Some General Questions

[Cubitt]

I'm still new and can't find a better place to post this. I'll try to keep the details brief:

1. I am 55 and seven years older than my wife, to whom I've been married for 4 years. She isn't keen to retire early, and would probably not do so until she had at least reached my present age. If she continued to work until I was 65, we could very comfortably do so on her income alone (no kids and no debts other than mortgage). I don't think that would be wise psychologically and emotionally. Any thoughts on how to retire and avoid possible resentment?

2. If it were all up to me, I think we could phase in our assets very gradually. Based on #1 above, I see no reason to tap into any investments or SS until she retires. We have about $600K in equity and a townhouse we rent that affords income as well as paying the mortgage for itself. The townhouse has about $250K in equity. Let's use $600K as the figure for investments and $4,000/month for SS when she retires. I'd like to hear a consensus of how well positioned you think I am to RE. (One additional note: I know the national housing situation is not as rosy as it has been, but in my area, appreciation has continued to go up 3-4% over the same period the previous year for the 12-month period ending in October 2007.)

Any general advice would also be welcome. Thanks!

 

[bssc]

Hi and welcome

Well, the most import thing is to be aligned with your wife. Of course, if you retire before her and she sees all the fun you are having, she might want to retire early to. As you say, you want to avoid resentment. Planning her early retirement might need to be part of the plan.

As for the second part of the plan, have you run FIRECalc yet. That would be a place to start. I would also wonder how much you spend (in addition to the mortgage). And how much of your equity is in tax deferred accounts.

 

[Cubitt]

Hi and welcome

Well, the most import thing is to be aligned with your wife. Of course, if you retire before her and she sees all the fun you are having, she might want to retire early to. As you say, you want to avoid resentment. Planning her early retirement might need to be part of the plan.

As for the second part of the plan, have you run FIRECalc yet. That would be a place to start. I would also wonder how much you spend (in addition to the mortgage). And how much of your equity is in tax deferred accounts.

I've looked at FIRECalc, but since I plan on phasing in my assets, I'm not sure how to do the calculation. Any suggestions?

Our joint living expenses have pretty much remained constant at about $3,000/month to cover everythng, including incidental expenses. This has been the case for about 20 years, now (I was married before for 15 years. I bought my ex out when we divorced).

My equity is in the house itself; I haven't taken anything out yet. I'm hoping that the yield on reverse mortgages improves by the time I am ready or need to avail myself of it. Any tips on other ways to reap benefits from the equity?

Thanks for the reply.

 

[REWahoo]

I've looked at FIRECalc, but since I plan on phasing in my assets, I'm not sure how to do the calculation. Any suggestions?

Take a look at the "Portfolio Changes" tab in FIRECalc. That will allow you to add assets at times of your choosing. Also, the "Other Income/Spending" tab allows you to add an income stream at a future date, say when a pension kicks in or if you did a reverse mortgage.

 

[mickeyd]

Hey Cubitt,

Welcome here.

If she continued to work until I was 65, we could very comfortably do so on her income alone (no kids and no debts other than mortgage). I don't think that would be wise psychologically and emotionally. Any thoughts on how to retire and avoid possible resentment?

I guess that I do not grasp from your post what the psychological and emotional problems would be in living on DWs income for a while.

This is what DW and I did for the last 4-5 years. I was retired and DW continued to work at the local school district at a job that she loved. We lived off of her take home pay for a few years and that ended up being a darn good way to field-test my theory on how much, or how little, 2 folks can comfortably live on. She also is now retired and all is well!

 

[Cubitt]

Hey Cubitt,

Welcome here.



I guess that I do not grasp from your post what the psychological and emotional problems would be in living on DWs income for a while.

This is what DW and I did for the last 4-5 years. I was retired and DW continued to work at the local school district at a job that she loved. We lived off of her take home pay for a few years and that ended up being a darn good way to field-test my theory on how much, or how little, 2 folks can comfortably live on. She also is now retired and all is well!

Problem 1 is that she does not love her job, and so going into work while I go into the backyard may provide fodder for resentment, even though there is nothing fundamentally unfair about it, especially if she retires at the same I did.

The second problem is that the situation creates a sense of my "living off of her," despite the fact that this would not be true, in that my assets are greater than hers, and her rental property is only rental property by virtue of having married me.

Problem 3 is that she doesn't understand my desire to retire early. She is the Energizer Bunny, and she gets a lot of her identity (by her own admission) from her job. It's a love/hate relationship with the concept of working that I have never bought into, but I understand her because so many I've spoken to feel the same way she does.

I want to respect her feelings about this, especially since much of the way one responds emotionally and psychologically comes from the gut and is not easily dismissed by the person who experiences negative feelings about something that just goes against their personal grain.

 

[2B]

There a couple of books I recommend you read and try to get her to read. They are about the psychological aspects of retirement.

Retirement for Two by Maryanne Vandervelde

For Better or Worse...but Not for Lunch by Sara Yogev

The first is an easier read and you can get 90% of the second book by reading the last chapter. Both emphasize communication and discussion. They also outline ways of helping avoid the resentment of one spouse retiring before the other.

Retirement is more than having enough money.

 

[bkoguy07]

Is firecalc the best program?

 

[2B]

Is firecalc the best program?

Of the free programs available, FIRECalc has many more options than all of the others. You can put in pensions, SS, changes in your spending, use different asset allocations and run the scenarios with different spending schemes.

I do think its the best out there. Don't assume you won't have problems if FIRECalc says you're 95% safe. It does give a good estimate and includes many factors other programs ignore.