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Old 01-09-2021, 11:07 AM   #1
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Me: 48
Wife: 44

1.6 mm in taxable
330k cash
800k in IRAs
About 150k in business assets

Excluding cash, invested 45% US stock index funds, 15% international index funds and 40% bond funds (via Vanguard)

No debt. Own 220k home with no mortgage

Spend about 45k-50k annually. Does not include health insurance as that is currently PIF by employers.

Is this enough? If not, how much more?
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Old 01-09-2021, 11:26 AM   #2
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Consult firecalc.com and plug in your numbers. You'll also need a social security estimate (see https://www.ssa.gov) and any pension info you may have to successfully use firecalc. For your expenses be sure to include federal and state income taxes you'll need to pay, especially if/when you plan to cash out of IRAs or pay capital gains as you cash out of stocks for living expenses.

Putting in 75K for spending and no SS or pension into firecalc, you are looking good for a 45 year retirement. SS will make you look even better.

Make sure your expenses are correct though, 75K including health insurance and taxes is fairly frugal, and I commend you if it works for you, but big "one time" expenses seem to pop up on a regular basis, e.g. new roof, new car, new tires, new furnace, etc.

others on here are better at this so they will probably chime in.
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Old 01-09-2021, 11:30 AM   #3
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Looks like you have done well. Especially the cash, the paid for house and the $1.6 taxable side of the equation, all of which are impressive.

What do you attribute your success to primarily?
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Old 01-09-2021, 11:55 AM   #4
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Originally Posted by cat4ever View Post
Consult firecalc.com and plug in your numbers. You'll also need a social security estimate (see https://www.ssa.gov) and any pension info you may have to successfully use firecalc. For your expenses be sure to include federal and state income taxes you'll need to pay, especially if/when you plan to cash out of IRAs or pay capital gains as you cash out of stocks for living expenses.

Putting in 75K for spending and no SS or pension into firecalc, you are looking good for a 45 year retirement. SS will make you look even better.

Make sure your expenses are correct though, 75K including health insurance and taxes is fairly frugal, and I commend you if it works for you, but big "one time" expenses seem to pop up on a regular basis, e.g. new roof, new car, new tires, new furnace, etc.

others on here are better at this so they will probably chime in.


I’m a little surprised you find it that frugal. It’s mostly just discretionary spending since we have no debt, so it feels like a lot to spend. While we are thoughtful about our spending, I don’t feel like we are lacking at all at this spending level. I’ve tracked all of our spending since 2013. This year, because of Covid, we spent much less- just over $40k

I agree about pop-up expenses. That’s why I question whether we have enough.
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Old 01-09-2021, 11:57 AM   #5
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I think you're there. You have 2.73M of spendable assets. The 1.6M in taxable helps a great deal. You can easily control your MAGI to maximize your ACA cost sharing reductions.
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Old 01-09-2021, 11:59 AM   #6
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History would predict that you'll retire sooner or more comfortably if you go to a more aggressive AA. 60/40 is probably OK entering retirement but DW and I were probably 90/10 until a year or two before we retired and glad for it.
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Old 01-09-2021, 12:00 PM   #7
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I think you're there. You have 2.73M of spendable assets. The 1.6M in taxable helps a great deal. You can easily control your MAGI to maximize your ACA cost sharing reductions.
+1 plus try Firecalc and you can estimate your number at 75% of the SS site estimated number.
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Old 01-09-2021, 12:00 PM   #8
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Looks like you have done well. Especially the cash, the paid for house and the $1.6 taxable side of the equation, all of which are impressive.

What do you attribute your success to primarily?


Thank you for the kind words. I’d have to sit down and really give your question thought, but off the top of my head, I would have to say good luck, what have turned out to be good decisions and a lot of very hard work.
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Old 01-09-2021, 12:02 PM   #9
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History would predict that you'll retire sooner or more comfortably if you go to a more aggressive AA. 60/40 is probably OK entering retirement but DW and I were probably 90/10 until a year or two before we retired and glad for it.


I’ve considered it a lot over the years, but this is the risk level at which we are comfortable.
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Old 01-09-2021, 12:16 PM   #10
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History would predict that you'll retire sooner or more comfortably if you go to a more aggressive AA. 60/40 is probably OK entering retirement but DW and I were probably 90/10 until a year or two before we retired and glad for it.
Well that knife cuts both ways, glad you timed the market well. But fact is 90/10 is aggressive allocation when one nears retirement. 60/40 is conservative and I’m not sure I’d push a soon to be retiree into a more aggressive allocation, especially given the low withdrawal rate. Why take the risk I say?
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Old 01-09-2021, 12:18 PM   #11
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Originally Posted by 333three View Post
Me: 48
Wife: 44

1.6 mm in taxable
330k cash
800k in IRAs
About 150k in business assets

Excluding cash, invested 45% US stock index funds, 15% international index funds and 40% bond funds (via Vanguard)

No debt. Own 220k home with no mortgage

Spend about 45k-50k annually. Does not include health insurance as that is currently PIF by employers.

