Hi.
There should be public school education on retirement. I found FIRE way too late and I'm embarrassed to say that it didn't occur to me that the purpose of working was to not work until about the last five years.
We are a 55 year old male married to a 54 year old female in a midwestern town in the United States. No kids. Combined annual income is currently $330K, we both contribute the maximum allowable amount to our 401Ks including the over 50 catch up and there is some company match. Total retirement savings to date is $1.715M, all in 401K.
Our retirement savings target is $2.25M which I understand is less than 8-10 times income but we have always lived well below our means and saved outside our 401K. This has allowed us to buy land in the country and build a house on it while remaining debt free. The value of that real estate asset is ~$900K. The house was built as age in place and we intend to stay here through retirement.
Our $2.25M target assumes a 30 year retirement with $115K per year in living expenses including $15,000 in property taxes (an average over 30 years of the current amount increasing at 2% per year), $18,000 in health care, $30,000 in vacations and entertainment and 25% taxes on everything including social security benefits as the major categories. We hope to get $36,600 of this from Social Security by taking it starting at age 62 and assuming we'll only receive 77% of the estimated benefit as per the social security trustees report. The rest will come from the $2.25M in 401K savings. If that works out it's a 3.5% withdrawal rate.
Projections at the current contribution rate is target reached in 4 years and 1 month at a 5% return or 3 years and 3 months at a 7% return. After the target is reached I'll probably quit my job and work at something less stressful until age 62. My wife likes her job and will probably continue until 62.
If it all goes wrong somehow first we may reverse mortgage the house and second the vacation fund comes out.
Can anyone point out any holes in this plan? Do you see any way to accelerate it? Please let me know what questions you have. Thank you in advance for looking at my retirement scenario.
There should be public school education on retirement. I found FIRE way too late and I'm embarrassed to say that it didn't occur to me that the purpose of working was to not work until about the last five years.
We are a 55 year old male married to a 54 year old female in a midwestern town in the United States. No kids. Combined annual income is currently $330K, we both contribute the maximum allowable amount to our 401Ks including the over 50 catch up and there is some company match. Total retirement savings to date is $1.715M, all in 401K.
Our retirement savings target is $2.25M which I understand is less than 8-10 times income but we have always lived well below our means and saved outside our 401K. This has allowed us to buy land in the country and build a house on it while remaining debt free. The value of that real estate asset is ~$900K. The house was built as age in place and we intend to stay here through retirement.
Our $2.25M target assumes a 30 year retirement with $115K per year in living expenses including $15,000 in property taxes (an average over 30 years of the current amount increasing at 2% per year), $18,000 in health care, $30,000 in vacations and entertainment and 25% taxes on everything including social security benefits as the major categories. We hope to get $36,600 of this from Social Security by taking it starting at age 62 and assuming we'll only receive 77% of the estimated benefit as per the social security trustees report. The rest will come from the $2.25M in 401K savings. If that works out it's a 3.5% withdrawal rate.
Projections at the current contribution rate is target reached in 4 years and 1 month at a 5% return or 3 years and 3 months at a 7% return. After the target is reached I'll probably quit my job and work at something less stressful until age 62. My wife likes her job and will probably continue until 62.
If it all goes wrong somehow first we may reverse mortgage the house and second the vacation fund comes out.
Can anyone point out any holes in this plan? Do you see any way to accelerate it? Please let me know what questions you have. Thank you in advance for looking at my retirement scenario.
Don't ask how I know... The 30K travel budget should help, but it can be a big change for both of you to be at home together most of the time unless you both have something to occupy your time. Think of it as the main "occupational hazard" of retirement. 
