Pick apart my retirement plan

[Maxhunter]

The biggest thing is have zero debt if you can do it. Have an emergency fund and put money away for your next vehicle purchase. Health insurance is the big thing because you never know what health issues might come down the road. Retirement is great but you have to keep active. Your plan looks pretty solid to me. Congrats on having a plan so you can retire early in your life.

 

[cnelk]

Here’s what I’ve found out:

In retirement you can only hunt and fish so much. After a while it gets to be a grind. This fall I spent 3 months hunting elk, moose and deer. After that left an unopened buck tag on the shelf.

It sure sounds sexy when you’re working, thinking about all hunts and fishing you can do….

Another thing about retiring early is almost everyone else is still working. Again it sure sounds sexy to be able to go off and do things by yourself, but there are times that a good hunting partner is fun to have along.

Maybe the buddy can’t get off work. Maybe their wife has a honey do list for them when you want to go.

Just a couple things I’ve noticed over the past few years after I retired early.

It’s not all about the money.

 

[Davyalabama]

CNelk, I understand where you're coming from about buddies not getting off work. I prefer to hunt alone anyway, I don't necessarily want anyone else around. I haven't had the privilege of being able to hunt that much, too many rental properties, honey do's, a grand kid that likes (and I like giving her) attention, etc. I could probably hunt turkeys every day (Sundays after church) from the end of March through beginning of May, or until my limit is secured, too many other things to do though.

It seems like I had more time when we had less money and time than I do now. How does that work?

 

[Sneaker]

Have you considered a scaled back schedule, work 3 days a week… spend more time doing things you want to do, see how it goes? Before jumping all the way out? I know some guys that retired early that end up very bored (can only solo trip so much before it gets a bit old, several threads here about that) and kind of scraping by 20 years later. I guess my point is pacing, be careful about going cold turkey and too much of one thing. Burnout is real on both sides of the work/non work spectrum. I guess you could always jump back into the work field at 54 or something if you wanted to since you would still be so young.

 

[Bubba]

Does your retirement have a minimum age to retire at? Here In California I receive 3% for every year I work. You can't retire till you're 50 years of age. The only way to retire before 50 Is on disability. If you retire on Disability before 50 your 3% is reduced down to 2.84%. Just wondering if you have talked with your pension people or retirement planning person.

 

[z987k]

My only concern is for inflation. I'm planning to retire early as well, and am on track for my goal, but your number is a lot lower than my number because I need to account for 40 years of inflation.

 

[eamyrick]

Does your retirement have a minimum age to retire at? Here In California I receive 3% for every year I work. You can't retire till you're 50 years of age. The only way to retire before 50 Is on disability. If you retire on Disability before 50 your 3% is reduced down to 2.84%. Just wondering if you have talked with your pension people or retirement planning person.

No minimum age and I started at 22. You buy out at 20 or 23 is full retirement and multiplier (3.2) keeps helping out for every year you stay.

 

[eamyrick]

My only concern is for inflation. I'm planning to retire early as well, and am on track for my goal, but your number is a lot lower than my number because I need to account for 40 years of inflation.

I have a meeting set up next month with a CFP to run the numbers on the intersection of pension payments/inflation/deferred comp draw. There is no age penalty for drawing out of the def comp as long as you are separated.

 

[S.Clancy]

I think you are solid. I would personally consider a 2nd career, something you can do part time. Lots of people's mental health falters after retirement. I imagine it's more pronounced when you are young

 

[drdrop]

Economists will tell you inflation will be a large risk regarding your pension. Politics aside, tariffs and removal of labor in tight labor markets will be inflationary. Stock investments can weather inflation to a degree, as well as real estate and commodities.

Source:
Inflation is as corrosive to investing as it is to the real economy

Inflation is as corrosive to investing as it is to the real economy

The failure to quell it quickly will transform financial markets

www.economist.com

From The Economist

 

[Marshfly]

Sounds like you have a decade until you wan to touch the lump sum you have plans to leave alone until 55yo. I would highly suggest spending that time learning how to manage that money on your own and generate alpha above the historical S&P average. That's PLENTY of time to do that. Then, you can easily do what you want. But YOU need to be in control of making that money earn money.

 

[TaperPin]

In our family going back to my earliest understanding of adult things and any friends close enough to know their private business, the biggest challenge is unpredictable medical issues that max out medical coverage, or have effects beyond medical care, or good old simple mental malfunction, addiction, and relationship drama and rebound. Not just you, the wife and kids, but parents, siblings and others close to you, and eventually grand kids.

Any one issue is pretty rare, but the world is full of money sucking issues and hard choices that increase with age.

Our financial advisor friend was about to retire - has every legal form known to man, has great income updated on a spreadsheet many times a day, beautiful wife, happy adult kids, great cabin in the woods, nice teeth, mostly natural hair, cautious driving discount, probably volunteered to walk puppies and served Thanksgiving dinner at the homeless shelter. Recently got Covid and died.

