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10-10-2014, 12:35 PM
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#1
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Planning to Retire at 55
Hi everybody
I found this site several weeks ago and am reading through a lot of the topics on the forums. There’s a lot of useful discussions, smart people and this site is great!
I’m planning to retire from a large corporation later this year when I turn 55.
Below is a summary of our stats. Are we positioned reasonably well to do this? What do you think?
Ages and family:
- Me: 54.5
- DW: 63
- No kids
- One parent alive and not expected to require much financial support.
Retirement savings: $2,052,000
Accounts as follows:
401K: $847K
IRA: $298K
Taxable Accounts: $907K
Asset allocations:
US Stocks: 60%
Non-US Stocks: 4%
Bonds: 29%
Real Estate: 3%
Cash: 4%
Home: Paid for.
Other debt: None
Pension (private sector) begins at age 55: $60,588/year – 5.7% of lump sum (100% joint & survivor annuity, no COLA) or can take $1,063,000 lump sum.
Social Security for me (age 62) : $21.6K
Social Security for DW (age 66) : $10.8K
Annual Living Expenses : $100,000
- Includes recent quote on retiree medical plan from megacorp
- Based on actual living expenses over the last few years.
- Does not include state (6% Louisiana),federal or property taxes
- I have assumed 20% tax rate so $125,000 gross = $100,000 ATAX
FIRE Calculator 35 year retirement: 96.3% success ($125K/year, annuitize pension, 3% inflation, total market (50% stock/50% bond), social security for me and wife
FIRE Calculator 35 year retirement: 94.5% success ($125K/year, take lump sum pension, 3% inflation, total market (50% stock/50% bond), social security for me and wife
Vanguard Nest Egg Calculator: 94% success
CALCX.COM Calculator 35 year retirement: (4.5% return, take lump sum pension, 3% inflation, social security for me and wife) $1,064,000 remaining after 35 years.
Thank You
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10-10-2014, 12:46 PM
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#2
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Full time employment: Posting here.
Join Date: Nov 2008
Posts: 728
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Without studying everything I'd try to buy into a Roth IRA with some of your funds....they would be tax free for many years before you would need them and I'd look at taking SS later, which is like getting almost 8% more each year.....especially i your family history would lead you to believe that you hae a long life ahead. You've done well financially, congratulations.
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10-10-2014, 01:08 PM
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#3
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Recycles dryer sheets
Join Date: Jan 2013
Posts: 198
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Congrats. It looks like you are in good shape. You only have about 10 weeks before the end of the year. Have you told megacorp of your plans?
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10-10-2014, 01:17 PM
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#4
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by jerome len
Without studying everything I'd try to buy into a Roth IRA with some of your funds....they would be tax free for many years before you would need them and I'd look at taking SS later, which is like getting almost 8% more each year.....especially i your family history would lead you to believe that you hae a long life ahead. You've done well financially, congratulations.
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Thanks jerome len
I guess once I retire and dont have earned income they will let me transfer some monry to ROTH's.
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10-10-2014, 01:19 PM
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#5
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Recycles dryer sheets
Join Date: Feb 2013
Location: Boise
Posts: 431
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Welcome. Congratulations. Your numbers look very doable. Myself 55 and thinking of pushing until I am 56. We have a similar spending rate and are at 2.8, 1.2 taxable, 1.6 deferred, no pension. I'd like to be over 3.0 before quitting. ID tax is 7%, I also assume about 20% for taxes.
I like to run numbers through Fidelity R.I.P., I-ORP, etc to make myself feel good that we are close to saying Adios to the j*b. Everything I run says we could bail today especially because I am budgeting for much more than we have spent the last three years.
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10-10-2014, 01:23 PM
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#6
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by InTheSticks
Congrats. It looks like you are in good shape. You only have about 10 weeks before the end of the year. Have you told megacorp of your plans?
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Thank you InTheSticks
I told them 4/15/15 unless I can work only 3 days per week (want more time with family/kids/grandkids). We will see.
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10-10-2014, 01:28 PM
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#7
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by jcretire77
Welcome. Congratulations. Your numbers look very doable. Myself 55 and thinking of pushing until I am 56. We have a similar spending rate and are at 2.8, 1.2 taxable, 1.6 deferred, no pension. I'd like to be over 3.0 before quitting. ID tax is 7%, I also assume about 20% for taxes.
I like to run numbers through Fidelity R.I.P., I-ORP, etc to make myself feel good that we are close to saying Adios to the j*b. Everything I run says we could bail today especially because I am budgeting for much more than we have spent the last three years.
