Hello, 60 yr old late starter here

[ERObjd]

Retired from military Army in 2014 .Married, 3 kids all grown and out of college, just finished paying off student loans for 2 of them.


In 20s I was in a Royal neighbor annuity , stupid and I ended up cashing it out in 30s to assist an ailing parent. Our Saving was sporadic at best. But we do have a house $760 a month with about 11 years left. We dont have car loans or credit card debt or expensive toys boats motorcycles. we dont even have smart phones we use tracfones so no cell bill, we do have internet, elec,heat, water garbage, insurance etc. Tricare prime is health insurance



Anyway finally we are in a position to do some serious investing.Some catch up. We do not have an IRA we cant because we have no earned income,
So moved old IRA from USAA then Victory Capital then to Vanguard. when Usaa sold the investment to Victory Capital the ER jumped to 1.14 I wasted no time moving that fund to Vanguard It has $8,200 in it. We are able to toss in $1200 per month now. It is a taxable account not in an IRA anymore because being retired and not working I do not have earned income. I get military retirement about 3300 after tax and VA disabilty about 1700 (tax free) per month



It is in the Vanguard VBIAX Balanced index fund which is 60% stock 40% bond.ER of 0.07 I am 2 months away from turning age 61 Considering taking my SS in about another year at age 62 . SS website says I would get right at 1500 at 62. Waiting till 70 would push it up considerably but am thinking of taking SS early it would probably be about 1100 after state and fed tax and pushing 2300 a month into the vanguard fund. Considered Vanguard Star fund as well but it has an ER of 0.31, So more or less a coin flip. Wife and I decided to stick with VBIAX. "God willing and the creek don"t rise" in 15 years we should have around 450K if i can dump in the SS and push up to 2300 a month in a year. We dis look at the Boglehead 3 fund and 2 fund but rebalancing does not seem like a task I want to undertake. So an all in one fund it is in this case VBIAX.



Starting late but everyone has to start somewhere.



Feb will be our first month of tossing $$ into the vanguard balance fund. Considered Star as well and looked at Wellington as well. But Vanguard balanced is going to be the horse we ride for better or worse.

 

[Out-to-Lunch]

Welcome aboard!

Yes, it is late, but congrats on being FIREd. From your description, it sounds like your pension/disability of $60k/annum exceeds your expenses. That is great. May I ask what your goals are for your savings? I.e., what is it that you would like to (eventually) fund with your savings?

Is your main question whether to take SS and save it, vs. delay?

 

[ERObjd]

No question on taking SS, plan to take it at 62, family tree does not tend to have a history of males living past 80. That is main reasoning for taking it early. Also have know several who died before dfrawing a dime and others who tried to wait to 70 and failed to make it. No one has a crystal ball so we just have to make the best decision we can. So I figure 20 years of good solid saving should allow us to get in that 400k club or possibly a bit higher depending on the market. And these accounts are not roth or 401k so we will have to pay tax on withdrawals. Wife and I figure that dumping 1200 a month into the VBIAX balanced fund should get us at about the 383K mark assuming a 4% return. Maybe market will do better maybe worse no one knows. In about a year when I hope to claim SS we should get about $1100 per mo after tax. Some quick input on an investment calculator results that in a year with putting 1200 a year into the fund should be about 23K . after a year we should be able to dump after tax SS into the fund (about $1100 which will push up monthly saving to $2300 . There may be a few months we cut back as we expect to replace our 30 yr old furnace within the next couple years. I suspect that a new furnace will be 5K minimum. Once we star adding SS and push investment to 2300 per month even 15 years at 4% will get us in the the 1/2 million club about 580K according to Bankrate retirement calculator. A long long climb ahead but am fortunate that we can do it at our age. I tell my 3 kids all below age 30, to start early. Dont be like me. I could have done better ,but then there were some expenses and periods and expenses where I just could not save. I was not very fiscally responsible in my 20'30'and even 40's and dumped money into an annuity Royal Neighbor which was a really bad idea. My wife does have a small TIAA annuity that she had back when she taught HS for 3 years over 20 year ago. That will pay her only about $170 per month in annuity pension. She no longer pays into it and has not for years. but at age 65 TIA Creft must pay it out to her. Not sure what her SS will be i would assume it will be less than mine . If I had to guess maybe $700 a month in SS since most of her jobs have been low wage part time.



