high yield account.
Sounds like you are good to go if health insurance is reasonable thru your employer.

 

[eamyrick]

A couple of things we did, prior to my retirement.

1. We are staying in this home we built 29 years ago till dead. It was paid off, but as we know things wear out. We replaced the roof, siding, ac, furnace and water heater, along with all appliances. Then created a fund for anything that could come up which isn’t much. The chance for a big expense is pretty small and the fund would cover it.

2. Created two separate accounts for my fun stuff and hers, to include for my misc vehicle repair, and hunting expenses.

3. Paid off two new rigs, and have an older truck for my excursions replacing anything needed on it, again like the home negating any likely possible large repair expense to them for a long time.

4. We have always lived within a budget and had it in place with a new budget when I retired, and further when the Mrs retires with a good buffer line for the unexpected.

You are set well when the time comes, many are not. The one thing we can’t buy is more time and at your planned age the sky will be the limit Good luck retirement is let’s say, Mighty Fine

Appreciate it. I have watched my parents always struggle with financial decisions so it was a great teacher. I think you are spot on with the retirement budget and getting ahead on home expenses. I still hope to be able to save some in retirement since I’ll be “young” but I have seen 5-6 guys I knew well die before 55 and figured time is the one thing I can’t really save for.

 

[SDHNTR]

There’s a way to answer this question definitively. It’s called a financial plan. You don’t have to guess at it.

 

[SDHNTR]

For those that don’t know…. A formal, written financial plan will answer questions and eliminate the guesswork associated with retirement.

Given my situation and goals, can I retire successfully? If yes, ok great, how do I do so most efficiently? If not, what exactly do I need to do to retire the way I want? How much do I need to save/invest? How much can/should I spend? How should my assets be invested? If you don’t know the answers to these questions, down to the dollar, you would benefit from a financial plan.

 

[eamyrick]

For those that don’t know…. A formal, written financial plan will answer questions and eliminate the guesswork associated with retirement.

Given my situation and goals, can I retire successfully? If yes, ok great, how do I do so most efficiently? If not, what exactly do I need to do to retire the way I want? How much do I need to save/invest? How much can/should I spend? How should my assets be invested? If you don’t know the answers to these questions, down to the dollar, you would benefit from a financial plan.

Appreciate the clarity. I guess what I was more looking for would be “pro tips.” I’ve ran the numbers multiple times and if my lifestyle stays the same my boys will get a pile when I’m done.

Also lifestyle and life satisfaction. My boys will be in high school when I retire. I love spending time with them but my wife and I are basically taxi drivers right now. I did 9 days in Alaska in August and really missed them but was ready to be back in the woods after a few days. Do any of yall that are retired crave part time work, consulting, volunteer etc?

Other tips like when to roll out of the S&P 500 to bonds, real estate etc.

 

[SDHNTR]

I hear you, but respectfully, I don’t think you are going to get any sound financial planning tips from a true professional over the internet on a hunting forum. You may get suggestions from keyboard cowboys, most of which are questionable. No licensed pro is going to give advice on a forum as that would be highly unethical and perhaps even illegal. There are strict “know your client” regulations in place. Plus, we don’t work for free.

Good luck in your pursuit of a fulfilling retirement, but I think you would be well served by looking elsewhere for this type of advice.

 

[eamyrick]

I hear you, but respectfully, I don’t think you are going to get any sound financial planning tips from a true professional over the internet on a hunting forum. You may get suggestions from keyboard cowboys, most of which are questionable. No licensed pro is going to give advice on a forum as that would be highly unethical and perhaps even illegal. There are strict “know your client” regulations in place. Plus, we don’t work for free.

Good luck in your pursuit of a fulfilling retirement, but I think you would be well served by looking elsewhere for this type of advice.

Thanks. I would be open to any groups/companies you would suggest that provide this service on an hourly basis. What is the going rate for per hour for financial planning?

In the past I’ve run into a fair bit of incompetence and shiesty behavior in the financial industry whether it be 529 investments, Def Comp funds, and life insurance etc but I’m sure I’m just looking in the wrong places which has driven me to try and figure it out by myself.

 

[SDHNTR]

Thanks. I would be open to any groups/companies you would suggest that provide this service on an hourly basis. What is the going rate for per hour for financial planning?

In the past I’ve run into a fair bit of incompetence and shiesty behavior in the financial industry whether it be 529 investments, Def Comp funds, and life insurance etc but I’m sure I’m just looking in the wrong places which has driven me to try and figure it out by myself.

I suggest asking other professionals (CPA, Attorney, etc) you trust for a referral. They will know who the good guys are. If you do not have such a relationship ask your successful friends and family members who they use. The best referral is a personal recommendation from someone you trust.

 

[SouthernCharm]

So, to not make it too long, prioritize your retirement.
1. Time, at first will seem slow, it then it will seem that you have more task than ever before
2. That time will cost you compared to when you were working. That extra lunch date with the wife, the extra scouting/camping trip
3. Your fuel cost will increase due to 2.
4. The wife and I did exactly what your are doing now, so we pre-bought all our big priced toys pre retirement, guns, cars, wood working, etc.
5. You have an idea of your monthly retirement pay, learn to live on 75% of that, save the other 25% in a separate savings account to get you used to living on your pension and invest the rest of your money for retirement. I bought a cd for each month and IBonds as well as my 401k to have diversity. Take the cash from cd when stocks are down and skim off the top when stocks are soaring. I couldn’t touch my 401k until 59.5, and SS until 62. That will be my extra gravy.
6. Insurances and taxes have been increasing significantly compared to retirement COLA.
7. Life is short, enjoy.

