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Just retired at 62 and I hope I saved enough??
Old 07-02-2018, 01:48 PM   #1
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Just retired at 62 and I hope I saved enough??

OK, Ive run the models and think I am ready. Lets me share my numbers and get your advise or expertise.

I am 62 and my wife is 55. Both are now gladly retired. We have saved $6,000,000 in an IRA and have $2,100,000 in cash and bonds. So a total investable egg of $8,100,000. The house will be paid off next year. We will spend bout $250K annually after tax on enjoying life. My immediate worry is bridging to 65 Medicare and will just pay Corba until then. I think I've got this covered but would like your opinions. My calculators say I am ready for take off but this is scary to a guy who has worked since hi school.

I am the youngest of 3 boys and both died at 65. My brother just passed from a stroke after receiving 3 SS checks. The 3rd check was recalled because he died a week into the period. All this was sobering enough for me to say it's time to stop and smell the flowers!!.

Opinions?
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Old 07-02-2018, 01:51 PM   #2
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Originally Posted by Franklin View Post
OK, Ive run the models and think I am ready. Lets me share my numbers and get your advise or expertise.

I am 62 and my wife is 55. Both are now gladly retired. We have saved $6,000,000 in an IRA and have $2,100,000 in cash and bonds. So a total investable egg of $8,100,000. The house will be paid off next year. We will spend bout $250K annually after tax on enjoying life. My immediate worry is bridging to 65 Medicare and will just pay Corba until then. I think I've got this covered but would like your opinions. My calculators say I am ready for take off but this is scary to a guy who has worked since hi school.

I am the youngest of 3 boys and both died at 65. My brother just passed from a stroke after receiving 3 SS checks. The 3rd check was recalled because he died a week into the period. All this was sobering enough for me to say it's time to stop and smell the flowers!!.

Opinions?
3% withdrawal rate with no need for SS. I'd say you are all set! Congrats!

BTW, if someone with $8.1M cannot retire, what hope do the rest of us have?
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Old 07-02-2018, 01:57 PM   #3
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Enjoy your retirement years! Congrats!
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Old 07-02-2018, 02:08 PM   #4
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Welcome to the forum. Sounds like you are good to go.
You can check out "HealthSherpa.com" for additional medical possibilities.
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Old 07-02-2018, 02:56 PM   #5
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8 large in hand and 2 sibs already gone? Get the hell out and enjoy the rest of your life.

OTOH, condolences on losing brothers while so young. That's gotta be tough. I have two brothers. While geographically dispersed, we are still kindred soul mates. They are both older than me, and I'm def the healthiest. Not a very comforting thought...
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Old 07-02-2018, 03:10 PM   #6
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Obviously no one needs to spend $250K/yr so you could cut back a lot if needed but it shouldn't be needed. You should be able to do just about anything you want with that kind of money. Good luck
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Old 07-02-2018, 03:12 PM   #7
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You obviously have way more than enough to retire.
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Old 07-02-2018, 03:18 PM   #8
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3% withdrawal rate with no need for SS. I'd say you are all set! Congrats!

BTW, if someone with $8.1M cannot retire, what hope do the rest of us have?
+1. You're golden. Retire now and enjoy the rest of the years that you have.

If I remember right, you can typically only do Cobra for 18 months, so check out healthsherpa.com
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Old 07-02-2018, 03:33 PM   #9
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I think the w/d rate is more than 3% after accounting for tax--my rough estimate is more like 3.75%? I think there's a max on cobra of 18mo, so be sure you have an accurate assessment of healthcare costs.

We're in a similar situation, but a few years behind you and have young kids, so less flexible spend for the first 10-15 years. Our target is pretty similar to yours and we're looking at a 4% withdrawal when we bake in taxes. Many here would argue that's not conservative enough given the length of retirement.

That said, I agree with aaron. Personally, I think people end up baking in many, many layers of conservatism into their SWR--e.g. wanting to get to 100% certainty on a long lifespan with a padded budget. In this case, or even targeting 95% in the models, you are far more likely to end up with a big pile of money. I get it the desire for conservatism, but I think the size of your nest egg and the amount of discretionary spend in your budget makes a huge difference.
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Old 07-02-2018, 03:46 PM   #10
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Your biggest problem may be adjusting to the decumulation phase from the accumulation phase. Many folks have a difficult time watching those $$$ fly out the door, with no income, even though their SWR is 4% or less.
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Old 07-02-2018, 04:01 PM   #11
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Welcome to the forum and congratulations on your retirement. If you don't have enough to retire, most here are in trouble. I am sorry to here about the loss of your brothers.

