Hello to forum...and I'm scared

DavidG · 04-09-2008, 06:17 PM

Fantastic forum. Love the "real life" experiences, advice, and general camaraderie that exists within the members/posters. Ya'll seem like a great group.

Okay,...nuff about you...<snicker>

about me: just turned 55, married, currently love job, we both hate where we live. Family - kids/grandkids all live "back home". I'm pretty much at my peak earnings years with lowest expenses, now that youngest has graduated from college, and has her own job, life etc...
After early retirement, we will move back home and build our "last" home.

As of today, 401k is at $433,000, and IRA is at $978,000.
total of $1,411,000 +/- market
Home has aprox value of $230,000 with $70,000 mort.
no pension. Will have health insurance from megacorp, but the cost is high at $900/month. (Megacorp just reduced their retiree health insurance subsidy from 70% to 10% two years ago...dirty rotten scoundrels..)
Been with same corp for over 30 years, and the carrot they've dangled all those years was very different. oh well....such is life.

401k/IRA is diversified into a mix of 65%stocks/25%bonds/10% cash. aprox

Also have about $70,000 in after tax savings. (emergency fund)

Social Security at age 62 (me) and 63(DW) will provide about $2000 a month in today's dollars.

I plan to self contract the new home construction and also plan on it being paid for when I finish. (We already own the land.) Due to the high health insurance, I feel that we will need about $65,000/year. (Earn almost twice that now.)

What is your opinion on the earliest age to pull the trigger? I'm currently saving $20,500/year (which is max) in the 401K, and another $12,000/year after tax.

Appreciate anyone's opinions..for..against.

Thanks

Midpack · 04-09-2008, 06:44 PM

I think most will suggest you plug in your numbers here first:

FIRECalc: A different kind of retirement calculator

Rich_in_Tampa · 04-09-2008, 06:46 PM

Welcome, David. Sounds like you've done a good job of accumulation. If you haven't yet done so, plug your numbers into FIRECalc (link at bottom of page) and play with the results a little.

With as much of you nest egg in qualified accounts, you be paying income tax on most of your withdrawals. Does the $65K/y expenses need to be grossed up, or is that after-tax money?

DavidG · 04-09-2008, 08:11 PM

The $65k is before taxes.

Rambler · 04-09-2008, 10:29 PM

A big factor here is "how much will the new home cost?" ...and, what happens in the market between now and your FIRE date. Excluding your home equity of 160k, you have 1481k saved. The standard 4% SWR would give you 59k/year on that amount. From 62 you will have another 24k...total 83k in todays dollars. But you have to figure out how to get your money out of IRAs and 401ks early to do that now. I am not proficient with this area, but I believe you can do what is called an SEP or 72t(search the threads for that).

Also you have 7 years until SS, so you will need to figure that. I would run FIRECalc to do that.

With a little more planning, I would think you are almost good to go...but do the planning first.

R

04-09-2008, 06:17 PM	#1
DavidG Confused about dryer sheets Join Date: Apr 2008 Posts: 4	Hello to forum...and I'm scared Fantastic forum. Love the "real life" experiences, advice, and general camaraderie that exists within the members/posters. Ya'll seem like a great group. Okay,...nuff about you...<snicker> about me: just turned 55, married, currently love job, we both hate where we live. Family - kids/grandkids all live "back home". I'm pretty much at my peak earnings years with lowest expenses, now that youngest has graduated from college, and has her own job, life etc... After early retirement, we will move back home and build our "last" home. As of today, 401k is at $433,000, and IRA is at $978,000. total of $1,411,000 +/- market Home has aprox value of $230,000 with $70,000 mort. no pension. Will have health insurance from megacorp, but the cost is high at $900/month. (Megacorp just reduced their retiree health insurance subsidy from 70% to 10% two years ago...dirty rotten scoundrels..) Been with same corp for over 30 years, and the carrot they've dangled all those years was very different. oh well....such is life. 401k/IRA is diversified into a mix of 65%stocks/25%bonds/10% cash. aprox Also have about $70,000 in after tax savings. (emergency fund) Social Security at age 62 (me) and 63(DW) will provide about $2000 a month in today's dollars. I plan to self contract the new home construction and also plan on it being paid for when I finish. (We already own the land.) Due to the high health insurance, I feel that we will need about $65,000/year. (Earn almost twice that now.) What is your opinion on the earliest age to pull the trigger? I'm currently saving $20,500/year (which is max) in the 401K, and another $12,000/year after tax. Appreciate anyone's opinions..for..against. Thanks

04-09-2008, 06:44 PM	#2
Midpack Thinks s/he gets paid by the post Join Date: Jan 2008 Location: Chicagoland Posts: 1,035	I think most will suggest you plug in your numbers here first: FIRECalc: A different kind of retirement calculator __________________ You only live once...

04-09-2008, 06:46 PM	#3
Rich_in_Tampa Moderator Emeritus Join Date: Feb 2006 Location: Tampa Posts: 6,010	Welcome, David. Sounds like you've done a good job of accumulation. If you haven't yet done so, plug your numbers into FIRECalc (link at bottom of page) and play with the results a little. With as much of you nest egg in qualified accounts, you be paying income tax on most of your withdrawals. Does the $65K/y expenses need to be grossed up, or is that after-tax money? __________________ Rich Tampa, FL (10% retired) As if you didn't know..If the above message happens to contain medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any medical purpose whatsoever. Consult your own doctor for all medical advice.

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04-09-2008, 08:11 PM	#4
DavidG Confused about dryer sheets Join Date: Apr 2008 Posts: 4	The $65k is before taxes.

04-09-2008, 10:29 PM	#5
Rambler Full time employment: Posting here. Join Date: Jul 2007 Posts: 778	A big factor here is "how much will the new home cost?" ...and, what happens in the market between now and your FIRE date. Excluding your home equity of 160k, you have 1481k saved. The standard 4% SWR would give you 59k/year on that amount. From 62 you will have another 24k...total 83k in todays dollars. But you have to figure out how to get your money out of IRAs and 401ks early to do that now. I am not proficient with this area, but I believe you can do what is called an SEP or 72t(search the threads for that). Also you have 7 years until SS, so you will need to figure that. I would run FIRECalc to do that. With a little more planning, I would think you are almost good to go...but do the planning first. R

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