Reader story: A neglected pretirement

Fantastic retirement savings, virtually no pretirement savings

Prison.   Photo by  jmrodri 

Prison.Photo by  jmrodri 

I received a request from a man named Jim recently to take a look at his financial situation. We had a brief exchange on another personal finance blog and I offered to share some deeper thoughts here. Here is Jim’s story: 

He and his wife are both in their mid-50s and are beginning to see retirement creeping up quickly on them. It’s probably fair to say Jim already has one foot out the door from his job, but his wife is afraid of “not even being close to being able to retire.” At this point, they’re still planning to work about 10 more years, but I get the feeling they’d both rather not if they could find a way to avoid it.

Let’s take a look at the numbers:

They have a joint $675,000 in 401(k) accounts and have just started IRAs. They owe around $115,000 on a $408,000 home and are planning to have that paid off in three more years. They refinanced last year into a 15-year loan at 3.25%. This very generous couple has been living a comfortable, American lifestyle and showering their family with a great deal of support. I’ll spare you all the details, but among the list, they paid for their own schooling, and paid for two kids to attend school with no debt. They paid cash for a daughter’s expensive wedding and pilot training for a son as well as a study/travel abroad program. Jim also mentions a sports car “driven only for fun in the summer” and a motorcycle. Additionally they are committed to helping their son through law school, at least the first year at $1,000/month so he can utilize scholarships (it’s a requirement that he not work the first year).

Monthly expenses look something like this:

  • Mortgage payment: $1,300
  • Groceries: $600
  • Charity: $600
  • Cars/gas: $500 (Jim mentions a “long commute”)
  • Car insurance: $170
  • Utilities: $250
  • Water: $100
  • HOA: $60
  • Cable: $80
  • Internet: $40
  • Miscellaneous: $160
  • Total monthly expenses: $3,900

On top of that, Jim and his wife have begun paying extra on their mortgage to pay it off in the three years mentioned above so they’ve actually been paying $4,000/month on the mortgage. Jim didn’t mention any credit card or other debt, so it sounds like they’ve been responsible with their money management.

On the income side, they make decent money, bringing in a joint $6,600 per month. When they take Social Security at age 65, they expect that to bring in about $50,000/year.

So can Jim and his wife pretire yet?

I really appreciate Jim sharing his story because it illustrates the exact reason I felt the need to start writing this blog. The financial services industry does a great job (in some ways) of gearing people up for a traditional retirement. But the concept of PREtirement is completely ignored. Many folks don’t even understand there IS such an era to life until they’re in it, often unfortunately due to an unexpected job loss. Jim and his wife, fortunately, are still employed and have done a great job saving for their retirement. So let’s take a look at their situation and see if we can get them into a comfortable pretirement as soon as possible. And IF they choose to keep working to build an even cushier retirement, they’ll be doing it by CHOICE, not because some expert tells them they have to save up some arbitrary amount of money.

First of all, it’s important to understand what pretirement is and is not. On the simplest level, pretirement is building up an investment fund that is large enough to pay for your monthly expenses. Now when most people hear that, they look at their monthly expenses multiply by 12 and then 20, realize it’s hopeless and then buy a new car to make themselves feel better. But in fact, it’s much easier to reach this level by controlling expenses than by building up the fund (although you do have to do both).

Let’s, then, take a look at Jim’s expenses.

Right now expenses are $3,900 a month. With $1,300 of that going to mortgage, they are at a very tolerable $2,600 with $600 of that going to “charity”. That brings the core bills excluding mortgage to about $2,000 per month, which I think is about the maximum one should have. Car/gas expenses are super high at $500/month, which as he mentions is due to “long commutes” — plus that figure doesn’t even include the sports car and motorcycle. It’s a little unclear if the $500 is for two or for three people, but really it doesn’t matter because Jim shouldn’t be buying gas for his adult child anyway.

