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Old 06-22-2022, 10:02 AM   #1
Confused about dryer sheets
 
Join Date: Jun 2022
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Hello

Hello all. Long time lurker. Great forum with lots of valuable advice. I would like to “stress test” my progress toward retirement. I live in a low cost city and have the opportunity to retire next month with health insurance and pension. The agency I work for normally offers early out retirement each year so I am not married to the idea of leaving just yet. I am 49 years old and married.

-No debt except for house. Monthly payment is $1400 at 3.375%.

Assets ($2.2M) are as follows:

-Taxable stock accounts/mutual funds. $278,000
-Cash $175,000
-Roth IRAs $380,000
-401ks/Deductible IRAs $1,400,000

Yearly spending is $90,000 at most and can be adjusted downward if needed. My pension would be $21,000 after deduction for health insurance and survivor annuity. My wife would be working part time three more years earning $28,000 per year. From age 57-62, my pension would increase by $14500 per year for a total of $35,500. At age 62, pension would decrease back to normal rate. Eligible for social security at age 62 and so is my wife.

FIRE calculations give this 100% success rate but it still makes me nervous . Any advice would be much appreciated. Thanks!
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Old 06-22-2022, 10:08 AM   #2
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Welcome Sullivan! If you haven't found them already, we have a helpful list of things to think about before you make the leap:

Some Important Questions to Answer

Glad to have you with us!

One concern is that retiree health insurance can be yanked under a lot of circumstances (it's a benefit, not a promise, in many cases - in my case the cost went from $300 to $1200/month and the coverage went down over the course of several years). How confident are you that you'll have it for the 16 years you'll need it, and would you be able to cover ACA cost in your budget if not?
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Old 06-22-2022, 10:09 AM   #3
Confused about dryer sheets
 
Join Date: Jun 2022
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Quote:
Originally Posted by MBAustin View Post
Welcome Sullivan! If you haven't found them already, we have a helpful list of things to think about before you make the leap:

Some Important Questions to Answer

Glad to have you with us!

One concern is that retiree health insurance can be yanked under a lot of circumstances (it's a benefit, not a promise, in many cases - in my case the cost went from $300 to $1200/month and the coverage went down over the course of several years). How confident are you that you'll have it for the 16 years you'll need it, and would you be able to cover ACA cost in your budget if not?
Thanks! Very confident that the health insurance will be for life. It is federal retirement.
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Old Yesterday, 11:14 AM   #4
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Welcome!
If you have all of the questions in the above post answered to your satisfaction, it looks like you are OK.
There are many threads about the nervous first few months of retirement. Research those and feel free to come back and ask any questions. I have found the members on the forum to be happy to help and very knowledgeable.
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Old Yesterday, 11:31 AM   #5
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If you retire before age 59, you'll likely have some hoops to get through to get the IRA money. So if you're thinking several years before age 59 it might be a good idea to sock more away in the taxable accounts, but I wouldn't give up any matching funds at all.
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Old Yesterday, 11:51 AM   #6
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Posts: 55
One thing to consider is how to fund the years before you have penalty access to IRA's (I think its at ~ 59 1/2 years). Ignoring investment performance and cost of living increases, seem you need access to an additional $178.5K.

Sorry for the hard to read table format below... don really know how to import a table to a post...

Age (Start of year)Pension HimPT work - HerTotal IncomeNeededTo be funded from investments
49 21,000 28,000 49,000 90,000 41,000
50 21,000 28,000 49,000 90,000 41,000
51 21,000 28,000 49,000 90,000 41,000
52 21,000 0 21,000 90,000 69,000
53 21,000 0 21,000 90,000 69,000
54 21,000 0 21,000 90,000 69,000
55 21,000 0 21,000 90,000 69,000
56 21,000 0 21,000 90,000 69,000
57 35,500 0 35,500 90,000 54,500
58 35,500 0 35,500 90,000 54,500
59 35,500 0 35,500 90,000 54,500
Total 274,500 84,000 358,500 990,000 631,500

Total Need to fund from investments: 631,500
Cash 175,000
Taxable 278,000
Total Non IRA funds 453,000
Gap (178,500)
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