plan2go, what do you think?

[plan2go]

I stumbled across this site a couple of years ago, and have been reading posts almost daily ever since. It has been a great resource and really got me thinking about when to retire. Recent family members medical problems have made it even more clear that life is short and we need to retire by the age of 60.

1. Ages-both of us are 58
2. Kids-4 adult children
3. Current plan would be to retire at 60 when pension can begin.
4. Salary-$132,000
5. Hope to move to larger home closer to kids for large family gatherings.
6. Our annual spending is currently $40,000, will need to add health insurance ACA $24,000, high estimate I hope, and increased housing expenses for larger home, so $75,000 per year in retirement
7. Debt-None
8. Portfolio-Cash-$165,000
Mutual Fund-$155,000
Traditional IRA-$405,000
Roth IRA-$43,000
401K-1,750,000
Pension-$60,000/yr non-COLA, (will do spousal benefit, don’t know that amount yet)
Social Security-(62)-$2256, or wait til 67-$3226, or 70-$4010
HSA-$12,000

Plan to spend around $350,000 for house, current house sale $125,000 (small house) we are not big travelers, looking forward to spending time with family (kids and aging parents) and pursuing our hobbies.

Biggest concern is taxes on our pre-tax money. How to reduce taxes on money we may withdraw for house. Majority of portfolio is currently in stocks. Also debating on when to take Social Security.
Firecalc appears to be 100%.

 

[Montecfo]

Hi Plan2go and welcome to the forum!

Just a couple of quick thoughts. On taxes, you may want to think about getting a mortgage and withdrawing cash as needed to pay it. That would likely be cheaper than pulling out a huge sum and taking a tax hit. Mortgage rates are very low now so this seems worth considering.

Also, you may want to try to dial in your health insurance costs. www. Healthsherpa.com is a good resource. You can evaluate plans available in your own area. Don't forget to include the cost of the actual claims.

Also, your taxes are going to be highly material to your cash flow. You probably should do a multiyear forecast to determine your longer term marginal and effective tax rates.

How did you handle taxes for firecalc?

 

[donheff]

I saw the title and first line in my RSS feed and thought Plan2go was an interesting website you were asking about. I should have known that this is the interesting site. Welsome to the forum.

If you have a good handle on your expenses and if those assets are sensibly allocated in low cost funds, you look good to go. I think your biggest question will be when to pull SS. The conventional wisdom is pull early if you want to spend more in the early years, pull late if you want insurance that you will have a secure income stream in your later years (through an increased, COLA'd annuity). Based on your plan to stay by the hearth I would lean toward the later. You also have the flexibility to watch the market and sign up for SS early if we have a downturn in the early years and you want to avoid tapping your portfolio.