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Thank You jcretire77
I will try to run numbers through Fidelity R.I.P. and I-ORP to compare.
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10-10-2014, 04:06 PM
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#8
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,358
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Quote:
Originally Posted by klbvbb01
Annual Living Expenses : $100,000
- Includes recent quote on retiree medical plan from megacorp
- Based on actual living expenses over the last few years.
- Does not include state (6% Louisiana),federal or property taxes
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Welcome. 55 is the perfect time to retire (that's when I did so it must be).
You're probably fine, but ...
Instead of basing your expense forecast on your recent experience while w*rking, I think it's important to seriously figure out what they will be afterward. Could be quite different. Also, to estimate taxes and include them as an expense (plenty of calculators for that).
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10-10-2014, 04:24 PM
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#9
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Thanks braumeister
Projected actual retirement spending = 80K$ ATAX = 110K current - 18K$ P&I (just paid off home) - current ATAX savings which will stop.
Ran numbers on 100K$/year ATAX to give us some play room.
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10-10-2014, 04:40 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Nov 2012
Location: Madeira Beach Fl
Posts: 1,403
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Well done, you are good to go.
__________________
_______________________________________________
"A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do" --Bob Dylan.
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10-10-2014, 06:32 PM
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#11
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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I plugged in your numbers to firecalc and it gave 100% success. Not sure how you came up with 94.5%.
Did you enter the extra income (SS, Pension) on the appropriate tab? When all that kicks in - you're covering a huge portion of your expenses.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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10-11-2014, 09:31 AM
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#12
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Thank You heeyy_joe
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10-11-2014, 09:58 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Sep 2013
Location: Ventura County
Posts: 1,433
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My numbers are similar, but I'm planning to make a go of it with with significantly less pension than the OP and significantly smaller savings than JCRetire77. I'll be at 0.9M taxable, 1.1M deferred with a $33K/yr non-COLA'd pension (includes retiree medical) and I expect to make the jump on or about my 55th birthday next summer.
The one (huge) saving grace in my plan is that DW will continue to work part time and will have a COLA'd state pension 50% larger than my own (plus a few $100K additional savings) when she drops out to join me at 60.
Of course, the other saving grace is that DW and I are both pretty frugal (as ex-grad students are wont to be) and have after tax expenses typically in the $60-70K/yr range...
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10-11-2014, 11:03 AM
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#14
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Recycles dryer sheets
Join Date: Sep 2012
Posts: 459
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You are in very good position..fire any time. 65K on 2M portfolio…3.2% WR + SS is very much doable.
__________________
Retired at age 52 on 12/1/2016
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10-11-2014, 03:15 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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Congrats. Looks like you are good to go. You have a big decision coming up on the pension. There are plenty of threads here on lump sum vs annuity. It was an excellent resource when I was making the same decision last year.
__________________
Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
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10-11-2014, 03:49 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: South central PA
Posts: 3,486
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If your annual living expenses are $100K and your pension is $60K, you will only need to w/d $40K/yr to start . What you withdraw from taxable accounts isn't income. You ought to be able to spend more on whatever you want (big hint: travel) than you thought. I don 't know if you saw this, but Kiplinger has info on state tax situations for retirees. You live in one of the top 10 tax friendly states for retirees. Congratulations. You look good to go.
Sent from my iPhone using Early Retirement Forum
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10-12-2014, 05:01 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,304
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The only nit I noticed was using 35 years in FIRECALC. Age 95 is the typical end of plan, so 40 years might be suggested if you plan to retire at 55. But that's your call, you know what makes sense for you.
In any event, you're in very good shape with very mainstream plan features (a positive), including a healthy non-COLa pension, congrats! Many have/will retire with much less.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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10-12-2014, 05:34 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,373
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20% for taxes sounds way high. Use Turbo Tax or Taxcaster to do a pro forma return assuming you are retired
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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10-12-2014, 12:03 PM
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#19
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by pb4uski
20% for taxes sounds way high. Use Turbo Tax or Taxcaster to do a pro forma return assuming you are retired
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Thanks a bunch pb4uski
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10-12-2014, 12:04 PM
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#20
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by Midpack
The only nit I noticed was using 35 years in FIRECALC. Age 95 is the typical end of plan, so 40 years might be suggested if you plan to retire at 55. But that's your call, you know what makes sense for you.
In any event, you're in very good shape with very mainstream plan features (a positive), including a healthy non-COLa pension, congrats! Many have/will retire with much less.
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Thank you Midpack.
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