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I have a rather detailed question. I should probably consult a financial planner, and probably will, but would like the unbaised advice given here first.
Heres the situation:
My wife and I are both police officers. I will be 42 very soon and she is 38. We will be eiligible for a pension of approx 75% of our salary at age 50. We will retire when I hit 50 but of course she will only be 46. If she starts drawing her pension early, there is a big penalty so thats not an option I want to consider, nor is working until she is 50.
We are also saving an incredibly high percentage or our income in other ways. We've been paying more than double payments on our house and it will be paid for in less than 2 years. We both max out our 457ks as well (similar to 401k but for govt employees).
So there will be more than enough money, but the question is how do I figure how much to withdraw from our investments to cover the 4 year gap until my wifes pension starts?
Once we are both drawing our pensions and drawing from our other investments, our total income will be susbstantially higher than what we are spending now.
I will need to draw more than the standard 4% during this 4 year "pension gap" which wont be a problem since its only 4 years, but I cant seem to figure out what percent should be.
We would like to have slightly more money in the first 15 years or so of retirement since we will want to travel more at that point and probably slightly less as we get older.
Is there some formula I can use to figure this out? Or do I just punch in numbers using trial and error until the number seems right? For example, if I withdraw 9% of investments the 1st 4 years and add that to my pension I will have XX amount....which will be approx the same the total income of both pensions (once she hits 50) plus 4% of our investments.
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