FWIW, intellectually I knew we had enough to retire but it took a couple of years before it felt comfortable. Then I moved into the "I should have retired earlier" phase.
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Old 07-02-2018, 04:15 PM   #12
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Welcome to the forum. Speaking from personal experience and a bit more assets than you have, I'd say you are in good shape, with around a 3.1% WR. I retired about 7-8 years ago (lost count) at 51, and the market has really helped lift our boat and bring assets beyond where we thought we'd be. Hopefully you can also enjoy the same ride we've had. Barring a market crash, your WR should be sustainable. If not, cutting spending back from 250K is not going to be too difficult.
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Old 07-02-2018, 04:18 PM   #13
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I think the w/d rate is more than 3% after accounting for tax--my rough estimate is more like 3.75%? I think there's a max on cobra of 18mo, so be sure you have an accurate assessment of healthcare costs.

We're in a similar situation, but a few years behind you and have young kids, so less flexible spend for the first 10-15 years. Our target is pretty similar to yours and we're looking at a 4% withdrawal when we bake in taxes. Many here would argue that's not conservative enough given the length of retirement.

That said, I agree with aaron. Personally, I think people end up baking in many, many layers of conservatism into their SWR--e.g. wanting to get to 100% certainty on a long lifespan with a padded budget. In this case, or even targeting 95% in the models, you are far more likely to end up with a big pile of money. I get it the desire for conservatism, but I think the size of your nest egg and the amount of discretionary spend in your budget makes a huge difference.
Sometimes this aspect can get lost in the shuffle. Unless the non discretionary ratio is the same as someone let's say with 1mm, there can certainly be more flexibility and the WR% might not be apples to apples.
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Old 07-02-2018, 04:41 PM   #14
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I think CA allows you to extend cobra up to 36 months, but even if not, with your portfolio, coverage of 18 months of even the best biggest gold plan with no subsidy would not make a dent.

Your post says you are both already retired. Congratulations! You have nothing to worry about.
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Old 07-02-2018, 04:57 PM   #15
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I hear you saying that part of your reason for retiring is the passing of your brothers at an early age, sorry for your loss.

Have you had time to consider what you are retiring to? How will you and your DW spend your days?

Congrats you got the hard part done now you get to enjoy the freedom you earned.
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Old 07-02-2018, 05:04 PM   #16
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I think CA allows you to extend cobra up to 36 months, but even if not, with your portfolio, coverage of 18 months of even the best biggest gold plan with no subsidy would not make a dent.
Yes. CA has a separate "Cal COBRA" program to carry those who need it/want their prior employer plan for an additional 18 months.

The main difference is that COBRA plans allow for a 2% admin fee for the administrator, Cal COBRA allows for a 10% admin fee. Sounds awful, but in my case Cal COBRA was ~$50/mo less than unsubsidized (Kaiser) ACA equivalent, so I took advantage of it. I'm coming up on month 36 in Sept, so Oct 1 I'll be going Kaiser direct.

Welcome to the Group!

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Old 07-02-2018, 05:31 PM   #17
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Your biggest problem may be adjusting to the decumulation phase from the accumulation phase. Many folks have a difficult time watching those $$$ fly out the door, with no income, even though their SWR is 4% or less.
Depending on his AA, more often than not his earnings rate will exceed his WR so his nestegg will keep growing.... may have years where it goes the other way but only occasionally.
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Old 07-02-2018, 05:45 PM   #18
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Is this a serious question, or are we being punked? You have $8,100,000 dollars at the age of 62 and your house is almost paid off and you want to know if you can retire?
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Old 07-02-2018, 06:17 PM   #19
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Is this a serious question, or are we being punked? You have $8,100,000 dollars at the age of 62 and your house is almost paid off and you want to know if you can retire?
He says he is already retired. Just probably looking for some general advice and have some agreement about his decision. Nothing wrong with that IMO.
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Old 07-02-2018, 06:52 PM   #20
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Is this a serious question, or are we being punked? You have $8,100,000 dollars at the age of 62 and your house is almost paid off and you want to know if you can retire?

costs and expenses

while Franklin has a large amount of cash and low debt obligations , he MIGHT has a higher cost of living expectations OR since his brothers have passed on , might wonder if there is enough buffer if his ( or his wife's ) health declines

ALSO does his state have death duties should one of the couple pass on that might a nasty hit to the nest egg

if he is concerned , maybe there is a nagging doubt

but being concerned is better than being ambushed by a pivotal event

at a glance i would say he is fine , but he has doubts so maybe we should look deeper

cheers

( if he was Donald Trump rich he could run for politics and get a GREAT health-care plan as part of the position )
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