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Old 05-25-2016, 07:50 PM   #1
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So here's my first post. Thank you all for the info I've been reading over the last year which has helped me a lot. I'm turning 57 this year and am eligible in July in for taking a deferred retirement at 60 (3 years away) which will result in a pension of approx 1600 a month plus a SS supplement of 1500 per month starting at 60 until I reach 62 and can apply for SS. Yes, I will be collecting SS at 62, after an episode with cancer 5 years ago, and a family history of heart conditions has me convinced to collect early. Hubby is retired military and is collecting a pension of approx 2300 per month, 80% non taxable due to VA disability. He retired 3 years ago at 59 from a contractor position. Will start collecting SS this year. House is paid off. We have a home equity line of credit of approx 60k. No other debt, besides monthly utilities, children and grandkids b'day presents. About 900k in IRA's and TSP and 100k in bank. We have Tricare Supplement, which costs us approx $480 in premiums per year, and should stay approx the same hopefully. We've both taken the beneficiary claims to have the other take 50% of their pensions. He's got a $200k life insurance and I've got an $650k life insurance which I intend to reduce to $200k upon retirement. We're both anatomically gifting. Please help me to fill in the blanks, so I can make a decision. I'm pretty sure living cheaply for 3 years and a part time job will be in order, but would like some thoughts. Thank you!
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Old 05-25-2016, 07:55 PM   #2
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You don't mention your expenses, which means no one here can really give you any advise.

Welcome to the board and can you come back with some solid expense numbers to share?It good that you have you have no debt,but your spending is the key number here.
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Old 05-25-2016, 07:59 PM   #3
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Sounds like you have it made. That's over $150K annually of income, right? With that kind of income, I wouldn't have to scrimp and save, but would be taking some world-class vacations.
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Old 05-26-2016, 05:20 AM   #4
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You don't mention your expenses, which means no one here can really give you any advise.

Welcome to the board and can you come back with some solid expense numbers to share?It good that you have you have no debt,but your spending is the key number here.
Thank you! What exactly should I be provide? Utilities? Travels a big deal, but would happily cut back to not work.
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Old 05-26-2016, 05:26 AM   #5
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Thank you! What exactly should I be provide? Utilities? Travels a big deal, but would happily cut back to not work.
You need to provide your anticipated total annual expenses in retirement, including taxes. Many of us tracked our annual expenses for a few years prior to retiring so that we could have a good basis to estimate what we would be spending once we pulled the plug
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Old 05-26-2016, 05:29 AM   #6
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Also, if you haven't seen it, this is highly recommended reading: Some Important Questions to Answer Before Asking - Can I Retire?
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Old 05-26-2016, 05:57 AM   #7
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Sounds like you have it made. That's over $150K annually of income, right? With that kind of income, I wouldn't have to scrimp and save, but would be taking some world-class vacations.
$150,000 in annual income. How did you calculate that number?

Just curious OP what happens if you don't declare deferred pension now but just wait the three years to retire? What are the numbers then? Also in addition to annual expenses, what will your total income be in three years including DH's social security?
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Old 05-26-2016, 10:55 AM   #8
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$150,000 in annual income. How did you calculate that number?

Just curious OP what happens if you don't declare deferred pension now but just wait the three years to retire? What are the numbers then? Also in addition to annual expenses, what will your total income be in three years including DH's social security?
The numbers remain the same in three years, full retirement pension and supplement. Income should be approx $62k without drawing from the IRA/TSP. Monthly expenses are utilities of $300 (heat/water/gas/sewer). I haven't factored in items. Car will be paid off in one year.
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Old 05-26-2016, 12:51 PM   #9
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The numbers remain the same in three years, full retirement pension and supplement. Income should be approx $62k without drawing from the IRA/TSP. Monthly expenses are utilities of $300 (heat/water/gas/sewer). I haven't factored in items. Car will be paid off in one year.
Okay but you certainly don't live on 300 dollars a month. Take you time and try to work out your spending. You need to figure out total monthly outgo and then reserve numbers for things like home upkeep and car replacement or repair.
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Old 05-26-2016, 01:05 PM   #10
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One quick way to get a rough idea of your spending is a top down approach. Take all of your gross income sources from today ( salary, dh's military pension....). Subtract out your current savings contributions (401k, tsp, contributions to savings and brokerage accounts). Subtract out the taxes you will not be paying in retirement:. Ss contributions, Medicare contributions. That's what you are spending... now make adjustments for things that are different in retirement. Perhaps you'll travel more. Perhaps you'll eat out more (or less). Commuting costs.... etc.

The other way to approach it is a bottom up approach.... look at all spending (including taxes, health care, Starbucks, trips to the movies... etc)
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Old 05-26-2016, 01:36 PM   #11
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How large an estate do you "have" to leave? I'd add the income that your 900k Ira throws off, say 2 to 3 percent annually. This would easily give you 20-30k yearly with only modest risk to principle. Given your strong pensions, it may be reasonable to pull more, say 4 percent, almost 40k extra, and enjoy while healthy. These numbers assume low investment expense (no advisor and/or high expense ratios burning 1 percent or more of your $).

Agee with others that you must know current and projected retirement expenses, otherwise planning in pointless...


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Old 05-26-2016, 03:31 PM   #12
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Thank you all, I've obviously got some work to do. Appreciate the input!
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Old 05-27-2016, 12:39 PM   #13
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One of the first things I did when I started planning is track everything I spent for a year. This helped make sure that I not only picked up the little every day costs I don't think about, but the big one time costs such as insurance, property taxes etc. As Rodi said, you can get a "guesstimate" by doing a top down approach, but by tracking individual categories, I could better identify which costs could be trimmed (monthly cable, dining out etc) and what my minimum fixed costs were.

Then I compared the amounts that I expect to receive from all income sources (including a conservative withdrawal on investments) to see if I had enough. If not, I had information that could help me adjust how much I needed saved if my costs changed by a specified amount, as well as info about which costs might change if I retired.

I track things with handwritten spreadsheets and notebooks (I'm old tech when it comes to this), but most people here use online budgeting software.

Don't be afraid to come back and ask more questions once you start reviewing materials.
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