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Opinions on this financial picture....
Old 03-25-2013, 11:08 AM   #1
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Opinions on this financial picture....

So I have been doing the "math" on retirement, and found this group. Seems to be a real wealth of experience here. Interested on opinions, let me lay it out here.

Ages: 51, spouse 53
Current annual income: $190K
Current annual investment funding: ~$24k/yr
Current IRA totals: $458k
Current 401K totals: $287K
Current Brokerage: $86K
Total investment portfolio: $838k

My pension: $1892/mo, available starting at 55, no early retire penalty
Spouses pension: $668/mo starting at age 62 (presently funded, it will grow)

Present net worth: ~ $1.3M (incl. 2 real estate properties)

Other: My pension will give me an additional ~$700/mo as a Social Security "Supplement" during any years that I retire before 62.

Social security estimate/mo for 62 and 67, me: $1660/$2600
Social security estimate/mo for 62 and 67, Spouse: $1550/$2500

Cost of living in present situation, incl mortgage, bare bones: $5k/mo
Comfortable monthly COL: $8k/mo
Ideal COL: $10k/mo

Plans: I want to retire between 55 and 58 and would not mind putting a requirement on myself for maybe $1000/mo or so for a few years. I started a web business 10 years ago, but thus far, it is all "fun money", not represented above. I might also work or consult part time.

Spouse is very happy in her job and wants to work until 62 (=59 for me).

A lot of our present income is directed at kids college right now, expect that to be over when I am 55.


Well at a high level I am trying to do some rough planning of what to draw when. It looks like if we wait until I am 62, pensions and SS will provide ~ $5700/mo. Not bad. Should do that, and draw from retirement portfolio early?

We are very disciplined with finances, other than our mortgage (< 50% of home value) we have no liabilities. We also own a large lot of undeveloped land in a desirable vacation region. Value is hard to pin down, probably between $125k and $300k. No plans to build on it, bought as investment only, no loan on it.

We like to travel and would like to have a winter vacation home in the Caribbean (who wouldn't?) but haven't seriously looked into that.

Thoughts? Ideas? Based on the spreadsheets I am doing, 57-58 looks pretty good, the challenge is those "bridge"years, -62 or so. The SS supplement looks to incent me to retire earlier. Not a ton of money, but I'd hate to walk away from it.

Retiring at 55 would be sweet....

Thanks in Advance for any advice.

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Old 03-25-2013, 11:23 AM   #2
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Join Date: May 2011
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What are your plans to pay for health care as an early retiree? Three years ago, DH and I retired at 59/52. Our biggest expense, being pre-Medicare age, is health insurance ($12K annually -- so far). Based on what info is currently available on the Affordable Care Act, we won't be eligible for any subsidy toward paying those premiums. Will you be fortunate enough to have some provision for health insurance/care through your employer(s) after you retire?

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Old 03-25-2013, 11:28 AM   #3
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Have you tried entering your numbers here FIRECalc: A different kind of retirement calculator It's the first place many of us start, and then it's easier to field questions. Give it a whirl...
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 03-25-2013, 11:35 AM   #4
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Yes, I have been playing around with FIREcalc a bit. Really cool.

Oh yeah, that health insurance thing....

No, I had not factored that in and will have to. My wife and I work for the same company and she can cover me when I am retired and she is still working.... but yes, after that, we'll have to pay out of pocket until medicare and probably some supplemental stuff after that. Thanks for that tip...
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Old 03-25-2013, 11:40 AM   #5
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Another good tool for planning is Quicken Lifetime Planner (included in Quicken Deluxe and higher) is pretty intuitive tool for doing a retirement plan and testing alternatives.

You might also want to take a look at the level of expenses that you need to live by looking at what you actually spend and how it would change once you are retired.
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Old 03-25-2013, 01:10 PM   #6
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From a quick glance, you already have 5,100 coming in from pension. So to hit your ideal income of 10k/month, you need to generate about 5,000 a month. Since you have two houses, are you looking to rent at least one out as rental? Based on your non RE investments of about 800k, it will be tough to cover 5k a month in income without eating into your capital each month.

How are you investing your investments currently? Make sure you have the "right" asset allocation, especially if you are serious about retiring shortly.

Try Bogleheads Investing Advice and Info Is a freaking great forum with tons of investment info and a large community to assist you. But you do need to spend time reading and understand some basic investment topics, but nothing really difficult.

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