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Date is Set!!! Looking for any advice--we're 52
Old 02-08-2016, 08:28 PM   #1
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Date is Set!!! Looking for any advice--we're 52

Ok, we've selected the date [or range] of this summer....wow it is exciting as hell!!!
We've got 1.6M in non-taxable funds [cash, cost basis and Roths], 480k in tax deferred and 450k in taxable. We own our house and cars outright. We have run through the numbers a bunch of times and don't think our normal expenses are over $35k for a year.

Am nervous as hell...any advice? Things to watch out for? Things to plan for? Any and all help welcomed!
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Old 02-08-2016, 08:44 PM   #2
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See this for a pretty comprehensive list of things to have handled or have a plan to handle upon retirement:

https://www.bogleheads.org/forum/vie...rt=50#p2786486
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Old 02-09-2016, 08:07 AM   #3
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My only concern is your comment: "don't think our normal expenses are over $35k for a year"

$35,000/year spending seems pretty low long term so you would want to make sure you know exactly what you spent in years past so that you will have a realistic expectation of future spending. It was a bit confusing for me understanding your NW but if it is $2.53 MM you are probably in good shape if you have taken into consideration the occasional costs of car replacement, home repairs and other unexpected costs. Also have you considered increased spending for vacations and hobbies? Our vacationing costs have increased quite a bit since retiring. I also read in a recent thread about the cost for Medicare premiums. I was a bit surprised that the cost is approx. $5,000/year for each person. This is significantly higher than I pay for subsidized ACA healthcare.

No mention of future pension or SS but if you have considered all of those costs you are probably good to go. Congratulations!
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Old 02-09-2016, 10:43 AM   #4
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Very exciting for you! Have you gone through all of these questions:

Some Important Questions to Answer Before Asking - Can I Retire??

$35K does sound low when you take into account major expenses (cars, home repair, etc.) and medical with high deductible which is pretty much the standard until you hit Medicare. You're probably OK but I would be watching expenses and WR very carefully for the first several years.

What do you have planned to kick off this new adventure?
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Old 02-09-2016, 05:45 PM   #5
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Congratulation on your achievement. Enjoy your free life.
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Old 02-09-2016, 06:23 PM   #6
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Hey NOGI, I'm counting down the next 11 weeks to Freedom50, and I'm nervous too, but with your numbers, you shouldn't be. Look at it this way: at $50,000 a year (accounting for tax and unexpected expenses), your $2.5M lasts 50 years if you stick it in a 0% interest account. There will be inflation during that time, so it won't actually carry you to when you are both 102.

But if you invest some of it in some good dividend stocks, you won't have any trouble maintaining or exceeding your current lifestyle. One thing that you might want to consider is that with all of the time you now how, you may want to spend more than you have while you've been working in travel, golf, a vacation property, generous charitable donations, cocaine, or nice meals out with your spouse.

It looks like you can afford it.
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Old 03-03-2016, 09:00 AM   #7
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Originally Posted by Tom52 View Post
My only concern is your comment: "don't think our normal expenses are over $35k for a year"

I was a bit surprised that the cost [for Medicare premiums] is approx. $5,000/year for each person. This is significantly higher than I pay for subsidized ACA healthcare.
:
Because we retired in 1986 in our 40s and stopped contributing to Social Security, our SS benefits are quite low compared to what anyone today would be receiving after working into their 60s, but still, that estimate for Medicare seems way too high. I just checked our SSA-1099 statement for 2015, and our Medicare deductions are 10% of benefits paid to us. We also have supplemental health insurance, and that's just under $2,300 per year per person - and you do want supplemental heath insurance, of course.

I wonder what that $5,000/pp/year figure is based on.
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Old 03-03-2016, 09:41 AM   #8
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Originally Posted by GypsyGrasshopper View Post
Because we retired in 1986 in our 40s and stopped contributing to Social Security, our SS benefits are quite low compared to what anyone today would be receiving after working into their 60s, but still, that estimate for Medicare seems way too high. I just checked our SSA-1099 statement for 2015, and our Medicare deductions are 10% of benefits paid to us. We also have supplemental health insurance, and that's just under $2,300 per year per person - and you do want supplemental heath insurance, of course.

I wonder what that $5,000/pp/year figure is based on.
Regular Medicare Part B premium is $105/mo ($122 in 2016 for those not getting SS). Part D is another $12-13, iirc. If you're subject to IRMAA, then the premiums can be much higher but of course, that means you have more income, too.
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Old 03-03-2016, 10:17 AM   #9
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Originally Posted by NoOneGetsIt View Post
Ok, we've selected the date [or range] of this summer....wow it is exciting as hell!!!
We've got 1.6M in non-taxable funds [cash, cost basis and Roths], 480k in tax deferred and 450k in taxable. We own our house and cars outright. We have run through the numbers a bunch of times and don't think our normal expenses are over $35k for a year.

Am nervous as hell...any advice? Things to watch out for? Things to plan for? Any and all help welcomed!
While I can live on likely live on $35k, I would agree with others to check that number. Depending upon where you live, you could have significant real estate taxes. Others noted medicare, but @ 52 you would need to buy your own health insurance. Also, expenses for taxes, repairs, etc.

I was a bit confused with your list of assets
Quote:
1.6M in non-taxable funds [cash, cost basis and Roths]
Roths are non-taxable provided you don't invest in things that distribute income that is taxable in qualified accounts (UBTI for instance - things that kick of K-1 forms). Cash and basis, are these in a taxable account? Usually it is $ taxable accounts (including under you mattress), T-IRA (and similar) and Roth (and similar). How you invest can change the tax rate.

Seriously look at your insurance costs, infrequent expenses (home and car repair/replacement), and what you'll be doing with your time.
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