Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Planning to retire next year
Old 07-31-2015, 12:48 PM   #1
Confused about dryer sheets
 
Join Date: Jun 2015
Location: Saratoga Springs
Posts: 5
Planning to retire next year

Hello,

For a number of years I've had a dream of retiring early. I didn't always have a specific idea of what "early" actually meant but over the past 5 years I've given it a lot of thought and have decided that I'd like to retire sooner rather than later.

I hit a milestone this year turning 50 years old in June. I am planning on retiring before I turn 51. I expect to leave my company sometime in April or May of next year.

A bit about me:

I'm married and my wife who is older than me (66) has been retired for 10 years. She collects a nice pension as a retired teacher of $48K a year. The pension has a COLA.

We have no mortgages; We own a home in New York and a condo in Florida. We are currently New York State residents. We plan to move to Florida after my retirement making that our residence but maintaining our home in NY and living there in the summer.

I currently make approximately $300K a year in salary with my company. A majority of that gets squirreled away. I'm fortunate in that I work for one of the few companies left that still has a defined benefit plan. If I leave in April, 2016 when I turn 60 I will begin collecting $78K a year in pension. The value of the pension goes up significantly higher if I stay longer but I've decided that I want to enjoy life and no longer enjoy the work.

Since I am an executive with my company, I also have a benefit where I can defer my annual bonus and periodically (typically every three years) I can defer up to 100% of my salary at a fixed rate of return. I've taken advantage of both these programs and so if I leave next year, I'll have a 10 year annuity of $75K which will bridge me to my pension.

Additionally, I have approximately $1.5MM in savings of which $1MM is in my 401K and my wife's 403B. I have most of this (around 80%) in equity investments (various index funds). I am hoping that we can avoid touching the savings as much as possible.

We have deferred my wife's social security since we don't need it and I'd rather get the 8% return. My plan is to begin collecting her social security when she turns 70 in 2019. According to the social security department letters we receive, my wife will collect $2400 a month bringing her total annual income to $76,800.

I'm also planning on working part time here and there but will use the money only to feed my passion for scuba diving and not expect to use the money I would make for real living expenses.

My wife's healthcare insurance (retired teacher benefit) was very inexpensive before she reached medicare age. Now because of our income, we're paying $330 a month in medicare plus the $38 a month for her private insurance.

When I retire, I'll need to find health insurance. I can get on my wife's plan but it's $700 a month. Looking around, I found cheaper insurance. Since our income will go down, I don't expect I'll have to pay as much for my wife's medicare so that will help.

I've been using Mint for the past 3 years and our expenses are roughly $90K a year. We do plan on traveling quite a bit in the first few years of my retirement but I am feeling fairly confident that I've got all our bases covered.

I'd be curious if any of you see some major flaws in my plan.

Thanks and looking forward to learning more from all of you!
__________________

__________________
Live4Scuba is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-31-2015, 12:54 PM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Quote:
Originally Posted by Live4Scuba View Post

I hit a milestone this year turning 50 years old in June.

If I leave in April, 2016 when I turn 60...
One of these is incorrect.

Here's a good list of questions that may help: Some Important Questions to Answer Before Asking - Can I Retire?
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 07-31-2015, 12:57 PM   #3
Confused about dryer sheets
 
Join Date: Jun 2015
Location: Saratoga Springs
Posts: 5
sorry, what I meant to say was:

"If I leave in April 2016, then when I turn 60..."
__________________
Live4Scuba is offline   Reply With Quote
Old 07-31-2015, 01:10 PM   #4
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,093
what's your planned annual spend?


(I love using spend as a noun)
__________________
Swing hard, look up
Big_Hitter is online now   Reply With Quote
Old 07-31-2015, 01:12 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,410
Have you run your numbers through Quicken Lifetime Planner, Firecalc or similar retirement planners?

That said, I think you are probably fine.

One thing about your wife SS.... you are not getting an 8% return.... rather, her benefit increases 8% each year that she waits. Givne the difference in your ages and disparity in income, I would suggest that you have socialsecuritysolutions.com or a similar service do an analysis for you of your optimal claiming strategy. Or SSAnalyze - Bedrock Capital Management is another (free) place to start.

