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Have a plan, what ya think?
Old 10-18-2016, 05:21 AM   #1
Confused about dryer sheets
 
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Have a plan, what ya think?

Hi Post for FIRE
Very long time lurker here and frequenter at Bogleheads. Utilizer of Firecalc and cFiresim. Have finally firmed up plans to retire in 3 years. Currently 53 (wife 54). One child left at home, age 13, college paid for.
Tracked expenses for 12 months with a total of 190k (that number includes 20k-healthcare premiums and out of pocket, 12k vacation and 19k in property taxes/insurance on the main house, see below in assets).
Assets: 2.4m taxable (Vanguard)
2.2m retirement (401k, IRAs)
Real estate: one vacation house (500k) and main house (1.2m)
New cars paid for, keep for 10+ years
No debt
Plan to sell main house in 6 years. I realize the 190k in expenses is high but I feel very certain after we downsize and the last child is out of house in about 6 years, the number should go down to around 150k per annum. I am going to work full time 3 more years to pad the numbers and get some more zeros off the Social Security grid. Even with this, Iíll only have about 25 years of max SS payments and 5 of small payments into SS. I will wait until 70 for SS, spouse worked about 15 years with close to max SS payments for all 15. I have been on the SS site to estimate benefits. Firecalc and cFiresim give me 100% to ages 94 for both of us.
What do you guys think about my plan to join the class of 2019?
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Old 10-18-2016, 05:41 AM   #2
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Welcome Setrakian.

Sounds like a slam dunk to me. You should be in a nice position to self-ensure for most any long-term care contingency also. Do you really want to work 3 more years? Did you back off on the health care expenses after 65 in your analysis?
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Old 10-18-2016, 07:30 AM   #3
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150/(2,400+2,200+1,200) = 2.6% No problem.
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Old 10-18-2016, 08:22 AM   #4
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You could easily join the class of 2016 if you choose. Those extra three years of maxing your SS income will add about $1900 per year to your age 70 benefit. A tiny drop in your bucket. In the words of Lenny from The Simpsons, "one less ivory back scratcher".
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Old 10-18-2016, 08:33 AM   #5
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Sounds like a slam dunk to me.
+1

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Originally Posted by Mdlerth View Post
You could easily join the class of 2016 if you choose. Those extra three years of maxing your SS income will add about $1900 per year to your age 70 benefit. A tiny drop in your bucket.
+1

You've already won the game, don't work another three years just to run up the score - go now. See here for why: All You OMYers and "Afraid to Jumpers" Read On
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Old 10-18-2016, 09:26 AM   #6
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Did a quick firecalc run with your input and assuming only 30k total SS for you and wife at 70 yrs old and you both live to 100 yrs old...... you could retire now and comfortably spend up to $170k per year.

You are in a very, very comfortable position. Really need to be sure you are working because you love it, otherwise you are wasting your time. Also need to figure out an estate plan to make sure all the money you have left over after you pass goes where you want it and as little as practical is just taken in taxes. Congratulations.
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Old 10-18-2016, 10:20 AM   #7
Confused about dryer sheets
 
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Thanks for all the input. Reasons for 3 more years: request from wife to make sure we are really financially ready (want to keep her happy), still moderately enjoy my job and it's more enjoyable knowing I've got a plan and I'm taking more vacation, want to decrease the number of years we are on our own for healthcare. Also, car purchase for the last kiddo.

Good thought on decreasing the healthcare component of budget a little after Medicare, forgot to bake that into the numbers.

Any more thoughts are very welcome.
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Old 10-18-2016, 11:50 AM   #8
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Originally Posted by Setrakian View Post
Thanks for all the input. Reasons for 3 more years: request from wife to make sure we are really financially ready (want to keep her happy), still moderately enjoy my job and it's more enjoyable knowing I've got a plan and I'm taking more vacation, want to decrease the number of years we are on our own for healthcare. Also, car purchase for the last kiddo.

Good thought on decreasing the healthcare component of budget a little after Medicare, forgot to bake that into the numbers.

Any more thoughts are very welcome.
First...Welcome to a fan of "The Strain"

+1 on previous posts. You could go now.

Given that you've asked if you can, maybe that means you really want to. So, one thought regarding the three more years is to go part-time now if your flavor of w*rk accommodates that. Happy wife, happy life, happy you, happy net worth.
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Old 10-19-2016, 09:25 AM   #9
Confused about dryer sheets
 
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Thanks to everyone for the input, the comments give me more confidence that we will be good. I would also add that we are fairly disciplined and could cut back in the event of early retirement bad sequence of returns. I am a fan of Guillermo del Toro and the Strain.
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Old 10-20-2016, 08:29 PM   #10
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Of all the posters I have seen so far, you and I seem to be closest to being in the same boat. I think in this low inflation environment in your late 50s drawing 4% and spending some principal is probably okay but it gets tricky of course if we get some market turbulence, so I think the key is being able to dial back. From a pure portfolio income perspective, if you get to say $5mm in 3 years, the math is pretty straightforward. I've managed a 3.33% yield. You have a lot in retirement accounts so your tax rate will be higher there with ordinary income. I like playing around with H&R Blocks income tax calculator to try to optimize things.

I just posted about taking the plunge to buy a vacation house in VT for 300k with a 1.55mm house in CT that has 32k in taxes, and glad to see someone else looking to downsize who also has a vacation house. People simply don't want these big expensive houses anymore- smart!

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