52 and dreaming of palm trees

[tsdogs]

Hi,
I'm happy to find this group and have been eagerly reading and learning! It's clear I have lots to learn.

My spouse and I hope to retire in a couple years. No date set, but I'm eyeing Jan. 2024. We'll both turn 55 that year. We have one child in college, living at home. And about 25K more in college expenses that we'll be covering.

Financials
770K in 401K
300K in Roths
185K in a pension that I need to figure out what to do with (lump sum or monthly)
40K in taxable

Also have about 300K in equity in our home; 50K mortgage. No other debts.
Eventually, we'd sell this and buy another home where the palm trees sway, likely spending slightly more.

We'll save 45k/year in 2022 and a bit more the year after.

I'm guessing 55-60K in annual expenses, but a big chunk of that is healthcare and I don't know what to expect there.

Based on the numbers, I think SS should cover most if not all are expenses if we take at/near full retirement age.

Am I crazy to buy us a retirement countdown clock for Christmas?
We're both eager to escape the corporate world.

 

[SecondAttempt]

Sounds like you are in fairly good shape financially. Main concern is not much in taxable so what will you live off of before 59.5

As an aside, palm trees are MESSY! Make sure someone else is taking care of them!

 

[Winemaker]

Welcome, keep up the good work.
We live in SW PA and we have 2 potted 4yo palm trees that we move indoors in the freezing months. They are cheered on by the 2 lime trees we started from seed after a trip to Hawaii in 2009. This year we've grown over 40 limes the size of ping pong balls. I don't know what we'll do when the palm trees grow coconuts or get bigger than the shop/garage.

Anything is possible

 

[38Chevy454]

Welcome to the forum. I agree that covering the period from 55 to 59.5 is a question. You could do more after tax savings from now until 55. Or you can consider a 72t withdrawals from your pretax savings. Healthcare is always an unknown, but the closer to 55 you will get a clearer perspective on how much that will cost.
I do think a retirement countdown clock is a great Christmas gift to yourself idea.

 

[Aerides]

Agree to start shoring up cash/taxables, stat.

For healthcare, you can browse on Healthcare.gov right now to see 2022. Of course it will change, but might give you some ideas. Before we ER'd, we put a placeholder of $1k per month in our budget planning for healthcare expenses (Premiums and deductibles). Best to plan that you might become a higher consumer of healthcare once retired...happens to a lot of us!

 

[1242Vintage]

Welcome! Second the comment on healthcare costs. We are in our mid-50s and retired 18 months ago.

Youngest daughter was finishing up university when we retired and we continued to include her on our healthcare when we retired. Total for 3 of us was a little north of $2k per month. Ouch!

One other thing that helped me survive the last couple years of working was a 3 month sabbatical in early 50s. Spent that time wandering around Central America and Caribbean. Wasn’t all that expensive either … Cuba was dirt cheap and over the top fun!!!

 

[tsdogs]

Thanks for the friendly welcome. Yes, we do plan to shore up savings. That has taken a hit the last few years. But the plan is to fund the 54 to 59 years with a combo of Roth basis withdrawals and Rule of 55 distributions from company retirement plans. These savings are more for extras... Or perhaps funding that sabbatical which sounds like a good plan.

I can always work part time if we need a little extra . My company is great with that...easing people out of the workforce. That said, we have our eyes on moving to a 55+ active adult community. I am sure once settled in I will lose interest in that idea.

We have 2k in the budget now for monthly health insurance. I certainly hope it isn't anywhere near that, but want to be prepared.

Retirement clock purchased. ��

 

[MC Rider]

Palm trees? Just make sure they are not on your property.

I don't know what it costs to trim their beards, but it can't be cheap.
Have dug up at least 2 dozen volunteer palm weedlings in my yard lately.
We have enough trees, and palms don't do much for shade.

 

[tsdogs]

I guess I have to rethink the palm trees! Maybe just citrus. My parents had grapefruit and orange at their retirement home and were mighty happy.

 

[MC Rider]

Oh yeah. Fruit trees FTW. Mature ones that produce fruit.

 

[Amethyst]

When coconut palms are 40 feet tall and were planted in clusters years ago, they certainly do provide shade. Also, literal, actual tons of coconuts (according to our tree guy, 1 to 2 tons per mature tree per year).

Also, it's expensive to have them trimmed, but you have to do it, lest you be overwhelmed with bowling-ball-size coconuts and volunteer coconut trees.

Of course there are other kinds of palms than coconut palms, but even those need yearly trims.

I still like them.

palms don't do much for shade.

 

[Sunset]

OP - to help you have an accurate forecast, start tracking your expenses now.

I use a phone app called spending tracker, and enter each and every expense when it happens. Then monthly move the category totals to a spreadsheet, so I have years of historical spending.
That way you will have a really accurate set of numbers to judge if you can afford retirement and how much is needed to fund it.

 

[HI Bill]

Main concern is not much in taxable so what will you live off of before 59.5

The OP is planning to RE in the year they turn 55...he can take penalty-free withdrawals from the 401(k) as long as they don't move it/them to an IRA per the IRS rule of 55.

 

[rodi]

The OP is planning to RE in the year they turn 55...he can take penalty-free withdrawals from the 401(k) as long as they don't move it/them to an IRA per the IRS rule of 55.

