Hey all, considering retirement in 6 month's but have no idea on what comes next.

[Slim11]

It's all about investments, accounts, and expenses. So add up and analyze each of the three parts. What you'll find is how much you need to draw from investments, and how long that will last. Obviously you must manage what is going on with the household, and the investments/earnings of each spuse.

You retire, and spouse continues working for awhile. That's a plus, insofar as it means you'll draw less from the total portfolio (both spouses).

If you really don't want to do this analysis, that you can pay a professional, or go into more detail and discussion on a forum like this.

I added more numbers in post 43. While its a basic analysis, it is planned. And other then some catastrophic event , I should be ok. Right now , I think the pension alone is enough to live on. In ten years I can take some distubutions, only interest, off my investments. That will add 30k a year in passive income indefinitely. That should be good for another ten years, or more. After that , I could start taking some of the investment money itself. But, I cant see needing that much. At 70 I will be probably spending less and doing less. Plus home will be paid off halfway through that and I can always downsize at that point. Its a plan, and while we can't think of everything that comes up, it should be ok. I may need some of the money a bit earlier, if so, that shoyld be ok also. It will lower my passive income a bit. College for the kido isnt fully funded, but its started with about 30k thats invested and thats seprate from the other $$$ listed. That will be a start, and then I can use the passive income to pay some of it off a bit later. Its not perfect, but I did plan to work a bit longer.

 

[EastWest Gal]

How are you figuring your health insurance costs? Is it from your previous plan, Cobra, or the ACA? You may want to browse your state exchange or if you don't have one, healthcare.gov. With a wife and a child, the federal poverty level is $24860, and 400% of that is $99440. There is no income "cliff" for the ACA until 2026. Since your pension is non-COLA, by 2026 who knows what the FPL will be. Plugging in your age, guessing your wife's age and your child's age, in my state, most plans have much lower premiums than your estimate. It's worth checking it out.

 

[Slim11]

I looked up what the cost is for the 2023 plan on the states website. Its a subsidised state helth benifit plan. Unfortunately It went up a lot since last year. They have to make up costs for all the free covid tests they gave out. So we are paying this year, nothing in life is free. Lol. I can pick a cheaper plan, and may do that down the road, but for now, I want to stick with what I know. Untill I get more information on if I can switch plans each year or not.

 

[target2019]

I added more numbers in post 43. While its a basic analysis, it is planned. And other then some catastrophic event , I should be ok. Right now , I think the pension alone is enough to live on. In ten years I can take some distubutions, only interest, off my investments. That will add 30k a year in passive income indefinitely. That should be good for another ten years, or more. After that , I could start taking some of the investment money itself. But, I cant see needing that much. At 70 I will be probably spending less and doing less. Plus home will be paid off halfway through that and I can always downsize at that point. Its a plan, and while we can't think of everything that comes up, it should be ok. I may need some of the money a bit earlier, if so, that shoyld be ok also. It will lower my passive income a bit. College for the kido isnt fully funded, but its started with about 30k thats invested and thats seprate from the other $$$ listed. That will be a start, and then I can use the passive income to pay some of it off a bit later. Its not perfect, but I did plan to work a bit longer.

I was on cup #1 when I responded. An hour or so later things are much clearer!


I measure what we have at the end of each month, in broad numbers. I've been collecting that information since 1990, and it does not take much time.

I don't keep a budget either, but I know at the end of the year how much we've spent. I have that data for about 10 years, and can project basic living expenses, entertainment, etc.

In NJ we have significant additional taxes, so that is one thing in common.

If you're confident, that's great.

For each of the past 15 years (only retired for 3), I know that at the end of each year our overall status and well-being changed a lot. The big impact there was having two going through college.

Several other major changes, like lay-off and new job (a very goof one) had effect. I imagine that by dropping out of your stressful job, you might actually do more at 70 than you do now.

Anyways, good luck with the future.

 

[Katiek]

Congrats, based on what you've posted, it sounds like you'll be ok financially - although you may need to be more attentive about budgeting and spending (or at least more aware). The budget awareness doesn't mean you necessarily have to cut back, but it can give you more confidence and comfort.