Healthsherpa.com can give you some choices on health insurance.

You may also want to do a pretend tax return as if you were retired, taking out your earnings and adding in your deferred comp benefit and making other appropriate adjustments. You might be pleasantly surprised, but in any event you need to include paying taxes in your expenses if you have not already done so.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 07-31-2015, 01:14 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,410
Quote:
Originally Posted by Big_Hitter View Post
what's your planned annual spend?....
OP said:
Quote:
Originally Posted by Live4Scuba View Post
....I've been using Mint for the past 3 years and our expenses are roughly $90K a year. We do plan on traveling quite a bit in the first few years of my retirement ....
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 07-31-2015, 01:35 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 1,654
Quote:
Originally Posted by Live4Scuba View Post
sorry, what I meant to say was:

"If I leave in April 2016, then when I turn 60..."
yes... I first thought the other interpretation, then I caught the meaning.

others will post links to things to consider before retiring and to run firecalc. Both good to do.

You have it kind of sweet having more pension/SS income than you'll need to spend. We'll have SS, but no pensions... just retired this year @53.... and no executives here.

You need to model your income and taxes over the upcoming years. You make a statement that your income will drop so health insurance will get less expensive. It may. But model what happens also as you and your wife hit RMD time. You may find that you may need to mitigate taxes at RMD time by doing Roth conversion earlier ... thus raising earlier tax rates. Some simple spreadsheets could give you a good idea.

Another thing... need some planning for how to cover LTC.... be it with insurance or savings/investments.
__________________
bingybear is offline   Reply With Quote
Old 07-31-2015, 04:04 PM   #8
Confused about dryer sheets
 
Join Date: Jun 2015
Location: Saratoga Springs
Posts: 5
Quote:
Originally Posted by pb4uski View Post
Have you run your numbers through Quicken Lifetime Planner, Firecalc or similar retirement planners?
Yes, I used Firecalc and it was helpful for me to try out "what-if" scenarios. I was able to increase my needed income as well as my lifespan well beyond where I expect to live (99) and still have 100% success.

Quote:
Originally Posted by pb4uski View Post
One thing about your wife SS.... you are not getting an 8% return.... rather, her benefit increases 8% each year that she waits. Givne the difference in your ages and disparity in income, I would suggest that you have socialsecuritysolutions.com or a similar service do an analysis for you of your optimal claiming strategy. Or SSAnalyze - Bedrock Capital Management is another (free) place to start.
Great advice, thanks!
__________________
Live4Scuba is offline   Reply With Quote
Old 07-31-2015, 04:08 PM   #9
Confused about dryer sheets
 
Join Date: Jun 2015
Location: Saratoga Springs
Posts: 5
Quote:
Originally Posted by bingybear View Post
You need to model your income and taxes over the upcoming years. You make a statement that your income will drop so health insurance will get less expensive. It may. But model what happens also as you and your wife hit RMD time. You may find that you may need to mitigate taxes at RMD time by doing Roth conversion earlier ... thus raising earlier tax rates. Some simple spreadsheets could give you a good idea.
That's a good thought. Is there a template spreadsheet for how to model this or an online calculator for doing such planning?

Quote:
Originally Posted by bingybear View Post
Another thing... need some planning for how to cover LTC.... be it with insurance or savings/investments.
I'm including my wife LTC coverage in our expenses. We've been paying for that for a few years now. I haven't purchased for myself yet but that's something I need to consider.
__________________

__________________
Live4Scuba is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
42 year old, saved $3M, thinking to retire next year JPearl Hi, I am... 73 04-06-2014 10:57 AM
sinjin here planning to retire in next year, yikes sinjin Hi, I am... 2 06-08-2011 09:31 AM
56, Planning on retiring next year Marie Hi, I am... 23 07-11-2010 11:51 AM
55 year old Texan will retire within the next year russingr Hi, I am... 7 05-25-2007 09:40 AM
Planning to ER next year, in my 30s. IDunno Hi, I am... 27 02-21-2005 05:09 PM

 

 
All times are GMT -6. The time now is 12:32 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.