Comments on: Reader Case Study: At Age 57, It’s Not Over Yet! http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/ Financial independence and simple living Sun, 18 Nov 2018 04:08:48 +0000 hourly 1 https://wordpress.org/?v=4.9.8 By: Ann Swantko http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-99338 Fri, 23 Mar 2018 12:33:21 +0000 http://www.frugalwoods.com/?p=16229#comment-99338 I believe you may have a clearer prism for viewing whether you stay in the house or not if you can find a route to pay it off sooner. I might have missed it, but I don’t think anyone has discussed your mortgage. Is it a 30-year fixed? Or 15 year? Without the expense of actually restructuring it you can break your payments up into bi-weekly payments and knock months or years off the mortgage. If you want to apply some of the savings from the other suggestions to the principal of your mortgage you will have even quicker results. Get a free online amortization table and play with the numbers. Every time you pay more principal scroll down to the bottom and it will reflect how many months earlier you just reached your goal. I did this when I bought my first house in my mid-twenties and paid it off in 10 years. Studying the expense of your house is where your answer lies. There is nothing like the feeling of living in a paid-for home.

]]>
By: Lauren http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-97851 Mon, 12 Mar 2018 17:38:49 +0000 http://www.frugalwoods.com/?p=16229#comment-97851 Any update on your situation, Chris? Mine was bittersweet – my ex and I had worked so hard finishing out the partially renovated house, so there was a lot to release. And, it was time for the next chapter to start with a new beau. We initially got in over our heads with a horrible mold problem at the new house that took over a year to remedy, and cost me being on antibiotics that entire time (it was bad). However, now that we’re past that, life suddenly gotten very simple with our 830 square foot bungalow. We spend a lot of time in the huge park that’s within walking distance with our dog, and in the hot tub out back.

]]>
By: Lauren http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-97849 Mon, 12 Mar 2018 17:26:54 +0000 http://www.frugalwoods.com/?p=16229#comment-97849 Ah, good to know. I was only aware of the type where the employer matches a % each month.

]]>
By: Susan @ FI Ideas http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-96420 Wed, 07 Mar 2018 22:14:36 +0000 http://www.frugalwoods.com/?p=16229#comment-96420 The total monthly expense after the mortgage is eliminated would be around $40,000 per year. Since the mortgage was lumped together with property taxes and insurance, this is just an estimate. Using AARP calculator, Social Security at age 65 for a person making $73472.88 per year now would be $1863 per month, or $22,356/yr . (Note that Lucy’s full retirement age is 67 and she could draw $2149 by waiting those 2 years). Assuming the 4% safe withdrawal rate, Lucy would need $17644/yr to retire, which could be provided by an account balance of $441,100. Since Lucy has $965,005.09 saved in 403B/IRA/pension money, she is in good shape. Of course, all these numbers need to be looked at after adjusting for inflation.

The mortgage simply needs to be paid early by 2 years. That can easily be done by using the Joint Account Contribution of $1,083.33/mo starting in 2020 when her youngest is done with college.

I would be cautious when looking at selling the home with that much of a gain in price. She would get to exclude $250,000, but we don’t know what her and her husband originally paid for the house or the improvements. Even though she bought her husband out of the house, this does not cause a step-up in basis, so the tax would be on the gain they made on the original purchase. It could be a really large tax bill. I’m not a tax professional, but I’m doing taxes for both my sister-in-law and my in-laws who each sold expensive homes this past year in San Jose, CA and have seen first-hand the huge taxes they owe.

I agree with everybody that Lucy is awesome and I wish her the best!

]]>
By: Maverick http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-96044 Tue, 06 Mar 2018 23:23:43 +0000 http://www.frugalwoods.com/?p=16229#comment-96044 Awesome accomplishments Lucy! This made me ponder something…I wonder what the divorce rate is for members of the FIRE community vs the general population. I would like to believe FIRE members are more goal oriented, thrifty, and likely have a higher personal value threshold. That is, if both spouses hold FIRE values.

