63 year old hoping to retire ASAP

[purplesage]

My husband is already retired and collecting social security, I have been reading this site for years and soaking up all the great info.
I am about to get laid off from my job and doubt I can get another at my age so am hoping I have enough to generate 7000 a month from my assets.
We currently have around 3 million in IRA's, Roths, 401ks and brokerage accounts. Assets are 40/20/40, I know I have too much in cd's but will change that when they mature next year.
Any advise will be appreciated!

 

[RunningBum]

With $3M in assets, needing $84K/year, that's a 2.8% WR assuming you've actually budgeted for all expenses, including taxes, health insurance, home repairs, car replacement, and so on. You are in great shape.

My advise is to not worry about generating that much income from assets, but rather taking a total return approach on assets, and selling off a small amount of assets each year for any shortfall from dividends and interest. In most years the appreciation on the assets will probably exceed the amount you sell.

 

[Red Badger]

Welcome!! Have you run FIREcalc yet?

https://www.firecalc.com/

 

[freedomatlast]

Looks like you're good to go with a WR of 2.8% excluding taxes, and if you include social security, your WR will be even lower.

 

[Mdlerth]

Your situation is so easy a caveman could do it.

If FIRECalc were a teenager and you fed it your data, I bet it would roll its eyes and say, "Really? You've got 3M and you only need to score 7k per month from it? Why is this even a question?"

Seriously, you are as golden as it gets. A WR of 2.8% is very safe. Perhaps you're worried that you've underestimated your expenses? Or maybe there is some other, non-financial concern that causes you to hesitate? Fear of boredom, stress on the marriage, loss of status or identity derived from the j*b, etc, all are legitimate concerns, although most posters here report those fears were largely unfounded.

You've been a member for a while, but not an active poster. I look forward to you writing more often.

 

[Aerides]

Congrats - you look golden. Also, getting laid off at 63 is there some severance or medical coverage? You can also expect to take cobra for 18 months after that, which should bridge you to almost-medicare. While cobra is expensive, it's often a path-of-least-resistance vs. shopping for new coverage.

With no health insurance worries, a spouse already on SS, and you can decide when to take SS... I have to agree even without firecalc your situation looks like a no brainer.

 

[joeea]

I am about to get laid off from my job and doubt I can get another at my age

There is no doubt in my mind that a 63 year old can get a job if they want to.

so am hoping I have enough to generate 7000 a month from my assets.
We currently have around 3 million in IRA's, Roths, 401ks and brokerage accounts.

With $3M you should no trouble withdrawing $7k/month.

 

[purplesage]

Thanks everyone, I have ran firecalc. The 7000 is not including social security which should be around 5000 for both of us but I will not take it for 4 more years.

I have kept a lot in cd's to help with SORR.
I have saved all my life and trying not to worry about having to SPEND down my nest egg.
I guess my worry is some experts are saying that the sock market returns are going to be very low in the future and we are entering a bear market....

 

[joeea]

I guess my worry is some experts are saying that the sock market returns are going to be very low in the future and we are entering a bear market....

Don't worry.

Retire if you want to. Realize that you don't have to.

 

[purplesage]

About getting a new job, I am in engineering and the market here has imploded. My husband and I both got played off 2 years ago, he retired and it took me 9 months to find another job at 1/2 of what I was making. I have looked every day for 2 years but no one wants someone my age I guess, now my company is laying off and I have been on overhead for 2 weeks, I never thought this would happen to me,
We bought a retirement home in St. George so when I get played off we will sale here and go home

 

[Mdlerth]

Don't fear the bear

Remember what FIRECalc does, which is test how well your plan would have survived during good times and bad time throughout history. Bear markets are baked into the calculations.

Someday we are going to have a bear market. Maybe we're in one now. Or, maybe it's ten years from now. I dunno. But during the time periods which FIREcalc examines, there were bear markets. When it tells you you're at 100%, it means that your plan would have survived even in those bear markets.

If you follow the curves on the chart, it shows that if you're at 100%, then even in the WORST case in history you still ended up not running out of money. And if you were lucky enough to not retire at the absolute worst times in history, you not only didn't run out of money but probably you ended up with a lot more than you retired with.

Is it a guarantee of the future? Of course not. Nobody knows what the future holds. But there have been some pretty rough times in the past century-and-a-half. If the future isn't any worse than those were, then you should be fine.

 

[Spock]

There is nothing wrong with being long on CDs assuming they have a relatively decent interest rate. Count them as bonds.

Congrats on making it to 63 while working in engineering. I was awarded another patent and laid off the same month I turned 55. While it stings, don't take it as a indication of your skills.

Looking at your retirement math sideways, 7K needed per month - 5K SS = 2K needed from savings of 3M. Assuming your house isn't included in the 3M, a 0.8% return will pay your bills without even touching your principal. Just keep an eye on inflation over time.

 

[ivinsfan]

How much yearly income are your brokerage account getting? If you are under the limit for ACA the CD money will come in very handy to keep HI costs lower until you both turn 65. And BTW great choice to settle down in SGU. Welcome to the forum.

