Time Flies

[hausfrau]

Ten years ago, I posted this:
https://www.early-retirement.org/forums/f28/retire-in-two-years-69204.html

I can't believe it has been ten years! My spouse never did retire. He was given different responsibilities at work and really started loving his job. I am pushing him to retire by next summer or the year after that at the latest. My retirement plan has us spending at least 4% of our invested assets for the first six years. We will need between 60-80K of income until child is launched. A lot of this depends on how much college will cost. We have almost 70K in her 529 plan, but I'm still not sure it will be enough.

I think in my old post I was projecting about 30-40K/yr of spending. No way that would have been feasible. I'm pretty sure we would both be out working again and probably not in jobs we'd enjoy that much. I hope the 4% withdrawal isn't too aggressive since I will hopefully still be around 30 years from now. However, once kid is out on their own, SS will kick in for my husband, and I'll start collecting it a few years after that when I"m 62. That will cover most of our expenses and we can use our investments for some fun/wants and big ticket items.

I'm currently trying to figure out if Roth conversions are possible. I'm in my early 50s now, so we need to be careful about inflating income too much for healthcare and college. I am younger than my spouse so it's worth considering. The downside is our state has high taxes (6.8%). I need to build a spreadsheet, unless there's some nifty software out there that is good for this kind of thing. Any recommendations?

I'm kind of glad he didn't retire. The bare bones budget would have been pretty difficult I think. Child did need to have braces after all and also decided to play a travel sport lol.

 

[Morgan22]

Just a thought I had when I read your post. Why are you pushing your husband to retire? Especially if you are not sure if you have enough? Let him retire when it's right for him. Or there could be some bad feelings if things don't seem to go well in retirement. ie, feeling like there's not enough to give daughter best education, or not enough to spend on new found hobbies, etc.

 

[2017ish]

It sounds like you have a more realistic set of expectations now--no surprise after 10 years of living!

Software for Roth conversions is dicey, as no one knows what future rates are going to be. There is a very good discussion of the topic at the bogleheads wiki:https://www.bogleheads.org/wiki/Roth_conversion The Retiree Portfolio Model available at that site provides a detailed spreadsheet that will say if it thinks conversions are warranted.

My personal approach since retirement 6.5 years ago at 57/56 has been to convert aggressively up to a marginal rate that, if rates snap back as scheduled, is less than what DW will pay as a widow in her latter years. (Or, although unlikely, what I would pay as an elderly widower.)

FWIW, not a fan of barebones retirement budgets. We worked several extra years so that we could spend twice as much in retirement as when working (excluding taxes and direct-work-related expenses.) DW wasn't happy that I kept pushing retirement off, but she has no regrets at this point.

 

[hausfrau]

Just a thought I had when I read your post. Why are you pushing your husband to retire? Especially if you are not sure if you have enough? Let him retire when it's right for him. Or there could be some bad feelings if things don't seem to go well in retirement. ie, feeling like there's not enough to give daughter best education, or not enough to spend on new found hobbies, etc.

You're right of course. I'm not really the pushy type, so they are more like suggestions. I just think it would be nice to have some time off as a family before DD leaves the nest. Maybe take a couple of trips or something. I think we are OK, but if he wants to keep working, that's OK too.

 

[marko]

Just a thought I had when I read your post. Why are you pushing your husband to retire? Especially if you are not sure if you have enough? Let him retire when it's right for him. Or there could be some bad feelings if things don't seem to go well in retirement. ie, feeling like there's not enough to give daughter best education, or not enough to spend on new found hobbies, etc.

DW was very hesitant to RE even though I had (involuntarily) retired almost ten years earlier.
I was bugging her that she should do so while we were young.

As it turned out, shortly after she finally did hang it up at age 48, external family issues came up the put a major crimp in our retirement plans to travel and do other things.

She reluctantly agreed that she regretted working as long as she did.

FWIW

 

[hausfrau]

It sounds like you have a more realistic set of expectations now--no surprise after 10 years of living!

Software for Roth conversions is dicey, as no one knows what future rates are going to be. There is a very good discussion of the topic at the bogleheads wiki:https://www.bogleheads.org/wiki/Roth_conversion The Retiree Portfolio Model available at that site provides a detailed spreadsheet that will say if it thinks conversions are warranted.

