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Old 02-23-2018, 10:59 AM   #1
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Hi

I'd appreciate an update from the wise folks here. My post from 2015 follows and I've updated it with current info. I did find a part time consulting gig after I was severed back in 2015. It was awesome...for a while. Lately my 20 hours have become 30+, and all my colleagues seem to have forgotten I'm part time. Plus I'm back on airplanes which I'm no longer fond of. Actually I never was.

I realize the markets are running high and so are our assets so this causes some concern for us. But, do you feel we could safely walk away (me now/DW end of year) at this point, or is it too tight for comfort?

Thanks in advance for any feedback you can provide!

Syd

Results updated from 2015 to current

-DW is 45 48 and I am 48 51
-One child who is 12 15
-DW still working and earns $102,000/yr and is planning to work until June of 2017 Quitting 12/2018. It's worth adding that she is growing quite weary of her job as she's been there 22 years. We have very good health insurance through her employer at present
-Once she retires in 2018 we will have to self insure but can purchase health insurance through her employer without subsidy as retirees for full full freight $17K/yr. It is a great plan, though we realize it isn't guaranteed. We're hoping that since the employer isn't paying any of the premium that they won't mind us continuing to participate at group rates

Assets

-$812,000 $1,150,000 After Tax (48% stock, 30% bonds, 22% cash) AA on taxable now 50/30/22
-$1,295,000 Tax Deferred (also 48% stock, 30% bonds, 22% cash)$1,660,000 50/30/22
-One small pension of $6,600/yr with no COLA, starting in the year 2032 Same
-Money for child's college, wedding, etc has already been saved and not included here
-We built a smaller house recently that is worth $350,000/no mortgage (so a future downsize to free up add'l money is really not an option)
-I hate to plug anything in for S.S., but you could figure a small annual amt if need be
I'll add S.S. in since last time forum folks wondered about my conservatism. Me if I quit now and zero out remaining yrs $21K at 62/DW $19K at 62 Maybe one of us, or both should wait longer .
-2014 and 2016 vehicles/low miles/own outright Same

Expenses

$60K per year plus $4K for misc expenses plus another $17K health insurance until 65. Total; lets round up the need to $84K plus inflation until 65. We would fund our retirement until age 65 with taxable monies. Sometime in next 5 years begin to do some Roth conversions to reduce tax rate post age 65. After age 65 a similar burn rate but we'd need to start paying taxes. I hope we save something each year after going over to Medicare. And we do have a LTC policy which will pay roughly half the cost.

I think I'm using FIRECALC correctly but maybe not. If we give the SS a haircut due to solvency issues, do the numbers still work for us both to walk away end of 2018 with current AA?? Any other advice welcome, we are both really starting to get anxious.
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Old 02-23-2018, 01:20 PM   #2
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What do your FIREcalc results say? Have you allowed for major "lumpy" expenditures such as vehicles, home repairs (roof/furnace/etc.), medical deductibles/co-pays for a major illness/accident, etc? Have you tried running it with lower SS and also with delaying SS to FRA?
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Old 02-23-2018, 02:08 PM   #3
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Hello Syd,

IMHO, you are more than ready with the numbers you posted. I ran your scenario through i-ORP and if starts you off with spending of $157K/year. I think your mind can rest at ease as far as the financial part of the equation. The emotional part? Well that's another story.

Spend some time with i-ORP and make sure you use the "Extended" version. I prefer to use the "Reality Retirement Planning" for spending plan as I believe it is much more representative of what retirement will look like. For the scenario I entered for your situation, I assumed 2.7 inflation rate and 7.4/3% for stocks/bonds, or a 4.7/0.3% real return. Since I chose ER almost 5 years ago, I'm at 7.8% nominal across all my accounts which are very close to your AA. I'm comfortable with that going forward as there is room to pare back if needed.

Good luck to you and your family.

Nano
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Old 02-23-2018, 02:27 PM   #4
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Just your investments (taxable + tax advantaged) above total $2,810,000. $2.81M withdrawn at a 3.5% rate would provide $98,350/year. That's well over your projected expenses and doesn't take into account the pension or social security (both of which improve your situation). As such, you look to be perfectly set to retire today.
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Old 02-23-2018, 05:36 PM   #5
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Originally Posted by exnavynuke View Post
Just your investments (taxable + tax advantaged) above total $2,810,000. $2.81M withdrawn at a 3.5% rate would provide $98,350/year. That's well over your projected expenses and doesn't take into account the pension or social security (both of which improve your situation). As such, you look to be perfectly set to retire today.
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Old 02-24-2018, 05:53 AM   #6
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Originally Posted by NanoSour View Post
Hello Syd,

IMHO, you are more than ready with the numbers you posted. I ran your scenario through i-ORP and if starts you off with spending of $157K/year. I think your mind can rest at ease as far as the financial part of the equation. The emotional part? Well that's another story.

Spend some time with i-ORP and make sure you use the "Extended" version. I prefer to use the "Reality Retirement Planning" for spending plan as I believe it is much more representative of what retirement will look like. For the scenario I entered for your situation, I assumed 2.7 inflation rate and 7.4/3% for stocks/bonds, or a 4.7/0.3% real return. Since I chose ER almost 5 years ago, I'm at 7.8% nominal across all my accounts which are very close to your AA. I'm comfortable with that going forward as there is room to pare back if needed.

Good luck to you and your family.

Nano
Thanks Nano. I jumped on the i-ORP site per your suggestion, filtered to "Reality Retirement Planning" and while I wasn't able to duplicate your $157K scenario, I did receive a favorable result. However, when I gave projected SS payouts a 30% haircut it got a bit iffy. But I'm thinking I fouled something up in I-ORP because Firecalc gave me a 100% success rate with the same inputs with a SS reduction.

Anyway, I like i-ORP too-thanks for the suggestion and the feedback!!
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Old 02-24-2018, 05:56 AM   #7
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Originally Posted by exnavynuke View Post
Just your investments (taxable + tax advantaged) above total $2,810,000. $2.81M withdrawn at a 3.5% rate would provide $98,350/year. That's well over your projected expenses and doesn't take into account the pension or social security (both of which improve your situation). As such, you look to be perfectly set to retire today.
Thanks! I was hoping to keep our SWR at or below 3% so it appears doable then

Syd
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