Now before I continue,  I need to deliver a firm spanking to Jim for being so indulgent with his kids. Paying for college? That’s something we can debate and I even debate with myself from time-to-time. But paying for a kid’s extravagant wedding? Work/study abroad? These are adults! You have GOT to be kidding me! My eyes aren’t that good, is that Bill Gates over there? What’s more, that a kid would WANT a fancy wedding shows that there is a long pattern of receiving hand-outs and that the child has developed a consumerist value system. I’m sure Jim’s daughter is a lovely person, and this may not apply to her, but I bet even Jim would agree that the overlap of kids who get their parents to pay for their weddings and the kids who later beg to be bailed out of their credit card debt is enormous. Perhaps the only thing dumber than a parent paying for a fancy wedding is a kid putting that same wedding on a credit card. Couples should be investing in their marriage, not their wedding! (Like these guys.) My wife and I spent just a few hundred dollars on our wedding (eloped to Vegas) and spent barely $60 each on rings. Is something wrong with us? Well, I’m 45 and work just four hours a week and my wife will be done working when she reaches her 40s as well. So who is crazier?

While I’m ranting, can we talk about long commutes? Many of us have done it (including me), but it’s time we Americans stop putting up with this daily torture. That starts with facing down this lie about the “American Dream.” The American Dream is to own a home? Please. Stop. Owning a home is great in many ways, but let’s stop pretending it’s what life is about. The American Dream should be about freedom to do what you want to do. Just because you fell in love with a lovely house in a “nice” neighborhood is no reason to throw away a decade of your life. What’s more we tend to ignore the costs of these homes, whether it be lawn equipment, time, repairs, remodels, commuting costs and time away from our families. It’s even sadder watching empty-nesters try to keep up the large house in which they raised their kids only to have those same kids dump it for cash right after the estate sale. But that’s a rant for another day.

OK, now that we have Jim begging for mercy, let’s build him back up with some good news!

On the mortgage, he’s on the right track. Although it’s too bad he chose a 15-year loan instead of a 10-year. The payment difference would only be around $300 or so and would have greatly increased the pay-down time. He could even afford to do a five-year loan in his situation! But that doesn’t matter that much because he can keep going with his current loan.

When it comes to a traditional REtirement, Jim and his wife are basically done. With only moderate growth, they should have close to $1 million in retirement funds available in 10 more years when they are 65. That million bucks should generate enough to cover their basic monthly bills even without counting their social security income, which they could actually live on by itself. Despite what professional investment advisers would say, they ALREADY have plenty of money for retirement.

Our challenge is to bridge the gap from now until age 65. The upcoming years are the classic “pretirement” phase that almost NO ONE talks about. I do find my GenX peers a lot more focused on it than my Boomer elders, but still in general, it’s just not an accepted “phase” of life. Anyhoo…

Jim, here is how you and your wife can reach the freedom of pretirement as soon as possible. Hang on, we’re going to thread the needle here…

