Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Hi, I am ready to jump ...
Old 01-08-2014, 03:29 PM   #1
Confused about dryer sheets
 
Join Date: Jan 2014
Posts: 1
Hi, I am ready to jump ...

Work is killing me and I am ready to jump off a bridge , so I am looking for advice or maybe just a push (not off of a bridge) to start retirement. I'm 59 1/2 and my wife is two years younger. We have ~$2.1 M in 401K, traditional and Roth IRAs, and taxable savings/mutual funds (~80% stock, 20% fixed/bonds - will probably move to 70-30 mix)). Of that, $100K is in a fairly liquid fund designed as emergency savings. Currently we live on ~$60K/yr and just paid off the mortgage. I hope to wait until age 66 to collect SS (~$24K/yr) and my wife will get half that amount as she teaches part time. I have a small pension, $3K/yr at 65. Otherwise, no income except $5K/yr my wife will make for a short time. I ran FIRECalc using a number of scenarios (spending, investment rates, etc.) and get a 100% success rate for all, up to a spending level of $90K. Have also run a similar tool on Fidelity and gotten positive results.

We have additional funds set aside for a new car, and phones/computer to replace work equipment. We will likely sell the house (~$250 - 300K) in a few years (or sooner) and downsize. However, I'm assuming this will be essentially a break even proposition. Obviously, health care and disability insurance (currently thru work) are the biggest financial concerns. I'm assuming my mortgage payments (~11K/yr) will go to cover thses costs so that I won't have any additional expenses.

Any advice? Ideas on forming an income stream? Based on your experience, have I missed anything or made poor assumptions?

BTW, I have followed the forum for 5+ yrs and have learned a lot. Love FIRECalc! Look forward to any and all advice.
__________________

__________________
Ready-to-Jump is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-08-2014, 04:11 PM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,107
The best advise I can give you is take a look at this before you jump...or fall...or lean too far : Some Important Questions to Answer Before Asking - Can I Retire?
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-08-2014, 05:03 PM   #3
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 1,823
Welcome! I would guess that if you run your $60K expense figure through Firecalc it will give you 100% success. At first glance you look more than sufficient financially to cover your expenses. I would just make sure the $60K is realistic, and covers unexpected expenses like major home repairs and eventual car replacements. If so, I can't imagine why you wouldn't take the plunge. Good luck with it!
__________________
Ready is online now   Reply With Quote
Old 01-08-2014, 05:25 PM   #4
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,608
Sounds like you have a pretty big margin of safety in these numbers. Enjoy your new lifestyle.
__________________
growing_older is offline   Reply With Quote
Old 01-08-2014, 06:24 PM   #5
Thinks s/he gets paid by the post
Live And Learn's Avatar
 
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,689
Welcome ! Please stay away from bridges until you figure this out.

I doubt $11k / year out of a $60k budget will not cover medical and LTC. You may be able to get ACA subsidies until you are Medicare eligible - you should look into that.

Definitely read the post that REWahoo pointed out - its a gem !

If FIRECalc says you can spend 90 instead of 60 then that 30k cushion is more than enough to cover those two expenses.
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
Live And Learn is offline   Reply With Quote
Old 01-08-2014, 10:05 PM   #6
Thinks s/he gets paid by the post
robnplunder's Avatar
 
Join Date: Nov 2013
Location: Bay Area
Posts: 2,124
Jump? How high? Looks like you are set to retire financially. Good luck in whatever you decide to do.
__________________
Pura Vida
robnplunder is offline   Reply With Quote
Old 01-09-2014, 01:34 AM   #7
Recycles dryer sheets
wingfooted's Avatar
 
Join Date: Jul 2011
Location: Oregon - Dry Side
Posts: 218
That $2MM plus SS at age 60 is within what I would call the twilight zone of ER. You can probably make it if all goes well but a limited amount of room to maneuver or to handle unexpected outcomes.

Have you rerun the numbers for 'one more year'. What is the new WR result and and would it be worth delaying ER.
__________________
wingfooted is offline   Reply With Quote
Old 01-10-2014, 06:20 AM   #8
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
You don't need disability insurance once you retire. There are no lost wages to protect. Heath insurance is another matter. Many people underestimate how much it really costs until too late. You can get COBRA for 18 months which is pricey but probably cheaper than buying your own policy. Check on eHealthinsurance.com for what a policy for you and your wife would cost. A high deductible plan could easily cost $12k/yr. A subsidy is available if you can control your income. I suggest you wait until the heath site for your state gets fully operational before you try to check there. Make sure you also include taxes in your income needs.

