fishndad42
Recycles dryer sheets
I’m glad I found this community – I've learned a lot already. Apologies up front – I tend to be wordy, and the FAQ suggests detail is good - so it is a long post. I‘ll be 59 this year, DW is 6 years behind me. I had my first bout with cancer in 1993 at the ripe age of 36. It was stage 4, colon cancer that had spread to my liver. I wasn't expected to make it. Although it financially wiped me out, I somehow survived. In 2007 they determined I had a genetic defect and decided to take my colon out as preventative. Although I had a clean exam just 6 months prior, they found new stage 3 already. Then 2 years ago DW had stage 4 breast cancer, and also survived but is on chemo every 3 weeks for the rest of her life. Last year I had a very rare skin cancer related to the same gene defect. More about longevity in a bit, but as you might guess we’d like a few years to enjoy the retired life.
My original plan was to retire at 62, now I’m confident I can go sooner. The new plan is at 60, just under 2 years from now. According to FireCalc, I could probably go today with at least a 95% confidence, but I have a few things to do before I go. Many people have a bucket list – since my dad died of cancer at 53, I've tried to check off bucket list items every year of my life, and not grow a long one. Living life every day seems like a better plan. On the other hand, I have had a longer list I call my “acquire before retire” list. These are things I’d like to have but would not take on debt in retirement to get them. I've been working on that steadily – 2 years ago we bought our retirement home on a lake in mid-Michigan (there is currently a mortgage), last year we bought a pontoon boat, etc. My kids are grown, ages between 27 and 32. The 32 year old actually still lives with us (she is a pre-school teacher, and that doesn't pay well) but is on notice that I’ll be selling the house next year and she needs to be on her own.
I've calculated a retirement budget. It is about 20% less than we spend today, outside of savings (in retirement for me, new accumulation isn't a priority). The 20% can be explained by reducing mortgage, right now I still live in another area full time, so the extra mortgage and house expenses will drop off when I sell it). Here it is for those that want to comment. You’ll find I didn’t drop things like smart phone data plans, cable, and I assume the worst in income taxes (most of our retirement is pre-tax). We regularly use the retirement home on weekends and a few weeks in the summer, but while we’re not sure about year round utilities, I can be confident they won’t be worse than my current home (and likely less since the house is smaller, has a wood stove that is very efficient, and a well that keeps water costs down). Not sure if I’ll keep the mortgage or pay it off when I sell my other houses (see below). Home maintenance includes putting away funds for bigger repairs; I don’t actually spend $200 every month on fixing things. The car payment is because we only own one SUV now (I have a company car as well), it has over $90K miles, and we’d like to get a smaller sedan like a Focus or Fusion. I still need to do diligence on health insurance, but my company retirement includes some insurance until I hit 65. (From what I've learned, I’ll need to fund HI for DW for the 6 years after I turn 65 but she doesn't). This puts me at around $62K/year. At this level we will easily be in the top 1/3 income in the area, so with a modest cost of living around there we expect to be quite comfortable.
Expense Monthly
Mortgage 450
Ins. (house) 50
Taxes (Property) 200
Mortgage ins. 50
Utility (elec/gas) 275
Car pmt 400
Car ins 250
Car maint/gas 250
groceries 400
Boat Ins 50
health ins 500
insurance (life, kids) 250
smart phone/data 150
cable/internet 120
hobbies 200
home maintenance 200
misc 200
medical out of pocket 320
Income taxes 830
marina dues 50
-------
Total Monthly 5195
Now the plus side. As I mentioned, I had a financial restart at age 36, and with 3 kids I just couldn't save as much as my peers. I estimate my 401k will be $400K based on modest 6% growth and a bit of make-up contributions. The better news is that I get a pension. I’ll have a choice of $3175/month annuity (non-COLA) or $740K lump sum (current estimate, these change each year). It is a 100% survivor pension due to additional employee contributions all along, so DW is set) There is an extra $1K/month until I reach 62. I lean toward lump sum at the moment, based on longevity. I will absolutely start my SS at 62 – also because of the longevity factor).
When I sell my downstate house, I expect about $40K net out of it. I also own a cottage free and clear just ¼ mile from my retirement house. The current plan is to sell it, which would end up being another $50K-$60K net. That house costs me less than $1K a year in taxes and insurance, so I do have a few other options. I could rent it out and probably get $450/mo or so. I could just use it as a guest house (it has an awesome pole barn, keeping my boats in there could save me in storage costs!).
The hardest part of planning is longevity. Most of the men in my family died at an early age from cancer, due to the genetic defect. Only one survived until he was 80, but he was a preacher so I think he had special help . Of course on my mother’s side they live longer, mid 80’s, but I don’t think that is a factor, so I really expect to go earlier rather than later. DW's longevity is even harder. The type breast cancer she had, with the drugs she now gets every 3 weeks, tends to be about 5 years of survival. However a certain percent of women go 20 or 30 years, and her family tends to live long (late 80’s early 90’s).
