Military Enlisted Retiree Trying to RE

[cnocmmz]

Good day all
I have introduced myself prior and have had some small input, now we are finally trying to see if we can make the move to RE. That being said, not sure it is really early; however, earlier than my Mother and Father. Somewhat winded here so here goes lol.
Well, I have been a long time observer and a somewhat reserved discussion participant. DW and I have both decided to finally call it quits after the OMY scare. (I am nervous) Hopefully, we can and here are the Stats. Interested for feedback especially assistance to figure out what I will actually take home after taxes, or is there something missing in the equation?
Ages:
DW: Retire 01 April 2020 (April Fools day :-0) at age 66
Me: Retire 01July 2020 at age 60 (59 and 11 months)
Pensions/SS pre-tax (All are Cola'd) (need help on the tax thing)
DW: Pension: $1,250 monthly
DW SS: $1,360
Me: Mil pension $3,992.00 monthly
Me: Fed Gov pension $ 675 Monthly
Me: Disability (A lot of medical issues and not taxable) $3245 Monthly
Me: SS at age 62 (Not sure if I should take it then) website states about $1,700

Investments/Cash give or take a few... about 1.1M
60%(S&P) /30% (bonds) /10% (cash)

*Been running a spreadsheet on expenses for the last few years which are :
-Essential expenses (Bills) 50K, i.e. Mortgage (1,600) electric, natural gas, phone ect.
-Entertainment expenses 20K: i.e. Dining out, travel shopping ect.
Total about 70K annually. Goal is to spend about 100K annually because we want to travel more and just overall enjoy, and I still want to invest a little something monthly.
*Medical: We are very fortunate to have military medical i.e. Tricare and wife now has Medicare so there is No real expense here.
Since our Guaranteed streams of income should cover most or all of our anticipated expenses I would like to leave some money for our Aires.


The only real concern I have I guess is if one of us were to pass first, moreover myself since most of the income is coming from my side. The DW is 6 years older so? I do have a small 10 year 100K term insurance that will help.
FireCalc has us 100% @ 130K annually using 500K. We will use the other 500K for LTC and leaving some funds to family.


Ok, please poke holes in our plan and let me know if we are missing anything?
This site has been extremely insightful for the young and the more seasoned folk.

 

[Teacher Terry]

Do your pensions have a survivor benefit? We both took a reduced amount so the other person will get a pension from that person.

 

[MrsHaloFIRE]

Military family here. As I understand them, Medicare premiums cost a lot more than Tricare prime enrollment fees/select copays. I would not count those as "no real expense." I would do the math and use them in the estimate. And Tricare benefits are a moving target. If you receive care on a base at no expense (except the enrollment fee) as a retiree, you may not have that privilege 12 months from now. You may be out in town. And if you are out in town, you may be paying some decent copays. DHA is making this a rapidly changing environment. I use a fairly inflated figure in my annual budget knowing that Tricare is one lawmaking session away from a wide swing.

 

[cnocmmz]

Do your pensions have a survivor benefit? We both took a reduced amount so the other person will get a pension from that person.

No, since DW is older the odds are slim and I purchased the life insurance to cover the 10 years if by chance I were to pass first.

 

[cnocmmz]

Military family here. As I understand them, Medicare premiums cost a lot more than Tricare prime enrollment fees/select copays. I would not count those as "no real expense." I would do the math and use them in the estimate. And Tricare benefits are a moving target. If you receive care on a base at no expense (except the enrollment fee) as a retiree, you may not have that privilege 12 months from now. You may be out in town. And if you are out in town, you may be paying some decent copays. DHA is making this a rapidly changing environment. I use a fairly inflated figure in my annual budget knowing that Tricare is one lawmaking session away from a wide swing.

Understand your point; however, after being retired now for 15 years I have done the math and I have really paid nothing since DW is on Medicare. BTW, Medicare is taken right out of your SS and the fact is once you become Medicare elligible Tricare becomes the secondary, there is no co-pays. I also use the VA for most of my medical stuff (free). Thanks for the input

 

[dirtbiker]

No, since DW is older the odds are slim and I purchased the life insurance to cover the 10 years if by chance I were to pass first.

On average women live five years longer than men. There's only six years of difference between your ages. There's a very good chance you could die first. You get $3992 per month, which is $47k/year. Your $100K life insurance policy will cover her for two years, maybe three, taking into account taxes. If you die after the term life insurance is up, she'll get nothing. I couldn't imagine not choosing survivor benefits.