""May I ask what your goals are for your savings? I.e., what is it that you would like to (eventually) fund with your savings?"" Good ?, I mainly just want to make up for lost time and ramp up our savings and hope the balance fund does well. I find it interesting to read the various postings on here, some people have managed to save millions, some save thousands some save hundreds but the main thing is everyone is is focused on a goal the goal of saving and watching their principle hopefully increase. I knew almost zero about investing and reading on this site and Bogle heads forum and reading "The little book of Common Sense Investing"by Jack Bogle has vastly increased my financial knowledge. I stress to our kids all under 30 to start now the advantage of time is a huge advantage as the compounding does a lot of the heavy lifting.

 

[Dash man]

No question on taking SS, plan to take it at 62, family tree does not tend to have a history of males living past 80. That is main reasoning for taking it early. Also have know several who died before dfrawing a dime and others who tried to wait to 70 and failed to make it. No one has a crystal ball so we just have to make the best decision we can. So I figure 20 years of good solid saving should allow us to get in that 400k club or possibly a bit higher depending on the market. And these accounts are not roth or 401k so we will have to pay tax on withdrawals. Wife and I figure that dumping 1200 a month into the VBIAX balanced fund should get us at about the 383K mark assuming a 4% return. Maybe market will do better maybe worse no one knows. In about a year when I hope to claim SS we should get about $1100 per mo after tax. Some quick input on an investment calculator results that in a year with putting 1200 a year into the fund should be about 23K . after a year we should be able to dump after tax SS into the fund (about $1100 which will push up monthly saving to $2300 . There may be a few months we cut back as we expect to replace our 30 yr old furnace within the next couple years. I suspect that a new furnace will be 5K minimum. Once we star adding SS and push investment to 2300 per month even 15 years at 4% will get us in the the 1/2 million club about 580K according to Bankrate retirement calculator. A long long climb ahead but am fortunate that we can do it at our age. I tell my 3 kids all below age 30, to start early. Dont be like me. I could have done better ,but then there were some expenses and periods and expenses where I just could not save. I was not very fiscally responsible in my 20'30'and even 40's and dumped money into an annuity Royal Neighbor which was a really bad idea. My wife does have a small TIAA annuity that she had back when she taught HS for 3 years over 20 year ago. That will pay her only about $170 per month in annuity pension. She no longer pays into it and has not for years. but at age 65 TIA Creft must pay it out to her. Not sure what her SS will be i would assume it will be less than mine . If I had to guess maybe $700 a month in SS since most of her jobs have been low wage part time.



""May I ask what your goals are for your savings? I.e., what is it that you would like to (eventually) fund with your savings?"" Good ?, I mainly just want to make up for lost time and ramp up our savings and hope the balance fund does well. I find it interesting to read the various postings on here, some people have managed to save millions, some save thousands some save hundreds but the main thing is everyone is is focused on a goal the goal of saving and watching their principle hopefully increase. I knew almost zero about investing and reading on this site and Bogle heads forum and reading "The little book of Common Sense Investing"by Jack Bogle has vastly increased my financial knowledge. I stress to our kids all under 30 to start now the advantage of time is a huge advantage as the compounding does a lot of the heavy lifting.

Will your pension give your wife 100% if you should die first? If not, that may be a reason to consider waiting for social security, to use it as longevity insurance should she live longer. If she will only get 50%, that would be a major financial haircut for her.

 

[ERObjd]

nope ,when I no longer have a pulse the military pension stops. unless you have SBP survivor benefit, we elected to not get that and go with term life instead. we have a 400K 20 year term life insurance that I bought at age 55,It was $86 per month for $400K term life. I don't smoke, drink or chew tobacco, so if I kick the bucket before age 75 my wife would get that and it is tax free. With SS there is no 50% the surviving spouse gets to keep the larger of the 2 payments. When my Dad passed in 2009 my mom made less than he did in SS so she was able to collect his larger payment. It was not a great deal larger I think it was about $100 per month more, but it was more than hers so SS rules allowed that. That was back in 2009 so not sure if rules have changed. If I assume room term before my wife then she would get to select my SS which is likely larger. If she goes first i would just keep what i get now and if we both go then that's it.

