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Retirement shouldn't be a trip to the morgue
Old 09-10-2010, 12:07 AM   #1
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Retirement shouldn't be a trip to the morgue

Nice to join the group. Found it while looking for reviews of ESPlanner.

Turning 55 this next month and become eligible for reduced benefit retirement with health plan/pension. I now work for a stressed out member of the DOW that is doing the outsource thing, right-sizing, no raises, etc. My boss had a mild stroke (TIA) a couple of weeks ago and I had a mild NSTEMI heart attack on the 1st day of vacation in July. Not to worry, it's just the latest corporate employee attrition initiative.

For some reason my motivation to retire has been stimulated.

My spouse has given me the thumbs up on this decision and I'm trying to figure out the financials. A recent inheritance of $200K taxable stocks/funds/cash and $100K IRA (mutual funds) adds to our $360K 401k's and $25K taxable stock. The missus wants to stay working full time for about 3 years ($75K salary) and then shift to part time for a couple of years.

My current pension will be worth $1100/month and the health insurance will be $235. Spouse's pension will be around the same when she turns 60 in 4 years. The house is paid off in 4 yrs ($550/mon) and the pool in 9 yrs ($300/mon). No car payments now but they are both +10 years old. If we take SocSec as soon as possible (age 62) we'll each get $1500/mon.

We plan on staying in the house until they come looking for us but it needs about $30K in remodeling to bring it into the 21st century. The kitchen was designed by one of Satan's relatives as a prototype torture device for fallen 3-star chefs. After that's done I could see getting a part time job or occasional contract work for a few years. Or not.

It feels like enough savings and income to keep us going but most retirement calculators have left me feeling a bit apprehensive. If you put in mildly pessimistic returns and throw in an unexpected big expense or two then cat food becomes a meal option as we leave our 70's. My own spreadsheet calculations aren't any different.

Your thoughts?
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Old 09-10-2010, 07:58 AM   #2
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Hello. Can I call you "us" for short? Welcome to the forum.

I see one glaring omission from your information - retirement expenses. How much will you need to spend per year to be comfortable once you pull the plug? Once you have that you can plug your numbers into FIRECalc (see link below) and see what it tells you.

If you can continue on your company health plan for a measly $235 per month (we're paying more than triple that amount) and both of you will have pensions plus SS, I'm guessing you're in fat city - provided you don't plan to live too high on the hog.
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Old 09-10-2010, 08:50 AM   #3
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In addition to REWahoo's question, if I were your financial planner I'd want to know your current salary and your current joint monthly outgoings.

With $4.7K/mo in pensions and SS after deducting health insurance, you're probably not going to be eating cat food. The worst that might happen would be a major house-related item, but that's why there are HELOCs. For the $30K remodelling, I'd be inclined to spend some of your portfolio.
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Old 09-10-2010, 02:14 PM   #4
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Are your pensions both survivor-payable (or will your income be cut in half when one of you passes from this green earth)? Also, is your insurance "guaranteed" until Medicare for both of you, or is your spouse on her own if you pass away before then? I'm not sure but I think SS will fall when one of you is gone, too. So would one of you be catfood-free on half of the total anticipated income?

Gruesome things to think about, but still....

But hey, welcome to the boards!
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Old 09-10-2010, 05:14 PM   #5
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Quote:
Originally Posted by us271934 View Post
Turning 55 this next month and become eligible for reduced benefit retirement with health plan/pension. I now work for a stressed out member of the DOW that is doing the outsource thing, right-sizing, no raises, etc. My boss had a mild stroke (TIA) a couple of weeks ago and I had a mild NSTEMI heart attack on the 1st day of vacation in July. Not to worry, it's just the latest corporate employee attrition initiative.

For some reason my motivation to retire has been stimulated.
Funny how factors like those you cite can combine to give one a new sense of perspective.

Quote:
Originally Posted by us271934 View Post
It feels like enough savings and income to keep us going but most retirement calculators have left me feeling a bit apprehensive. If you put in mildly pessimistic returns and throw in an unexpected big expense or two then cat food becomes a meal option as we leave our 70's. My own spreadsheet calculations aren't any different.

Your thoughts?
I don't like the idea of carrying debts into retirement.

Otherwise, as others have already said, you haven't yet provided enough information to allow us to make meaningful comments. But pending additional info on your expenses, I would suggest that multiple retirement calculators and your own hard data are probably more reliable than your 'gut sense' that you have enough. "Mildly pessimistic returns and ... an unexpected big expense or two" are not remote possibilities.

Quote:
Originally Posted by BigNick View Post
In addition to REWahoo's question, if I were your financial planner I'd want to know your current salary and your current joint monthly outgoings.
I agree that his current expenses are relevant, but is his current salary really important?
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Old 09-10-2010, 10:39 PM   #6
Confused about dryer sheets
 
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Thanks for the responses - as far as expenses go we are rooting through those this weekend. My first pass or two revealed some unsustainable discretionary spending habits that will require a meeting of the minds to sort out. I'll be posting that in a couple of days.

The pensions will be set up to pay the survivor 100%. SocSec will only pay the living in most cases so the widow/widower scenario does need to be run.

Since I am retiring from my current employer about Nov. 1 my current salary will soon be a memory.
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