  • Tell your son you’ll help with support for school for year 1, but after that he’s on his own. If he has to take on debt, he has to take on debt. But, oh no, school loans suck!
    Here’s the deal: Aside from the emotional desire to ensure a debt-free law school graduate, it’s really quite mathematical. You have limited years to save up for retirement, he has many more years to pay back debt. And don’t kid yourself that there is no debt involved when you pay to support him. Unless you’re debt-free, you’re effectively borrowing to pay for his education anyway. Basically you’re using your home loan to support him instead of paying off your mortgage and building your own pretirement fund. In addition, I think he’ll learn more about money, pretirement and what it’s like to be carrying debt in his 50s from how you handle this situation more than anything he’ll learn in school. (By the way, if he has scholarships, the loan he’d get for living costs would be quite small. I’d reconsider your approach there. He can take 10 years to pay back his loan, but you are going to try to pay off your house much more quickly making your cashflow that much tighter.)
  • Let’s talk about your expenses. Overall, you live a relatively frugal lifestyle, which is great. There are a few areas you should think about cutting back because there is some low-hanging fruit there.
    Your food budget is EXTREMELY high. You should be able to easily trim $200 off that to bring it down to $400. I suspect that number includes some restaurant spending and probably some waste. Time to bring that under control. Say goodbye to Whole Foods!
    Your internet and cable total to $120/month. For high-speed internet plus TV I pay just over $60 for full HD, so I think you’re getting ripped off there. As a former Dish Network customer, I suspect you may have a satellite system. That needs to be canceled To-Day.
    I’m not seeing a cell phone cost line, but I assume you have one. If you’re a normal American, you can probably save on that, too. And it’s time to get rid of the landline. That’s just a needless expense that you’re wasting money keeping. If you want to keep your phone number, you can convert it to Google Voice and have that number ring through to your cell phone. That’s what I did and it works awesome!
    It’s nice you donate to charity, but it’s also not appropriate when you’re trying to hit aggressive goals. I don’t know what kind of cars you drive, but I suspect they’re perhaps not the most economical. If you’re driving an SUV to work every day, you should be hanging your head in shame as you head over to Craigslist to put that beast up for sale NOW. But since you didn’t mention this, we’ll just assume there is moderate room for improvement and drop this to $400/month. It’s hard for me to imagine anyone paying more than $100 per driver just for the honor of getting to work every day. While you’re on Craigslist, you’re going to put two more ads up: one for your sports car and one for your motorcycle. Keeping a depreciating asset sitting there not earning you money is painful to see in your situation. I don’t know what those are worth, but I’ll just throw in a round $15,000 coming your way once you dispose of those toys.
  • It’s also painful to see you have an HOA. For what? The joy of living “there”? Frustrating! But since I’m sure have deep roots there now, I’ll give you a pass and we’ll leave that in place. (Although see below for more fun!)
  • So with barely even touching your extravagant lifestyle, we’ve dropped your monthly pretirement number from $2,000 to $1,600 a month.
  • Next, just to undertake a little financial discipline, you should immediately open a home equity line of credit on your house, if you don’t already have one. Don’t freak out, you’re going to keep this balance at ZERO at all times. You can get as large of a credit as you want, but no less than $24,000 (one year of your current core expense amount.) This HELOC is your new emergency fund! Now you don’t need to keep cash sitting around in your savings accounts earning nothing. Not having loads of cash sitting in the bank might help you learn to say no to your kids, too!
  • For everyone reading this, it doesn’t typically help you to pay extra principle on your mortgage. I mean it does but it doesn’t. Let me explain. It does help you in two ways.
    One it lowers your principle so you owe less and your payoff target does come closer. You could even consider those payments as “earning” the amount of interest on your loan — in your case 3.5%.
    The other way it helps you is by putting your money somewhere you can’t get to it.
    On the other side of the same coin is your money is somewhere you can’t get to it. And even as you pay the mortgage company gobs of money, your PAYMENT doesn’t budge at all. So in general I suggest considering investing those funds elsewhere instead, but keeping them semi-liquid for eventual loan payoff. For Jim, though, it may make sense to go ahead and throw this money at the principle as we’ll see.
  • Now that we’ve lowered your expenses down to a more sane $1,600/month, you have $5,000 remaining, not including your mortgage. With mortgage, you’re left with around $3,700 each month. Here’s how you’re going to get rid of your mortgage in two years, not three! ALL of your $3,700/month will go toward your mortgage fund. That, plus your motorcycle and sports car money should be enough to get that monkey off your back. ($3,700 * 12 * 2 + $15,000) If you’ll check your handy amortization table, I think you’ll see that just about gets you there*. (For other folks interested in paying off a mortgage quickly, see my post on How to get rid of your mortgage.)
  • That was two painful years, but are we at pretirement yet? Unfortunately, not yet. Now that you have paid off his mortgage, it’s time to build up a pretirement fund. The good news is that without a mortgage, you can now save around $5,000/month. That $60,000/year should build up quickly. The bad news is it’ll STILL take about five or six more years to reach a break-even point. That’s frustrating, but we can’t argue with the math. You’ll need nearly $400,000 invested in order to cover monthly expenses and by the time you get there, you’ll basically have just retired. Hey, worse things have happened! Nothing to cry about!
  • But what if there was another option? If we say you’re about 55 today, you would need to do some careful planning, but you could simply work for the two years to pay off the mortgage (until you’re 57). Then work three more years to age 60. If you save aggressively during those last three years, you should have somewhere in the neighborhood of $190,000 saved. Now that you’re 60, you could simply live off the principle, giving you way more than you’d need every month. Then, at age 65, you can dive in and tap your social security and other retirement funds. You could even consider taking retirement at 59 1/2, but you probably know that already.
  • You could also consider semi-pretirement. That would mean working part-time to make ends meet and to have a little extra spending money. Since you are so close to obliterating your mortgage, I’d recommend you stick it out until that’s paid off. Then, if you desire, you could quit your jobs and find something part-time closer to home. You’d only need $1,600/month coming in, which would be a trivial amount to make for two people. Without your expensive commuting costs, you would need even less each month as well!
  • Let’s assume for a moment that you guys hate your jobs as much as I hated my last job. Can you do anything sooner than the two years it’ll take to pay off the house? It’s time to talk downsizing. Because you have good equity in your home, that is a source of funds you can tap. Also, by downsizing you may be able to lower your living costs as well, including commuting costs, utilities, your ridiculous HOA and, of course, your mortgage payment. Of course this depends on where you want to live and how much room you really need. But if you could sell your house for the Zillow price of $408,000, you should be able to net somewhere around $260,000 in cash. That may not sound like much, but remember, now you don’t need to pay your mortgage for two more years. We’ll assume you can buy a comfortable, well-built small home for $200,000. This isn’t possible where I live nor is it possible in many areas of the country. But, remember, they can move anywhere they want! Once that house is purchased, they’ll again open a big HELOC and not use it. Now with no mortgage, no commuting costs and much smaller living costs, I believe you can get your monthly bills under $1,000/month, maybe a little higher with homeowner’s insurance and taxes. You could certainly save up the $250,000 it would take to generate that expense or you could simply work part-time to make up the difference. I used to joke that if I ever got into a cashflow crunch, I could always water the plants at Home Depot and be happier than I was at my soul-sucking job. And I could!