IF - and only IF the plan allows it. The IRS rule 'allows' but does not 'require' 401k plans to support the rule of 55. And plans vary... some require a 1 time lump withdrawal, others require periodic withdrawals. Read the 401k plan summary doc's and consult HR.

 

[LakeRat1]

My DW and I retired early, her 59.5, for me it was 52.....After 2 years of paying the high cost of Health Insurance, I began researching CHM .... Christian Healthcare Ministries ..... Made the move from traditional insurance to joining this organization...... DW is now on Midicare, I continue with CHM....... We have saved thousands over the past 5 years...... check it out.... https://www.chministries.org/

 

[LarryMelman]

My DW and I retired early, her 59.5, for me it was 52.....After 2 years of paying the high cost of Health Insurance, I began researching CHM .... Christian Healthcare Ministries ..... Made the move from traditional insurance to joining this organization...... DW is now on Midicare, I continue with CHM....... We have saved thousands over the past 5 years...... check it out.... https://www.chministries.org/

Discussion on the "health ministries" is that they seem great until you really need the coverage. "Saving thousands" is not very helpful if the insurance is not there when you need it. What has been your experience?

 

[badatmath]

Make sure you understand how tall that palm tree will get. Up close they just look like telephone poles to me.

 

[HI Bill]

I guess I have to rethink the palm trees!

Do some research on palm tree species. We have some relatively short ones (about 20-30 feet tall) that are easy to maintain with a pole saw, but our neighbors have the really big ones...they have to hire tree climbers to trim the coconuts on those. We don't have coconuts, and love our tropical palm tree vibe!

 

[HI Bill]

IF - and only IF the plan allows it. The IRS rule 'allows' but does not 'require' 401k plans to support the rule of 55. And plans vary... some require a 1 time lump withdrawal, others require periodic withdrawals. Read the 401k plan summary doc's and consult HR.

Absolutely. Despite the IRS rule, not all plans follow it to the letter, nor provide the flexibility you may need.

 

[ut2sua]

I have to defend our palm trees here. We have a total of 7 Queen palm trees in our yard, and they are pretty much maintenance-free. We have had them for ~20 years and they require the least care of all our trees. They are ~20' tall and the nuts are the size of play marbles. A few old leaves may need to be cut each year, and the trees will look great. The biggest draw back is: there is no coconuts on them. I would be willing to pamper the trees if they would give me sweet drinking coconuts. Our weather is not warm enough in the winter for coconut palm trees to live however. And yes, these palm trees are among my favorite in our yard.

 

[MC Rider]

I have to defend our palm trees here. We have a total of 7 Queen palm trees in our yard, and they are pretty much maintenance-free. We have had them for ~20 years and they require the least care of all our trees. They are ~20' tall and the nuts are the size of play marbles. A few old leaves may need to be cut each year, and the trees will look great. The biggest draw back is: there is no coconuts on them. I would be willing to pamper the trees if they would give me sweet drinking coconuts. Our weather is not warm enough in the winter for coconut palm trees to live however. And yes, these palm trees are among my favorite in our yard.

That sounds nice, and I like trees, including palms. 20' is not too big. There are lots of different Palms. I think I would be happy each tree did not make a ton or more of coconuts every year, like someone posted above.



Close to me some trees have to be at least 50 foot tall, with 40 foot beards of dry untrimmed branches. I'm glad they are not on my property, not my expense. We have enough shade trees and mess as is.


What does the guy that climbs that 50+ foot tree with a chain saw and trims it get paid?

 

[LakeRat1]

Discussion on the "health ministries" is that they seem great until you really need the coverage. "Saving thousands" is not very helpful if the insurance is not there when you need it. What has been your experience?

Fortunately neither my DW nor I have had to personaly utilize the services. I have had a friend, join. 3 Weeks after joining, he had to have emergency surgery on a torn retina. After all said and done, he submitted his bills, within 3 months the entire charges were paid .......

I did a lot of research before joining, talked with others that have been members and utilized the services ........ I stand-by this organization in my case....... I have saved over $800 per month ($9600) this past year for the cheapest plan based on the 2020 rates. The savings will be more next year

 

[LarryMelman]

Fortunately neither my DW nor I have had to personaly utilize the services.

Yeah, I thought that might be the case.

Everything I've read is that while these plans might be OK for some expenses, a typical person (with normal chronic health issues and a number of maintenance prescriptions) is not going to be well served by the ministry plans.

 

[foxfirev5]

Yeah, I thought that might be the case.

Everything I've read is that while these plans might be OK for some expenses, a typical person (with normal chronic health issues and a number of maintenance prescriptions) is not going to be well served by the ministry plans.

Yep. Not much different than the HDHP DW and I had for the last 10 years. We were lucky and paid small premiums while accumulating big $ in our HSA. We got lucky. Others would have catastrophic issues covered which served the purpose of insurance. There are no free lunches.

 

[RetiredAndLovingIt]

There is a lot of maintenance in Palm trees and a whole environment living in the beards, rats, snakes, spiders, raccoons, possums and of course a multitude of birds.
Mine are Mexican Fan Palms and the beard alone is probably 15 feet long and it needs to come off, it's a fire hazard and it's going to cost me a fortune.
Just last week I watched a tree climber scoot up a distant neighbors tree and cut all the dead stuff off and he was fast. I wish I'd driven over to get his number for a quote, I'm thinking at least $1000 probably a lot more.