Hello

[Sullivan]

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!

[MBAustin]

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?

[Sullivan]

Quote:

Originally Posted by MBAustin 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.

[pacergal]

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.

[SnowballCamper]

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.

[perez99]

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 Him	PT work - Her	Total Income	Needed	To 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)