MikeD
Full time employment: Posting here.
My wife and I are 59 and 60. I am on disability and my wife is about to retire, hence this post.
I have a lot of health problems such as diabetes since age 6 and kidney failure and, most importantly, vascular dementia, from the diabetes. I have over 16 real, Dr. issued prescriptions that must be paid for. I got a kidney and pancreas transplant in the mid '90s and cured two problems with one stone (no pun intended).
The vascular dementia has manifested itself as short term memory loss and cognitive difficulties. I was a real time microprocessor programmer. I used to be really smart and fast. Now I am only slightly smart and 4x slower. In other words, it takes me four times as long to do cognitive tasks like program and no one will pay me to program at that rate! My wife has a slew of medical problems herself but we think she'll go for another 30 years. I foresee a max life span of 20 years for me.
My wife is about to retire on medical disability. What a pair!
So we need the money stream to last for 20 years for both and 30 years for one so I used 25 years in Firecalc.
We had 100% S&P500 Vanguard Index Fund until about 2 years ago. We did not panic AT ALL during the market fall. Really. I just was sure it would come back and come back it did. So there's my tolerance for surviving market fluctuations. We don't like any more risk than the S&P500 index fund at Vanguard.
We have $2.4m in cash right now: $1.0m is in our 401Ks. When she retires we will put it all in 60% stocks, 40% bonds.
We have a paid off house worth about $650K.
I have been tracking expenses for three years. We want to spend $116K/year after taxes. We spend a LOT on medical care. More than $17K/year out of pocket.
I have Medicare and Medigap insurance plans due to being on disability and having kidney disease.
I think that we'll have to pay $20K/year for taxes (high estimate).
So we'll "need" $136K per year.
Firecalc says 100% success for both 25 and 30 years.
My thinking:
A WR of 4% of 2.4m is $96K.
We think SS will be there for us since I am presently on it giving us $25K.
When my wife gets SS disability she will get $31K/year from that.
I also get an additional $31K from company disability that will end in 5 years. I am not counting this as retirement income since it is ending soon.
$96K + $25K + $31K = $152K
We only want $136K so we have $16K wiggle room. So if I figure on taking $80K instead of the $96K I get a WR of 3.3%.
So if my wife gets SS disability I think we'll be set. If she does not we will have to wait 3 years for her to reach age 62 in order to go on SS. She will get less than the disability rate, approx $23K/year.
$96K + $25K + $23K = $144K or a WR of 3.67%
Please tell me what you think of my plan's chances for success. I have read other people's posts like this (I've been a member here for over 750 posts and since 2003) and realize I am spending a lot after retirement. We have no children and do not need to pass anything on to anyone.
If the plan fails, I think it will happen far in the future what with our starting amount. We or, most likely, my wife, would have the equity in the house to fall back on.
Thanks,
Mike D.
I have a lot of health problems such as diabetes since age 6 and kidney failure and, most importantly, vascular dementia, from the diabetes. I have over 16 real, Dr. issued prescriptions that must be paid for. I got a kidney and pancreas transplant in the mid '90s and cured two problems with one stone (no pun intended).
The vascular dementia has manifested itself as short term memory loss and cognitive difficulties. I was a real time microprocessor programmer. I used to be really smart and fast. Now I am only slightly smart and 4x slower. In other words, it takes me four times as long to do cognitive tasks like program and no one will pay me to program at that rate! My wife has a slew of medical problems herself but we think she'll go for another 30 years. I foresee a max life span of 20 years for me.
My wife is about to retire on medical disability. What a pair!
So we need the money stream to last for 20 years for both and 30 years for one so I used 25 years in Firecalc.
We had 100% S&P500 Vanguard Index Fund until about 2 years ago. We did not panic AT ALL during the market fall. Really. I just was sure it would come back and come back it did. So there's my tolerance for surviving market fluctuations. We don't like any more risk than the S&P500 index fund at Vanguard.
We have $2.4m in cash right now: $1.0m is in our 401Ks. When she retires we will put it all in 60% stocks, 40% bonds.
We have a paid off house worth about $650K.
I have been tracking expenses for three years. We want to spend $116K/year after taxes. We spend a LOT on medical care. More than $17K/year out of pocket.
I have Medicare and Medigap insurance plans due to being on disability and having kidney disease.
I think that we'll have to pay $20K/year for taxes (high estimate).
So we'll "need" $136K per year.
Firecalc says 100% success for both 25 and 30 years.
My thinking:
A WR of 4% of 2.4m is $96K.
We think SS will be there for us since I am presently on it giving us $25K.
When my wife gets SS disability she will get $31K/year from that.
I also get an additional $31K from company disability that will end in 5 years. I am not counting this as retirement income since it is ending soon.
$96K + $25K + $31K = $152K
We only want $136K so we have $16K wiggle room. So if I figure on taking $80K instead of the $96K I get a WR of 3.3%.
So if my wife gets SS disability I think we'll be set. If she does not we will have to wait 3 years for her to reach age 62 in order to go on SS. She will get less than the disability rate, approx $23K/year.
$96K + $25K + $23K = $144K or a WR of 3.67%
Please tell me what you think of my plan's chances for success. I have read other people's posts like this (I've been a member here for over 750 posts and since 2003) and realize I am spending a lot after retirement. We have no children and do not need to pass anything on to anyone.
If the plan fails, I think it will happen far in the future what with our starting amount. We or, most likely, my wife, would have the equity in the house to fall back on.
Thanks,
Mike D.