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Still on the fence.....
Old 11-24-2012, 08:38 PM   #1
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Still on the fence.....

Man that fence is starting to hurt!

Any board experts care to run some numbers for me.

Age 50
Target retirement 51
After tax 480K
401K 251K
Roth 16K
Mil Pension 38K (Cola'ed)
Company Pension 16K (Age 65 non COLA)
SSA 16K Age 62
Spousal SSA 5K 64

I've run these numbers through FIRECalc, but not 100% sure of my results. Curious what others arrive at given the numbers above. Also thoughts on whether you would be comfortable with that spending power.

Have also used several other retirement calculators including OPR and Random Walk's Flexible Retirement Planner.

Thanks....Nano
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Old 11-24-2012, 08:48 PM   #2
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Nano, what is your expected spending? There are a lot of people around here that would be fine with just the Mil pension (already started). Others would be happy campers with the Mil + the 15k or so of interest and dividends from your taxable. Me? I would not. My DW and I have spending patterns that are higher than that. So, what do you intend to spend, and are you comfortable that the spending figure you have in mind is a good, solid, long-term livable figure, incl health care, etc?

R
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Old 11-25-2012, 06:50 AM   #3
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Nano, what is your expected spending? So, what do you intend to spend, and are you comfortable that the spending figure you have in mind is a good, solid, long-term livable figure, incl health care, etc?

R
Rambler, I can say that my family and I live comfortably on a monthly spending budget of $6000. This has been our budget for 3 years running so it should be sufficient in retirement. Am definitely a LBYM type family; however, not a minimalist.

Nano
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Old 11-25-2012, 08:36 AM   #4
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Unless I'm misunderstanding I'd say it would be pretty hairy to retire at 51 with the income/assets you listed and with a monthly budget of $6,000. If you are comfortable spending $6k a month that means you need gross income of roughly $8k a month.

It appears that you only have about $4.5k gross monthly income with your taxable account and and mil pension and that it will be 12 years before SS and than a few more before 2nd pension kicks in.

You would have to draw on the principle in your taxable to meet the budget you specified until the pensions start kicking in which I don't think would be advisable since 50 is a fairly young age to already being drawing down principle.

I wouldn't feel comfortable doing it I guess, but maybe others would.
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Old 11-25-2012, 08:45 AM   #5
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Originally Posted by NanoSour View Post
Rambler, I can say that my family and I live comfortably on a monthly spending budget of $6000. This has been our budget for 3 years running so it should be sufficient in retirement. Am definitely a LBYM type family; however, not a minimalist.

Nano
Nano-

I didn't run any numbers but, a glance at yours tells me you're in good shape as long as you don't have any unusual circumstances.

You need $72/yr (assuming taxes are included in expenses)

You have that at 65: 38+16+16+5=$75 (mostly COLAd)

For 51-62 you have ~$750K*(4.5%)=34+38=$72

Note that 4.5%/yr is not too bad for a 12 yr horizon; build it up to $850K if you want to take only 4%/yr

You are eligible for health care (perhaps in several ways): TriCare, Company retiree benefits?, and ObamaCare.

I'd still do a few things first though before singing a Johnny Paycheck song.
1. Make sure your expenses in retirement will be $72K/yr.
2. Double check on your health care arrangements.
3. Build up an emergency cash stash of ~$36-72K (3-6 mos)
4. Run your SS numbers at FRA and 70 to ensure you're choosing the best time to start collecting
5. Read Nords' book on military retirement (lots of links on this forum)
6. Have a back-up plan.

Best of luck to you.
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Old 11-25-2012, 09:20 AM   #6
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We're all different, and the nature of your query indicates you're very different from me. I guess some of us are pathetically conservative (me) and have a hard time with a question like yours, as though there is that magic number that provides definitive answers. Your relatively young (compared to me - 61!) but at your age I'd want a large buffer to cover the unknowns of your next 10-15 years. And that means not just the market variances covered by Firecalc, but the things that can wreak havoc on your personal expense side. You really need to track your expenses and be realistic about them going forward, in my opinion.

