Marketwatcher
Recycles dryer sheets
- Joined
- Mar 16, 2015
- Messages
- 64
Hi, Everyone,
I've been in training for RE for over a year now and am ready (I think!) to pull the plug on my corporate job in March 2016. I'll be 52.
Here's my situation:
I've done lots of research and calculations using Firecalc, ESPlanner, Fidelity RIP, i-ORP, and Vanguard Financial Engines. Everything is telling me it's safe to go ahead and RE, especially since I have the pension as a floor.
Here's my plan for RE, beginning in 2016:
One of my main concerns, at this point, is finding cheaper health insurance. Are there good deals through ACA? I like my current plan, but would be paying almost $7k a year for a $2,500 deductible. I have no health issues, so could probably find something with a higher deductible and much lower payments.
I've toyed with the idea of ROTH conversions but, based on all the calculations I've done, it seems the benefit's not really there. I'm currently in the 28% marginal tax rate and will be in the 25% rate in retirement. Since I'm tapping into my retirement funds at 60, RMDs at 70 aren't really an issue. Even if I decided to convert, I wouldn't do it until 2017 when my income's lower. Of course, a lot depends on the value of my portfolio as well. (No one can predict what tax changes will happen.)
I feel like my income will be fine through retirement and I plan on leaving nothing behind by the time I'm 100 .Maybe my main focus/issue will be minimizing taxes through my retirement?
I'd appreciate any advice. Thanks!
I've been in training for RE for over a year now and am ready (I think!) to pull the plug on my corporate job in March 2016. I'll be 52.
Here's my situation:
- Annual income over the past three years or so: $160 -170K (hard to give it up, but will be worth it for RE!)
- I have been saving a lot of money over the past three years or so. My discretionary consumption is about $30K/year, so I live far below my means.
- Expected annual pension for life as soon as I leave: $60K (no COLA)
- I really like my current health insurance through work, but it would cost $7K/year for me to continue coverage.
- Expected value of retirement accounts at RE: $800K (all with Vanguard, most in indexed mutual funds, 90% in equities, no ROTHs)
- Expected value of nonretirement funds at RE: $130K (all with Vanguard, most in indexed MF, a little in MM)
- Emergency savings account: $25K
- Only debt is my mortgage
- No dependents, but I do have a life partner who is FI, working, could retire any time, but chooses not to for the moment
I've done lots of research and calculations using Firecalc, ESPlanner, Fidelity RIP, i-ORP, and Vanguard Financial Engines. Everything is telling me it's safe to go ahead and RE, especially since I have the pension as a floor.
Here's my plan for RE, beginning in 2016:
- Quit in early 2016 and immediately take my pension
- In 2017, I'll begin supplementing my pension, as needed, with funds from my taxable account. It probably won't be more than $20K a year. I'm comfortable with running it down to 0 when I'm 60, at which point I'll start withdrawing from my retirement accounts. I expect my retirement accounts will be worth over $1M at that point. I could live off $80K/yr until 60, but at that point, my income takes a jump.
- I'll continue to contribute annually to my HSA, which I'm using a stealth IRA, until I'm 65.
- My partner and I are active outdoors people. We recently bought a truck and trailer and plan on traveling around after I retire. If we like it enough, we'd consider doing fulltime RVing for a while.
- I plan on selling my house in 2016 or 2017 and should be able to pull about $165K in equity from it. My partner and I plan on moving to lower cost state that doesn't tax pension income (probably TN). The proceeds from selling my house should help us buy a nice place in TN, mortgage free, once we decide to settle down.
- I'll probably take SS at 67 or 70. It will depend on my financial situation.
One of my main concerns, at this point, is finding cheaper health insurance. Are there good deals through ACA? I like my current plan, but would be paying almost $7k a year for a $2,500 deductible. I have no health issues, so could probably find something with a higher deductible and much lower payments.
I've toyed with the idea of ROTH conversions but, based on all the calculations I've done, it seems the benefit's not really there. I'm currently in the 28% marginal tax rate and will be in the 25% rate in retirement. Since I'm tapping into my retirement funds at 60, RMDs at 70 aren't really an issue. Even if I decided to convert, I wouldn't do it until 2017 when my income's lower. Of course, a lot depends on the value of my portfolio as well. (No one can predict what tax changes will happen.)
I feel like my income will be fine through retirement and I plan on leaving nothing behind by the time I'm 100 .Maybe my main focus/issue will be minimizing taxes through my retirement?
I'd appreciate any advice. Thanks!