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I'm THAT GUY at work...
Old 02-14-2018, 04:02 AM   #1
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I'm THAT GUY at work...

Yeah, I'm "that guy" at work who is known for reading almost obsessively about earlier than normal retirement. Since DW and I were married at 23 yrs old, while making $4.83 an hour out of college, I had been socking 15% into a 401K at work. Have kept this rate of investing up in every job since, even while raising three children (Lord, how did we do that).

How I got to be "that guy" was when my DW and I agreed on a plan to get rid of our debt (house debt not included YET ), so we could begin enjoying our mid-life by saving to spend on stuff/travel/house projects that we didn't do while in debt and raising three children. My co-workers got to hear about it and hear about it and hear about it; figured out not everyone wanted to hear. Luckily, I had another co-worker who was attempting to do the same thing, along with a few others that were interested in investing. So I was able to talk shop with them and have a cheerleader squad to help motivate me.

Most of the people I work with have little to no clue about their Federal retirement, they just understand the concept of TSP and that there is some kind of match. I've taken a road less traveled and decided to obese on my retirement instead of letting the bureaucracy get to me and focus on the future for my family. Now in the last year or two, lots of my co-workers are within 2 years of retirement and are having to ask questions as to were to find information or what information they should be looking for (MRA and years of service folks). I'm "that guy", if they cannot find it, they know I will have an idea and be able to point them in the right direction as to where or who they might ask. I'm also "that guy" that keeps chatting up retirees' after they leave to find out their experiences, downfalls, and up-swings about retirement. "Good decisions come from experience. Experience comes from making bad decisions." Figure why not learn from their "wisdom" and "experience". :-)

I think I can pull this off.

Age: 48 (DW 45), 3 grown-up DD
ETA Retirement: 58.5 (55)
Life Expectancy: 83 yrs old
Range of Incomes: $35,000 to $85,000; current $74K
Current Net Worth imoldernu style: $670,000
Future Income:
Soc Sec Suppliment (58 to 61 yr 11 months): $23,800
Pension: $20,300
Future Soc Sec @ 62 yrs: $30,700+$15,350 for DW in three years after myself
TSP/Roth TSP/IRAs: $510,000 (5% Cash, 95% in major index funds) and get a 5% matching for TSP.
Expected ROI over lifetime: 8% (5-6% during retirement)
Yearly Income: $74,000 (gross) $48,000 (net)
Actual Living Expenses: $38,000
Mortgage: $38,000 (10 yrs)
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Old 02-14-2018, 04:47 AM   #2
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drinkoj, welcome to the forum and congratulations on your savings progress. Have you run your numbers through Firecalc? With your pension, SS and savings, I suspect your plan will be fine. However, there is some key information missing from your post. Does the NW figure include your house? If so, most would recommend you remove this item from your retirement planning unless you are planning to down size. Does the pension have a COLA? You may want to prepare a retirement budget that includes the travel and home projects you mention. IOW, your retirement spending may be more than your current spending. Finally, have you anticipated the cost of health insurance from age 58 to 65?

Once again, great job and welcome to the forum.

P.S. Your life expectancy projection looks low. One or both of you are likely to live past 83. Using average life expectancy can mean you are broke at 84.
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Old 02-14-2018, 07:42 AM   #3
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Maybe because it is 15 years into the future, but the SS @ 62 seems high at least compared to mine and I have most years at maximum, although I am closer in age to collecting it.


But if your "THAT GUY" your numbers are probably correct.....
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Old 02-14-2018, 09:03 AM   #4
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Welcome and congratulations!

Alas, now that you have made your nest in this tree you are now just 'one of the guys'. :-)
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Old 02-14-2018, 10:01 AM   #5
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Maybe because it is 15 years into the future, but the SS @ 62 seems high at least compared to mine and I have most years at maximum, although I am closer in age to collecting it.