Now let’s talk about health care for a moment. It’s probably the biggest wild card hanging out there to worry about. First, let’s talk about health. People who spend $600/month on groceries, $500/month commuting and $80/month on cable TV are, almost by definition, not healthy. This could have a direct impact on your health care costs over the next decade. Again, by moving to a more walkable and bikeable community, by not sitting on your butt either in front of the TV or in a car every day will have a lasting impact on your health and your happiness. Secondly, I haven’t listed health-care costs in the above because there is such a wide variance in the potential costs. How I wish this country would pull its head out of its collective ass and implement a sane Canadian-style health care system. It is truly the ONLY thing that makes a lick of sense.

But that doesn’t mean there are no options. If you choose to work part-time, finding a gig that covers health insurance is definitely an option. Thanks to Obamacare, you WILL actually be able to buy coverage, that is something that was not a guarantee even a couple years ago. You are VERY lucky that this legislation was passed before you needed it. The bad news is that health insurance companies are still evil, blood sucking scumbags that exploit the desperate for profit. It’s time to start looking around for an affordable plan with a high deductible (you have that HELOC if you really need it, remember?) I have heard of plans for folks your age that were a ridiculous $1,000/month and I’ve heard of some that are $300/month. A lot depends on where you live and your health, etc., so shop around. This could be a reason to choose another state over another where you live today. Shop around. What you find may help you determine what is possible.

So let’s summarize!

Jim and his wife did a great job of saving for retirement but basically didn’t save at all for Pretirement — outside of paying down their house. This leaves them potentially commuting to jobs they’d rather not be going to for 10 MORE YEARS — and that’s after an already long career. This happened because they forked over a ton of money to their kids, have lived an expensive, if typical, lifestyle and, frankly, never planned seriously for this era of their lives.

With some relatively minor lifestyle adjustments and learning to say no to their adult children, or more significant lifestyle adjustments if they want to speed things along, they can leave their jobs and gain a great deal of freedom quite quickly! EVEN IF they decide to keep working out of fear or simply a desire to live a decadent retirement, I would STILL recommend reaching pretirement stage (investments cover expenses) as soon as possible. You’ll won’t need to take as much bullshit at work, you’ll be safe in case of a major life event (such as a job loss) and you’ll live every day in the sweet, sweet mindset of complete freedom that comes with PRETIREMENT!

