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Hi, getting ready to pull the trigger.
Old 10-17-2016, 08:09 PM   #1
Confused about dryer sheets
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Hi, getting ready to pull the trigger.

Hi, preparing to pull the trigger.
Both the DW and I are 61 and looking for ER next year. 62 was chosen, naÔvely, many years ago as a retirement age goal based on SS availability. We have learned much since then, but old thought processes are hard to change. Goal still remains ER at 62, but seriously thinking the end of this year is it.
The DW was downsized 4 years ago and decided to remain unemployed to provide Grandma Daycare to our new grandson. Since her salary was considerably less than mine, it was an easy decision. Now itís my turn, if I can find the nerve to pull the trigger. Hard choice, since like most here, Iíve spent a lifetime working, saving, and accumulating a retirement grub stake. OK, you can say Iím scared giving up the paycheck, and youíd be right. I know, not a novel thought, but still the change, like most major life decisions, has me running a bit scared.
We have been tracking our spending for the last 3 years so we have a good idea of how much we need to live on. DW has it all on a spread sheet sorted by year and expense type. We are planning on delaying taking SS until 66, and then SS will cover our day to day needs (property taxes, home insurance, food, heating, cooling, electrical, transportation costs, TV subscriptions etc.). We have updated the house, new windows, new vinyl siding, new roof, new furnace and air, all within the last 3 years with the thought of getting the big ticket items out of the way before ER. Not that they werenít needed, but they are done now.
We have not gotten any serious heath insurance quotes yet, but we have been pursing the exchanges to see what is out there. (Dang, expensive compared to company supplied health insurance.) We at least know what we are getting into there, $1k to $2K a month depending on plan. COBRA will be available, but we havenít looked into costs yet.
Current spending per year is $60 K This includes an annual vacation.
Assets include:
Two IRAís 401k one currently at Megacorp. $600 K
Pension plan at $ 90 K, no option to take as annuity, itís a lump sum deal.
Second 401k in another institution at $470 K
Brokerage account not taxable at $ 50 K
Cash on hand $ 63 K
Investments are in an approximately 60/40 equities and fixed income portfolio.
Total investable (liquid) assets ~ $ 1.250M fluctuates with market, but average $1.250M
Taking SS at 66 will provide $ 48.6 K per year as estimated on SSA.gov calculations based on current income. We considered taking SS at 62, but most people say delay as long as you can, so thatís the plan. Iíve run multiple scenarios taking SS at 62 and at 66, both seem like viable options
We have some company stock, about 20% of assets in Megacorpís IRA, and are looking into the cost basis to gauge tax concerns.
Iíve been running FIREcalc and getting 100% success rate with a life expectance out to 100, or 39 years of ER. Increasing our expenditures by $1000 a month still gives us a 100% success rate. Iíve been running other retirement calculators, one from Fidelity, and one supplied by another firm. Both leave us with a good margin of cash at end of plan.
We just met with our financial planner and she said we should be good to go at the end of the year.
YetÖ..I still think Iím missing something. What does the forum think? Good to go? Or, what am I missing in my consideration?
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Old 10-18-2016, 05:01 AM   #2
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Looks like you need $60k/year for the next 4 years (assuming you wait on SS like you mentioned) and ~$12k/year after that from your investments. I don't see any problem meeting those numbers with what you've posted.
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Old 10-18-2016, 07:43 AM   #3
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+1

If you take your $1,250k total, then subtract $270k to fund $60k a year of expenses for 4 1/2 years (now until 66), you'll have $980k left... at a conservative 3.5% WR that would be $34k a year plus your $49k SS would be $83k a year for expenses from 66 onwards.

You then tweak it a bit and make spending $80k a year then your $1,250k declines to $890k by the time you start SS and if you then use a conservative 3.5% WR that will give you $31k which when combined with your $49k of SS get you back to $80k in spending from now for the rest of you life so you have about 33% redundancy... should be plenty unless you start going crazy.

Dial down your HI costs by using healthsherpa.com

Your next task is getting the courage to make the leap... it is a bit of a leap of faith but well worth it IME.
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Old 10-18-2016, 10:04 AM   #4
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As others have said, looks quite workable. Some ideas to consider:

(1) Get your health care plan costs pinned down and give some thought to amount they may go up over time. Currently several folks on this board are seeing large rate increases for 2017. ( Actual Health Insurance Premium Increases For 2017 )

(2) Ensure the SS estimates you have assume no income past your retirement date. Also consider that changes in SS laws may effect what you receive. Several on this board have assumed they'd only get about 75% of what is currently projected in expectation of government working to get more revenue to address debt levels.

(3) Think about what may happen temporarily to your portfolio if we have a recession and ensure you are comfortable you know what you'd do. We've had a long bull run so wouldn't be surprising to see a pretty good dip in the market in the next year or two. The concern is mainly getting nervous and bailing out at a low point in the market swing.

Bottom line is you should be ok but worth thinking about the above a bit.
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Old 10-18-2016, 11:02 AM   #5
Confused about dryer sheets
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[QUOTE=Whisper66;1791943]As others have said, looks quite workable. Some ideas to consider:



(2) Ensure the SS estimates you have assume no income past your retirement date. Also consider that changes in SS laws may effect what you receive. Several on this board have assumed they'd only get about 75% of what is currently projected in expectation of government working to get more revenue to address debt levels.

This is something we are looking at, not figured in yet. Thanks for the input.
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Old 10-18-2016, 02:30 PM   #6
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Welcome MOSAT!

If you haven't seen them yet, there are two excellent resources here that might help you over the hump:

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

and

Early Retirement FAQs - Early Retirement & Financial Independence Community

Your numbers look good and you're tracking expenses, so personally I'd go for it. If you haven't read this recent thread, it may help you:
All You OMYers and "Afraid to Jumpers" Read On
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