I'd suggest taking some time off when/if you leave. You'll see how you fill your time or if you are bored. If you are bored, or decide you want to earn more, I expect you'll have a lot of opportunities to use your skills that you can't even identify now. A person with good management and people skills who can handle situations that require analysis and clear thinking is useful in a wide range of opportunities. But no need to rush into anything right away. You may find volunteer or other activities keep you entertained and feeling purposeful.

 

[Slim11]

Ok, so i am officially retired as of Aug 1. Still have no idea on what I am doing but thats ok. I have been going on my preplaned vacations this summer and after that will take some time to figure out what to do with my time. I have been looking for jobs, but really just want so.ething part time and doing something I want to do. But thats just looking, as its something to do. Pension numbers came in at roughly 110k a year. So about what I expected. Medical and dental will be about 775 a month, again about what I expected. So, with that my pension should carry me for the next 5 to 10 years without tapping savings/holdings. Its still a plan. Only time will tell if its a good one. I keep looking at the finances, as its still a bit unnerving. But everytime I look at the finances it looks good. I just have to learn how to think its good and tell myself that this was the right decision without checking the stuff so often. That will come with time.

 

[Car-Guy]

Ok, so i am officially retired as of Aug 1. Still have no idea on what I am doing but thats ok. I have been going on my preplaned vacations this summer and after that will take some time to figure out what to do with my time. I have been looking for jobs, but really just want so.ething part time and doing something I want to do. But thats just looking, as its something to do. Pension numbers came in at roughly 110k a year. So about what I expected. Medical and dental will be about 775 a month, again about what I expected. So, with that my pension should carry me for the next 5 to 10 years without tapping savings/holdings. Its still a plan. Only time will tell if its a good one. I keep looking at the finances, as its still a bit unnerving. But everytime I look at the finances it looks good. I just have to learn how to think its good and tell myself that this was the right decision without checking the stuff so often. That will come with time.

Congrads. FYI, I'd check my finances all the time at first. Now 10+ years later almost never.

 

[Katiek]

Congratulations! I wouldn't worry about looking for a job just yet. You deserve time to relax and adjust to the new pace. You'll know when/if you find something you'll enjoy, but take the time to enjoy a break. I can relate to "checking" the finances a lot even if you know you're ok. It's a big change and it's natural to worry until you get more settled, even if there is nothing to worry about.

 

[Koolau]

So glad it's w*rking out for you. You'll play it by ear for a while and then it will all seem normal to you. Keep us posted and welcome to FIRE life.

 

[LateToFIRE]

Sounds like you might be using FIRECalc to crunch your numbers, if not, I would reccomend using it.

You will want to be careful entering your mortgage. Don't include your $2,400/month mortgage payment in your spending.. if the $2,400 includes escrow for property taxes and insurance then include those in your spending but exclude your monthly payment for principa and interest (P&I) because that payment is fixed and does not increase with with and it also ultimately ends when you mortgage payments end. If you include your mortgage P&I in your spending then FIRECalc will increase it for inflation eahc year and it will never end. So if the entire $2,400 is P&I, then under the Other Spending/Income tab enter a $28,800/year off-chart spending item beginning in 2023 that is NOT inflation adjusted. Also, enter a corresponding pension item beginning in the year that your mortgage ends of the same amount. This will include in outflows your annual mortgage payments with no inflation and they will stop when you mortgage stops.

Also, enter any SS that your DW is entitled to.

Finally, after you have run FIRECalc to see your success ratio, play with the Investigate tab, especially the last tiem to calculate your maximum spending with a 95% success rate.

Good luck.

I can't believe I hadn't thought of this mortgage hack for FIRECalc. Brilliant. Thanks!

 

[Gumby]

Sounds like you might be using FIRECalc to crunch your numbers, if not, I would reccomend using it.

