Hello, new to the forum and would like your thoughts on our plan to semi-retire now for 15 years and than be at full retirement. We have tried to be as conservative as possible in assumptions and would certainly be able to maintain semi-retirement status longer, cut spending, etc... if we needed to down the road. At the trigger-pulling point and would like opinions. The intent is to enjoy life more and keep work down to a day or two per week each until comfortable to fully retire. We are lucky to be in fields/location where this is possible and are really looking forward to this change. I appreciate all of your time and look forward to reading any thoughts you might have.
I am 37 and my wife is 36. We both came from very humble upbringing and I believe this helped us avoid the “Keeping up with the Joneses” mentality as our salaries grew.My wife and I are both making very solid salaries.I am very close to pulling the trigger and so my wife has recently gone down to a day a week…she loves her job at this pace and has no issue keeping it for a long while.I am not so much in love with my job, but aside from the occasional heavy stress I do not hate it.We have three children ages 9, 7, and 4.
Our plan is to semi-retire at the end of May (1 ½ months out) and fully retire in 15 years. As a combat veteran I know the challenges folks face upon coming home and would love to take a part time position to help in whatever way I can for my part of the semi-retirement.We will have a combined salary of $90-100k for the next 15 years until “real” retirement.
The model I have built shows the part time salary being reduced by 11% 403b, full HSA contribution, health/dental benefits, taxes, and ROTH IRA contribution…and allowing for coverage $58k in expenses. Aside from covering the expenses we would be adding $25k per year to stash (403b, match of 3%, full HSA w/ match, and ROTH IRA). For my modeling I have assumed my cost would not change over time other than growing by 2.5% inflation.I intentionally still hold a mortgage of $242k as the fixed interest rate is at 3.125%.Without any additional payments we would not have the above Home Prin & Int annual payment of $20k after 14 years…within our 15 year semi-retirement timeframe.I assume we will have $15k of annual healthcare cost after the semi-retirement benefits drop…$10k roughly in today’s dollars.
Our current asset allocation above shows 58% in Vanguard institutional and admiral total US market equities fund, 14% in a handful of high value stocks averaging 4% div, 20% in Vanguard admiral total US bond fund, 5% in Lending Club, and 2% in cash…totaling $664k. Split between liquid accounts (HSA, Lending Club, brokerage account, and cash) and non-liquid accounts (ROTHs and 401k/403b) is $148k/$516k.We have one major purchase before starting this endeavor which is at or below $35k…so we will have $113k liq and $516k non-liq or $629k.As my goal would be to enter semi-retirement in 2 months we should have another $20k or so on this value upon starting bring us back to $650k.Aside from an annual re-allocation to rough 75/25 equity over bond split I will probably be dialing down my lending club and dividend stock weighting thru tax harvesting at the end of the year and proportionally re-allocating to index split.
With the assumptions that we will get an average 6.5% return on investments, inflation will average 2.5%, and that Social Security will be roughly $24k per year from age 62 on my model shows our withdrawal rate at “real retirement” +15 years or 2032 will be 3.39%. Taking out social security is minor as the model still shows continuous growth.Given that an average rate of return and inflation is not realistic we used FireCalc to run 96 50 year (present day thru real retirement of 15 years and than 35 years to our 88th birthdays where we will tie meat to our wheel chairs and roll out into the woods to feed the wildlife) scenarios from 1871 forward.We received a 100% success rate with and without social security…At 2% real return from here on we would end a $0.
Built in conservatism is in our cost not going down over time, our not earning anything additional in the future, healthcare being high, low investment returns, etc. Additionally, as mentioned before my wife LOVES her job at a day a week and would without hesitation add a year if necessary.Additionally, although I hate to even write it as I’d rather it never happen we will most likely be getting a decent inheritance from family at some point.Outside of these numbers we have about $45k saved for kids college.We will certainly pivot to help kids down the road, but believe having some financial skin in the game in so far as self-funding for the large part their college cost is critical for their understanding the value.Outside of mortgage we have no debt.