 

[aaronc879]

If it was just you I would ask why are you saving money. You have military pension, VA disability and SS that will give you a very comfortable retirement without needing to save any money. The problem is if you pass before the wife which seems likely then she has only SS plus whatever savings you can put aside for her before you die. That could be a challenge for her late in life so makes sense to save what you can now. Hopefully you live a healthy lifestyle and can outlive your past family and benefit from the large government money you will be getting.

 

[cnocmmz]

Will your pension give your wife 100% if you should die first? If not, that may be a reason to consider waiting for social security, to use it as longevity insurance should she live longer. If she will only get 50%, that would be a major financial haircut for her.

Very much agree Dashman

 

[JRon]

Waiting with SS until 70 equals something like an 8% return so if you’re thinking of 4% with Vanguard, you could double that. If you don’t need the money to live on before you turn 70 and the goal of the savings is to take care of DW after you die, waiting till 70 to claim SS seems like the thing to do.

 

[Out-to-Lunch]

Waiting with SS until 70 equals something like an 8% return so if you’re thinking of 4% with Vanguard, you could double that. If you don’t need the money to live on before you turn 70 and the goal of the savings is to take care of DW after you die, waiting till 70 to claim SS seems like the thing to do.

I agree that the OP should strongly consider waiting until 70 for SS to provide some longevity insurance for his wife.

However, waiting does not provide an "8% return." It provides an 8% annual increase in benefits. But you are forgoing a year of payments, so that makes it different from a "return." Moreover, you cannot even define the return that this wait will provide because you don't know when you will die.

 

[JRon]

Out-to-lunch - thanks for the correction.

 

[ut2sua]

OP, your situation is somewhat unique in that you have guaranteed income (that many of us don't have), so that is great. If I were you, I would just worry about the worst case situation if you pass earlier than planned, then how to make sure your DW is OK. I would research and do some calculation on taking SS at 62 (and save more early as you have planned) versus taking SS later (and have bigger payment that could be passed on to your wife). Another thought is to look into buying some additional term life insurance if cost is still reasonable. $1mil equates to an income source of around 40K per year. Overall, I think you are having the right thinking on many fronts, and personally, I would do many of the same things you have planned. In your particular situation, taking care of your own health is a 2x major investment in itself for the whole family, so I would keep that in mind also. Cheers.

 

[RetireeRobert]

If I were you, I would just worry about the worst case situation if you pass earlier than planned, then how to make sure your DW is OK.

Yes, I very much agree with that bit of advice.

 

[mistermike40]

If it was just you I would ask why are you saving money. You have military pension, VA disability and SS that will give you a very comfortable retirement without needing to save any money. The problem is if you pass before the wife which seems likely then she has only SS plus whatever savings you can put aside for her before you die. That could be a challenge for her late in life so makes sense to save what you can now. Hopefully you live a healthy lifestyle and can outlive your past family and benefit from the large government money you will be getting.

+1 to all of the above.

 

[Koolau]

Yes, it appears the real "issue" here is not day-to-day living expenses. It's really about survival of your spouse when you hear (well, don't hear) Taps for the last time. I've mentioned to folks here about my friend who has about your income (between he and wife). BUT at about age 77, he has $500K in debt! He survives just fine since his income is guaranteed. My fear for him is when he "goes" his DW will be in trouble. She'll get his SS and half the pension, but that will still be a big hair cut - especially while servicing the huge debt (fortunately, it is mostly mortgage and 2nd mortgage debt - long story.)

SO, relax, enjoy your well deserved retirement and work toward replacing your income for your DW when you leave us. I would suggest some professional help - maybe a Certified Financial Planner who ONLY works for fees and doesn't sell anything. Other than that, just keep thinking about my buddy who is really enjoying his retirement and KNOW that you are WAY better off. Of course, YMMV as always.

By the way, I hope it isn't becoming a cliche, but thanks for your service.