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Sounds like you’re in good shape but you don’t have to get drastic! I’d try your hand in the market as there are openings and you’ve got some tenure. I do worry about age discrimination but if your value prop is good enough it won’t matter. You miss 100% of shots you don’t take. When do you actually want to retire? If you’re done sell that HCOL house and move into condo. Another avenue is consider starting an LLC and become a contractor. Tons of opps there especially in public sector. I know it seems bad but welcome to FREEDOM. Enjoy it. You’ve worked hard to build it
Do something quick regarding health insurance and long term care insurance if you dont already have it taken care of. That will probably be your biggest expense going forward, other than the remaining mortgage.
Why is the obvious next step to sell the home? What would each of these give you per month in cash flow if rented?
It is almost always better to sell primary homes and invest the delta (either in brokerage or actual investment real estate) than it is to rent them.
Yep got the rule of 55 in my arsenal lol
Allows me to withdraw miney from 401k without penalty as long as I’m 55 and unemployed . Usually you need to wait until 59.5
Maybe rent out a room to someone and have fun with a roommate for a little for extra cash. Maybe someone with similar age and lifestyle. I’m sure there are several middle age folks in weird pinch situations these days. Raise rent at your condo in the short term when next lease is up. Having a 600k pretax windfall might not be absolutely necessary at this point if you truly are flying solo? And a paid off house you can bunker down in and not deal with the the world might actually be the thing that will help you sleep easiest. Housing usually plays the biggest variable in determining H.M.LCOL and you don’t have that expense so if you contain expenses you might actually be able to be fine. Careful with condos with HOA unknowns as you probably have seen.
My home costs me $65k a year to run . I have rented a portion in the past but am not interested in doing that. I can rent the whole house but again don’t won’t to deal with the headache . It’s an option tho . My kids have moved away from this area and that’s the main reason .
I was thinking about starting my own llc as I have a very specialized skill set. Has anyone tried this ?
Obvious next step is figuring out if you want to find a new job, and then what area that might be in.
Sell (or rent temporarily, if concerned about investing the proceeds into a bear market and negative compounding and portfolio depletion) and move to LCOL if ready to retire, and you enjoy the LCOL community. With no debt, I would expect your annual expenses to be covered if your investments are adequately diversified.
Subject Expert
Personally I would check whether I was financially ready to retire and reflect on whether I wanted to before doing anything about the house.
If you are financially ready and want to, then by all means sell the house and move to the condo and retire.
But you might not be ready (how much are your annual expenses?), or might not want to (did you like your job? What will you do when you retire?). And if not, your next job might be...near your house, not the condo.
Subject Expert
Always a pleasure. Enjoy your new job and/or retirement.
If pre tax account is a 401k, you could look at the Rule of 55 to pull from the account penalty free
Tell us about the RIF. What was your level, tenure with the firm?
I was an executive in industry.
You are 56 with potentially 2mm. If you don’t have any debt , can you just retire ? I mean this is early retirement territory.
Why do you need to continue slaving for the W2? Focus on living.
Do you have a life mapped out in LCOL that you would enjoy? If not, it might be worth renting out HCOL place and saving a room for yourself as you build that life. LLC/S-Corp is a good path if you can leverage your network to sell your services. Try to create a first contract with your former company. Also consider board roles for extra cash. Congrats for getting to this point, you have worked hard for it!
Congrats on what you've done and where you are. I'm leaving this year - I turn 55 - single - kid2 almost done Uni and employed 300 miles away. kid1 graduated Uni and doing great. My assets are a little less and I have been planning this for a few months - note: I geek out on financial engineering my next steps so enjoying the challenge but also hired a wealth planner for a $3k plan (fee only) - my miniroadmap:
1. find a fee only wealth planner (trust, wills, etc + financial as is and plans for next 10 years)
2. (Ideally before 1: get educated so you are invested and following and can poke at the advisor) Read up: a. Tax Planning To and Through Retirement [Garrett/Mullany](Goldmine - as readable as it can be but could be a slog). b. Holistic Retirement [Ruby et al]--just started, might be ok?. c. How to Retire [Benz]
3. re: the job stuff: check out Designing Your Life, Happen to Your Career (book and pod), What color is your parachute, The Pathless Path
extra credit if you're into DIY investing: Invest like a Billionaire [Fraser], Hands off Investor Burke, Cash Flow Investor Bupp, Fire Yourself [Hill]
But, really, the key is to find the right advisor and get a plan done that covers what you care most about and answers a lot of question. Right Now is GOLDEN hour for you and me to generate optionality and position assets most advantageously for the next 30 years. Good luck!