Greetings from Montana

[SilverCrestedGeezer]

Hi, I am a state employee that is planning on retiring the end of 2020. I am 58. My wife is 54. I love the outdoors and have been fortunate enough to have had a wonderful career in the natural resource field for the past 35 years with outdoor adventures in the Northwoods of Wisconsin and Minnesota, Arkansas, SE Alaska, New Mexico, Wyoming and Montana. The most I have earned is $66,000 per year. My wife also had a state job for 21 years but lost her job due to an addiction 8 years ago. We have not been able to save any money since her illness. My wife is currently on the coast working on her recovery where there is adequate support. If she does not recover, we will probably end up divorced. So far, my wife is doing well but the divorce is a big risk. I started investing when I was 18 and have been working with a financial planner for the past 13 years, so I think I am still good to go. Nevertheless, I would like to find out what others on this forum think about my situation.

Our house ($250,000) is paid off. My wife and I need $3,500/month to meet our needs. However, we would like to live on $7,000 or more per month if our pensions and retirement investments are sufficient to support this. I ran our numbers in FIRECalc and this looks doable. We are hoping to spend our time gardening, cooking, camping, fishing, hunting, bicycling, hiking, kayaking and traveling during the winter as snowbirds. we intend to spend about $125,000 to fix up our house and for a truck and travel trailer.

Here is what we have for retirement:
Fixed Income
2021 - $40,000 my pension (3% COLA)
2027 - an addition $20,000 Wife’s Pension (3% COLA)
2032 - an addition $48,000 SS for both of us

Investments: Total $1,250,000
Allocation:
50% Stocks
20% bonds
10% REIT
20% Cash

Accounts:
Pretax: 30%
Roth: 30%
Brokerage: 40% (I have been selling investments each year to raise the cost basis)

We plan on buying our health insurance from the exchange until my wife is 65 if this is still an option. Therefore, we do not plan on withdrawing any money from our pretax accounts until my wife is 65 so we can qualify for subsidies. We may also purchase a qualified longevity annuity with a nursing home rider later in life to defer some of our RMD taxes and to help pay for any potential nursing home expenses.

We may also look for part time jobs that fulfill our passions. Please let me know what you think.

[Vacation4us]

Sorry to hear about your wife, that can certainly make planning difficult.

I think it is very impressive the amount of assets you have accumulated on your modest income.

Sounds like your job has been a real source of pleasure.

Based on your pension and brokerage account I think your good to go as long as a divorce does not leave you with half. Starting over once retired would be difficult.

Best wishes.

[WyomingLife]

Thank you for your post. You do work in a wonderful field. Thank you for everything you do.

Sorry about your DW, and I am glad she is on the mend.

It looks like you have thoughtfully considered the various issues. My thoughts.

1. If divorce is a “big risk,” I think you have to take it into consideration in your financial planning somehow. I don’t know how divorce impacts state pensions, for example. Such planning might also lead you to conclude that you should at least continuing w*rking until the situation on the home front is resolved.

2. Your plans to increase spending in retirement make me nervous, in large part again because of the divorce risk. If I were you, I’d be running scenarios that had decreased, not increased, spending. For example, it seems that you have been just fine living off of $66K In recent years (though with no room to spare — i.e., no savings). Under a worst case divorce scenario, could you (as a single) live on half of that? Again, I don’t know how divorce impacts state pensions.

3. Aside from how they are handled in divorce, are there risks related to the state pensions? I don’t know what MT’s fiscal situation is. Again, you might want to stress test your planning calculations based on potential pension risks.

***

I guess if I were you, it would make me nervous to pull the plug and retire on the facts you have presented. At minimum I would not retire until the situation with DW is resolved — and even if it is resolved in this round, could the situation return down the road? Relapses are not uncommon. And if there were to be a relapse, does your financial plan include paying for those future treatments?

And under no scenario would I retire unless and until my financial plan showed success assuming a 50% reduction in assets.