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Retirement?
Old 05-15-2017, 04:37 PM   #1
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Retirement?

I am considering retiring at the end of the year, and am a little nervous about it. Firecalc says I'm okay, and I spoke with Fidelity and they say I'm okay too.
Still......thought I would ask for another opinion. Giving up a nice income makes me a little nervous.

My current monthly expenses run around $2400 per month. I don't see them changing except as prices rise due to inflation.
My income after retirement would be $2800 per month. It will go up when I turn 70 (in 7 years) and take my own social security (it will increase approximately $1500 per month)
I will be buying my health insurance from the ACA exchange.If it goes by the wayside at some point, I'm two years away from Medicare.

Current investments:
1,100,000 in sep/roth iras.
340,000 non-ira split between a mutual fund and a bond fund.
100,000 cash (my emergency money).
My house is free and clear (worth around $500,000)
and I own two rentals (combined worth around $450,00 with
a mortgage on one of $67,000)

So two questions:

First, do things look good for retiring?

Second, I will shortly be inheriting somewhere between $300,00 to $400,000 in addition to the above. Any idea on what to do with it?
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Old 05-15-2017, 04:54 PM   #2
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Welcome to the forum!

If you haven't already seen it this is a list of questions that you will want to have solid answers to before retirement:

Some Important Questions to Answer Before Asking - Can I Retire?
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Old 05-15-2017, 04:57 PM   #3
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what type of $$$ do the rentals throw off net?
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Old 05-15-2017, 05:20 PM   #4
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Originally Posted by RockyMtn View Post
what type of $$$ do the rentals throw off net?
They net me $1200 per month although I am just about to increase the rent on each which should bring it up to $1500.
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Old 05-15-2017, 05:22 PM   #5
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Quote:
Originally Posted by TripleT View Post
I am considering retiring at the end of the year, and am a little nervous about it. Firecalc says I'm okay, and I spoke with Fidelity and they say I'm okay too.
Still......thought I would ask for another opinion. Giving up a nice income makes me a little nervous.

My current monthly expenses run around $2400 per month. I don't see them changing except as prices rise due to inflation.
My income after retirement would be $2800 per month. It will go up when I turn 70 (in 7 years) and take my own social security (it will increase approximately $1500 per month)
I will be buying my health insurance from the ACA exchange.If it goes by the wayside at some point, I'm two years away from Medicare.

Current investments:
1,100,000 in sep/roth iras.
340,000 non-ira split between a mutual fund and a bond fund.
100,000 cash (my emergency money).
My house is free and clear (worth around $500,000)
and I own two rentals (combined worth around $450,00 with
a mortgage on one of $67,000)

So two questions:

First, do things look good for retiring?

Second, I will shortly be inheriting somewhere between $300,00 to $400,000 in addition to the above. Any idea on what to do with it?

Just my humble opinion.

When you get your inheritance put it in the market at a 30-50% equity/bond split.

You have over 1 mil in sep and roth IRA plus rental property and 340 K in another IRA. Thats a net worth close to 2 million and over that with the inheritance.

You are 63 now so a 3.0% swr is reasonable. You could even do 2.5% and collect rent and do fine. When social kicks in then even better. If you are really nervous about it, go part time and transition out over the next 3 years.
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Old 05-15-2017, 05:40 PM   #6
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Based on the info you provided (age, NW, income and spend rates) you should be good to go. IMO, don't really need much of a calculator to figure yours.

BTW, welcome to the forum....
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Old 05-15-2017, 05:43 PM   #7
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Quote:
Originally Posted by TripleT View Post
They net me $1200 per month although I am just about to increase the rent on each which should bring it up to $1500.
I am assuming that number is in the $2800 per month income?? Even with the 's on ACA costs (for only two years) I think you are more than good to go!

Good luck!!
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Old 05-15-2017, 05:43 PM   #8
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You may want to use Cobra to get you closer to Medicare.
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Old 05-15-2017, 05:49 PM   #9
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Originally Posted by Car-Guy View Post
Based on the info you provided (age, NW, income and spend rates) you should be good to go. IMO, don't really need much of a calculator to figure yours.