But if your "THAT GUY" your numbers are probably correct.....
+1. I am 4 years older but make almost double and have a good 35 and my projected at 62 is 10K under yours. Might want to double check. Good luck and welcome.
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Old 02-14-2018, 10:58 AM   #6
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1) Have you run your numbers through Firecalc?
2) Does the NW figure include your house? If so, most would recommend you remove this item from your retirement planning unless you are planning to down size.
3) Does the pension have a COLA?
4) You may want to prepare a retirement budget that includes the travel and home projects you mention. IOW, your retirement spending may be more than your current spending.
5) Finally, have you anticipated the cost of health insurance from age 58 to 65?
6) P.S. Your life expectancy projection looks low. One or both of you are likely to live past 83. Using average life expectancy can mean you are broke at 84.
1) Yes. Was a touch intimidated by it but it came out with 5 poor possibilities. I need to redo it, as I was really just "playing" with it when I found this site and a couple of articles.
2) Yes. As I noted, imoldernu style, as I think similarly to him on this point. The fact is before retirement we may move up in acreage and house, but still be debt free at retirement.
3) Yes, pension with a COLA.
4) THIS is what scares me, future "frivolous" activity costs and I know it's going to increase dramatically. I've only in recent years started letting the purse strings go emotionally to do things outside of a family Disney World trip every two/three years. Since 3 kids are adults, we are focused more on "us" trips; part of my deal with the wife.
5) Roughly. Very lucky to have good retirement health insurance available but there are some health issues in our lives that I am concerned about down the road; 70 to 83.
6) Agreed. Need to adjust that number.

Quote:
Originally Posted by SomedaySoon View Post
7) Maybe because it is 15 years into the future, but the SS @ 62 seems high at least compared to mine and I have most years at maximum, although I am closer in age to collecting it.


But if your "THAT GUY" your numbers are probably correct.....
7) This is where I have some issue with my "numbers" too. I do feel the SS number is high, but I've used the SS Quick Calculator to project future dollars and the numbers keep coming back to $30K at 62 years old. I do think I need to redo the estimate on this, but 15 years future dollars is kinda hard for me when it comes to SS. Suggestions?
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Old 02-14-2018, 12:51 PM   #7
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Well first I would see what it says on your SS statement, and base you SS and supplement on that. Although it will probably be higher in the future because of inflation, look at it in current dollars, just as you are looking at your expenses in current dollars.


Of course, who knows what will happen to SS and Federal SS supplements in the future.
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Old 02-14-2018, 01:11 PM   #8
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Originally Posted by drinkoj View Post
7) This is where I have some issue with my "numbers" too. I do feel the SS number is high, but I've used the SS Quick Calculator to project future dollars and the numbers keep coming back to $30K at 62 years old. I do think I need to redo the estimate on this, but 15 years future dollars is kinda hard for me when it comes to SS. Suggestions?
In the SS calculator are you putting in $0 earnings from retirement until 62?
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Old 02-14-2018, 01:30 PM   #9
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OP, I entered the following numbers in Firecalc. Some of these are just estimates so you will need to adjust as appropriate.

Current age 48 Spouse 45
Investable assets (WAG) $400k (your NW number minus a house equity estimate)
Retire @ age 58 Spouse 55
Annual savings till retirement $10k with inflation increases
Pension w/cola of $20,300 at age 58 (not sure if the age is correct)
Social Security @ age 62 todays dollars (WAG) You $25K Spouse $14K

Firecalc shows a 95% success rate with a spending level of $64,000.
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Old 02-14-2018, 01:43 PM   #10
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By the way, I don't want you to think that you can't retire when you want. Your numbers still look good even if you apply current dollar estimates to your SS. Just stick to the plan !


Congrats on putting yourself in a great position and welcome to the FIRE community.
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Old 02-14-2018, 03:23 PM   #11
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Originally Posted by brokrken View Post
In the SS calculator are you putting in $0 earnings from retirement until 62?
I'm putting in 2017 "earnings in current year" for self and using 12/2028 as "future retirement date option". Being 10 years away the "current dollars" short changes us on promotions/raises/COLA in salary and "future dollars" COLA is over stated to me, but it comes closer to what I think it will be. That is if SS, my Special Supplement, and pension are not raped by the government. If that happens I just want to be in a position with my individual retirement accounts (TSP/IRA/401K) that I can retire before most.

