New Member - Your Guidance Requested

[clifp]

A couple of thoughts, by my tally you guys are saving $72k+ a year a bit more than 30%, congrats. This means you are really talking about replacing a combined income of 168K or so. Your income is really in the sweet spot for taxes since you each barely exceed the FICA caps. I'd estimate that you'll save 15K+ in medicare/FICA taxes a year after retirement.

If you end up retiring in a state that doesn't tax pension, make sure your taxable portfolio throws off lots of capital gains and dividends etc, you can probably save another 30-50K in state and federal taxes. This means you'll need to replace roughly 110-130K between your pension, IRA withdrawals and income from your taxable portfolio to maintain the same life style.

If your spending is really 130K, than I don't think you have the portfolio to support in the next couple of years especially since the pension will be reduced. I think 110K is rather risky, but you certainly look like you are in good shape to retire at 56 or so.

I'd echo the comments of needing to get better handle on your expenses before jumping into retirement along with sitting down with a CPA/turbo taxes to look at your tax situation.

 

[sheehs1]

I'll give you $10.00 for the dog

p.s. Welcome!

 

[Helen]

I didn't see how much you'll receive in Social Security, OP.

 

[Spanky]

The pensions are, sadly, what they are.

Your pension and that of your spouse are much better than our pension with a value of $0. We can actually live on the pensions that you two have.

 

[ProGolferWannabe]

Your pension and that of your spouse are much better than our pension with a value of $0. We can actually live on the pensions that you two have.

Apologies if I came off as unappreciative. I was responding to a poster who sid that our pensions looked rather low given our incomes. All I meant was that the amounts are what they are. In today's world, I feel very fortuante to have a pension at all.

 

[toothpick]

Hi, have you always maxed out your 401k accounts? Just wondering if you were doing this in your 20s. Very impressive!

No--income has been pretty steady/grown slowly over time. We did always put the max amount we could into our 401k's (had a pretty constant 70/30 equities/bond mix over the years---moved ito 60/40 in the past couple years). We did pay off our house early---put extra payments on, and the house was paid off after about 17 years, and we did fully fund our kids college educations, so those things might have taken a toll on our finacial assets. Of course, like everyone else here--we also did not fair very well in the market over the past 10 years.

The pensions are, sadly, what they are.

We are not eligible for Roths as far as I know. Wish we were, but I do contribute max to HSA.

I would not say that we have been as frugal as most people who post on this board. We certainly have lived below our means, but we are lightweights compared to some of you giys with regard to defering immediate gratifcation to achieve early retirement. That may be a good thing for us to keep in mind moving forward---maybe we need to tighten up the purse strings a bit more if we want to have sufficient assets in retirement.

Thanks for the observations.

 

[SpencerM]

Welcome. You look in pretty good shape. Are the pensions indexed to inflation? If not the value will dwindle pretty quick. Do not suspend your 401 catch-up for any reason - too good a deal to pass up! Oh, and put the dog to work...

SM