51 and want to retire at 53. Can I do it??

[DaveH27]

I am 51, as is my wife. I am thinking about possible retirement in a couple of years and want to make sure we are on track. We are new to this and would like to know if we are taking everything into consieration.

Our financial situation is as follows:

401K: $761K (70% stock, 30% Fixed Income)
Trust: $870K (90% stock, 5% cash, 4% Fixed Income)
Investments: $1.3M (80% stock, 8% Fixed Income, 7% cash, 5% bonds)
House: $400K (no mortgage)
Property taxes: $10K per year
Two kids who may need some financial help after college.
Will need to pay for our own health insurance.
Thinking about moving to a different location; cost of living may be higher

We want to live on about 120K a year. We do like to travel.

Can we do this??

 

[travelover]

At your age I'd feel comfortable living on 3% of your total portfolio (excluding home). That 3% includes healthcare, taxes, - all spending.

 

[Alan]

Welcome to the site Dave.

Have you tried putting your numbers into FireCalc? What SS do you and your wife expect to receive?

I would also suggest doing a detailed expenses workbook to be sure you have everything planned. (does your $120k include taxes - Firecalc assumes projected spending includes taxes).

 

[Sirka]

you are on your way

At your age I'd feel comfortable living on 3% of your total portfolio (excluding home). That 3% includes healthcare, taxes, - all spending.

+1
That would be $87,930 (3%) - lot less then $120k. I think you would need about $4mil for that. $10k property taxes is very high. We pay about 1% of assessed value in California. You could find lower tax area.

 

[BigE]

I would say you are definitely on track and that's an awesome portfolio. I think many would say that 120k from that portfolio would be a little too aggressive of a withdrawal rate. Important additional points would include ages of children and if there are any 529 fund monies set aside, and exactly how many more years you plan on working. A recurring recommendation from those who have successfully done ER is knowing your budget details. Another concern would be constraints on access to funds in the Trust as well as fees the trust assesses (could affect withdrawal rate as this diminishes your return). Things that could damage your ER plan include healthcare costs and college costs (a good state university is usually the best bang for the buck). Good luck.

 

[DaveH27]

Welcome to the site Dave.

Have you tried putting your numbers into FireCalc? What SS do you and your wife expect to receive?

I would also suggest doing a detailed expenses workbook to be sure you have everything planned. (does your $120k include taxes - Firecalc assumes projected spending includes taxes).

At this point it looks like we will receive about 2K per month at 62 years old, more if we take it later. Also, the 120K will include taxes.

 

[DaveH27]

Thanks for the reply. We have one kid that will graduate from college this year and another graduates from high school this year as well. College for our second child is covered, so no issue there. I'm hoping that we will not have to use any of the trust money.

 

[pb4uski]

I think it would be worth your while to spend a few hours with Quicken Lifetime Planner and plug in your portfolios, projected expenses, SS, etc. (I used the Budget Planner to do an expense estimate, but you could just plug in $120k a year since that is your desired spending level). For investment return, I looked up the historical investment returns of a portfolio consistent with my AA on Vanguard and reduced it by 2% to be conservative.

QLP can include special expenses such as college, weddings, or whatever. It is pretty flexible and I found it good as providing a framework of the things I needed to think about.

 

[obgyn65]

It seems that your spending is higher than 4% of your NW. I would either keep working to save more or FIRE and spend less.

I am 51, as is my wife. I am thinking about possible retirement in a couple of years and want to make sure we are on track. We are new to this and would like to know if we are taking everything into consieration.

Our financial situation is as follows:

401K: $761K (70% stock, 30% Fixed Income)
Trust: $870K (90% stock, 5% cash, 4% Fixed Income)
Investments: $1.3M (80% stock, 8% Fixed Income, 7% cash, 5% bonds)
House: $400K (no mortgage)
Property taxes: $10K per year
Two kids who may need some financial help after college.
Will need to pay for our own health insurance.
Thinking about moving to a different location; cost of living may be higher

We want to live on about 120K a year. We do like to travel.

Can we do this??