I’m looking for some feedback regarding our personal circumstances.
I’ve only been a member here for a very short time… I have learned quite a bit… but not sure if we fit in or even belong here. My wife and I are ~58 and will be retiring at 60… so not really that “early” of a retirement. Our portfolio appears to be significantly less than the average represented by other members of the forum. We are very middle class with a goal of maintaining our current lifestyle through retirement. Fortunately we have a very good pension available at 60.
Our withdrawal rate will be significant in the years before we receive SS. After we begin receiving SS benefits the portfolio will primarily be used as a hedge against inflation. We haven’t determined exactly when we will elect to take SS... our original thought is to begin at 62. At 62 all of our living expenses (including taxes) can be covered by pensions and SS. Health insurance is covered by my wife’s employer and we have 0 debt.
Running the numbers using “Flexible Retirement Planner” (and FIRECalc) assuming an average annual inflation rate of 3% and 0% return on investments we could live until we’re 97 years old before our plan fails. A modest 3% annual return (e.g. PenFed CDs) and we could increase our annual expenses by 18% and live until we’re 95 before our plan fails.
Eventually interest rates will rise and >3% guaranteed returns should be readily available.I realize over the long term we could possibly do much better than 3% by continuing to invest in the market. But for us personally… is it worth the risk? Where do you draw the line between need and greed?
I’m considering going to ~80% cash and buying additional CDs as rates improve.
Given similar circumstance what would you do or suggest?
I’ve only been a member here for a very short time… I have learned quite a bit… but not sure if we fit in or even belong here. My wife and I are ~58 and will be retiring at 60… so not really that “early” of a retirement. Our portfolio appears to be significantly less than the average represented by other members of the forum. We are very middle class with a goal of maintaining our current lifestyle through retirement. Fortunately we have a very good pension available at 60.
Our withdrawal rate will be significant in the years before we receive SS. After we begin receiving SS benefits the portfolio will primarily be used as a hedge against inflation. We haven’t determined exactly when we will elect to take SS... our original thought is to begin at 62. At 62 all of our living expenses (including taxes) can be covered by pensions and SS. Health insurance is covered by my wife’s employer and we have 0 debt.
Running the numbers using “Flexible Retirement Planner” (and FIRECalc) assuming an average annual inflation rate of 3% and 0% return on investments we could live until we’re 97 years old before our plan fails. A modest 3% annual return (e.g. PenFed CDs) and we could increase our annual expenses by 18% and live until we’re 95 before our plan fails.
Eventually interest rates will rise and >3% guaranteed returns should be readily available.I realize over the long term we could possibly do much better than 3% by continuing to invest in the market. But for us personally… is it worth the risk? Where do you draw the line between need and greed?
I’m considering going to ~80% cash and buying additional CDs as rates improve.
Given similar circumstance what would you do or suggest?