 

[Davyalabama]

Current plan is to retire at 46 with 23.5 years in. I love family time and don’t want to give any up but would love to spend several months a year skiing, fly fishing, and hunting multiple tags in multiple states.

Hahahahahahahahahahahaha, good luck with that! You will become the resident handy man, the handy man for any friend your wife has, the in-laws (if they live remotely close to you), and anyone else your wife so chooses. You will become the resident house maid, the resident baby sitter when your kids have kids (this is the best part, don't miss this), the errand boy, the gopher, etc. Your time will not be yours at your leisure. It doesn't matter money is still rolling in from pensions, etc., her answer, "I work, you don't." It doesn't matter all the stuff you do, if she is going to work, you're not working.

Don't get me wrong, I hope your plan works out for you, I really do.

 

[TheWhitetailNut]

I’m not 60, but this is my community and I’m hesitant to post on reddit or another forum. I’m in LE and work for a dept than has one of the last pretty decent pensions. I moved to Texas at 22 for work because of the job and the idea of early retirement. I’m 7 years away.

Details:

Current plan is to retire at 46 with 23.5 years in. I love family time and don’t want to give any up but would love to spend several months a year skiing, fly fishing, and hunting multiple tags in multiple states.

My pension is a 3.2 multiplier by years of service. My plan is to have my two boys college funded prior to retirement and my house paid off in the next few years. After taxes and health insurance (guaranteed access to current plan) my monthly should be approximately $8500 a month. I also participate in the deferred comp plan which I will have penalty free access to upon separation. Since my pension does not have a COLA I plan to leave the def comp money (S&P 500 Index) alone until 55 to offset inflation. Should be 1-1.5 million at 55. Lastly, my leave bank check will equal a year of pay pre tax upon retirement and the plan would be to spread that over the first 6-7 years to really enjoy traveling. My current monthly spend is less than I would be making in retirement by over 1k but I still have the house and college savings which should be going away.

What am I missing? I’m fairly money responsible now but still enjoy travel and hunting but am just limited by time away from family.

Appreciate any informed responses from those of you who have retired.

I don't see any references to plans to mitigate inflation. Honestly your numbers don't look like they would support a massive amount of travel now much less in 20 years. You are way ahead of the game, but do you really expect to go decades without being productive?

 

[Felix40]

$8k a month take home? Anyone who can’t live on that and hunt their ass off needs to reevaluate their spending. The plan looks great to me. I’m hoping to go when I hit 20 years but I’ll be bringing home less than 1/2 of that. Ill have to get a second job but at least I won’t be wearing a duty belt anymore.

 

[eamyrick]

I don't see any references to plans to mitigate inflation. Honestly your numbers don't look like they would support a massive amount of travel now much less in 20 years. You are way ahead of the game, but do you really expect to go decades without being productive?

My plan is to not touch my deferred comp account until 55 and start drawing down then to counteract inflection. Should be a chunk. I also kinda struggle with the idea of what is productive? I’ve don’t get to spend time with my friends like I would like to or be a regular at church small group. I plan to be busy I’d just rather not have a boss forever. I very well may still do some part time contract work.

 

[txtransplant]

Thanks. I would be open to any groups/companies you would suggest that provide this service on an hourly basis. What is the going rate for per hour for financial planning?

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[pacoalcracker]

I'm certainly glad you are thinking about all of this now instead of 2 years from retiring....however, retiring at 46 means you have to plan for a 40 year retirement, perhaps even 50 or 55 years with the medical science advancements we have......40 or 50+ years is a LONG time. A 40 or 50 year retirement is going to cost a lot more than you might think. Nobody knows what the future holds.....rampant inflation, but for years, health issues for any member of the family, lengthy stagnate returns in the markets, major and or lengthy recessions, and many others that can and do upset even the best laid plans. You can and should look into CFP certified financial planners and there are always very good ones in any location. There are a lot of things that need planning for besides the financial investment portion, especially for really lengthy retirements. Most CFP will work on an hourly basis or a % of investable assets and neither is right or wrong as everyone's situation is unique.

Also, think on a second career that would be interesting and rewarding. whether it's for extra money or not. Remember, you will need to fill up 24 hours a day...every day, for 40+ years. You can't be on vacation every day.

 

[pacoalcracker]

txtransplant....thanks for those links. im retired almost 6 years but it's always nice to get a second opinion.

 

[Smb60usa]

I retired about 3 years ago at 55, draw 2 pensions and have a 401 plan that I can draw on without penalty prior to 59.5. I have been drawing $2500 a month from that since retirement and the principal is larger now than when I retired. Granted, the market influences that, but so far things have been good.
House is paid for, kids education is covered, have ample savings and health care is cheap for the family thru my union.
Recently bought a new truck and actually financed it because the rate is 1.9% and I’m getting 4.25 on my money in a high yield account.
Sounds like you are good to go if health insurance is reasonable thru your employer.

txtransplant....thanks for those links. im retired almost 6 years but it's always nice to get a second opinion.

Sounds like you’re on the right path