There’s no real advice in all this - nothing all of us don’t already know.

 

[drdrop]

Sounds like you have a decade until you wan to touch the lump sum you have plans to leave alone until 55yo. I would highly suggest spending that time learning how to manage that money on your own and generate alpha above the historical S&P average. That's PLENTY of time to do that. Then, you can easily do what you want. But YOU need to be in control of making that money earn money.

I can't tell if you're trolling or seriously believe an average person can beat the S&P500. Less than 15% of financial experts that work on investing for their job can do that https://www.fool.com/investing/2024/07/29/this-simple-investment-strategy-outperforms-88-of/

 

[SDHNTR]

I can't tell if you're trolling or seriously believe an average person can beat the S&P500. Less than 15% of financial experts that work on investing for their job can do that https://www.fool.com/investing/2024/07/29/this-simple-investment-strategy-outperforms-88-of/

Nor should most people, especially those preparing for a looming retirement, even try!

And some people simply don’t want to. I know how to paint my house, but I’ll guar a damn tee you that’s the last way I’m going to spend my time and energy. Some people have the same feelings around investing. And there is nothing wrong with that.

 

[Dos Perros]

Most "financial experts that work in investing for their job" aren't even trying to beat the S&P 500. That is the most tired argument in investing talk. I wish people would stop repeating it.

 

[NevadaMike]

Here’s what I’ve found out:

In retirement you can only hunt and fish so much. After a while it gets to be a grind. This fall I spent 3 months hunting elk, moose and deer. After that left an unopened buck tag on the shelf.

It sure sounds sexy when you’re working, thinking about all hunts and fishing you can do….

Another thing about retiring early is almost everyone else is still working. Again it sure sounds sexy to be able to go off and do things by yourself, but there are times that a good hunting partner is fun to have along.

Maybe the buddy can’t get off work. Maybe their wife has a honey do list for them when you want to go.

Just a couple things I’ve noticed over the past few years after I retired early.

It’s not all about the money.

This right here. I retired at 46 as well. I hunt Idaho, Nevada, Alaska and now Colorado this year. I live at the base of the Sierras in the Tahoe area and ski as much as I can. I also fish in Alaska a ton in the summer but oddly enough I never fish the Sierras. That is a hook in my thumb in my photo complements of an angry salmon. Cnelk is right about everyone else working and lots of down time. You need to have a plan to fill this up. I volunteer at the local hospital and had a handyman business for a while but that got in the way of powder days. Stay active just like you do for your LE career! My FD buddies that retired early and took up beer drinking and frisbee golf are not aging very well.

***!!!@@@ For the love of all things good do not hire a commission based financial planner @@@!!!****

You want a CFP that is strictly fee based or a percentage of managed assets. This way they are incentivized to make you money and not go on the all expenses paid trip to Hawaii provided by some investment firm for selling their product. My guess is you know this already given your situation but it may help someone else reading this.

Good luck and enjoy! Thank you for what you do!

 

[Axle]

Lots of good advice here. Retirement is hard to plan for because none of us know what the future holds. We just have to make the best decisions we can with the information we have. It sounds like you are way ahead of most people your age.

If you are interested in another forum about investing you could try bogleheads…it’s still an Internet forum, but there is good info and some smart people there.

I hope things turn out well for you, and congratulations on saving up as much as you have!

 

[Dos Perros]

Most "financial experts that work in investing for their job" aren't even trying to beat the S&P 500. That is the most tired argument in investing talk. I wish people would stop repeating it.

Case in point. Only about 20% of the S&P 500 stock outperform the S&P 500. Which means you could pick any stock at random and not buy it, buy all the others, and have an 80% chance of outperforming the S&P 500. But people don't do this because it's a pain in the ass.

 

[Marshfly]

I can't tell if you're trolling or seriously believe an average person can beat the S&P500. Less than 15% of financial experts that work on investing for their job can do that https://www.fool.com/investing/2024/07/29/this-simple-investment-strategy-outperforms-88-of/

This post shows a fundamental lack of understanding of what the VAST majority of pro investors are tasked with doing. They are tasked with minimizing risk. NOT high performance. They are also severely handicapped by regulations and rules that artificially hinder performance. The S&P is mostly dogs of companies that drag it down. It's not hard to pick a few good ones.

That statement and statistic is simply gatekeeping by the industry that wants everyone's money. No more, no less. Those people CAN beat the S&P. They aren't trying to.

 

[Marshfly]

Case in point. Only about 20% of the S&P 500 stock outperform the S&P 500. Which means you could pick any stock at random and not buy it, buy all the others, and have an 80% chance of outperforming the S&P 500. But people don't do this because it's a pain in the ass.

And I bet any random person can pick 5-10 of those top performers out of the list with zero research.

Successful trading is about mindset not so much skill. And I agree with SDhunter that a lot of people need the arms length that an advisor provides so they don't screw themselves. That said, this isn't hard.