So I have a few things that must be done before I go – get the house ready to sell, take one more big trip for our 35th anniversary, and a few things on the new house (like a new well, which goes in this spring). I have a few things to continue to research and gain confidence on, like health care costs over time. I’ll have to ultimately decide about lump sum or annuity, and mortgage or payoff. But no matter what scenario I run, I see 100% success in the future. Unless of course I missed something….
My original plan was to retire at 62, now I’m confident I can go sooner. The new plan is at 60, just under 2 years from now. According to FireCalc, I could probably go today with at least a 95% confidence, but I have a few things to do before I go. Many people have a bucket list – since my dad died of cancer at 53, I've tried to check off bucket list items every year of my life, and not grow a long one. Living life every day seems like a better plan. On the other hand, I have had a longer list I call my “acquire before retire” list. These are things I’d like to have but would not take on debt in retirement to get them. I've been working on that steadily – 2 years ago we bought our retirement home on a lake in mid-Michigan (there is currently a mortgage), last year we bought a pontoon boat, etc. My kids are grown, ages between 27 and 32. The 32 year old actually still lives with us (she is a pre-school teacher, and that doesn't pay well) but is on notice that I’ll be selling the house next year and she needs to be on her own.
I've calculated a retirement budget. It is about 20% less than we spend today, outside of savings (in retirement for me, new accumulation isn't a priority). The 20% can be explained by reducing mortgage, right now I still live in another area full time, so the extra mortgage and house expenses will drop off when I sell it). Here it is for those that want to comment. You’ll find I didn’t drop things like smart phone data plans, cable, and I assume the worst in income taxes (most of our retirement is pre-tax). We regularly use the retirement home on weekends and a few weeks in the summer, but while we’re not sure about year round utilities, I can be confident they won’t be worse than my current home (and likely less since the house is smaller, has a wood stove that is very efficient, and a well that keeps water costs down). Not sure if I’ll keep the mortgage or pay it off when I sell my other houses (see below). Home maintenance includes putting away funds for bigger repairs; I don’t actually spend $200 every month on fixing things. The car payment is because we only own one SUV now (I have a company car as well), it has over $90K miles, and we’d like to get a smaller sedan like a Focus or Fusion. I still need to do diligence on health insurance, but my company retirement includes some insurance until I hit 65. (From what I've learned, I’ll need to fund HI for DW for the 6 years after I turn 65 but she doesn't). This puts me at around $62K/year. At this level we will easily be in the top 1/3 income in the area, so with a modest cost of living around there we expect to be quite comfortable.
Expense Monthly
Mortgage 450
Ins. (house) 50
Taxes (Property) 200
Mortgage ins. 50
Utility (elec/gas) 275
Car pmt 400
Car ins 250
Car maint/gas 250
groceries 400
Boat Ins 50
health ins 500
insurance (life, kids) 250
smart phone/data 150
cable/internet 120
hobbies 200
home maintenance 200
misc 200
medical out of pocket 320
Income taxes 830
marina dues 50
-------
Total Monthly 5195
Now the plus side. As I mentioned, I had a financial restart at age 36, and with 3 kids I just couldn't save as much as my peers. I estimate my 401k will be $400K based on modest 6% growth and a bit of make-up contributions. The better news is that I get a pension. I’ll have a choice of $3175/month annuity (non-COLA) or $740K lump sum (current estimate, these change each year). It is a 100% survivor pension due to additional employee contributions all along, so DW is set) There is an extra $1K/month until I reach 62. I lean toward lump sum at the moment, based on longevity. I will absolutely start my SS at 62 – also because of the longevity factor).
When I sell my downstate house, I expect about $40K net out of it. I also own a cottage free and clear just ¼ mile from my retirement house. The current plan is to sell it, which would end up being another $50K-$60K net. That house costs me less than $1K a year in taxes and insurance, so I do have a few other options. I could rent it out and probably get $450/mo or so. I could just use it as a guest house (it has an awesome pole barn, keeping my boats in there could save me in storage costs!).
The hardest part of planning is longevity. Most of the men in my family died at an early age from cancer, due to the genetic defect. Only one survived until he was 80, but he was a preacher so I think he had special help . Of course on my mother’s side they live longer, mid 80’s, but I don’t think that is a factor, so I really expect to go earlier rather than later. DW's longevity is even harder. The type breast cancer she had, with the drugs she now gets every 3 weeks, tends to be about 5 years of survival. However a certain percent of women go 20 or 30 years, and her family tends to live long (late 80’s early 90’s).
So I have a few things that must be done before I go – get the house ready to sell, take one more big trip for our 35th anniversary, and a few things on the new house (like a new well, which goes in this spring). I have a few things to continue to research and gain confidence on, like health care costs over time. I’ll have to ultimately decide about lump sum or annuity, and mortgage or payoff. But no matter what scenario I run, I see 100% success in the future. Unless of course I missed something….
