Just Turned 60, Feeling REALLY Ready to Retire

S

SoReadyToRetire

Recycles dryer sheets
Joined
Aug 11, 2018
Messages
171
Location
Burlington
Hi everyone! I read about how to introduce myself and what to prepare before I ask "can I retire yet", but I'm still eager to jump in and get started.

I turned 60 a week ago. My husband is 57. We're both in reasonably good health, although he has Crohn's (in remission/on medication) and l'm starting to have memory issues (have a memory clinic coming up in the Fall).

For that reason, I'm feeling like we may want to retire while we're still in good enough health to travel a little and enjoy ourselves in general--and I don't think I can last longer than 2 more years at my stressful programming job.

Here's what I keep coming back to when I think about whether we're ready: We have over 7X what my mom had put away when my dad died 7 years ago--and she's doing ok. She doesn't live extravagantly by any means, but she's 85 and likes to stay home a lot. But the fact that she's living on a SS income of about $50/month after Medicare costs, and still has over $80K in the bank (started with $103K) makes me think we might be able to retire now and be ok. I don't know if we're crazy to be considering retiring in 2 years or even less.

We have no debt (paid off our mortgage years ago); have always worked full-time; have no children together (hubby has 2 adult children); and live below our means (although I have a tendency to give a lot of money/things to others, which I could curb if I had to, though it'd be difficult :blush:). We live in VT and want to move to a warmer place with lower property & income taxes after we retire.

We currently have $725K in stock-heavy mutual funds in our 401Ks (and know the market could plunge overnight, affecting that total drastically), plus our home that's worth about $225K. Property taxes are $4400/year. We own 5 vehicles outright, all over 10 years old. We have about $75K liquid at the moment. Neither of us have LTC insurance, and we don't care about leaving anything much to family (outside the life insurance we bought for that purpose). We've been on one vacation a year for the past few years, costing around $4-5K, and would probably want to continue doing that for the next 5 years, tops. Other than that, we could continue to live on ~$2400/month just as we do now. If I can make it until 68 to start taking SS, I'll get $2200/month; hubby will get $1800. I'd like to eliminate that from our equation entirely, so we can think of it more as a "cushion" for our later years.

I haven't run FireCalc yet (just learned about it in this forum today!), but most of the calculators I put the basics into tell me we need something like $2M to retire. That's so discouraging!!!

I keep comparing our situation to my mom's and thinking that since we have a lot more put away than she did, and don't live an extravagant lifestyle, maybe we CAN think about retiring while we're still fairly healthy in mind and body. The sooner the better! I really don't want to work up until I literally lose my mind. :(

It's very hard to know what health issues you'll have in the future--and whether you'll need long term care--so how do people know when they have "enough"?

I'm off to try to find FireCalc now. But please chew on what I've written for now, and feel free to comment. Thank you--and I'm so happy to have found this forum! Looking forward to learning and chatting more. :greetings10:
 
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Welcome aboard. You only need $2 million if you spend $80k per year and have no source of income other than your portfolio. So the big question is (as it is for everyone) how much will you be spending?

With vacation, you currently appear to be spending about $34-$35,000 per year, which is excellent. Gross that up for taxes. Then, add in a sinking fund amount for larger expenses that you know will be coming (i.e. - you'll probably want to replace at least one car, and you'll probably need to paint the house or something like that). You will also need health insurance to bridge between now and medicare. Assume $60k spending (including taxes) to be conservative, dropping to $50k when you go on Medicare and to $45k when your spouse goes on Medicare.

I wouldn't totally discount social security. Maybe knock it down to 70% of what they currently estimate you'll get, but it's not going away entirely.

Running FireCalc with $60K initial spending (decreasing as noted), $800k in assets and 70% of your social security at full retirement age, gives a 79% success rate.

At the end of the day, you should make your decision based on your own life and your own calculations, not by comparison to other family members, whose situation may or may not be sufficiently similar to yours.

Edit to Add: I assumed in the FireCalc run that you would retire today. Working two more years will boost your success rate.
 
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Welcome -- Here is the link to FireCalc -- https://www.firecalc.com/

Suggest you create a retirement budget (there are a few samples on this forum). It will help you to confirm your assumptions. Biggest wild card (other than the markets) is healthcare.