You will want to be careful entering your mortgage. Don't include your $2,400/month mortgage payment in your spending.. if the $2,400 includes escrow for property taxes and insurance then include those in your spending but exclude your monthly payment for principa and interest (P&I) because that payment is fixed and does not increase with with and it also ultimately ends when you mortgage payments end. If you include your mortgage P&I in your spending then FIRECalc will increase it for inflation eahc year and it will never end. So if the entire $2,400 is P&I, then under the Other Spending/Income tab enter a $28,800/year off-chart spending item beginning in 2023 that is NOT inflation adjusted. Also, enter a corresponding pension item beginning in the year that your mortgage ends of the same amount. This will include in outflows your annual mortgage payments with no inflation and they will stop when you mortgage stops.

Also, enter any SS that your DW is entitled to.

Finally, after you have run FIRECalc to see your success ratio, play with the Investigate tab, especially the last item to calculate your maximum spending with a 95% success rate.

Good luck.

Wouldn't the bolded advice double count the effect of paying off the mortgage? Because you are both subtracting $28,800 spending AND adding $28,800 income.

 

[Ronstar]

You need some hobbies.

 

[mystang52]

I hear ya and might even know the site, but we are also here to help Slim but do need more financial info to do so.

I just finished this entire thread. Not immediately, but I suggest to OP he follow up on his intent for a part-time job. By all means enjoy your time off now, and there's no pressure seek a part time position right now. But once the weather turns cooler, give it some effort. The small income from a part time gig may help ease some residual financial concerns, and after accruing those additional S.S. quarters, that will be a nice bonus once you become eligible.
Congrats and enjoy!

 

[Slim11]

All good advice. And yea, working on hobbies. Lol. Soon. Right now getting used to waking up a little later, fixing minor stuff around the house. After that maybe a job or not. Right now still tracking money and trying to figure out a plan. But thats the whole thing, everything will always be changing, so thats almoat like a hobby. You have to stay on top of things!

 

[Slim11]

Ok , so update, happy soon to be new year people. 6 months retired. Not hating it or loving it, its just diffrent. My pension , as expected, even with the inflation is covering the bills. That includes Christmas presents, etc. So I will be ok as I calculated. I just need to get into the retired mindset, or find a part time job, still staying busy. I have finally orginized the garage, and basement, will follow through with a couple of hobbies I never had time for. I am busy, but not as much as I want to be. I also find I check the bank accounts way too often. Never did that before, probably because thier is no new $$$ really coming in. I will ajust. Happy new year to all.

 

[Koolau]

Congrats on 6 months. Perhaps it will take a bit longer to hit your FIRE stride. Since you're financially stable, you should have relatively few worries. And the "what to do" aspect will come. You can always find a j*b if that's what gives you fulfillment. Probably not the first thing I'd do, but whatever w*rks for you.


I'd be looking at anything social. Clubs, church, social media, volunteering, dog-parks, etc. It will come!


Please keep us posted - and ENJOY!

 

[Slim11]

Ok, so update, still have no clue what I want to do, but nicer weather is approaching. So camping is in. Money situation is fine, although inflation is taking a larger chunk then expected out of what I planed to spend. No worries, I have back up plans. Lol. Still checking the bank accounts, but thats mostly because I dont have a clue what to onvest things in. I keep second guessing my ides, thats leading to indecision. All is good. Health is good, hobbies are ok for now.

 

[street]

Ok, so update, still have no clue what I want to do, but nicer weather is approaching. So camping is in. Money situation is fine, although inflation is taking a larger chunk then expected out of what I planed to spend. No worries, I have back up plans. Lol. Still checking the bank accounts, but thats mostly because I dont have a clue what to onvest things in. I keep second guessing my ides, thats leading to indecision. All is good. Health is good, hobbies are ok for now.

Enjoy life find some new things to try. Each year I tackle a project or something of interest and just start. One year I overhauled a small engine that came off of a Maytag washing machine from the 30's. I never have done a small engine complete tear down and rebuild. What a learning experience and had a great time locating parts learning how too. In the end I got it running like a Swiss watch.

I wish you the best and I believe it will get better the longer you are retired.

