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6 month to go, seeking answers/reassurance
Old 06-01-2019, 09:47 AM   #1
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6 month to go, seeking answers/reassurance

A few things have me stressed out thinking about the next 6 months and beyond. Spouse is aware of plans, agrees with them, but the bulk of the work comes down to me, and I do not know what I do not know. I would like to share our positions, plans and ideas, and get feedback. Thank you in advance for any time and thoughts you put into this.

Assets total about 2.2M. 320K of that is in a variable annuity, some of which will be taxed. Most of these funds are tax deferred in low cost index funds.
40K cash, should be 70K by end of year. End of year is when one of the regular paychecks will stop.
No personal debt!
177K owed on 4 rental homes, each one cash flow positive. HVAC systems and roofs in good shape.
Our current income is perhaps 150K/yr. We were saving 1/2 of that for many years. We don't need that much money.
Rentals add >1k per month.
Expenses out of pocket averaged 3508.25 per month in 2018. (This does not account for anything tax or health insurance related).
One of us has the option to take social security real soon but wants to wait to age 65 or 66 for increased payout. 1700 now vs 2300 or similar then.

At the end of 2018 the older of us, age 62 is retiring. A couple years ago we met with the benefit specialist at work, pension was to be 2400/ month, perhaps is $2600 a month now. I expect that we would take a reduced benefit for joint life, using 80% of overall amount to figure on things.

The younger of us plans to keep working full time for healthcare. Age 51. The general plan is to keep working for the following things:
Insurance until one of us is 65.
Peace of mind to not knock down nest egg too much.
Stay busy and not spend too much...
Aim to pay off real estate debt first. or pay off 110K of it first, the principal on one of the properties might be inherited.
Grow 2nd 401k past 1M (559K now).
Wait to draw social security until we both retire?
Buy more equipment for retirement hobby business?

The annuity choices we most consider are to take guaranteed payout over 5 years in the amount of 5643 per month compared to joint life monthly payment of $1266. It would take greater than 22 years to have the lower amount come close to the faster payout. Taking the larger payout could increase our peace of mind and allow other funds to grow another 5 years or longer. It would also make it easier to delay social security. What do you think of the annuity? A few months ago the payout was higher. IT is tough to decide when to lock in the payout amounts.

So income to start in 2020 would be as follows:
Regular paycheck gross 70K, perhaps up to 48K take home. 4k/month.
Pension 2000/month
Rentals 1000/month
Annuity 5643 /month if we take according to plan.
For emergencies we could always tap Roths, HELOC, or take SS. We do not expect emergencies.
This seems like more than enough money.

Over the next 4-10 years we would add
2nd pension $1000, month (4 yrs) or 2500 a month (10 years)
SS in 4 years 2300/month
SS in 11-15 years Likely similar amounts of 1700-2300 per month.
More rental income as they get paid off, perhaps 2500+ per month.
Subtract out the annuity.
In 15 years, we expect to have recurring monthly income of >= 9K/month without withdrawals considering pensions, real estate, SS.
All of the above leaves bulk of the funds untouched. We would consider using a VPW method of withdrawal as being realistic. Having a decent cash position would allow lower withdrawals during tough times. VPW suggests we could pull 7500 a month now. Healthcare really is the big driver of continued employment. Perhaps go part time as we see how things work.

Our to do list is as follows:
Talk to HR about the pension and figure out final date.
Talk to Fidelity about the annuity. Consider when to lock in the amount?
Talk to social security to confirm figures.

Home maintenance is up to date.
First vehicle newer. 2nd vehicle is 2005 full size pickup. Feels like a tank in parking lots, lacks safety features such as TACC, lane departure warnings, back up camera. We are thinking about the utility of a newer smaller truck versus a 3rd vehicle for as a 2nd daily driver. No rush, can bargain, can wait.
We have no grand plans for world travel, perhaps short trips to explore bike paths.
We have many other interests to keep us busy.

What else should I be thinking about?
Should we lighten up and spend more now if it means we enjoy more?
Should we go for newer safer vehicle? trade new truck vs daily driver?
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Old 06-01-2019, 10:01 AM   #2
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Go through your expenses with a fine toothed comb, include medical and taxes. Don't expect emergencies, but do plan for them. Add in replacement costs for roofs, cars, appliances, etc over 30 plus years.
Go to ER FAQ forum and answer all of the "can I retire" questions, they helped me tremendously to make sure I wasn't forgetting anything.
From what you have posted, its looking good to me, but you know your actual spend rate.
Congratulations!
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Old 06-01-2019, 10:14 AM   #3
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Originally Posted by pacergal View Post
Go through your expenses with a fine toothed comb, include medical and taxes. Don't expect emergencies, but do plan for them. Add in replacement costs for roofs, cars, appliances, etc over 30 plus years.
Go to ER FAQ forum and answer all of the "can I retire" questions, they helped me tremendously to make sure I wasn't forgetting anything.
From what you have posted, its looking good to me, but you know your actual spend rate.
Congratulations!
Firecalc is 100% success to FIRE now and have an average of 3x the amount of money in 30 years and 5x the amount in 40 years.

We have kept every receipt for years.
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Old 06-01-2019, 10:24 AM   #4
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Seems like You are good to go! Congratulations and enjoy life from a fellow nurse
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Old 06-01-2019, 10:28 AM   #5
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Wow. If I was in your shoes, I'd be OUTTA THERE!!! We're nowhere near where you are financially and I'm considering retiring in a year. :-)

I know that's not helpful; I'm just being envious.
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Old 06-01-2019, 12:08 PM   #6
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Looks like you are FI and can RE when you want to. That's the goal, so congratulations on seeing your hard work pay off!
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Old 06-01-2019, 01:49 PM   #7
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Originally Posted by SoReadyToRetire View Post
Wow. If I was in your shoes, I'd be OUTTA THERE!!! We're nowhere near where you are financially and I'm considering retiring in a year. :-)

I know that's not helpful; I'm just being envious.
What about insurance? Too much unknown for us to cut that cord. I am only working for insurance. Will stay full time to begin with and might go part time. If the market went to crap it is also nice to be working.
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Old 06-10-2019, 08:59 PM   #8
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It is nice to be w*rking when the market tanks. But you folks have enough. Recheck your numbers, answer the “can I retire” questions that @pacergal referenced, and find that j*b that gives insurance to part-time employees.

You worked and saved for it! Congratulations!
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