Retirement Income Plan A

[Tiger8693]

Just playing with some numbers, thinking of how I would work with SS, a small pension, and then tax deferred account. My plan would be to have $100k income (30%-40% more than planned expenses). I do have an after tax account ($~$200k) that I would utilize for planned/unplanned expenses (car, home repairs, etc), but not showing as income for this plan purposes.

Thoughts/comments?

 

[Stormy Kromer]

It looks like you'll be paying some income taxes each year.


You mention that planned income is 30-40% more than planned expenses. Would you still draw $100k if your actual expenses are $60-$70k ? or would you reduce your withdrawals to your actual living costs, leaving more working in your tax deferred & pension ? If you draw more than your actual expenses would you invest the difference in an after tax account you could draw on later ?


The only danger I see in your plan is inflation on a flat $100k income.

 

[pb4uski]

Have you run your situation through FIRECalc?

Also, it is a bit confusing as you have age 62 twice and age 65 twice. Is the part-time work for 2 years (60 + 61) or for 3 years (60, 61, 62)?

 

[Golden sunsets]

The only danger I see in your plan is inflation on a flat $100k income.

As stated above no adjustment to income for inflation and 8 years of pulling more than 4% of your portfolio, would appear to be potential issues for the longterm longevity of the retirement funds. Have you modeled your numbers in firecalc for success percentages? Do you feel that PT work of 52K is achievable?

 

[SumDay]

Does your pension cease when you begin SS?

 

[Tiger8693]

Thanks! I’ll try to answer in order of posts rather than quotes:

Income Taxes: my plan (although details not given which would have answered this) includes taxes.

Higher draws than spending: would beef up after tax account, and allow some giving and maybe more travel (early) than in spending plan. I’m already going to bump up with RMD’s, which leads to

Inflation: I’m thinking as we age, less activity will lower some spending. Also, I haven’t done the RMD math yet but that will definitely drive up withdrawals at/after 70.

Firecalc and Fidelity Planner say ok

Part Time: Yes, Sorry, I see how that’s confusing. 2 years p/t (61&62). Those numbers I don’t think will be too hard, current salary near $200k.

Pension: this is defined contribution (known $ amount) that has an (one of several) option to draw over 5 years. No tie to SS, just not available until 65.

 

[pb4uski]

.... Pension: this is defined contribution (known $ amount) that has an (one of several) option to draw over 5 years. No tie to SS, just not available until 65.

I was able to roll my DC plan balance into my tIRA. Once in the tIRA it could be withdrawn penalty free after 59 1/2.

 

[Tiger8693]

Yep, that is one of the options as well. I figured I’d use this to allow/help my SS delay to 70. Unfortunately, no access until 65, not even for rollover.

 

[Tiger8693]

Added a 2% inflation factor and also lowered my "after retire" growth rate by 1.5%. Some impact to the amount left at age 95, but not too bad.

Wild card, as for everyone, is Healthcare from 60-65, and then beyond of course.

Thanks for the questions!