We believe we are ready for this, but really just want to get some outside opinions. Planning for this is far easier than pulling the trigger and my wife is worried I’ll keep saying one more month, one more year.I’m sure there is slack in our expenses and feel that given we are absolutely on the same page with everything we could pivot and overcome any challenges that arise.
I am 37 and my wife is 36. We both came from very humble upbringing and I believe this helped us avoid the “Keeping up with the Joneses” mentality as our salaries grew.My wife and I are both making very solid salaries.I am very close to pulling the trigger and so my wife has recently gone down to a day a week…she loves her job at this pace and has no issue keeping it for a long while.I am not so much in love with my job, but aside from the occasional heavy stress I do not hate it.We have three children ages 9, 7, and 4.
Our plan is to semi-retire at the end of May (1 ½ months out) and fully retire in 15 years. As a combat veteran I know the challenges folks face upon coming home and would love to take a part time position to help in whatever way I can for my part of the semi-retirement.We will have a combined salary of $90-100k for the next 15 years until “real” retirement.
The model I have built shows the part time salary being reduced by 11% 403b, full HSA contribution, health/dental benefits, taxes, and ROTH IRA contribution…and allowing for coverage $58k in expenses. Aside from covering the expenses we would be adding $25k per year to stash (403b, match of 3%, full HSA w/ match, and ROTH IRA). For my modeling I have assumed my cost would not change over time other than growing by 2.5% inflation.I intentionally still hold a mortgage of $242k as the fixed interest rate is at 3.125%.Without any additional payments we would not have the above Home Prin & Int annual payment of $20k after 14 years…within our 15 year semi-retirement timeframe.I assume we will have $15k of annual healthcare cost after the semi-retirement benefits drop…$10k roughly in today’s dollars.
Our current asset allocation above shows 58% in Vanguard institutional and admiral total US market equities fund, 14% in a handful of high value stocks averaging 4% div, 20% in Vanguard admiral total US bond fund, 5% in Lending Club, and 2% in cash…totaling $664k. Split between liquid accounts (HSA, Lending Club, brokerage account, and cash) and non-liquid accounts (ROTHs and 401k/403b) is $148k/$516k.We have one major purchase before starting this endeavor which is at or below $35k…so we will have $113k liq and $516k non-liq or $629k.As my goal would be to enter semi-retirement in 2 months we should have another $20k or so on this value upon starting bring us back to $650k.Aside from an annual re-allocation to rough 75/25 equity over bond split I will probably be dialing down my lending club and dividend stock weighting thru tax harvesting at the end of the year and proportionally re-allocating to index split.
With the assumptions that we will get an average 6.5% return on investments, inflation will average 2.5%, and that Social Security will be roughly $24k per year from age 62 on my model shows our withdrawal rate at “real retirement” +15 years or 2032 will be 3.39%. Taking out social security is minor as the model still shows continuous growth.Given that an average rate of return and inflation is not realistic we used FireCalc to run 96 50 year (present day thru real retirement of 15 years and than 35 years to our 88th birthdays where we will tie meat to our wheel chairs and roll out into the woods to feed the wildlife) scenarios from 1871 forward.We received a 100% success rate with and without social security…At 2% real return from here on we would end a $0.
Built in conservatism is in our cost not going down over time, our not earning anything additional in the future, healthcare being high, low investment returns, etc. Additionally, as mentioned before my wife LOVES her job at a day a week and would without hesitation add a year if necessary.Additionally, although I hate to even write it as I’d rather it never happen we will most likely be getting a decent inheritance from family at some point.Outside of these numbers we have about $45k saved for kids college.We will certainly pivot to help kids down the road, but believe having some financial skin in the game in so far as self-funding for the large part their college cost is critical for their understanding the value.Outside of mortgage we have no debt.
We believe we are ready for this, but really just want to get some outside opinions. Planning for this is far easier than pulling the trigger and my wife is worried I’ll keep saying one more month, one more year.I’m sure there is slack in our expenses and feel that given we are absolutely on the same page with everything we could pivot and overcome any challenges that arise.
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