Getting closer, need perspectives

[sirion]

Married, ages 47/46


Current assets a bit north of $5M invested in 85/15 stock/bonds.$850k in 401(k)s

• $112k in HSA
• $550k in Roths
• $3,600k in taxable
• $725k townhome (no mortgage)

One spouse employed FT making $180k/year and eligible for retention bonus of about $40k/year for the next four years (2022-2025) due to company acquisition by a Fortune 500 company. Benefits through this employer include HSA-eligible health insurance and decent 401(k) plan.

One spouse employed PT at $18/hour and expected to earn $10-15k/year.

One teenager with $350k in 529 savings accounts and doing well in high school so far.


Expenses are $90k/year.


Continuing to save by maxing out one 401K, HSA, two backdoor Roth IRAs and putting 85% of PT income into second 401(k), which is the max allowed. Planning to contribute retention bonus to mega backdoor Roth IRA which should be available in 2022 when my company merges benefits with our new parent company. This would put us at 30% savings rate, give or take, and add about $70k/year to retirement accounts.


The question is--do I keep trucking on this path? Would you change anything?

 

[LarryMelman]

Your posting history here goes back to 2009-10-11. Then a few in 2015. Three months ago you said you planned to work 8 more years. You should know how to state a post-retirement "plan" better than what you have. I imagine many others feel the same.

 

[Sunset]

You could retire now, using a 3% withdrawal rate due to the long retirement time.

But, honestly in your shoes, at that age I was still too full of drive to retire, and I didn't make as much.
Given the retention bonus I'd stay the 4 more years.

You would want to figure out health insurance as it will add to your yearly expenses and are probably largely covered by the employer. Retirement around age 50 means you have 15 yrs to cover for health ins.
Good thing about doing it at age 50 , is the teenager will probably be in college and would not have to be on your plan.

You are in Great shape whatever you decide.

 

[MichaelB]

Your posting history here goes back to 2009-10-11. Then a few in 2015. Three months ago you said you planned to work 8 more years. You should know how to state a post-retirement "plan" better than what you have. I imagine many others feel the same.

Someone needs to brush up on his Dale Carnegie ..

The question is--do I keep trucking on this path? Would you change anything?

What is your retirement objective and what is your plan for health care?

Edit to add - how confident are you that you have a solid grasp on your spending wants and needs for the next 45 years?

 

[corn18]

$5M retirement savings. $90k in annual expenses. Paid off house. Retire now.

 

[Romer]

Its all a personal decision. Could you retire now, maybe depends on well you have things mapped out

Personally, there is a long road ahead of you and 18 years until you can get Medicare. I am retiring this year and will have to accept the $20K+ a year in health insurance costs, but only for 4.5 years

You have a lot more savings then I do, I spent a lot as I went wanting to enjoy life. With just the two of us maintaining my lifestyle and adding travel I am in the $120-$150K a year expenses

Thats what you need to do is really map out everything? I am in the house I want to grow ole in. 6 garages for my toys. Are you were you want to live and grow old? Do you have a play budget allocated? Is your $90K getting by because you are working or does it include fun stuff?

Personally I would go the 4 years and punch at 51. I wish I could have punched at 51 But I would be open to modifying that date to make sure you are all setup with where you want to live, funding hobbies that will keep you engaged and travel as you want

Me, I waited until I had all the toys I could for see, house paid off (some disagree with this), pension starting and more than enough income to keep living the way I do now with more travel

Its a individual question that really comes down to what do you want to do with the rest of your life

I hope that perspective is what you were looking for. Financially, you have to map it out after you answer the the question I posed

Your investments will have grown a lot by then

 

[ivinsfan]

;LOL I feel like LarryM is the Don Rickles of ER.org.. I dunno if he talks to people like that in real life..

 

[RetiredHappy]

$5M retirement savings. $90k in annual expenses. Paid off house. Retire now.

