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Can I retire in February, 2012??
Old 06-08-2011, 07:21 AM   #1
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Can I retire in February, 2012??

I'll be 55 in February with 31 years at the same company, and can retire with full company medical benifits at that time.

I draw $36K per year (tax free) from the Veterans Administration (disability)
I have 1 million in 401K/Company pension.
I will start drawing about 9K per year at age 60 from U.S. Army Reserve Retirement (also qualify for TriCare at that time).
The SS calculator tells me that I can draw about 18K per year at age 62.
House is paid for,... no plans to move.
Got 4 kids at home,... will need about 80K after taxes till their on their own (10 years?), then less after that.

Can I retire in February,.. or should I work a few more years
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Old 06-08-2011, 07:37 AM   #2
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If you need 80K net, then for the first 5 years you'd have to come up with 60-70K gross per year, which is 6-7% withdrawal rate from 401K (i.e., presuming there are no other funds to draw from), which is higher than what the retirement bibles suggest. That withdrawal rate goes down once your Army pension kicks in, and again when you hit 62.
Four kids at home- college plans and if so are they financed? Don't forget weddings, and decide what you plan to do for them.
Are you married and if so does your spouse work? If no to either, my vote is you're almost there, but you are not quite ready to retire comfortably at 55.
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Old 06-08-2011, 07:39 AM   #3
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It appears at first glance you are there but... The taxes are a big question and would need to add to total 80K expenses. Would also need to consider method of pulling $$ out 401K and tax ramifications. What do you anticpate expenses to be when kids on thier own at age 65? . Is thier a spouse? Does the VA pay the pension to a spouse if something were to happen to you? Is the SS for both you and a spouse? If thier is a spouse just need to make sure $$ available if something were to happen to you.
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Old 06-08-2011, 09:19 AM   #4
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I think you are there or very close if nothing changes with your assumptions, but it also depends on your comfort level and cushion that you may have and desire.

Some others mentioned college & wedding fund, etc.

Here are some of the things that I am thinking about as I dream of FIRE:

- potential home improvements that are in the near term, i.e. roof, carpeting, HVAC, water heater, appliances, furniture, etc.
- car replacement(s)
- potential wild cards, i.e. future expenses for kids (activities, car(s), car insurance, spring breaks/vacations). This is an area I'm trying to anticipate an increase as my kids are younger.
- parents that might need your assistance in the future?

Is your asset allocation ok for your upcoming ER?

Any taxable and/or emergency funds not listed?

Good luck with your planning.
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Old 06-08-2011, 09:22 AM   #5
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Spouse is 43, does not work. The SS amount was just for me. The VA disability will pay her about a third of the current amount when I die.
We could live very well on about 60K net after the kids are gone.
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Old 06-08-2011, 09:24 AM   #6
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There is considerable "cushion" built into the 80K net figure. We live in the rural south and things are cheaper here.
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Old 06-08-2011, 09:49 AM   #7
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BTW - be sure to use FIRECalc and other tools to see what results you get.
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Old 06-08-2011, 10:01 AM   #8
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Quote:
Originally Posted by Aiming_4_55 View Post
BTW - be sure to use FIRECalc and other tools to see what results you get.

Done that, and it appears that everything looks good. I've also consulted with a financial advisor at my bank and she also believes I'm "Good to go".
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Old 06-08-2011, 04:30 PM   #9
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i would put off taking SS until you are 70. that will give you more COLAed income from SS and if you die before your wife, it gives her more income (review this thread 72t for the spouse? since alot of what i said there also applies here). i am a little concerned about how much income your wife will have if you die young, hopfully you have planned for that.

i dont think your taxes will be that high. 36K is tax free and then you have 6 exemptions and probably 4 child tax credits. you may actually have the feds paying you some years. it would be worth while running a trial tax return.
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Old 06-08-2011, 06:18 PM   #10
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The 4 kids at home for the next 10 years seem to be the wild card here. In my experience kids costs are unpredictable and usually bigger as they get older. Cars, Auto Ins. College, Weddings, etc.
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