 

*There will be some looseness in these numbers due to taxes, insurance, inflation and various surprises and unknowns that may occur along the way. It’s the concept that’s important, not the exact numbers.

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19 Thoughts on “Reader story: A neglected pretirement

  1. “..pretirement is building up an investment fund that is large enough to pay for your monthly expenses.”

    It can’t get any clearer than that.

    “Couples should be investing in their marriage, not their wedding!”

    Thank you for that. The SO and I talked about our wedding. I want a simple courthouse wedding and go travel somewhere. Unfortunately, his family’s side prefer a church wedding with the works. I believe they want to help us out with the expense (though that means going through the big rituals).
    Ms. D recently posted…One goal down~ Initial retirement fund, completed!My Profile

    • Pretired Nick on April 22, 2013 at 12:51 pm said:

      For some people, it’s important to be in a church and all that, but that’s different than dropping $30,000 on a ceremony and party. Talk about messing up your future!

  2. Ouch – ha! I love you pf guys/gals ’cause you just lay it on the line. K – I’m still licking my wounds, but I will respond to your input (God knows I asked for it). First and foremost, thank you VERY much for doing this. Really appreciate you input. Gonna have to give this some serious consideration. You’re not the first one to say our grocery budget is too high. Yikes! Wife is a total foodie and son and I love to eat! We might just have to get more creative with that. As for the “sports car” – well, that’s true. It is just a toy sitting in our garage, but (and here come the rationalizations) it is 20 years old (in mint condition and fully paid for) as is the motorcycle. In addition to loving food, we love to cruise – it’s just fun!

    Gotta admit when I read your description of what we’ve paid for for our kids, I did cringe ’cause it makes them sound so spoiled (and trust me, neither my wife nor I were spoiled as kids). But they don’t have an entitlement attitude and my wife’s family is huge and very traditional so a big ass church wedding was practically a necessity (think Irish-Catholic) – and we did pay cash for it.

    As for their undergraduate degrees, we have absolutely no regrets about doing that. We busted our a##es to get thru school, damn near starving in the process and swore our kids would never have to do that. Water under the bridge and no regrets there. Although I must admit we probably did go overboard with paying for the son’s pilot’s license lessons and study/travel abroad. Nonetheless, if you knew our kids you’d know how adorable they are and how could any sane person say “no” to either of them (I’m being funny here) – but they really, truly are absolutely adorable – and kind and sweet and generous and precious – alright I’ll stop gushing.

    Wife would like to retire in 5 years. Me, I want to work for as long as I can. When our house is paid off in 3 years (or sooner) we can and will live on about $50,000 (the same amount we can expect from SS) and we’ll be banking wife’s (gross) salary of $115,000/year (assuming no raises/figuring in col expenses). So, that gives us 3 years to up the “pretirement” fund to about $300,000 – doesn’t it? Or am I missing something here.

    Do you really think we should take out a heloc? Wow! We’ve been debt-free and cash flowing everything for so long (with the exception of the mortgage) that taking out ANY loan (even one we don’t intend to touch) is very foreign to us. What exactly is the advantage of doing that again? Something re: that just isn’t sinking into my brain. (Sorry – slow learner here).

    I think your points are well-taken, especially the one about telling the son he’s got one year of our support in law school and then he’s on his own. He’s actually resistant to any financial help, but we are definitely going to help him his first year ’cause we know the pain of school loans first-hand. We are playing with the idea of letting him fend completely for himself his 2nd & 3rd years, but we’d like to at least pay the interest on his loans so he isn’t drowning when he graduates.

    And in defense of our HOA fees – ha! I hear you. I don’t even like HOA’s – in fact I find them a necessary evil. We lived in a great working class neighborhood for years and LOVED it and loved our neighbors, but gang bangers moved into the area and totally destroyed the area as a safe place to raise kids, so we got the hell out of there.

    In closing, Nick – thanks again for doing this. It’s great to get other’s perspectives. And it certainly gives us lots to think about.

    p.s. how did you know that’s what we spent on our daughter’s wedding 10 years ago? I did actually laugh out loud when I read that!