Since you are both working, suggest you look into the IRS Rule of 55 -- this may help you in your situation.
 
badatmath said:
What did you plan to do about health insurance?
Click to expand...

That's one of the tough questions as we're not sure yet where we'll be living or when we'll be moving there (as I don't really want to move until my mom passes away). I'd assume it'll be somewhere in the Southeastern US.

Sounds like we'll need to plan on at LEAST $1k/month for a policy for both of us that doesn't cover much, as a rule of thumb. Maybe $1500/month. Whew--that makes a pretty big difference.

This is the sort of thing I want to learn about on this forum--how to estimate this kind of thing.
 
Where the heck does the "confused about dryer sheets" tagline under my username come from? Does everyone get a random tagline?
 
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welcome ,

you seem to have a grip on the family medical issues but maybe i would add an extra buffer for the unexpected .

predicting your future ( non-medical ) expenses is a little like crystal ball gazing

it is probably better imposing a spending limit on yourselves and try your hardest to stay within it every year.

... say you need to replace your car , in the next 2 years do you know what it will cost in total .. ( i am not even willing to guess taxes, inflation finance are very hard to predict more than 12 months into the future )

one curve ball to throw at you will you need to relocate ( or renovate ) this year would be an interesting time to consider that decision ... you could turn your holiday into an information gathering trip

cheers !
 
Welcome to the Forum and good job with your savings and your thinking process --- this puts you far ahead in the game just by starting. I did have to read this line twice:

"We own 5 vehicles outright, all over 10 years old."

How are you defining vehicles? Does this include snowmobiles and off roaders? Remote controlled toys? If these are automobiles/trucks, are you paying insurance and maintenance etc. on 2.5 cars for each of you?

So, perhaps selling at least three of these would be wise as you gather more resources.

Just a thought! :)

Also, about the memory. After your 50s memory loss is very common. It is usually nothing to worry about; but I'm guessing you will be told that at the memory clinic.

-BB
 
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SoReadyToRetire said:
That's one of the tough questions as we're not sure yet where we'll be living or when we'll be moving there (as I don't really want to move until my mom passes away). I'd assume it'll be somewhere in the Southeastern US.

Sounds like we'll need to plan on at LEAST $1k/month for a policy for both of us that doesn't cover much, as a rule of thumb. Maybe $1500/month. Whew--that makes a pretty big difference.

This is the sort of thing I want to learn about on this forum--how to estimate this kind of thing.
Click to expand...

Hi there
As Conundrum mentioned, look at those 2 healthcare sites. If you can manage your MAGI for ACA purposes (see rules below)
http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf
your monthly medical costs can definitely be under 1k with a full Silver plan.
It depends heavily on where you live down to the county.
We live in Florida and in most counties of Florida, one would spend less than 1k at a lower MAGI.
 
Bryan Barnfellow said:
Welcome to the Forum and good job with your savings and your thinking process --- this puts you far ahead in the game just by starting. I did have to read this line twice:

"We own 5 vehicles outright, all over 10 years old."

How are you defining vehicles? Does this include snowmobiles and off roaders? Remote controlled toys? If these are automobiles/trucks, are you paying insurance and maintenance etc. on 2.5 cars for each of you?

So, perhaps selling at least three of these would be wise as you gather more resources.

Just a thought! :)

Also, about the memory. After your 50s memory loss is very common. It is usually nothing to worry about; but I'm guessing you will be told that at the memory clinic.

-BB
Click to expand...

We have 3 Honda Civics (2000, '05 and '05--we just kept finding bargains!), a BMW convertible ('02), and a Tacoma pickup ('06). I think we bought all the Civics in case one breaks down, so we'd have another available, tee hee. We had 2 but then my sister decided to sell hers and it's in excellent shape--only 60K miles!), so we couldn't resist buying that one, either. The BMW is my toy car; I put it up for the winter. The truck is just for hauling stuff, although my hubby used to commute in it until we got the Civics. We didn't have these Civics until I had to have my Kia crushed last summer--I drove it until the wheels basically fell off and there was nothing left to it. :D

And yup, we pay insurance/inspection/registration on all of them, but it's only $1K/year (minimal coverage) for all 5. It is silly to have so many once we both don't need to commute, so we'll definitely get rid of 2 or 3 soon.
 
