ChugiakTinkerer
Confused about dryer sheets
- Joined
- Nov 3, 2017
- Messages
- 8
Hi from the last frontier!
DW and I are working on launching our second child, he's currently a senior in high school. The nest egg just hit the $1M mark, and I told myself that would be the time to see if early retirement was an option.
I am 55 and will reach 30 years of federal employment in 2020, shortly after I turn 58. With our pensions and anticipated portfolio ******** says we have 95% likelihood of being able to retire in 2020 spending 105% of current expenses.
Therein lies the rub. I don't have a good handle yet on our retirement expenses, particularly separating out the non-discretionary from the discretionary-but-vital from the what-the-heck-indulgences. I've always had a working date of 2025 for my retirement planning, and I confess to being caught a little off guard by the possibility of going five years earlier.
So it's time to enforce some self-discipline and rein in those sloppy financial habits. Credit card debt is first priority, as well as tracking expenses. I plan to pull all our records back to January of 2017 as well as start tracking every expense through 2018. I'm a tech head and would love to have all this information in digital form. I stopped using Quicken a decade or two ago, and looking at another thread it still seems to be one of those programs that's easy to hate. I'll probably go with GnuCash just because I'm a Linux user and it sounds like it has sufficient capability.
As we get our financial house in order and firm up our expenses numbers, one thing I'm looking at is how much to have in a Roth account. Unfortunately we have been oblivious to the potential advantage of Roth conversion so that's something I'll also be looking at before year's end.
Here's where we stand with the questions:
1. (Expenses) - working on it.
2. (Health care) - My FEHB will continue through retirement if I take an immediate FERS annuity. Am starting to drink from the fire hydrant that is info about Medicare.
3. (Major expenses) - Another question mark. Will have to firm that up, but house will definitely need some TLC before we sell it and buy smaller.
4. (Lifestyle changes) - I think this question and #3 will determine how long the OMY glide is beyond 2020.
5. (Sources of income) - FERS pension, PERS pension, SSA, TSP, DW's SBS and Deferred Comp, plus our handful of other IRAs.
6. (Confirmed pension income) Yes, the numbers are as accurate as can be short of requesting an estimate from the provider.
7. (SSA benefits) Mostly accurate, need to estimate what DW's benefit will be from her limited years of paying SS tax and allowing for windfall elimination.
8. (Taxes) 2016 tax year our marginal rate was 25%, need to get a better handle on tax strategy in retirement, unsure if dropping down to lower bracket is possible.
9. (Nest egg) All retirement accounts, really need to position myself with more cash. House has some equity which isn't in this calculation. Allocation is strong on equities, but I don't have a handle on DW's asset allocation yet.
10. (Life expectancy) Current life tables shows 83 for a male my age. I am planning on both of us living to 93.
11. (FireCalc) I use ********, and it gives me a 95% success with spending 105% of current spending.
12. (Death) I've been the significant breadwinner since DW left a toxic office job for a part time job she loves. So all my benefit calculations are with max survivor options. It's something to fine tune as we approach the final date.
DW and I are working on launching our second child, he's currently a senior in high school. The nest egg just hit the $1M mark, and I told myself that would be the time to see if early retirement was an option.
I am 55 and will reach 30 years of federal employment in 2020, shortly after I turn 58. With our pensions and anticipated portfolio ******** says we have 95% likelihood of being able to retire in 2020 spending 105% of current expenses.
Therein lies the rub. I don't have a good handle yet on our retirement expenses, particularly separating out the non-discretionary from the discretionary-but-vital from the what-the-heck-indulgences. I've always had a working date of 2025 for my retirement planning, and I confess to being caught a little off guard by the possibility of going five years earlier.
So it's time to enforce some self-discipline and rein in those sloppy financial habits. Credit card debt is first priority, as well as tracking expenses. I plan to pull all our records back to January of 2017 as well as start tracking every expense through 2018. I'm a tech head and would love to have all this information in digital form. I stopped using Quicken a decade or two ago, and looking at another thread it still seems to be one of those programs that's easy to hate. I'll probably go with GnuCash just because I'm a Linux user and it sounds like it has sufficient capability.
As we get our financial house in order and firm up our expenses numbers, one thing I'm looking at is how much to have in a Roth account. Unfortunately we have been oblivious to the potential advantage of Roth conversion so that's something I'll also be looking at before year's end.
Here's where we stand with the questions:
1. (Expenses) - working on it.
2. (Health care) - My FEHB will continue through retirement if I take an immediate FERS annuity. Am starting to drink from the fire hydrant that is info about Medicare.
3. (Major expenses) - Another question mark. Will have to firm that up, but house will definitely need some TLC before we sell it and buy smaller.
4. (Lifestyle changes) - I think this question and #3 will determine how long the OMY glide is beyond 2020.
5. (Sources of income) - FERS pension, PERS pension, SSA, TSP, DW's SBS and Deferred Comp, plus our handful of other IRAs.
6. (Confirmed pension income) Yes, the numbers are as accurate as can be short of requesting an estimate from the provider.
7. (SSA benefits) Mostly accurate, need to estimate what DW's benefit will be from her limited years of paying SS tax and allowing for windfall elimination.
8. (Taxes) 2016 tax year our marginal rate was 25%, need to get a better handle on tax strategy in retirement, unsure if dropping down to lower bracket is possible.
9. (Nest egg) All retirement accounts, really need to position myself with more cash. House has some equity which isn't in this calculation. Allocation is strong on equities, but I don't have a handle on DW's asset allocation yet.
10. (Life expectancy) Current life tables shows 83 for a male my age. I am planning on both of us living to 93.
11. (FireCalc) I use ********, and it gives me a 95% success with spending 105% of current spending.
12. (Death) I've been the significant breadwinner since DW left a toxic office job for a part time job she loves. So all my benefit calculations are with max survivor options. It's something to fine tune as we approach the final date.