My personal approach since retirement 6.5 years ago at 57/56 has been to convert aggressively up to a marginal rate that, if rates snap back as scheduled, is less than what DW will pay as a widow in her latter years. (Or, although unlikely, what I would pay as an elderly widower.)

FWIW, not a fan of barebones retirement budgets. We worked several extra years so that we could spend twice as much in retirement as when working (excluding taxes and direct-work-related expenses.) DW wasn't happy that I kept pushing retirement off, but she has no regrets at this point.

It's a lot easier to model conversions if the rate is always steady. We will spend down DH's IRA first in retirement and mine can grow. I have more in a Roth than DH since I started it at a younger age. When I was researching the ACA, I found we may need to up our income a bit if we want to keep DD off Medicaid, so the conversions might come in handy there.

I'm glad we didn't do the bare bones thing either. We've been able to take a couple nice vacations that we wouldn't have been able to otherwise and we've been able to save more for college.

 

[Badger]

Ten years ago, I posted this:
https://www.early-retirement.org/forums/f28/retire-in-two-years-69204.html

I'm kind of glad he didn't retire. The bare bones budget would have been pretty difficult I think. Child did need to have braces after all and also decided to play a travel sport lol.

Since you have been here for 10 years you must have read the many posts by other members who once they had saved enough for a bare bones budget retired only to go back to work a few years later. I don't see where a nest egg that is only enough for a bare bones budget is ever a good idea. Glad you came to that realization and your DH continued to provide with an income.
Now may be the time to reevaluate you present budget and see if there can be an opportunity to LBYM a bit more to prepare for the future.

Cheers!

 

[FREE866]

Great post!
So, 10 years ago the post you made said FIRECALC gave you a 92% success likelihood. What was your asset allocation that you inputted?
thx

 

[hausfrau]

Great post!
So, 10 years ago the post you made said FIRECALC gave you a 92% success likelihood. What was your asset allocation that you inputted?
thx

I think it might have been 60/40 or 65/35 at the time. We've since moved to more equities since we have more money and we are closer to SS.

 

[hausfrau]

Since you have been here for 10 years you must have read the many posts by other members who once they had saved enough for a bare bones budget retired only to go back to work a few years later. I don't see where a nest egg that is only enough for a bare bones budget is ever a good idea. Glad you came to that realization and your DH continued to provide with an income.
Now may be the time to reevaluate you present budget and see if there can be an opportunity to LBYM a bit more to prepare for the future.

Cheers!

I think the next three years will be the spendiest we will have, haha. DD will start driving soon and we are planning on taking a few trips with her while she is still at home. I'm glad we didn't either. It might have been a nice sabbatical, but I'm not sure the next job would have been so well-liked.

 

[hausfrau]

DW was very hesitant to RE even though I had (involuntarily) retired almost ten years earlier.
I was bugging her that she should do so while we were young.

As it turned out, shortly after she finally did hang it up at age 48, external family issues came up the put a major crimp in our retirement plans to travel and do other things.

She reluctantly agreed that she regretted working as long as she did.

FWIW

I think he will like it once he takes the plunge. It's cultural for him too I think. People in his family always worked until almost 70. He feels too young at early-60s. That's fine, but it's my job to handle all the finances. I suspect he'll find he's had enough one day and we'll be ready.

 

[pacergal]

Good update.
I would encourage DH to continue to work as long as he wants too.
It may be better for your budget for him to work until your daughter is finished with college and launched.
Does he get good vacation time? You can use that to take nice vacations now and spend time as a family together.

 

[hausfrau]

Good update.
I would encourage DH to continue to work as long as he wants too.
It may be better for your budget for him to work until your daughter is finished with college and launched.
Does he get good vacation time? You can use that to take nice vacations now and spend time as a family together.

I think I'm changing my mind about his retirement. If it makes him happy that's fine. We do have a child at home for a while anyway, so we have to deal with the school calendar and can't really do what we want when we want. I guess the key is to be prepared for the day he isn't. I think we are fine in that regard.

He does get a lot of PTO, but sometimes it's a pain to use it in big chunks. He does take frequent long weekends though which is nice.