55 and anxious to retire, I think I can, I think I can

[56mga]

I am 55 married and concerned over ability to retire. I have read postings with very impressive net worth. Your advice is really needed.

Heres the data:
Mortgage free (house value $650K)
Cash/Equity investments $550K
Pension (cash value) $110K (or $8K/yr)
Pension (cash value) $40K (or $2K/yr)
3 rental properties (net equity $850K) net yearly income $28K
annual combined family income approx $110K
living expenses are low (we spend approx 36K to 40K/yr)

I would like to retire and not have to sell the rental property. I am concerned that with a 4% draw down on investments that I will not have the retirement income I would like ($65K to $70K/yr).

Your comments, suggestions would be appreciated
Thx

 

[Puzzley]

While I realize you stated you didn't want to sell your rental properties, it seems to me that your return is pitifully low for an $850,000 investment. 28K a year is just a little over 3% Might as well have it in a CD and not have to be a landlord. You should easily be able to double your income, and probably more, on the 850K, which should get you where you want to be.....

 

[Puzzley]

56, when I first answered this post, I didn't realize where it was. You're in the Firecalc support forum, and probably won't get many responses here. Also, this forum cleans out often, so these posts will go away soon. Why don't you try this question in the "Hi, I am... " forum. Maybe the mods will move it there...

 

[bbbamI]

56....

I think we may have you a bit confused. When BSSC said you needed to run your numbers through Firecalc, he didn't mean just to post on this part of the forum, but use the actual calculator.

Scroll down to the bottom of the page and on the right you will see FIREcalc underscored. Click on that and it will take you to the nifty calculator that you can plug your numbers into for retirement purposes.

 

[56mga]

Thx for the comment.
I realize my return on the rental property is ow, however, it does provide diversification and a hedge against inflation. The the value of the properties should go up as should the equity, and rental income. Im nervous about having everything on the market (or interest) as I have had very poor luck and returns on my investments.

 

[56mga]

Thx for the tip on how to find firecalc. It was a bit difficult in that my portoflio is not all stocks and bonds, however, if I look at the total value of my investments ($1.4M) excluding my house, it looks as though I should not have trouble.

However

I do not want to liquidate my rental portfolio, rather, I want to live off the rental income it generates.

 

[Milton]

Assuming a 4% withdrawal rate, your cash/equity investments will likely generate $22,000 annually. Add on $10,000 from your (indexed?) pensions, and $28,000 from the rental properties, you have a total of $60,000 a year. $60,000 gives you a cushion of at least 50% above your current $36,000 - $40,000 annual expenses, and allows you to retire right now.

If you are used to living on $40,000 or less, why do you need / want rental income of $65,000 - $70,000?