    • Pretired Nick on April 22, 2013 at 8:13 pm said:

      Thanks for being a good sport, Jim! Remember, you guys are doing great just as you are. If you want to keep working until retirement, more power to you. But you don’t have to!!
      The only thing you’re missing on the point about saving up the $300,000 for your pretirement fund is that it doesn’t leave you a lot of time before retirement. (3 years to pay off the house + time to save up for pretirement.) By the time you’ve saved up enough, you might as well just retire. I’m just giving you options if you want to stop working sooner but still end up in about the same place.
      The HELOC also is completely unnecessary if you decide to keep working right up until retirement. It’s only critical when you’re running a tight cashflow strategy to quickly save up money. That way you have cash you can access without using credit cards or tapping invested money. The main reason to get the HELOC set up now is that if/when you’re no longer working (a sudden layoff is the classic gotcha), it’ll be impossible to then get that loan, even though that’s when you’d need it.
      Hope it helps and even if you decide not to pretire and work straight through, I hope it helps you and others think through ALL the possibilities so you at least know what your options are. Good luck!

      • Ok, so most of your expense suggestions and calculations are right on. However you totally forgot that he could use a SEPP withdraw to access his retirement funds (in IRAs) in pretirement!!!!!

        SEPP withdraws are perfect for his age and he can easily access more than 4% of his retirement assets annually without penalty if he wants too. Of course a more conservative withdraw approach would be better, but the point is he doesn’t have to build a separate fund at all. I would suggest some of the expense reductions and paying off the house, then it would be very easy to generate his needed retirement income from IRA withdraws only.

        If you need any more info on SEPPs i am kind of the PF evangelist for them, so let me know as i am pretty up on the details. The only real catch is that once you set one up you have to continue it for at least 5 years or until you reach 59 1/2 (whichever is longer). At his age though this risk is very minimal and you can always offset withdraws by re-contributing to another IRA or 401k if you end up with “earned income”.

        • Pretired Nick on November 7, 2013 at 6:49 am said:

          Thanks for the comment, Lucas. It’s a good point. I don’t talk about that concept too much because I’d like to see people only use this approach as a last report (in most cases). However, you’re totally right that in this case, that would be a smart, valid approach to shortening the timeframe with little to no negative impact on his overall financial situation.

          • Curious why you see them as a last resort? If i can save 10% more each year because all my savings is tax deferred, then setup a SEPP withdraw for less then 4% of my retirement assets, while my income needs mean that i pay virtually 0% taxes, i see that as beating ROTH IRA funded pretirement (as you pay marginal tax rate going into it) and other taxable funds or investments (including potentially realestate which is a lot of work).

            I guess i see that plan as way to effectively save more each year, avoid almost all taxes, and if you keep your withdraws below the safe withdraw limit, then what is the risk?

            • Pretired Nick on November 7, 2013 at 9:05 am said:

              Oh, only because more is more. I would much rather see folks (depending on the size of their retirement and pretirement funds) pick up some part-time work and not take any retirement money withdrawal at all if they are still of “working” age. It’s not so much about risk as it is about making your older years even more enjoyable. I have a post planned on a related topic that touches on why there is some benefit to retaining retirement funds until retirement age. There’s a balance between having all of your money locked up in retirement funds (in which case your approach is smart for accessing it) and between having too much in taxable accounts and thus not gaining the tax-free growth aspects.

            • ok, so agree that it would be best to minimize expenses and find fun meaning full part time work that covers there. However i think the path i am suggesting actually saves people valuable years of their life and they end up with more money (by minimizing taxes).

              plan is effectively this
              1) save in tax deferred accounts (IRA/401k) while working as you save at your marginal rate on taxes and are able to save a higher percentage of your income.
              2) These funds grow tax deferred and tax free (beating any taxable accounts and ROTHs)
              3) Once you have ~25-30 times expenses in retirement accounts and probably have at least 1 years funds in taxable accounts then you can pretire.

              in pretirement you
              1) setup a SEEP from your IRAs on about 4% of your assets annually (or whatever your base expenses are) which will be taxed at your average tax rate (likely 0 or very close to it at this point). This is your cover your butt tax free income stream that will never run out.
              2) If you earn any income as you suggested (and is a good plan) then this gets put back into ROTH IRAs (almost tax free as your marginal rate is now very low), or into Traditional IRAs/401ks if you are self employee or earning more money (HSAs are also still an option).

