One more year in So Cal

[cathy63]

Hi,

I joined this site a couple of years ago, but never introduced myself. DH and I live near San Diego. He's 53, and left a job of 26 years last summer. I'm 52 and planning to retire next year, ending a career in tech.

We've got $2.4M saved, with about $900K of that in after-tax accounts. My plans for next year are to shift 100% of my income to my 401K contribution starting 1/1/2016 and work just long enough to contribute the max for the year plus earn enough for both our IRA contributions. That should be right around April 1, so one-more-year from now. Our daughter will be finishing college about then, and we'll be within 2 years of paying off the mortgages on both our residence and a rental property.

Other than savings, I have a small pension of about $9K/yr coming at age 62 and we both have social security. DH is also expecting a low 7-figure inheritance someday.

I've run a lot of retirement simulators with a $100K/yr withdrawal rate and no inheritance and we seem to be on track. This is just a rough estimate of expenses though with a very generous travel allowance, so we'll be spending a lot of time this year working out actual budgets and making sure.

 

[Bamaman]

Congratulations on your success. I have traveled to San Diego a few times over the years, and it's a great place to live with great weather. However, I have found housing prices to be obscene, especially on The Strand.

There are so many places where you can live very well on you and your wife's financial resources. But in Southern California, living well is increasingly difficult.

Good luck in your retirement. I assume you'll be joining the exodus of Californians to places with cheaper housing and more reasonable cost of living--while improving the quality of life.

 

[EastWest Gal]

Once the house is paid for housing is pretty cheap anywhere. You live in a beautiful place with little energy needs-not much need for heat or AC.

You are way better off than we are and FireCalc gives us a 100% success rate. Congratulations!


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[Rothman]

cathy63 congrats on your accomplishment, as others have said your numbers look golden. You don't give back ground on what established your $100k withdraw rate, so the usual concerns on tracking real spending and covering health care and other expenses that may be different in retirement than now apply.
Enjoy your retirement, you've earned it.

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[cathy63]

Congratulations on your success. I have traveled to San Diego a few times over the years, and it's a great place to live with great weather. However, I have found housing prices to be obscene, especially on The Strand.

There are so many places where you can live very well on you and your wife's financial resources. But in Southern California, living well is increasingly difficult.

Good luck in your retirement. I assume you'll be joining the exodus of Californians to places with cheaper housing and more reasonable cost of living--while improving the quality of life.

Thanks! (I am the wife btw.)

No, actually we plan to stay here. We made a conscious choice before we got married 28 years ago to live in a place we loved, even if that meant a smaller lifestyle and working a few years longer. We're still happy with that decision and still like living here.

Fortunately, things worked out so that whatever sacrifices we made to afford living here weren't really excessive. We both come from LBYM families, so we weren't going to be buying new cars every year no matter where we lived. We live in a 2400 sq ft condo instead of a house; a 3-block walk to the beach instead of a place with a view -- this is not exactly a miserable existence.

 

[cathy63]

Once the house is paid for housing is pretty cheap anywhere. You live in a beautiful place with little energy needs-not much need for heat or AC.

This is very true. We don't even have central heat or AC and our typical utility bill for gas and electric is about $60/month.

We are paying $6500/yr in property tax and I don't know how that compares to other states, but the annual increases on that are capped at 2%. Also we have annual HOA dues of $2520 since it's a condo. So we are currently under $10K/yr plus whatever is needed for repairs and improvements. That "whatever" is one of the things I'm working on in my budgets.

 

[cathy63]

cathy63 congrats on your accomplishment, as others have said your numbers look golden. You don't give back ground on what established your $100k withdraw rate, so the usual concerns on tracking real spending and covering health care and other expenses that may be different in retirement than now apply.
Enjoy your retirement, you've earned it.

Thank you. The $100K is largely a WAG at this point (I have a ton of Quicken data, but way too much of it is categorized as Misc or Uncategorized).

My number includes
- actuals for housing costs, various utilities and non-health insurance
- health insurance estimated from the marketplace assuming no subsidy
- a guess at amortized expenses for new cars and other big-ticket items like appliances
- income tax estimates based on last year's taxable investment income since we won't be touching our tax deferred accounts for quite a while
- estimates for groceries, eating out, entertainment, charity, clothing, gifts
- planned travel

My big project for this year is to keep refining that number and come up with a real budget. We've always lived without one because we were spending way less than we were earning, but now I need to know where the money is going.