Hi all, I am hoping to ER by the end of 2007. I am 42 and my husband is 43. I've planned out a 4 stage retirement/partial retirement plan, but would appreciate some feedback from folks who are traveling the same path as we are!
I have estimated our living expenses to be approximately 90- 100k a year (but because we want a pretty large fudge-factor we are planning for 120K), which includes an estimate of 15k a year for insurance and medical expenses. My husband has fairly expensive medical problems and will need to be covered through our state high risk insurance pool. Our daughter, age 8, and I will obtain a high deductible HSA eligible policy.
My husband will continue working part-time, earning approximatey 60k a year for 10-12 +/- years. He has a law practice and our plan is to ramp it up or slow it down as needed/desired over the years. Cutting back to 60k should allow him to put in 2-3 days a week on average, with several weeks off throughout the year for travel.
Our home will be paid off prior to my retirement. We do pay for private school for our kiddo (10k a year), and that will most likely continue (but is part of the 90 - 100k estimate).
So, here's what the income equation looks like to fund retirement:
1st 5 years: (Ages 43-47/44-48) 124K a year
Payout from deferred compensation program (mine) of 40k a year.
Income from commercial properties: 24K a year.
Spouse's income 60k a year
2nd 5 years: (Ages 48 -52/49-53) 136k a year
Deferred comp goes away, but begin spending after tax savings (approx 300k today, will be 450k at my retirement, grows at 7% to 630k by 2012) $40k a year
Income from commercial properties grows to 36k
Spouse's income 60k a year
3rd 5 years: (Ages 53-58/54-59) 148k
After tax savings spend-down: 60k a year
Commercial property income: 48K a year
Spouse's income: 40k a year
Next 35+ years:
Commercial property income grows to 60K+ a year (equity increases as we must refinance every 5 years. Income should incease by 12k every 5 year period) Value of properties is 2 million today with 335k in current equity.
Income from pre-tax accounts: 88K a year (current value 800k, grows at 7% annually to 2.2M by time husband is 60 and we can tap without penalty. Assumes we don't add anything more to it during working years, but we probably will if we need to shield excess income.) Assumes a 4% withdrawal rate.
Social Security income
? Who knows by then.
Anything glaring that I am missing? I appreciate your insights. Thanks, Tracy
I have estimated our living expenses to be approximately 90- 100k a year (but because we want a pretty large fudge-factor we are planning for 120K), which includes an estimate of 15k a year for insurance and medical expenses. My husband has fairly expensive medical problems and will need to be covered through our state high risk insurance pool. Our daughter, age 8, and I will obtain a high deductible HSA eligible policy.
My husband will continue working part-time, earning approximatey 60k a year for 10-12 +/- years. He has a law practice and our plan is to ramp it up or slow it down as needed/desired over the years. Cutting back to 60k should allow him to put in 2-3 days a week on average, with several weeks off throughout the year for travel.
Our home will be paid off prior to my retirement. We do pay for private school for our kiddo (10k a year), and that will most likely continue (but is part of the 90 - 100k estimate).
So, here's what the income equation looks like to fund retirement:
1st 5 years: (Ages 43-47/44-48) 124K a year
Payout from deferred compensation program (mine) of 40k a year.
Income from commercial properties: 24K a year.
Spouse's income 60k a year
2nd 5 years: (Ages 48 -52/49-53) 136k a year
Deferred comp goes away, but begin spending after tax savings (approx 300k today, will be 450k at my retirement, grows at 7% to 630k by 2012) $40k a year
Income from commercial properties grows to 36k
Spouse's income 60k a year
3rd 5 years: (Ages 53-58/54-59) 148k
After tax savings spend-down: 60k a year
Commercial property income: 48K a year
Spouse's income: 40k a year
Next 35+ years:
Commercial property income grows to 60K+ a year (equity increases as we must refinance every 5 years. Income should incease by 12k every 5 year period) Value of properties is 2 million today with 335k in current equity.
Income from pre-tax accounts: 88K a year (current value 800k, grows at 7% annually to 2.2M by time husband is 60 and we can tap without penalty. Assumes we don't add anything more to it during working years, but we probably will if we need to shield excess income.) Assumes a 4% withdrawal rate.
Social Security income
? Who knows by then. Anything glaring that I am missing? I appreciate your insights. Thanks, Tracy