BTW, welcome to the forum....
+1 With expenses that low you'll be fine for sure
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Old 05-15-2017, 06:26 PM   #10
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Have you considered taxes and have you factored in medical expenses into your numbers?
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Old 05-15-2017, 08:07 PM   #11
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Fidelity & FireCalc say you are good as well as most of the replies above..so what is making you nervous? Any major change is usually somewhat unsettling...fear of unknown is pretty normal. What are your plans for when you do retire?
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Old 05-15-2017, 08:22 PM   #12
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I will repeat what most have already said. I would say you are more then good to retire. Very low cost to live and the one thing is you have cash flow. I really don't see any issues unless you change things up.
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Old 05-15-2017, 08:48 PM   #13
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Originally Posted by RockyMtn View Post
I am assuming that number is in the $2800 per month income?? Even with the 's on ACA costs (for only two years) I think you are more than good to go!

Good luck!!
Yes, it is included in the $2800.
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Old 05-15-2017, 08:50 PM   #14
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Originally Posted by T-Minus View Post
Have you considered taxes and have you factored in medical expenses into your numbers?
I checked with my accountant and it looks like if my income does not change I will have very little to no taxes due. However, the extra $100,000 I have set aside as my "emergency fund" is there in case he is wrong or for medical expenses. I also have another $400 left over at the end of the month for any medical expenses that crop up.
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Old 05-15-2017, 08:53 PM   #15
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Fidelity & FireCalc say you are good as well as most of the replies above..so what is making you nervous? Any major change is usually somewhat unsettling...fear of unknown is pretty normal. What are your plans for when you do retire?
Just normal paranoia I think....all of a sudden no large income from working.
Also, I have worked since I was in 5th grade (baby sitting, berry picking when younger, not a lot of money, but still used to working and earning) so it will be strange to no longer do so.

After retirement will spend time taking care of the property (house and land need a lot of work), relaxing, and spending time on my passion, competitive shooting. Also planning to take classes, including learning an instrument. All kinds of things I've never had time for before!
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Old 05-15-2017, 08:58 PM   #16
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You may want to use Cobra to get you closer to Medicare.
I was self employed, so my understanding is the premiums wouldn't be deductible I should "only" be paying $355 for the monthly premiums under the ACA which isn't bad.
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Old 05-15-2017, 09:29 PM   #17
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Originally Posted by TripleT View Post
I was self employed, so my understanding is the premiums wouldn't be deductible I should "only" be paying $355 for the monthly premiums under the ACA which isn't bad.


If you are self employed health care premiums are a line item deduction on the 1040, up to your earnings, but no more.
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Old 05-15-2017, 10:23 PM   #18
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Quote:
Originally Posted by TripleT View Post
I am considering retiring at the end of the year, and am a little nervous about it. Firecalc says I'm okay, and I spoke with Fidelity and they say I'm okay too.
Still......thought I would ask for another opinion. Giving up a nice income makes me a little nervous.

My current monthly expenses run around $2400 per month. I don't see them changing except as prices rise due to inflation.
My income after retirement would be $2800 per month. It will go up when I turn 70 (in 7 years) and take my own social security (it will increase approximately $1500 per month)
I will be buying my health insurance from the ACA exchange.If it goes by the wayside at some point, I'm two years away from Medicare.

Current investments:
1,100,000 in sep/roth iras.
340,000 non-ira split between a mutual fund and a bond fund.
100,000 cash (my emergency money).
My house is free and clear (worth around $500,000)
and I own two rentals (combined worth around $450,00 with
a mortgage on one of $67,000)

So two questions:

First, do things look good for retiring?

Second, I will shortly be inheriting somewhere between $300,00 to $400,000 in addition to the above. Any idea on what to do with it?
What are you waiting for? Death? Spend that hard earned money.
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 05-16-2017, 12:53 AM   #19
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If you are self employed health care premiums are a line item deduction on the 1040, up to your earnings, but no more.
Correct,but I thought it was different with COBRA. No matter though, will get coverage through ACA.
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Old 05-16-2017, 04:43 AM   #20
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