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More Retirement Fantasizing
Jul. 11th, 2007 08:23 pmI now have three plans in place for retiring at age 52.
Plan A - Continue making minimum mortgage payments on time; my mortgage will be paid off at age 50.5. Work at UT or other UT System employer until one week after I turn 52. Retire from the UT System. The Teacher Retirement System alone will give me enough money to live off of, plus I have an IRA and stuff.
This plan has two problems. 1) Work at UT 7.5 more years. Don't feel like it. 2) TRS rules may change for the worse between now and then; I may not be able to retire at age 52 after all.
Plan B - Pay off mortgage at age 50.5. Work at some other place that uses TRS until one week after I turn 52. Retire.
This plan has three problems. 1) I'm still working for 7.5 years, though this plan gives me more choices. 2) TRS rules may change. 3) Other TRS employers use TRS-Care for employee insurance, which is much worse than what UT retirees currently get. And old people use insurance more, so that matters.
Plan C - Pay off mortgage at age 50.5. Let my retirement investments (Roth IRA, Roth 403b, regular investments, whatever) grow at an average of at least 8% per year (i.e., keep them all in stocks) and add an additional 8% in cash each year. Another way to say that is to have $200,000 saved by age 52. Then quit and withdraw no more than 7% of my portfolio each year. This amount will fluctuate wildly from year to year. (In other words, I would not base the withdrawal rate on the beginning amount plus inflation but on the actual current value of the portfolio.) And the point of that is to maximize withdrawals (4% at the start plus inflation is recommended) while minimizing the chance of spending it down (by pulling out less money when prices are down).
Problems: 1) I have to keep getting raises (and, you know, working). 2) The income is minimal. I'd probably still want to have some kind of job. 3) I'd have to pay for my own health insurance.
I still love this plan, though, because it means that if TRS gets changed again, I can just quit anyway. Additional money would eventually come to me by the time I finally got old enough for their new rules.
Okay, and now I need to quit thinking about that and start focusing on getting a better job.
E-mail hint of the day - Do not use a title like "Don't Forget! Meeting July 11" for an e-mail when an equally true title would be "New Location: July 11 Meeting." Especially when I'm not done with my cold yet. Because if you do, I'll just look at my calendar, see that the meeting is there, and then trash the e-mail without reading it. Then I will drag myself all the way across campus, see that I have screwed up yet again, drag myself all the way back to my office, check my paper calendar, my online calendar, and the group's web calendar, all of which claim the meeting is in the place I went. Then I will look through a long stack of e-mails that are still in my inbox, finding no evidence of any meeting change. And I will miss the meeting.
It was a breakfast meeting, too.
Do I really have to read through every "don't forget" e-mail I get, just in case one of them isn't just a resending of a previous e-mail? No. I will read every one of that guy's e-mails, though.
Plan A - Continue making minimum mortgage payments on time; my mortgage will be paid off at age 50.5. Work at UT or other UT System employer until one week after I turn 52. Retire from the UT System. The Teacher Retirement System alone will give me enough money to live off of, plus I have an IRA and stuff.
This plan has two problems. 1) Work at UT 7.5 more years. Don't feel like it. 2) TRS rules may change for the worse between now and then; I may not be able to retire at age 52 after all.
Plan B - Pay off mortgage at age 50.5. Work at some other place that uses TRS until one week after I turn 52. Retire.
This plan has three problems. 1) I'm still working for 7.5 years, though this plan gives me more choices. 2) TRS rules may change. 3) Other TRS employers use TRS-Care for employee insurance, which is much worse than what UT retirees currently get. And old people use insurance more, so that matters.
Plan C - Pay off mortgage at age 50.5. Let my retirement investments (Roth IRA, Roth 403b, regular investments, whatever) grow at an average of at least 8% per year (i.e., keep them all in stocks) and add an additional 8% in cash each year. Another way to say that is to have $200,000 saved by age 52. Then quit and withdraw no more than 7% of my portfolio each year. This amount will fluctuate wildly from year to year. (In other words, I would not base the withdrawal rate on the beginning amount plus inflation but on the actual current value of the portfolio.) And the point of that is to maximize withdrawals (4% at the start plus inflation is recommended) while minimizing the chance of spending it down (by pulling out less money when prices are down).
Problems: 1) I have to keep getting raises (and, you know, working). 2) The income is minimal. I'd probably still want to have some kind of job. 3) I'd have to pay for my own health insurance.
I still love this plan, though, because it means that if TRS gets changed again, I can just quit anyway. Additional money would eventually come to me by the time I finally got old enough for their new rules.
Okay, and now I need to quit thinking about that and start focusing on getting a better job.
E-mail hint of the day - Do not use a title like "Don't Forget! Meeting July 11" for an e-mail when an equally true title would be "New Location: July 11 Meeting." Especially when I'm not done with my cold yet. Because if you do, I'll just look at my calendar, see that the meeting is there, and then trash the e-mail without reading it. Then I will drag myself all the way across campus, see that I have screwed up yet again, drag myself all the way back to my office, check my paper calendar, my online calendar, and the group's web calendar, all of which claim the meeting is in the place I went. Then I will look through a long stack of e-mails that are still in my inbox, finding no evidence of any meeting change. And I will miss the meeting.
It was a breakfast meeting, too.
Do I really have to read through every "don't forget" e-mail I get, just in case one of them isn't just a resending of a previous e-mail? No. I will read every one of that guy's e-mails, though.