Hi,
I have learned a lot from lurking on this forum, and would like to introduce myself and run a retirement scenario through the hive mind. I am 60 and still working, and DH is 65 and has just retired. On this Labor Day I am asking myself whether a year from now I too will be able to retire. If not on Labor Day, maybe by the end of 2018?
We currently own 4 investment properties, one of which is in the city to which we expect to retire and it will become our home in retirement. Total market value of the 4 properties is currently about $1.4M, against which we owe $360K. In addition, our current residence is worth about $450k and we owe $190K on it. Two of the investment properties have no mortgage. Next year, we plan to sell one of the properties without a mortgage. The proceeds will pay off the two remaining investment mortgages. In 2019, we will sell a second property as well as our current home, leaving us with one rental and our future home in the new city, and no mortgages. (we have been renting out our future home since we bought it last year). When the three properties are sold and all mortgages are paid off, we will have just under $1M in investments (when added to current brokerage and IRA accounts), and the one remaining rental. This total is net of LTCG taxes and selling costs. The plan for the investment accounts (tIRA, Roths, taxable) is a 40/60 split between bond index and equity index funds.
As far as expected income, we will have ~$5,100/month from my pension, DH's social security and the rental. If I take SS at 63, that monthly total will increase to $6,500. My best estimate of expenses, including big ticket purchases, all taxes, and healthcare, which I will get through my state retirement until Medicare, will be $7,600/month all in, so we will need our investments to cover a $2500/month gap for two years until I take social security at 63, and about $1100/month thereafter. Once I'm on Medicare in 4.5 years healthcare costs will decrease somewhat. Delaying SS is an option, it would just require more from our own resources in the near term.
My questions for the hive are: 1) What is the advisability of selling two investment properties and our home in two consecutive years; and 2) what have I failed to consider in this plan?
I have learned a lot from lurking on this forum, and would like to introduce myself and run a retirement scenario through the hive mind. I am 60 and still working, and DH is 65 and has just retired. On this Labor Day I am asking myself whether a year from now I too will be able to retire. If not on Labor Day, maybe by the end of 2018?
We currently own 4 investment properties, one of which is in the city to which we expect to retire and it will become our home in retirement. Total market value of the 4 properties is currently about $1.4M, against which we owe $360K. In addition, our current residence is worth about $450k and we owe $190K on it. Two of the investment properties have no mortgage. Next year, we plan to sell one of the properties without a mortgage. The proceeds will pay off the two remaining investment mortgages. In 2019, we will sell a second property as well as our current home, leaving us with one rental and our future home in the new city, and no mortgages. (we have been renting out our future home since we bought it last year). When the three properties are sold and all mortgages are paid off, we will have just under $1M in investments (when added to current brokerage and IRA accounts), and the one remaining rental. This total is net of LTCG taxes and selling costs. The plan for the investment accounts (tIRA, Roths, taxable) is a 40/60 split between bond index and equity index funds.
As far as expected income, we will have ~$5,100/month from my pension, DH's social security and the rental. If I take SS at 63, that monthly total will increase to $6,500. My best estimate of expenses, including big ticket purchases, all taxes, and healthcare, which I will get through my state retirement until Medicare, will be $7,600/month all in, so we will need our investments to cover a $2500/month gap for two years until I take social security at 63, and about $1100/month thereafter. Once I'm on Medicare in 4.5 years healthcare costs will decrease somewhat. Delaying SS is an option, it would just require more from our own resources in the near term.
My questions for the hive are: 1) What is the advisability of selling two investment properties and our home in two consecutive years; and 2) what have I failed to consider in this plan?
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