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Old 03-06-2014, 02:26 PM   #21
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Keep in mind a few things:
Firecalc assumes spending includes all income taxes (state/local)

As far as the house - we don't include the value because it's our plan B if we need long term care, or some other need. If you plan to downsize, you can model the NET equity you'll gain by adding it as as a lump sum addition on the portfolio tab of Firecalc.

Have you calculated how retiring at 47 will impact your SS. It might not impact it much if you've been working for most of your adult life.

As others have mentioned - the key is accurately calculating/predicting spending - including taxes. If you reduce your spending, you can make the money last longer.

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Old 03-06-2014, 09:49 PM   #22
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Looking at your expenses of $75K, you would need to withdraw 4.17% of your $1.8M portfolio to get to $75K. However, if your $75K expense estimate is net after taxes, you will need to figure out how much you will need to pull out gross to net $75K.

Based on your young age of 47, you have a long retirement ahead. I would not pull the plug just yet if I needed that large of a percentage of my portfolio to live on. If you want to down size your house your numbers may look a bit more favorable. But most of the members on this forum are pretty conservative, and would probably not want to spend more than 3 or maybe 3.5% each year if they were starting retirement at 47.

I'm also 47, and still working part time BTW. If I was not working part time, I would need about 2% SWR to cover my expenses. But I like not having to think about it just yet, which is why I found part time work to be a good compromise. Might be something to consider if you have that as an option.

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Old 03-07-2014, 04:59 AM   #23
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Welcome aboard.
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 03-07-2014, 06:35 AM   #24
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I have a couple of questions. Did you include any Social Security in your Firecalc runs?
You mention $225K college costs. Do you already have that saved outside of your retirement portfolio?
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Old 03-07-2014, 06:53 AM   #25
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Originally Posted by MikeWillRetire View Post
Did you include any Social Security in your Firecalc runs?
You mention $225K college costs. Do you already have that saved outside of your retirement portfolio?
Hi MikeWillRetire,
I didn't include SS in the FireCalc and I do have savings outside of those mentioned for college.

To your earlier point about expenses coming down when the kids leave, I think this is very important. Granted, we can't predict what the labor market will look like and if there may be needs beyond their graduation date, but we can say with a high degree of certainty that the spending rate to support four people won't continue throughout our retirement. To that end, I have also built a separate spreadsheet modeling out spending year-by-year and building in SS and various rates of return on investments and real estate appreciation. All the while realizing that a spreadsheet is merely a reflection of one's assumptions. But at least under my current assumptions, it's doable. The biggest fear I have is getting 15 years in and not being able to get a job if things don't go as planned.
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Old 03-07-2014, 07:17 AM   #26
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Hi ExitLeft. Welcome to the forum.

My experience in the education bucket was a little higher. At $30k + each for four years at a state school you would be close, but my DS will start his 6th year next fall. That was not in my plans. I was going to be a hardass on only 4 years on Dad, but that was easier said than done.

DD graduated in 4 years, but isn't making enough money to cover her expenses yet, so Dad is helping there (hopefully for a very short time).

I agree with those above. You would probably sleep much better with a few more years at the grindstone.
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Pushed out and considering staying out...
Old 03-07-2014, 08:45 PM   #27
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Pushed out and considering staying out...

A house is not an investment, as many people recently discovered.

Conservatively, $1.8m could provide about $54k a year. Against expenses of $75k?

Quick and dirty? No, you're not there, in my opinion. Not with 15 years to any SS.

"Growing old is no excuse for growing up."
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