]]>
By: Adrian - Investor Tuition http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-95752 Tue, 06 Mar 2018 07:17:04 +0000 http://www.frugalwoods.com/?p=16229#comment-95752 Wow, what a great case study. As a retired adviser, I must say this is a very thorough examination and response. I also believe Lucy is in a pretty good situation, and your advice to her is pretty sound. I would love to chip in some words of wisdom but I am totally lost in the US retirement system. but from what I deduce from the quoted balances in Lucy’s retirement accounts, she is pretty well on track to retire sooner rather than later. I thoroughly enjoyed reading this post and the respective advice that ensured. I am glad I stumbled onto your blog.
Regards Adrian

]]>
By: Janis http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-95226 Sun, 04 Mar 2018 17:38:04 +0000 http://www.frugalwoods.com/?p=16229#comment-95226 I agree that Lucy should sell her home soon. Many of the responses assume that its value will remain as high as it is now but I believe we are in a real estate bubble again and these prices cannot be kept up much longer. Get while the gettin’s good, as the saying goes. Also, many responses assume the present system will remain viable into the future. I think this is a dangerous assumption and I believe we are on the edge of the abyss – financial collapse.

]]>
By: Michael CPO, From the Far Side of the Planet http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-94281 Sat, 03 Mar 2018 02:38:23 +0000 http://www.frugalwoods.com/?p=16229#comment-94281 Looks cool … I like the option of renting out the house … and there are options for working overseas as a nurse … travelling and working around the world … or like I teaching … would be good to hear from folks like myself who have a homebase overseas … I am F.I. but still do international school teaching … which is busy, but have 3 months of holiday to explore the world …. my friends and co-workers are from or have moved and worked … all over the world. Michael CPO, From the Far Side of the Planet 🙂

]]>
By: Christine http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-92266 Wed, 21 Feb 2018 14:44:31 +0000 http://www.frugalwoods.com/?p=16229#comment-92266 Lucky is doing great! Though I didn’t read through all of the comments, there is one thing that Lucy needs to consider if she retires before 65. That is health insurance, which can be a large expense that is currently unpredictable. Does her workplace provide early retiree health insurance? How much does it cost? What do marketplace plans in her current area or where she’d like to live cost. At 64 years old I currently pay nearly $1000 a month for a plan with a high deductible. My plan does pay for basic preventive care but any other medical costs come from my pocket until I hit the $6,700 deductible. Fortunately I’ve been very healthy but an illness or accident could quickly bring my annual health care costs up to $18,700 (premiums plus deductible) or more (misc uncovered stuff). This is a huge expense that younger people or those with employer health care often don’t consider.

]]>
By: Ann Moody http://www.frugalwoods.com/2018/01/12/reader-case-study-at-age-57-its-not-over-yet/#comment-92238 Wed, 21 Feb 2018 09:01:41 +0000 http://www.frugalwoods.com/?p=16229#comment-92238 Hi Lucy. I am late to this post but being me, I can’t resist throwing in my two cents. I am onboard with everyone who subtly suggests selling your gold mine, um, I mean beautiful house in the Boston area. Since you can’t live with all of your kids, I vote for moving back home to Kentucky near your parents and continuing to work until you qualify for Medicare. The salary won’t be what you are used to, but the cost of living should be significantly lower, and while I have no understanding of what it’s like in health care careers, I suspect you might be able to find a gig where you have less stress while continuing to assist with college and building your retirement fund.

Depending on where exactly you would be if you went to Kentucky, likely you could find plenty of nice house options that are affordable and allow for the garden you will obviously need (recreation, therapy, food production. . . really a necessity). Might even have space for a swing set in case grandkids enter the picture at some point.

As our smart Mrs. Frugalwoods points out, none of this matters if you want to spend the remainder of your years in your current lovely home in the Beantown area, but think of the lovely 10 mile runs in the country. Whatever you decide, I hope you’ll come back and tell us how it’s working out.

]]>