Gumby's 79% success rate statistic would give me pause, assuming the inputs are correct.
 
Welcome to the forum. You will need to input more info about spending for those smarter than I here, to help you.
 
We are in the same boat. I am 59 and my DW is 56. I am trying my best to make 62. Like you we will have no insurance. Your retirement numbers are close to ours. My only worry is insurance. Hope this forum can help us.
 
This boat is getting crowded! I will turn 61 in Oct and trying to push on to 62. Megacorp has subsidized retiree healthcare at $420/mth/person but deductible and copay climb. OP’s monthly spend sounds low and I hope all is included But you are living it now so that is the best test.

Good Luck
 
I almost never give specific financial advice here, and others might disagree with me. But I believe that if you do intend to retire shortly, you should reduce your percentage of stock holdings in your retirement portfolio. I won't say what that percentage should be - that depends on your comfort level. But if a major market correction occurs, being too weighted in stocks might derail your retirement plans.
 
I don't have any specific suggestions for you (although, consistent with what mystang52 mentioned, I have adjusted my asset mix in preparation for retirement in a few years), but welcome. I look forward to seeing more of your posts.
 
SoReadyToRetire said:
That's one of the tough questions as we're not sure yet where we'll be living or when we'll be moving there (as I don't really want to move until my mom passes away). I'd assume it'll be somewhere in the Southeastern US.

Sounds like we'll need to plan on at LEAST $1k/month for a policy for both of us that doesn't cover much, as a rule of thumb. Maybe $1500/month. Whew--that makes a pretty big difference.

This is the sort of thing I want to learn about on this forum--how to estimate this kind of thing.
Click to expand...

Vermont is very favorable for health insurance since it is one of the few states in the US that precludes age rating. Since the lowest cost bronze plan will exceed 8.2% of your retirement income, under ACA you can qualify to buy lower cost catastrophic insurance coverage.... the coverage is similar to a bronze plan but the cost is about 1/2 of a bronze plan.... we have cat coverage and pay $500/month for the two of us vs ~$1,000/month for two for the bronze plan. Both are reasonable compared to other parts of the US. This $500-1,000/month is part of the cost of freedom from working.

The other advantage of the cat plan is that the annual premium increases are more modest than the bronze plans.

For both the cat plan and bronze, the insurance doesn't really start paying until you have blown through a ~$6k per person deductible.... luckily we are relatively healthy and have never come close to blowing through the deductible but YMMV.

We looked at relocating to Florida since we have a winter condo there but health insurance there would be ~$1,000 per month more than what we are paying now and that added cost would erase any state income tax savings and then some.
 
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I think you have a good chance. I ran FIRCCalc for a 40 year time horizon with $725k of assets that are 75/25 plus 75% of your SS and came up with spending of $48,520/year at the 95% success level. You need to do further study/analysis but it may be a possibility given your modest cost lifestyle.
 
Controlling your income is paramount to reducing your expenses for healthcare.
A post tax account that you can draw on tax free is a great asset during the years before medicare. If you have the ability to build up a post tax account in cash, money market, or short term bonds, it would be a great source to control both taxes and health insurance costs. I retired at 61 with DW retiring the same age. We have been able to receive maximum subsidies and cost sharing(low deductible and Out Of Pocket Maximum) by controlling our taxable income to about 30,000 per year. Anything beyond 30,000 we need, we pull out of the post tax account.

Good luck on your retirement,

VW
 
SoReady2: Thanks for joining and THE Question. Something that I keep running into when calculating "can I now" (which is 6yrs for DW & me) is what is the yearly health cost between ER and 65. If your gene pool is unlucky it will be largest expense at 64. However if you know it be near zero at 64, why not now? Get quotes is the best answer I get...

The other big question mark is your 401K earnings between now and SS. If the SP500 looses half its value 6 months after ER do you have the nerves (& resources) to wait two years for it to come back before withdrawing anything?

Unrelated question: We are thinking of moving to New England. Do you go across the border into NH for tax free shopping or Canada for cheaper Rx? Thanks!
 
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