^^^^ Agree. The only part that may throw that amount off is health insurance. If OP has to pay full freight, it will add $25K per year initially to $40K per year as they get close to 65 years old.

 

[levindb]

I would strongly encourage you to retire TO SOMETHING, rather than FROM SOMETHING. You have the funds to do a lot, but...

1. What will you be doing for45 years?
2. Where will you live?
3. What do you want to accomplish with your life?

Your initial discussion has been backward looking, what you have accomplished. Now look to the future so that you can pull together your new spending patterns.

 

[LarryMelman]

I dunno if he talks to people like that in real life..

I meant what I wrote. The OP has been on this site for 12 years. Not continuously, but he should know the obvious questions that will be asked, about detail which he failed to include: how confident is he about his number for current annual expenses, has he seriously thought about new expenses in retirement (hobbies, health care, college planning, care for parents, etc). He states nothing about post-retirement.

Three months ago, he posted that he intends to work 8 more years. Did something happen to change that plan?

Bottom line, it wasn't even obvious what his question IS. Is it "should I keep saving?" or is it "how should I change my savings mix" (which no one here can answer).

Again this is a person with 12 years on this site. Not a newbie.

 

[Aerides]

Again this is a person with 12 years on this site. Not a newbie.

No rules stating that someone has to spend lots of hours reading threads in order to post. The OP might have been here a long time, but doesn't appear to be here frequently. There's no requirement that anyone provide a perfect set of data points to start a thread, that's what friendly dialog is for.

 

[ivinsfan]

Sometimes it's all in the delivery. I agree it's a very open ended thread beginning, but sometimes they bring the most varied responses. OP come on back and answer a few of Larry's questions. You'll get more out of this if you do that.


I'm under the impression you are female is that correct? I don't want to keep saying he if that's wrong.



We don't actually bite but sometimes we gnash our teeth...

 

[FlaGator]

We don't actually bite but sometimes we gnash our teeth...

And sometimes we spit venom. But it easy to duck and miss[emoji6]

OP-you have built a great foundation, one that someone 10 years older would be glad to have. You need to run the numbers and be confident you can make it to the end.

I encourage you to be thoughtful about the “what’s next” and “what about….” X type of expense questions some have posed.

With your long horizon, you may find yourself with more expensive interests than a reasonable budget can handle-if you bail at this point.

I bailed at 55 with two pre-teens and had plenty to do, until they became more independent. If you’re a “joiner”, you’ll find plenty to do. If not….

You’re in a great position. I’d be inclined to take the stick bonus for the next few years, see how the future employment environment is looking, and decide later.

 

[sirion]

Woman here. Watching Olympics. Lots of food for thought. Will post more tomorrow. The future is the problem. I’ve got the present covered.

 

[sirion]

It's true, I'm not sure what I'm looking for. I guess I'm looking for someone to slap me upside the head and tell me something that is going to be the magic answer. Not gonna happen, I realize that! I'm not a newbie, it's true. I am not looking to retire right now, I think we are not quite there given age and health insurance concerns.

In short, I know my husband and I are on a good path. He quit his job about a year ago and went PT, which I told him was perfectly fine. Maybe I feel a bit like a sucker, continuing to work myself while he works PT? My husband suffers from chronic pain and ensuing depression and he needed to quit his job. Unfortunately, his additional free time had led to more injuries (which never seem to heal for him) so I'm not sure it was worth it.

It is my plan to work until I'm 55, mainly because of the health insurance, also because I don't hate my job mostly. I figure working until 55 will be safe. At that point, DD will be out of college, hopefully on her way to independence and we'll be only 12 years out from Medicare. But if someone has those magical words for me that will ensure I will enjoy my life to the fullest and not run out of money, that'd be great.

Oh, one other thing. I'm at high risk of losing my vision due to a genetic condition in my retirement so I'm wanting to walk this fine line of enjoying my vision while I have it and also ensuring I have enough to hire an aide if I need one.

