Age: I'm 43 years old, the Mrs is 38, no kids.
Location: New Hampshire
Investments:
Total net worth is roughly 950k but should be about $1,020,000 at the end of 2017 (without any market growth or losses).
Roughly 600k will be in my 401k and 420k in a non-retirement brokerage account. Asset allocation is about 75% stock, 20% bonds, 5% cash.
Expenses:
After revisiting our detailed budget and factoring in future health care premiums, our monthly expenses will be about $4500 per month. This includes our mortgage of $815 per month which will be paid off in 15 years. We have no other debt.
Part time income:
My wife and I can easily bring in 1k per month each working 2 or maybe 3 days per week (no more than 20 hours a week). With 24k per year in income we would only need to withdraw 30k annually from our investments. We would keep working 2 or 3 days a week for about 10 years unless of course we fall into careers or find work that we both really enjoy.
Health Care:
I’m well aware that health care premiums are likely on the rise and there’s lots of uncertainty right now but based on our state and projected income, we can currently purchase a gold level policy for $425 per month on the exchange. I’ve built in an extra $300 per month for our health care budget on top of the $425 per month, assuming premiums increase in 2018 (70% increase).
Taxes:
We’ll keep taxable income low enough to pay 0% on capital gains and qualified dividends. I’ll rollover my 401k and implement a Roth conversion ladder over a period of years and not pay tax on the conversion as long as I keep the tax bracket low enough. We’ll have access to our retirement account before age 59 1/2. There’s also the 72T option.
Planning:
I’ve used two FIRE calculators and Fidelity’s retirement analysis and they all look successful between 90-100%. I’ve factored in 4 lump sum withdrawals- two for 10k, and two for 15k over a period of 40 years for large purchases (cars, roofs). The Fidelity analysis factors in 2.5% annual inflation.
In summary:
We both partially retire in 2018. Work 20 hours per week (or less) to bring in 2k per month. Withdrawal rate from assets will be about 3%. By the time we’re both 62, we’ll have about $3400 in social security and a pension (both inflation adjusted). I’ve reduced my social security estimate by 25% assuming social security will be cut by the time we’re 62.
With future income factored in, we really only need to fund about a 20 year retirement. Withdrawals from our assets will be minimal after 62. If necessary, once our mortgage is paid off, we can use that $815 toward health care.
Thoughts on this plan? Retirement and investment calculators can only tell you so much. I think real life experiences from people already retired are important to consider.
Thank you for reading and commenting.
Location: New Hampshire
Investments:
Total net worth is roughly 950k but should be about $1,020,000 at the end of 2017 (without any market growth or losses).
Roughly 600k will be in my 401k and 420k in a non-retirement brokerage account. Asset allocation is about 75% stock, 20% bonds, 5% cash.
Expenses:
After revisiting our detailed budget and factoring in future health care premiums, our monthly expenses will be about $4500 per month. This includes our mortgage of $815 per month which will be paid off in 15 years. We have no other debt.
Part time income:
My wife and I can easily bring in 1k per month each working 2 or maybe 3 days per week (no more than 20 hours a week). With 24k per year in income we would only need to withdraw 30k annually from our investments. We would keep working 2 or 3 days a week for about 10 years unless of course we fall into careers or find work that we both really enjoy.
Health Care:
I’m well aware that health care premiums are likely on the rise and there’s lots of uncertainty right now but based on our state and projected income, we can currently purchase a gold level policy for $425 per month on the exchange. I’ve built in an extra $300 per month for our health care budget on top of the $425 per month, assuming premiums increase in 2018 (70% increase).
Taxes:
We’ll keep taxable income low enough to pay 0% on capital gains and qualified dividends. I’ll rollover my 401k and implement a Roth conversion ladder over a period of years and not pay tax on the conversion as long as I keep the tax bracket low enough. We’ll have access to our retirement account before age 59 1/2. There’s also the 72T option.
Planning:
I’ve used two FIRE calculators and Fidelity’s retirement analysis and they all look successful between 90-100%. I’ve factored in 4 lump sum withdrawals- two for 10k, and two for 15k over a period of 40 years for large purchases (cars, roofs). The Fidelity analysis factors in 2.5% annual inflation.
In summary:
We both partially retire in 2018. Work 20 hours per week (or less) to bring in 2k per month. Withdrawal rate from assets will be about 3%. By the time we’re both 62, we’ll have about $3400 in social security and a pension (both inflation adjusted). I’ve reduced my social security estimate by 25% assuming social security will be cut by the time we’re 62.
With future income factored in, we really only need to fund about a 20 year retirement. Withdrawals from our assets will be minimal after 62. If necessary, once our mortgage is paid off, we can use that $815 toward health care.
Thoughts on this plan? Retirement and investment calculators can only tell you so much. I think real life experiences from people already retired are important to consider.
Thank you for reading and commenting.