FireCalc is one of the more conservative programs I've seen. Unfortunately,it's based on past performance and not the future. It's a shame someone can't fix that but we have to go with the best we can do. Most measures say you've got plenty for your living costs and you have options to reduce them if necessary. I think you've got enough money to retire. Good luck.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 01-10-2014, 05:47 PM   #9
Thinks s/he gets paid by the post
Katsmeow's Avatar
 
Join Date: Jul 2009
Posts: 3,397
Quote:
Originally Posted by wingfooted View Post
That $2MM plus SS at age 60 is within what I would call the twilight zone of ER. You can probably make it if all goes well but a limited amount of room to maneuver or to handle unexpected outcomes.

Have you rerun the numbers for 'one more year'. What is the new WR result and and would it be worth delaying ER.
Is this meant to be humorous and I'm just not getting the joke? Or, are you serious?

I am sure that there are people with $2 million plus SS who at age 60 couldn't retire. But, I don't really think there is much doubt here where they OP says they currently live on $60k and just paid off the mortgage. He will get $24k SS at 66, his wife will get $12k, and he will have a $3k a year pension in about 5 years. Firecalc gives 100% with spending up to $90k which is 150% of what he is spending now. He also has additional funds set aside for some one time expenses.

Let's say he decided to withdraw 3% a year until SS comes. That 3% alone would cover his expenses. SS and pension will ultimately cover $41k of the $60k a year. Granted his expenses may change during retirement and he should certainly model that. But, even if health care expenses are likely to be higher some expenses are likely to be lower. And he has budgeted his $11k a year of mortgage spending (which he no longer has) to cover all or part of those. Even if his ultimate expenses turn out to be more than $60k with $2.1 million if it was me I wouldn't be trying to figure out if I needed to wait OMY.

If he has no retiree insurance available, figuring out cost of health insurance is clearly much easier now since he can just go and price exchange policies.
__________________
Katsmeow is offline   Reply With Quote
Old 01-14-2014, 01:38 PM   #10
Recycles dryer sheets
wingfooted's Avatar
 
Join Date: Jul 2011
Location: Oregon - Dry Side
Posts: 218
Quote:
Originally Posted by Katsmeow View Post
Is this meant to be humorous and I'm just not getting the joke? Or, are you serious?

.


Serious

Health insurance on the new exchanges for older couples -$20K per year

Some portion of the funds are in 401K - tax bite is not zero

IMO, future SS income needs to be viewed with some suspicion as the program will likely be income or asset tested.

OMY can have a significant impact on available funds
__________________
wingfooted is offline   Reply With Quote
Old 01-14-2014, 02:31 PM   #11
Thinks s/he gets paid by the post
Katsmeow's Avatar
 
Join Date: Jul 2009
Posts: 3,397
Quote:
Originally Posted by wingfooted View Post
Serious

Health insurance on the new exchanges for older couples -$20K per year

Some portion of the funds are in 401K - tax bite is not zero

IMO, future SS income needs to be viewed with some suspicion as the program will likely be income or asset tested.

OMY can have a significant impact on available funds
Sure, but he has plenty of cushion to cover all that stuff. Basically, if you can't retire with $2MM, then there isn't hope for the vast majority of Americans. And, I think the vast majority can and do retire with less than $2MM.
__________________
Katsmeow is offline   Reply With Quote
Old 01-14-2014, 02:36 PM   #12
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 1,823
Quote:
Originally Posted by Katsmeow View Post
Sure, but he has plenty of cushion to cover all that stuff. Basically, if you can't retire with $2MM, then there isn't hope for the vast majority of Americans. And, I think the vast majority can and do retire with less than $2MM.
+1

If you can't retire at 59.5 with $2.1M in the bank and no mortgage, then we have a lot of people out there in serious trouble in this country. That has to be at the very top percentage of savings for someone their age.
__________________
Ready is online now   Reply With Quote
Old 01-14-2014, 06:59 PM   #13
Thinks s/he gets paid by the post
robnplunder's Avatar
 
Join Date: Nov 2013
Location: Bay Area
Posts: 2,124
Quote:
Originally Posted by Katsmeow View Post
Is this meant to be humorous and I'm just not getting the joke? Or, are you serious?