 

[cnocmmz]

On average women live five years longer than men. There's only six years of difference between your ages. There's a very good chance you could die first. You get $3992 per month, which is $47k/year. Your $100K life insurance policy will cover her for two years, maybe three, taking into account taxes. If you die after the term life insurance is up, she'll get nothing. I couldn't imagine not choosing survivor benefits.

Understand. DW also gets max Survivor Benefit Plan on pension which I believe is 55%; also gets the 1.1 M, and of course a good chunk on my disability since I am 100% permanent disabled.

 

[Nords]

Pensions/SS pre-tax (All are Cola'd) (need help on the tax thing)
DW: Pension: $1,250 monthly
DW SS: $1,360
Me: Mil pension $3,992.00 monthly
Me: Fed Gov pension $ 675 Monthly
Me: Disability (A lot of medical issues and not taxable) $3245 Monthly
Me: SS at age 62 (Not sure if I should take it then) website states about $1,700

Investments/Cash give or take a few... about 1.1M
60%(S&P) /30% (bonds) /10% (cash)

*Been running a spreadsheet on expenses for the last few years which are :
-Essential expenses (Bills) 50K, i.e. Mortgage (1,600) electric, natural gas, phone ect.
-Entertainment expenses 20K: i.e. Dining out, travel shopping ect.
Total about 70K annually. Goal is to spend about 100K annually because we want to travel more and just overall enjoy, and I still want to invest a little something monthly.

The only real concern I have I guess is if one of us were to pass first, moreover myself since most of the income is coming from my side. The DW is 6 years older so? I do have a small 10 year 100K term insurance that will help.
FireCalc has us 100% @ 130K annually using 500K. We will use the other 500K for LTC and leaving some funds to family.

CNOCMMZ, you’ve been crunching the data as well as we could. FIRECalc seems to support your conclusions. If your numbers are accurate then your pension income is nearly $10K/month (depending on your Social Security) and your spending is below that.

Having income over $8500/month meets your spending goal, you’d be saving/investing a little each month, and your heirs would probably prefer you to be happy instead of trying to give them more money.

DW and I have both decided to finally call it quits after the OMY scare. (I am nervous)

(A lot of medical issues ...)

... since I am 100% permanent disabled.

If you have any concerns about longevity then I’d stop working now and enjoy your life.

At the very least you’ll reduce stress and improve your quality of life, which may prolong your life.

Remember Rich, the unofficial E-R.org Poster Child for “Just One More Year”? We all wish he’d stopped working sooner than he did.
Early Retirement & Financial Independence Community - View Profile: Rich_by_the_Bay

Understand. DW also gets max Survivor Benefit Plan on pension which I believe is 55%...

That is correct.

Interested for feedback especially assistance to figure out what I will actually take home after taxes, or is there something missing in the equation?

I’d suggest seeking professional help from a fee-only CFP from NAPFA, the Garrett Network, or the XY Planning Network. Pay them for a few hours of analysis to estimate how much you’d spend on all of your taxes, as well as Medicare premiums.

I can also recommend a couple of fee-only CFPs who work online with military clients around the globe. They’re both military retirees (one a nuke and the other a submariner), one of them is an Enrolled Agent, and they both deeply understand military pensions & benefits.

 

[cnocmmz]

Military family here. As I understand them, Medicare premiums cost a lot more than Tricare prime enrollment fees/select copays. I would not count those as "no real expense." I would do the math and use them in the estimate. And Tricare benefits are a moving target. If you receive care on a base at no expense (except the enrollment fee) as a retiree, you may not have that privilege 12 months from now. You may be out in town. And if you are out in town, you may be paying some decent copays. DHA is making this a rapidly changing environment. I use a fairly inflated figure in my annual budget knowing that Tricare is one lawmaking session away from a wide swing.

UPDATE: Finally, tomorrow is my last day at my w#&#k. After the OMY syndrome from above post, I am finally leaving at age 61. Financially we are set with several government streams of income coming in…We actually leave Virginia for our drive to our new home in
Boerne, Texas. on 02 Dec. We will miss our children and grandchildren but they can visit.. It is our turn to enjoy!
I have learned a lot from all the wisdom on this site and I will be staying in touch through the other articles associated. [emoji3]

 

[smalltownguy1]

Congrats and welcome to the blue card mafia. And to a new Texan.

 

[Act2]

Boerne is beautiful. Best wishes!