BurntBrain
Confused about dryer sheets
- Joined
- Aug 17, 2015
- Messages
- 4
Hi Everyone,
I'm new to the forum…great site, love the vibe. I'm hoping for some feedback on our retirement plan.
Here is our story. I'm 49 and my wife is 42, looking to retire early, maybe next year. We have one young child.
Net worth $7.2 million
Home worth, $1.3 million, we still owe $200K (1.1 mil equity)
Cash $1.2 million
Equities 4.9 million (1.2 in retirement accounts)
Expenses $150K including $20K for travel budget.
We would like to increase our discretionary spending, mainly for travel, in retirement.
We are hoping to have a total spending budget of about $200K after taxes and health insurance.
I figure 4% of our liquid assets, minus taxes and health insurance should get us there. We plan on using a flexible 4% rule, not fixed. After a market drop, our spend could drop by $60K from $200K without terribly affecting our base standard of living. Firecalc seems to suggest that this scenario is reasonably safe, though I don't know if I've allocated enough for taxes.
Cushions to mitigate risk of going broke long term:
-Flexible 4% withdrawal, only taking 4% of each years liquid assets, even after a market drop.
-Social security and medicare kick in in 15-20 years
-Home equity ($1.1 million) not included in calculation, useful in potential downsizing or reverse mortgage in worst case scenario.
-Most expenses from our child, including expensive private school ($30k/yr), will hopefully go away in 15 years.
I know we are very fortunate. Are we being to bold, or too conservative?
Thanks you all very much in advance for your feedback.
BB
I'm new to the forum…great site, love the vibe. I'm hoping for some feedback on our retirement plan.
Here is our story. I'm 49 and my wife is 42, looking to retire early, maybe next year. We have one young child.
Net worth $7.2 million
Home worth, $1.3 million, we still owe $200K (1.1 mil equity)
Cash $1.2 million
Equities 4.9 million (1.2 in retirement accounts)
Expenses $150K including $20K for travel budget.
We would like to increase our discretionary spending, mainly for travel, in retirement.
We are hoping to have a total spending budget of about $200K after taxes and health insurance.
I figure 4% of our liquid assets, minus taxes and health insurance should get us there. We plan on using a flexible 4% rule, not fixed. After a market drop, our spend could drop by $60K from $200K without terribly affecting our base standard of living. Firecalc seems to suggest that this scenario is reasonably safe, though I don't know if I've allocated enough for taxes.
Cushions to mitigate risk of going broke long term:
-Flexible 4% withdrawal, only taking 4% of each years liquid assets, even after a market drop.
-Social security and medicare kick in in 15-20 years
-Home equity ($1.1 million) not included in calculation, useful in potential downsizing or reverse mortgage in worst case scenario.
-Most expenses from our child, including expensive private school ($30k/yr), will hopefully go away in 15 years.
I know we are very fortunate. Are we being to bold, or too conservative?
Thanks you all very much in advance for your feedback.
BB