Is this enough? If not, how much more?
If your expenses are accurate, and I have no reason to believe they aren’t I’d say you are tot good to go! Nice work.
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Old 01-09-2021, 12:37 PM   #12
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Does your spending number include taxes? If you are using FIRECalc, you need to gross up spending to account for taxes.
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Old 01-09-2021, 12:40 PM   #13
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Does your spending number include taxes? If you are using FIRECalc, you need to gross up spending to account for taxes.


No- the spending I indicated does not include income tax.

So enough? No?
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Old 01-09-2021, 12:41 PM   #14
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My frugal comment was assuming that 40k-50k would be expected to cover all popup expenses, plus income and property taxes, etc. Personally I'd estimate that would bring base (recurring) spending down to about 30k-40k per year. Of course it's all relative and depends greatly on the COL where you live as well, and what taxes are like there (e.g. real estate tax, personal property taxes, state income taxes).

Expenses I think is the area in all of this that is easiest to get wrong so be sure to take everything into account.
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Old 01-09-2021, 12:43 PM   #15
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Originally Posted by 333three View Post
Me: 48
Wife: 44

1.6 mm in taxable
330k cash
800k in IRAs
About 150k in business assets

Excluding cash, invested 45% US stock index funds, 15% international index funds and 40% bond funds (via Vanguard)

No debt. Own 220k home with no mortgage

Spend about 45k-50k annually. Does not include health insurance as that is currently PIF by employers.

Is this enough? If not, how much more?

Well those numbers look very good to me, the only thing you would have to do, and it is easily done since you have a huge pile in the taxable column, is manage your MAGI for ACA subsidies and get your health care costs down considerably but even if you didn't it looks good to me.
I have also been tracking all expenses for 9 years and we average about $40-$42,000 per year as well.
No debts , no mortgage etc. and we don't lack for anything we want. Some on here have big discretionary travel budgets. We just don't care about travel all that much.
I am also a hard core DIY kind of person and save a lot of dough that way.
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Old 01-09-2021, 12:43 PM   #16
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Originally Posted by cat4ever View Post
My frugal comment was assuming that 40k-50k would be expected to cover all popup expenses, plus income and property taxes, etc. Personally I'd estimate that would bring base (recurring) spending down to about 30k-40k per year. Of course it's all relative and depends greatly on the COL where you live as well, and what taxes are like there (e.g. real estate tax, personal property taxes, state income taxes).

Expenses I think is the area in all of this that is easiest to get wrong so be sure to take everything into account.


That figure includes property and all other taxes, except income taxes.

So given that.... yeah or no?
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Old 01-09-2021, 12:46 PM   #17
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That's why when I plugged your numbers into Firecalc I used 70K for your expenses. With that and a 45 year retirement, you still came out at a 100% success rate, so yeah! However please play around with Firecalc yourself and post specific questions you may have here.
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Old 01-09-2021, 01:01 PM   #18
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Assuming your taxable mutual fund account throws off 6% distributions every year, that would be AGI of $96,000 per year on which you'll need to pay taxes. Even if you don't spend all that, you'll still need to pay taxes on it. How much depends on the mix of long term capital gains and qualified dividends versus ordinary income, but it won't be zero. And, of course, any money you take out of your IRA will be ordinary income. It's unclear from your post whether your spending number includes property tax, but if not, it should be added.

As I mentioned earlier, FIRECalc does not do taxes. You need to figure out how much they will be and then add it to your spending number to see if your plan is sound. It probably is, but you should still do the exercise so you can be absolutely sure.

Another issue will be health insurance. With an AGI of $96,000 per year (from taxable investments), you won't be eligible for an ACA subsidy. You ought to consider adding $25 to $30k to spending for health insurance.

If, after adding in all taxes and health insurance cost, your total annual spending is about $90k or less, which would be about 3% of your portfolio value, then you should be golden. But you should run your own numbers rather than take the word of anyone here. We don't have to live with the results if we're wrong about that.


ETA: I see from your subsequent post that property tax is included, so that's good.
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Old 01-09-2021, 01:25 PM   #19
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Taxes and health care will not run this family more than additional $40k/year. Hence he is still plenty good to go, it’s not even a stretch. That’s my 2 cents.
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Old 01-09-2021, 01:27 PM   #20
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Assuming your taxable mutual fund account throws off 6% distributions every year, that would be AGI of $96,000 per year on which you'll need to pay taxes. Even if you don't spend all that, you'll still need to pay taxes on it. .

6% distributions (I assume dividends mostly) per year is really high. I’d say something like 2-3% is more accurate, isn’t it?
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