How much reserve should I plan for @ 71?

[corn18]

We plan to retire next month. I will be 55, wife 51. Some details:

$49,524 / year COLA military pension already collecting.
$42,884 my SS starting @ my age 70
$17,292 her spousal SS starting @ my age 71 (her age 67)

$109,700 Total COLA income

$100,700 Annual expenses

$9,000 excess / year

So, once we hit 71, we don't need any savings. While I would love to blow all my savings from 55-70 and slide into SS with no nest egg, that makes me uneasy. So I am trying to determine what amount I should reserve for unknown unknowns after age 71. Right now, I have $300k for the reserve in my spreadsheet. Wanted to check in to see if that is a good wag for now. I have no plan to leave an inheritance. That will come from grandma for the kids.

The reason I am asking is that reserve number is what I use in the VPW spreadsheet to determine annual discretionary spending from 55-71.

 

[teetee]

300k without the house seems low for a couple in their 50s.

My goal is have 5M net worth by 55 so that I can cover my long term care insurance (500k), 500K healthcare expense, 1M emergency, which barely leaves me not touching the investment based on firecalc (100k annual expense with 3M net worth).

 

[disneysteve]

I want to make sure I understand the question.


At 71, your income will be $109,700. Your expenses will be $100,700. Your surplus will be $9,000. You will have $300,000 in reserves. Is that all correct?


If so, I guess what I'd want to know is what you've included in your expenses. Home repairs, car replacements, long term care, etc? Are they covered or would they come out of the 300K?


How does your plan account for the possibility of one of you not reaching 71? Will the surviving spouse be adequately taken care of?


I also think that any estimate of your expenses 16 years from now probably needs more than $9,000 of wiggle room.

 

[RunningBum]

I wouldn't be counting on getting 100% of your SS. You may get it, but you may not.

 

[corn18]

I wouldn't be counting on getting 100% of your SS. You may get it, but you may not.

Yeah, I hear that a lot.

 

[corn18]

Now that I have looked at survivorship and the possibility of reduced SS, I think I am going to start retirement with maximum caution. I have put all of our discretionary spending into the 100% Ps base model and we will run with that for year one. We'll re-evaluate @ year 2.

 

[Out-to-Lunch]

Well, my WAG was that I wanted $500k in the place that you want $300k. No real good reason. In my case, I suspect is has something to do with the number of digits on one of my hands.

 

[Montecfo]

Big risk to me would be when one of you passes. Large cut either way and higher taxes.

 

[DrRoy]

You also do not say what your NW is. I would want $500k min also, maybe more.

 

[mrfeh]

I wouldn't approach planing this way (having $X dollars left 15 years from now)...too many unknowns/variables.

How much of your annual expenses are for core living expenses vs wants?

 

[corn18]

I wouldn't approach planing this way (having $X dollars left 15 years from now)...too many unknowns/variables.

How much of your annual expenses are for core living expenses vs wants?

I have abandoned this approach. I agree that it is not good.

 

[pb4uski]

Good... I didn't get it at all.

 

[ivinsfan]

Since you are so focused on numbers this week, whats the breakeven on years for your DW taking her spousal SS at her FRA instead of just taking hers as soon as you file for your benefit.

Remember you both have to be living for her spousal check to continue. Sounds like you are forgoing at least one entire year of possible spousal checks. My first spousal check hit the bank account the same day my DH's started, we filed together.

 

[corn18]

Since you are so focused on numbers this week, whats the breakeven on years for your DW taking her spousal SS at her FRA instead of just taking hers as soon as you file for your benefit.

Remember you both have to be living for her spousal check to continue. Sounds like you are forgoing at least one entire year of possible spousal checks. My first spousal check hit the bank account the same day my DH's started, we filed together.

The social security planner that maximizes the net present value of benefits based on life expectancy (I forget the name of it) says she should take it @ 66 vs 67.

 

[ivinsfan]

The social security planner that maximizes the net present value of benefits based on life expectancy (I forget the name of it) says she should take it @ 66 vs 67.

Was that 67 age in your first post a typo, or have you decided on 66?

 

[skyking1]

(I forget the name of it) says she should take it @ 66 vs 67.

https://opensocialsecurity.com/?

 

[ivinsfan]

https://opensocialsecurity.com/?

I got that I was asking if he changed his mind on her age at claiming..

 

[corn18]

I got that I was asking if he changed his mind on her age at claiming..

We are on planning for her take take @ 67 right now. Could change a thousand times between now and then. We’ve got 15 years to decide.

 

[ivinsfan]

We are on planning for her take take @ 67 right now. Could change a thousand times between now and then. We’ve got 15 years to decide.

With your stress level right now it could change a 1000 times in the next couple of months....

 

[walkinwood]

You've expressed this desire to spend a lot between now & 70 before.



What do you envision your lifestyle being? And how do you think you'll feel downsizing your lifestyle suddenly at 70? If you're healthy at 70 you may still want to do a lot.


I don't have any advice on the question you asked