 

[Slim11]

Thanks, I think so. Little projects done. Was going to get a new camper but may renovate the old one. And I still tinker with my old lionel trains. So, its something. Not important to anyone, nor life-changing, as my last job was, but no stress. Plus like you said, never had time to just putter around fixing old stuff.

 

[street]

Thanks, I think so. Little projects done. Was going to get a new camper but may renovate the old one. And I still tinker with my old lionel trains. So, its something. Not important to anyone, nor life-changing, as my last job was, but no stress. Plus like you said, never had time to just putter around fixing old stuff.

Interesting hobby!! I have two friends that do that, and they have a club and work on their layouts in a building that one of them owns.

 

[Koolau]

Thanks, I think so. Little projects done. Was going to get a new camper but may renovate the old one. And I still tinker with my old lionel trains. So, its something. Not important to anyone, nor life-changing, as my last job was, but no stress. Plus like you said, never had time to just putter around fixing old stuff.

That is so cool. Enjoy your hobby. A video would be fun for us.


Here's one from Gomez Adams (Adams Family - one of my favorite scenes.)

 

[Badger]

Noticed that too

I just had to show that to my wife.

 

[Badger]

Ok, so update, still have no clue what I want to do, but nicer weather is approaching. So camping is in. Money situation is fine, although inflation is taking a larger chunk then expected out of what I planed to spend. No worries, I have back up plans. Lol. Still checking the bank accounts, but thats mostly because I dont have a clue what to onvest things in. I keep second guessing my ides, thats leading to indecision. All is good. Health is good, hobbies are ok for now.

Camping is great! That is how we vacationed for 30 years. I did that for many years with old VW buses I set up for camping and toured all over the country and Canada. Later we flew our tent and sleeping bags to an area in the country we wanted to explore then rented a car.
I don't know what kind of camper you have but restoring it is a fun project. If I was 15 years younger and free of arthritis I would buy a used Sprinter and set it up for traveling and camping again.

 

[brett]

When we took early retirement we only had two firm plans.

The firsrt six months was getting our home ready for sale, downsizing into a storage container.

The second was traveling for 8-12 months.

After that it was a mystery other than possibly re-locating, finding a new home, and getting our belongings out of storage.

It all worked out just fine. Looking back 12 or 13 years it was absolutely the best thing we could have done. No regrets.

I would not worry about mapping out your retirement life completely. Work on year one or two, then go with the flow. Things change. We changed during that first year of travel and retirment.

Our thoughs about what type of home we wanted and where changed. Our eating habits changed for the better and we generally chilled out. Our health improved.

The one thing we learned...don't sweat the small stuff. And keep moving forward.

 

[pb4uski]

Sounds like you might be using FIRECalc to crunch your numbers, if not, I would reccomend using it.

You will want to be careful entering your mortgage. Don't include your $2,400/month mortgage payment in your spending.. if the $2,400 includes escrow for property taxes and insurance then include those in your spending but exclude your monthly payment for principa and interest (P&I) because that payment is fixed and does not increase with with and it also ultimately ends when you mortgage payments end. If you include your mortgage P&I in your spending then FIRECalc will increase it for inflation eahc year and it will never end. So if the entire $2,400 is P&I, then under the Other Spending/Income tab enter a $28,800/year off-chart spending item beginning in 2023 that is NOT inflation adjusted. Also, enter a corresponding pension item beginning in the year that your mortgage ends of the same amount. This will include in outflows your annual mortgage payments with no inflation and they will stop when you mortgage stops.

Also, enter any SS that your DW is entitled to.

Finally, after you have run FIRECalc to see your success ratio, play with the Investigate tab, especially the last tiem to calculate your maximum spending with a 95% success rate.

Good luck.

Wouldn't the bolded advice double count the effect of paying off the mortgage? Because you are both subtracting $28,800 spending AND adding $28,800 income.

No, because what it does is include $28,800 of expense withdrawals for the mortgage for the entire projection period but since the $28,800 of offsetting pension income starts when the mortgage ends its offsets the mortgage payments... the netresult is withdrawals of zero from when the mortgage ends until the end of the projection period.