              This sets up the best of all worlds situation.

              1) you have saved a higher rate during working years (avoiding maximum taxes) so you get to this point sooner
              2) you have a solid income stream that you pay minimal fees on (assuming you are index investing), that never runs out.
              3) if you do earn money in pretirement to offset expenses it can go right back into your retirement funds so they grow even more (You just have to contribute to a different IRA than you have the SEPP setup on, but that is a very easy requirement).
              4) whenever you get to 59 1/2 you just cancel the SEPP and withdraw whatever you need to to bridge your income to expense gap directly.

              • Pretired Nick on November 7, 2013 at 9:54 am said:

                Very smart take! Any interest in writing up a guest post about this topic?

              • Potentially! I am trying to work through all the tax issues on my personal plan (that includes a couple other optimization steps) at the moment to make sure i haven’t missed anything. so far i haven’t found anything of concern, but i have a couple more arcane tomes of the tax code to dig through to make sure. once i get this complete i will get in touch.

  3. Love your honesty here, Nick. I agree with the food bill too – it can definitely go down. As I perused your site you’ve given me lots to think about regarding our own situation and “pretirement” options. Thanks. :-)
    Laurie @thefrugalfarmer recently posted…Doing Your Due Diligence Before Purchasing Life or Critical Illness InsuranceMy Profile

    • Pretired Nick on April 23, 2013 at 12:53 pm said:

      That’s great to hear, Laurie. If you write up some of your thoughts on your site, be sure to let me know so I can come take a peek!

  4. Nick, loved this post. I felt as if my thoughts magically transferred to your paper.

    It’s such a mindset, all of it. He should absolutely dump vehicles that aren’t being used, dump the gas guzzler, dump the cable TV, and possibly sell the house and downsize/move closer to work.

    That food budget is outrageous. I mean seriously, the Cash Cow Couple survives on like $100-125 per month!

    Great stuff.
    Jacob@CashCowCouple recently posted…Save Money With a Low Flow ShowerheadMy Profile

    • Pretired Nick on April 25, 2013 at 7:06 am said:

      Thanks, Jacob! Once a person takes a step back and can see their own lifestyle with new eyes, it’s pretty easy to see where all the money went. That said, I don’t expect everyone to adopt a super frugal lifestyle. But I do hope they can find a few tips that will help them pretire sooner. Jim is in better shape than most. What’s frustrating are the people who complain they’ll have to work forever but can’t see the gusher of money they’re spending mindlessly.

    • Nick,
      Get your facts straight before you go mouthing off!
      1). we don’t have any vehicles we’re not using – (that little paid for, 20 year old sports car in mint condition gives us a great deal of pleasure as does the m/c);
      2). we don’t drive any gas guzzlers;
      3). we’re not selling our house – we LOVE it and built and paid for it – and are very comfortable with our neighbors; and
      4). we’re not moving closer to “work” ’cause that would take us farther away from our kids/ grand kids.

      Wow! I love that you guys are into this pf shit – but your arrogant attitudes need to be seriously racheted down! Live and learn, darlings and unless and until you’ve been there/done that – show more respect. You’re clueless (and/or incredibly selfish).

      • Pretired Nick on April 26, 2013 at 5:45 am said:

        Jim, I’m sure Jacob meant no disrespect. Everyone just wants you to have a happy, health retirement and a pretirement that is as long as possible.

        • He may not have “meant” any disrespect – but he certainly showed it and it absolutely flabergasts me when someone who has never put their own kids thru college debt-free and done a gazillion other financially responsible things – which one can ONLY do after decades of living – spouts off as a “know-it-all” and with such a cocky attitude.

          I’d love to hear his story – how’d he get thru school? How’d he pay for it? Is he/has he saved for his own (future?) kids’ education? Did he even pay for his own? What’s he given to charity – $ wise or time-wise. Who has he helped, financially, along the way? Or is it all just about him?

          Other than taking care of himself, what has he contributed for the benefit of someone else? It’s the snotty tone I object to – not his financial goals.

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