And thanks for the kind words in the other post. It's just hard to get unbiased options or at least educated opinions on this subject matter. Most people don't like talking their personal $$$ open like this when around the workplace, much less in a private discussion in real life. Just trying to ease my mind that I'm on a path that leads to a nice retirement
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Old 02-16-2018, 12:09 PM   #12
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Hi drinkoj!

We are somewhat FIRE doppelganger's in that I'm that guy in my office that folk come to for FERS advice. I'm just a tad older than you but have also for 3 kids just off the payroll, all whilst a Fed career. Similar to you I'm looking at going out between 56 and 58 years old.

Some of your numbers might need some clarification to fully understand them. I can't fully tell if they are expressed in future values or current dollars or a mix of both. However you decide to track, make sure it's consistent between pension, supplement and Social Security. I think based on back calculating your numbers you'll have 31 years at retirement? If so I wonder if your pension amount stated is based on your 74k salary * 31 years with a 10% reduction for spousal coverage? The supplement amount seems high but perhaps not if its been escalated to when you retire. For your Social Security estimate, when you go to the website to calculate, make sure you are zeroing out the years from 58 to 62 for earnings. If I recall you can view Social Security estimate on the calculator in either current dollars or future dollars. Again, just make sure you're consistent across all income streams for your analysis. Also you might want to consider looking at you taking social security at 67 and your spouse taking it at 62 in order to maximize potential spousal benefit should you pass away. I like the bedrock capital Social Security estimator website to look at various claiming alternatives.

I always run my longevity numbers into the 90s even if I don't think I'll live that long because there are two of you and one of you just might. You also need to do an analysis if you were to pass away and your pension is now 50% and your Social Security is only the spousal benefit. Could your spouse live on that?

All that said though, your expenses are low. I like to compare against the broad brush estimate of 30 * your net expenses (expenses minus pension and social security) to see if you have enough. And I think you'll be in fine shape.

I do all my own analysis on Excel and so I've also run a bunch of sensitivity analysis in terms of spending. Analyze a baseline spending level which just meets your needs, a realistic spending level, and a high spending level, multiply each of those numbers by 30 to get the range of assets you will need, and see where you stack up in that range.

Good luck and I look forward to comparing FERS notes with you in the future.
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Old 02-16-2018, 06:25 PM   #13
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Hi drinkoj!

Some of your numbers might need some clarification to fully understand them. I can't fully tell if they are expressed in future values or current dollars or a mix of both.
Yes, I have SS as "future estimated values" that come from the ssa.gov website I listed in an above post and the Supplemental is based off that, along with "predicted high 3 salaries" for the pension amount upon retirement with 31 years.

I use my own Excel spreadsheet to predict future TSP contributions and annual salaries with a 1% COLA/raise for each year of employment (which is understated) and it has served me well.

The numbers I gave do not include ANY reductions such as spousal annuity, healthcare, and etc. Just the basic FERS raw numbers. Although I have ran those once or twice but they tend to take away from my "big picture" outlook. Really need to put something together in my spreadsheet to look at those expenses, as they do add up and need to make sure the Mrs. is taken care of if I leave before her.

Thanks for the input.
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Old 02-17-2018, 11:19 AM   #14
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I agree with those above who said your SS estimate is off. You're ~ $10k higher than mine but I'm only 4 yrs older but have a higher earnings band than you've stated.

Get your annual earnings record from the "MySocial Security" website from SSA, then go to https://www.ssa.gov/planners/benefitcalculators.html and select the Retirement Estimator calculator. Enter in the earnings data plus your future earnings to age 58 and 0's till 62. That should give you better estimates for SS, reflective of retiring before 62.

Your supplement will be ~31/40 * [age 62 benefit in today's dollars]
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Old 02-18-2018, 05:21 PM   #15
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and need to make sure the Mrs. is taken care of if I leave before her.
I did note that was missing from the plan. What happens if you are hit by a bus the day after you file for SS. Is the Mrs.' health care covered? Are you covering her 100% joint and survivor on your pension? Too often life insurance which is supposed to cover the spouse becomes too expenses or otherwise lapses before it is needed.
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