Check my numbers, i think i'm ready

[green night]

Is that the future estimated value or current value (that you assume would inflate)?

If you are currently earning 180k and burning through 140k per annum then you have done incredibly well to build those kind of funds. Is your spending estimate ultra conservative?

The 45K, is the value when I'm 65. No increases, no COLA.

My spending the last 4 or so years has been very close to $120K. I put $140K, to account for taxes. Above the 180K was bonuses and options ... which varied based on the year. I do think the $120K spending may be the high water mark given vacations for 5, at least twice per year.

All in all, I do think I'm being conservative. But, not silly .... for instance, I don't have any annual vehicle spending. We tend to buy 3 year old vehicles and hold onto them for a long time (at least 10 years).

 

[Cap_Scarlet]

The 45K, is the value when I'm 65. No increases, no COLA.

My spending the last 4 or so years has been very close to $120K. I put $140K, to account for taxes. Above the 180K was bonuses and options ... which varied based on the year. I do think the $120K spending may be the high water mark given vacations for 5, at least twice per year.

All in all, I do think I'm being conservative. But, not silly .... for instance, I don't have any annual vehicle spending. We tend to buy 3 year old vehicles and hold onto them for a long time (at least 10 years).

My conclusion is that firstly, you have a lot of money BUT over the next 20 years you will burn through a substantial proportion of that and there is not a lot of buffer for potentially unknown events or extended downturns. Psychologically that might be tough.

My other question would be whether you have the chance to go back to work should the numbers not work? Will your skills remain relevant.

Personally I would be tempted to delay 4-5 years if you want to really go with a clear mind.

 

[green night]

My conclusion is that firstly, you have a lot of money BUT over the next 20 years you will burn through a substantial proportion of that and there is not a lot of buffer for potentially unknown events or extended downturns. Psychologically that might be tough.

My other question would be whether you have the chance to go back to work should the numbers not work? Will your skills remain relevant.

Personally I would be tempted to delay 4-5 years if you want to really go with a clear mind.

I don't think i can do 4 or 5 more years. I do think i can / would cut my spending during the next several years if there was a market downturn or or if my assumptions look less certain near term. I think spending down to 80 or 90K is pretty realistic, if needed. To your point, it might be mentally tough to do that, especially if its during the next few years.

Skills transferable? Yes, i think some of them but not at my current pay rate. I think i could get a job a pretty quick over the next couple years ... but i'm not sure if that's the case 10 years from now. And that does make me nervous.

 

[Whisper66]

Greenlight - does your plan include possible expenses or an alternate plan if one or more of your children don't "launch" after college? For example, if we have a downturn in the economy and they cannot find a decent job.

This was a big concern of mine as it had a relatively large impact on my retirement expenses (another person covered by food, clothing, insurance, etc). My retirement coincided with my last child graduating and being hired in a good paying job. This eliminated a lot of uncertainty / financial stress for my retirement.

 

[Cap_Scarlet]

I think i could get a job a pretty quick over the next couple years ... but i'm not sure if that's the case 10 years from now. And that does make me nervous.

...and therein lies the key conundrum for all of us which will be a very personal decision. How much comfort / buffer do we need to feel truly happy versus the joy of not working any more.

Personally I don't think its necessarily a binary decision i.e. do I have enough or not but maybe you can find a part time gig (working a couple of days a month) which gives you a bit of income but also keeps your skills relevant.

Whatever happens - its nice to have the choice.

 

[green night]

Greenlight - does your plan include possible expenses or an alternate plan if one or more of your children don't "launch" after college? For example, if we have a downturn in the economy and they cannot find a decent job.

This was a big concern of mine as it had a relatively large impact on my retirement expenses (another person covered by food, clothing, insurance, etc). My retirement coincided with my last child graduating and being hired in a good paying job. This eliminated a lot of uncertainty / financial stress for my retirement.

No, I haven't planned financially for that type of thing. If that was to happen, my house would be open and yes I would incur extra food but I don't look at it as a big expense. I guess since I'm holding my current rate of spending the same as today, I'm not assuming that I would have any incremental costs.

I do see why one would go forward with that type of plan. A kid or two at home a couple years after college would have costs.