My expenses are tracked down to the penny so I'm quite confident those are accurate. I've been tracking for years and it's pretty consistent. DH doesn't want a house cleaner, we buy whatever food we want, go on any vacations we want, send DD to whatever activities she wants, etc.

 

[O2Bfree]

This is not a happy thing to think of, but one thing I don't see much in RE plans is what would happen if there was a divorce or a breakup of a unmarried couple? Would each person be able to stay retired on their own? Maybe it's worth considering, especially for younger people such as the OP, who have many years ahead that often involve life changes that can trigger relationship problems. Tough subject to bring up with a partner though.

 

[Unpaintedhuffhines]

Agree with levindb - would recommend you run to and not from. Sounds like you are fine working a few more years, but you are at the point where financially you're there right now. When I got there it changed my attitude towards work entirely - as I pointed out to someone I work with, I want the ability to retire, and separately I want to actually retire. Then I can make the choice whenever I want. With $5M and $90K in expenses, you will be more than fine. And $350K for college/university - that's more than enough there. The math is very simple.

The vision thing would give me pause though. That's one thing that might accelerate my decision. Depends on what you want to do in retirement. If you're happy puttering around the house, then it's not as big of an issue as wanting to travel the world.

 

[RetiredHappy]

With regards to genetically dispositioned to lose your eyesight, I would do 2 things here: 1. Buy LTCI now. 2. Retire while you still have good health.

I bought my LTCI 12 years ago, with an inflation rider and a 90-day waiting period. It is very cheap and covers about $10K a month by the time I reach 65 and will continue to grow. This takes away the unexpected expenses of LTC.

I would certainly rework the $90K number as it seems too low, but with about $5M of investible assets, you are in excellent shape and very "unlikely" to run out of money.

 

[braumeister]

if someone has those magical words for me that will ensure I will enjoy my life to the fullest and not run out of money, that'd be great.

Probably something you've done, but just in case ...
Have you spent some time playing with your parameters in FIRECalc?

It's important to read all the instructions and use all the tabs, but you can really get a very good feeling of confidence (or motivation) from using this remarkable tool.

 

[levindb]

Right now, you have enough to withdraw $200k/year (assuming 4% SWR) from your investable assets. To that number, you will add SSA benefits for both of you.

Your chunky expenses (cars, wedding, assistance with daughter's first house, healthcare, etc.) will have to come out of that, but you will be adding to your nest egg in the coming years as well. Your $90k/year expenses are certainly well covered.

With health issues for both of you, think about when to retire, as others have mentioned. You have all the money you NEED right now, so look carefully at the lifestyle you WANT to have in the next 30-50 years.

 

[SnowballCamper]

With the health concerns, and a long time to pay for health insurance, and not hating work, is it possible to move to some more flexible work arrangement that keeps health insurance?

 

[pjigar]

My husband suffers from chronic pain and ensuing depression and he needed to quit his job.

I'm at high risk of losing my vision due to a genetic condition in my retirement so I'm wanting to walk this fine line of enjoying my vision while I have it and also ensuring I have enough to hire an aide if I need one.

Based on these factors I would retire sooner rather than later. If your expense is indeed 90K now and you add insurance on top of it then you should have more than enough buffer in 4-5 years. I say punch out at 50.

 

[sirion]

Thanks for the comments, everyone. I agree that a lower-key position that maintains health insurance might be a good option, however, I don't hate working and have often thought that lower-paid jobs aren't really any less difficult so I may as well keep doing what I am doing. If I could find a PT job working 50% schedule for 50% pay and full benefits, I'd consider it, but that doesn't really exist in my industry (IT management). Based on my mother's experience, she had good vision until her mid-60s and was not really unable to deal until age 78-79. I am not going to be the person who wants to travel every year until I am 80 so I think I'll be able to do what I need to as long as I retire by 55, which seems like is the most logical time. Maybe we will even have a better health insurance situation by then in this country. Hope springs eternal!