Of course you might be adding severance and your UI to your annual income for this year and next which could push you over the ACA cliff.

 

[Spock]

Other items to consider if you haven't been laid off yet:
1. Check your max 401k (if you have one) contribution %. Mine allowed deductions up to 80%... so I started the year deferring 80% of my paychecks until I hit the annual max.
That way if you get laid off before year end, you still have 12months worth of contributions reducing your annual income/taxes.
2. Max your HSA (if you have one). It can be treated like an IRA "later" and thus reduce this years taxes.
3. When you're laid off, check your states unemployment compensation rules. I was laid off in May, but did not start unemployment until December. That put my unemployment "income" into next year where the taxes were lower.
All of the above depend on your current tax bracket vs. future years (including the SS tax torpedo).

 

[gwraigty]

I have kept a lot in cd's to help with SORR.
I have saved all my life and trying not to worry about having to SPEND down my nest egg.
I guess my worry is some experts are saying that the sock market returns are going to be very low in the future and we are entering a bear market....

If you need only 2.8%, you don't need to take on any undue risk. Even with the recent rate reduction, income from CDs, money market mutual funds, ultra short term/short term bond ETFs/MFs, are among your more conservative options.

I posted some details in this interesting bond discussion of what I'm currently investing in:

http://www.early-retirement.org/forums/f44/bond-management-strategy-99122.html#post2280918

Lots of interesting perspectives to be had there from all posters. Are you invested in some of the more conservative stock areas? Some with a dividend emphasis?

 

[joeea]

About getting a new job, I am in engineering and the market here has imploded.

You were an engineer. You don't need to continue being an engineer.

I have looked every day for 2 years but no one wants someone my age I guess

There are plenty of companies hiring people your age. Perhaps not for the jobs you have been applying to.

We bought a retirement home in St. George so when I get played off we will sale here and go home

Good luck. It appears that financially it is a safe choice for you to make either way.

 

[LarryMelman]

I guess my worry is some experts are saying that the sock market returns are going to be very low in the future and we are entering a bear market....

Come on, you know that at any given time, someone is always saying that.

You say you can generate $7K/month. You don't say how. Is that pure income from dividends and interest? Is it from a plan to slowly sell off assets? And what is your perceived income need? You didn't mention that either.

I am also in engineering, and my company has a lot of engineers and upper management over 55 and over 60. They don't seem to do layoffs, they seem to generally let the older workers coast for as long as they choose to. Me, I'm almost 55 and I've had enough. Sick of dealing with unqualified co-workers and lower-level managers from foreign lands who resist direction from anyone not of their own race. Sick of the direction of the company and of my projects being changed every other week. Sick of pointless meetings and other mandatory crap.

I'll have to walk away on my own, I won't get any unemployment or severance. If laid off, you'll get both of those, plus Cobra for 18 months to bridge you (all the way to?) (almost to?) Medicare. Actually if your husband is already on Medicare, I believe you have to be offered Cobra for 36 months. Ask about that. Actually if you're really lucky, your severance might include some medical coverage. Ask for that too.

Seriously, being laid off at 63 is almost an ideal situation. Smile when they tap you on the shoulder.

 

[RobbieB]

Yeah, at 2.8% you are in the "no need to touch principle" camp.

 

[LarryMelman]

There is no doubt in my mind that a 63 year old can get a job if they want to.

There are plenty of companies hiring people your age. Perhaps not for the jobs you have been applying to.

joeea, I'm new here and you've got almost 3000 posts. Please do not interpret this as a newbie slamming on a veteran. OK?

Your profile says you're retired since 2016 but doesn't give your age. I'd like to know where all these jobs are that a 63 year old can easily get. Especially a 63 year old (or a 55 year old like myself) with a lifetime of very narrow engineering experience.

This is a sincere question.

 

[purplesage]

IvinsFan, are you from Ivins? If so I think it beautiful there.
I have actually applied for 3 jobs in St. George with small firms and 2 of them actually called me to find out more info so who knows.

 

[joeea]

joeea, I'm new here and you've got almost 3000 posts. Please do not interpret this as a newbie slamming on a veteran. OK?

Your profile says you're retired since 2016 but doesn't give your age. I'd like to know where all these jobs are that a 63 year old can easily get. Especially a 63 year old (or a 55 year old like myself) with a lifetime of very narrow engineering experience.

This is a sincere question.

Where I live you can walk down the street, turn right or left, walk into any establishment, and get a job on the spot.

If you limit yourself to your one narrow domain, you are obviously limiting your choices. But if you are willing to look outside your domain, there are plenty of jobs available.

 

[ivinsfan]

IvinsFan, are you from Ivins? If so I think it beautiful there.
I have actually applied for 3 jobs in St. George with small firms and 2 of them actually called me to find out more info so who knows.

No not from Ivins, but started wintering there a couple decades ago and just love it, or loved when it was a sleepy, small town.