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I think it's time-maybe
Old 01-30-2016, 10:33 AM   #1
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I think it's time-maybe

Have admired the intelligence of all of you for some time now. Always thought the day would come when I'd actually post and solicite feedback. Well here I am.
61 years old. DW is 59. Kids grown up and gone. Proud to have sent them to the colleges of their choice. It wasn't easy but they are debt free and so are we with regard to college.
Assets total $5M, with $2.7M in after tax account. $1.8M in 401K. Balance of $500,000 in wife's 401K. Pension is $42,000 annually should I begin now. That's single life option, no benefit to DW. My Social Security would be $24,000 at age 62. I'm inclined to start collecting at 62 as breakeven at 65 is close to 14 years. Why wait? Owe $280,000 on home valued at $$470,000. Also own condo in warm climate valued at $130,000. This paid for.
Huge concern, health insurance which I estimate at $15,000 annually. Lastly I do not live extravagantly but to live tomorrow like I live today is $120,000 annually. (Mortgage and taxes are in this number)
Firecalc says all is good- but I'm afraid anyway.
Any words of wisdom you good people?


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Old 01-30-2016, 11:34 AM   #2
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Looks pretty good.

Quick and dirty. If you pay off the house it's about 4.5m investable. If you add the 15 to the 120 you are at a 3% withdrawal rate before SS or pension. Throw that in and it seems like you're getting as close to perfect as possible.

Assuming the other stuff is answered I'd do it.

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Old 01-30-2016, 11:47 AM   #3
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Congratulations!
With $42k in annual pension and $5M invested in taxable/ira/401k accounts you shouldn't have any problems sustaining your lifestyle.

Yes you do have some GOOD problems viz: "Hmm....which account do I withdraw from".
Happy retirement. Cheers!
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Old 01-30-2016, 11:58 AM   #4
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With the assets you have there probably isn't any worry but since your pension dies with you, you may want to make sure to maximize what your wife gets from SS in case she outlives you by a decade or two. That may mean you postponing SS until full SS age and certainly means your wife waiting until her full SS age or maybe even age 70 to maximize the benefit if there's reason to believe she'll outlive you by many years. Either way, with your assets, you should be in great shape to FIRE anytime you choose. Congrats.
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Old 01-30-2016, 12:46 PM   #5
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I agree with Aaron - the only concern I would have is if you predecease your wife.

You need $120k/year to spend.
Subtract out the pension - that leaves $78k that you'd need to withdraw from your $5M portfolio.
That's a 1.56% WR...
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Old 01-30-2016, 02:30 PM   #6
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Seems to me also that you are in pretty good shape. You don't say how long you have on the mortgage but after that you should in even better shape. No worries.
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Old 01-30-2016, 03:21 PM   #7
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I was the same way. At 56, I have ~3M in assets, most rental property equity. Decent rental income. More than enough to meet my lifestyle, and them some.

Here are some of my posts over the years.

How do you get the Courage?

Finally getting the Courage

Keep looking at the numbers. Slice, dice and analyze them 100 ways to Sunday. Realize that even at 70 years of age, the numbers will look the same. Then, once you are comfortable, jump.
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Old 01-30-2016, 03:29 PM   #8
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Originally Posted by birdie View Post
.......
Any words of wisdom you good people?
Yea - don't go into work on Monday, or ever again. You've got it covered about twice over.
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Old 01-30-2016, 05:10 PM   #9
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What or what are you waiting for?
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Old 01-30-2016, 06:01 PM   #10
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I'm not yet retired although within 18 months. Planning to retire with smaller nest egg, higher spending, younger, and no pension. So from my perspective I can't imagine what you're waiting for. Good luck.

Muir


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Old 01-30-2016, 06:18 PM   #11
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Congratulations Birdie - you are easily FI and free to retire if you choose to.
I have same expense outlook as you, am several years younger (55) and lower assets....now retired quite happily with no concerns after reviewing my numbers from many angles.

If you wish to get a stronger sense on how good you are, rerun Firecalc setting the "Investigate" tab option to "Given a success rate, determine spending level for a set portfolio, or portfolio for a set spending level". This will give you an idea of how much leeway you really have in yearly expenses. You'll find you have a LOT of leeway with your numbers. If that's not convincing enough, run I-ORP and you'll get similar results using totally different tool.

Enjoy your retirement.
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Old 01-30-2016, 06:49 PM   #12
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.....Huge concern, health insurance which I estimate at $15,000 annually. Lastly I do not live extravagantly but to live tomorrow like I live today is $120,000 annually. (Mortgage and taxes are in this number)
Firecalc says all is good- but I'm afraid anyway.
Any words of wisdom you good people? ....
You have plenty to retire now. ($15 +$120)/$5000 = 2.7% which is very reasonable for a 62 yo.

$15k for health insurance is quite a bit more than what we pay but $15k is not unheard of. Have you priced out a good bronze level policy on your state exchange or healthsherpa.com?

Your taxes will likely plummet once you retire. Recalculate your taxes as if you were retired on TaxCaster or with TurboTax by taking out your earnings and making any other appropriate adjustments.

My fear for you is the tax torpedo with so much in tax deferred. You might want to consider deferring starting your pension and SS and do Roth conversions from now until you are 70.
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Old 01-31-2016, 12:05 PM   #13
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You guys are great! Everyone of you. Thank you for your advise. I have not priced out health insurance, and I take some comfort in your perspective pb4uski. And you thoughts on taxes are most helpful too. Whisper66, my task today will be to rerun Firecalc as you suggest. I've never been closer to the exit door but as you all know better than me, there is a time to turn to the next chapter.
Health and happiness to you all!

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