I guess my point is that when you really are going for early as you are, be sure you are comfortable with the possibilities. Me, I didn't want to be on a knife edge of solvency once I had irrevocably left the work place. Of course, I realize that for many the work place can become pretty intolerable. Good luck!
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Old 11-25-2012, 01:20 PM   #7
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Thanks for the responses. Let me try to address some of Huston55's points:

1. Make sure your expenses in retirement will be $72K/yr. Have done this for 3 years and been very comfortable in a pretty expensive urban setting.
2. Double check on your health care arrangements. Retired Military and have Tricare for Life. I must say that is an irreplaceable benefit for ER
3. Build up an emergency cash stash of ~$36-72K (3-6 mos) Great idea!
4. Run your SS numbers at FRA and 70 to ensure you're choosing the best time to start collecting. Ran the numbers on SSA website so my numbers provided are as accurate as can be and could only get an estimate for 62 so that's what I'm using in my calculations
5. Read Nords' book on military retirement (lots of links on this forum) I will do this.
6. Have a back-up plan. I'm relatively young, healthy and can always go back to work if needed, don't need the successful career that I've been fortunate to have. Would be content to help those less fortunate than myself.

When I send the numbers thought FIRECalc for a 45 year period (through 95) I get 100% chance of success.

Thanks again.....Nano
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Old 11-25-2012, 01:30 PM   #8
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Spousal SSA 5K 64

Just wondering why spousal SSA would only be 5k. Would she not at minimum get 1/2 of your SSA amount.
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Old 11-25-2012, 01:33 PM   #9
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Just wondering why spousal SSA would only be 5k. Would she not at minimum get 1/2 of your SSA amount.
Yes, she gets half if she takes it at full retirement age of 67. If she takes it when she is 62 it is reduced to apps 33% of mine.
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Old 11-25-2012, 01:43 PM   #10
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As long as you are comfortable with the possibiity of spending down a chunk of your nest egg until SSA and 2nd pension kicks in you should be o.k. Be aware that with inflation the 2nd pension may only be worth about 70% of what it is worth today when you start receiving it.
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Old 11-25-2012, 07:40 PM   #11
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Yes, she gets half if she takes it at full retirement age of 67. If she takes it when she is 62 it is reduced to apps 33% of mine.
Nano-

Double check the spousal SS rule. I believe your spouse must be at her/his FRA before being eligible for spousal benefits. IOW, spouse cannot take any spousal benefit at 62.
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Old 11-25-2012, 07:46 PM   #12
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I believe your spouse must be at her/his FRA before being eligible for spousal benefits. IOW, spouse cannot take any spousal benefit at 62.
Unless there is something I missed about Nano's situation, this is not the case. A spouse may begin taking SS at 62 or any age thereafter.
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Old 11-25-2012, 07:46 PM   #13
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Huston,

I believe the spouse can receive as early as 62 and actually it could be higher than I thought because it states that it is a 67.5% reduction from my benefit at FRA which would be higher than the 16K I'm planning for.

Retirement Planner: Full Retirement Age

Nano
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Old 11-25-2012, 08:05 PM   #14
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Unless there is something I missed about Nano's situation, this is not the case. A spouse may begin taking SS at 62 or any age thereafter.
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Huston,

I believe the spouse can receive as early as 62 and actually it could be higher than I thought because it states that it is a 67.5% reduction from my benefit at FRA which would be higher than the 16K I'm planning for.

Retirement Planner: Full Retirement Age

Nano
Yep, looks like that's right. I thought I'd seen that rule on another thread but, the SSA site clearly shows a spouse can claim reduced spousal benefit at 62. Good to know.
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Old 11-26-2012, 07:41 AM   #15
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I believe the spouse can receive as early as 62 and actually it could be higher than I thought because it states that it is a 67.5% reduction from my benefit at FRA which would be higher than the 16K I'm planning for.
I think her benefit will be closer to 8k if she waits till 64 to collect.
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