I am sure that there are people with $2 million plus SS who at age 60 couldn't retire. But, I don't really think there is much doubt here where they OP says they currently live on $60k and just paid off the mortgage. He will get $24k SS at 66, his wife will get $12k, and he will have a $3k a year pension in about 5 years. Firecalc gives 100% with spending up to $90k which is 150% of what he is spending now. He also has additional funds set aside for some one time expenses.

Let's say he decided to withdraw 3% a year until SS comes. That 3% alone would cover his expenses. SS and pension will ultimately cover $41k of the $60k a year. Granted his expenses may change during retirement and he should certainly model that. But, even if health care expenses are likely to be higher some expenses are likely to be lower. And he has budgeted his $11k a year of mortgage spending (which he no longer has) to cover all or part of those. Even if his ultimate expenses turn out to be more than $60k with $2.1 million if it was me I wouldn't be trying to figure out if I needed to wait OMY.

If he has no retiree insurance available, figuring out cost of health insurance is clearly much easier now since he can just go and price exchange policies.

+1.

One thing I learned about this forum, it has a lot of financially ultra conservative RE folks. The OP's sitting on so much money and future income to live comfortably for the rest of their lives. Of course, WW III can happen, super volcano can wipe out 1/2 of USA, etc.. But if that happens, we will all be in a same boat.
__________________
Pura Vida
robnplunder is offline   Reply With Quote
Old 01-14-2014, 09:04 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,326
Quote:
Originally Posted by Katsmeow View Post
Sure, but he has plenty of cushion to cover all that stuff. Basically, if you can't retire with $2MM, then there isn't hope for the vast majority of Americans. And, I think the vast majority can and do retire with less than $2MM.
+3. I suspect the vast majority of households out there retire with way less than $2.1M.
__________________
daylatedollarshort is online now   Reply With Quote
Old 01-20-2014, 01:41 AM   #15
Recycles dryer sheets
 
Join Date: May 2011
Location: Maple Valley
Posts: 466
I am retired and my husband is retiring this year with only $1,000,000 in the bank per se. Have a pension and a house note but every calculator I use, including the FIRE calculator say we can do it. So you should be good by all means with the expenses you have listed. Go for it and enjoy!
__________________
kimcdougc is offline   Reply With Quote
Old 01-20-2014, 02:57 AM   #16
Recycles dryer sheets
 
Join Date: Apr 2007
Posts: 354
Quote:
Originally Posted by daylatedollarshort View Post
+3. I suspect the vast majority of households out there retire with way less than $2.1M.
+4

Let's revisit the options as OP stated them in the original post:

1) Jump off a bridge

2) Retire early with a $2mill portfolio.

I'd take door #2.
__________________
lhamo is offline   Reply With Quote
Old 01-20-2014, 08:49 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,888
Quote:
Originally Posted by wingfooted View Post
Serious

Health insurance on the new exchanges for older couples -$20K per year

Some portion of the funds are in 401K - tax bite is not zero

IMO, future SS income needs to be viewed with some suspicion as the program will likely be income or asset tested.

OMY can have a significant impact on available funds
Is Suze Orman posting here now?
__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 01-20-2014, 11:07 PM   #18
Recycles dryer sheets
wingfooted's Avatar
 
Join Date: Jul 2011
Location: Oregon - Dry Side
Posts: 218
Quote:
Originally Posted by travelover View Post
Is Suze Orman posting here now?

No, but maybe one of her disciples ?
__________________
wingfooted is offline   Reply With Quote
Old 01-20-2014, 11:13 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,428
What happened to the OP? A one-post wonder?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 01-21-2014, 11:23 AM   #20
Dryer sheet aficionado
 
Join Date: Feb 2011
Location: Colorado mountains
Posts: 31
We've got the same $2.1 million in investable assets and a $70K pension. No SS coming our way. No debts.

We plan on spending $130K/yr (includes HI, taxes) and firecalc puts us at 100% success. Checking out this year @ 55 ...
__________________

__________________
pinejake is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 08:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.