RetiringAt55
Recycles dryer sheets
Hello everyone. My DH and I have been getting serious about retirement planning lately and I was hoping to get your perspective on our situation.
Here are some of our stats:
DH age 57, me age 48, both computer programmers and frugal.
Hope to retire in seven years when I am 55 in 2019 with retirement medical benefits from my employer. Plan has dental, prescription, and supplement to Medicare after age 65. I would want to retire earlier if not for these retiree medical benefits.
2 teenagers, college savings put aside already and not included in savings numbers below. Both kids will be in college when I plan to retire. We also have three adult children that are doing well and live on their own.
We both have been semi-retired for years. I have been part time since my two children were born. DH has been part time running his own company since taking the retirement plan from his old employer during the telecomm blow up. We work four days a week and have our wonderful Fridays together.
DH, pension $56K/yr, non-COLA. No survivor benefit for me.
Retirement savings: Currently $850K, estimated $1.8M when I am 55
Plan to sell current home right before retirement and move to smaller home that we can buy outright. Property taxes are outrageous here so this is the only way to get expenses down. We don't need this huge house after the kids are off to college anyway and we want to move closer to DH's family.
Bad news is that DH has a life threatening illness. We do not know if he has 2 years or 20 years to live. The reality is that I will probably be widowed for a very long time. For me, I am more scared of running out of time with DH than with running out of money. I want to enjoy those happy years together before my lonely years as a widow begin.
DH has a $700K insurance policy that we plan to keep at least until I am 60. If DH survives that long, we can gradually decrease the policy amount depending on his health and the state of medical progress on his disease. It sounds harsh but with DH's illness, we probably won the insurance gamble and it would be stupid to cancel it unless it becomes cost prohibitive. The premiums greatly add to our expenses but are pretty important with our situation. In addition, expenses go down after DH passes, due to his high medical, insurance, and other costs. If I were to pass away, DH would receive a $400K policy on me.
If DH passes away before retirement, I could switch to full time to save more if needed and delay retirement. I also have the possibility of working very part time after retirement if I want to, to keep my foot in the door and my skills up.
We have been doing detailed expense tracking with Quicken for the last year. Using these numbers our estimated expenses after retirement and downsizing homes is $100K/year, including property and income taxes and including allowances for increased medical costs and some other factors. If it is just me, my expenses would be $70K.
After retirement, we plan to travel a little more and do more camping and have included that in our budget. I am looking forward to having the time to do more of those simple things like reading, playing games, and doing our other hobbies.
DH has suggested that we might downsize and buy a fixer upper at retirement and spend time fixing it up since we are both skilled at home repair. I wonder if this is realistic because because of H's age and illness. I don't know if we would have the physical ability to continue to do these projects at that time.
We created several detailed spreadsheets. Assuming 3.5% inflation, a SS COLA of 1.5%, and investment returns of 6% we are ok. We performed several what if analyses assuming DH passes at different ages, and assuming that I live to 95. We think the best approach would be for DH to delay SS until 70. If he passes early, I would start widow survivor benefits at 60 or 62 and then switch to my SS when I am 70 (9 years later). The life insurance would cover me until I started collected SS.
I ran things through FireCalc and it said we were at 100%, but I did not go into details on the asset allocations. I was glad that I was able to model the pension and SS factors correctly in FireCalc, unlike the other calculators I tried.
What do you all think?
Here are some of our stats:
DH age 57, me age 48, both computer programmers and frugal.
Hope to retire in seven years when I am 55 in 2019 with retirement medical benefits from my employer. Plan has dental, prescription, and supplement to Medicare after age 65. I would want to retire earlier if not for these retiree medical benefits.
2 teenagers, college savings put aside already and not included in savings numbers below. Both kids will be in college when I plan to retire. We also have three adult children that are doing well and live on their own.
We both have been semi-retired for years. I have been part time since my two children were born. DH has been part time running his own company since taking the retirement plan from his old employer during the telecomm blow up. We work four days a week and have our wonderful Fridays together.
DH, pension $56K/yr, non-COLA. No survivor benefit for me.
Retirement savings: Currently $850K, estimated $1.8M when I am 55
Plan to sell current home right before retirement and move to smaller home that we can buy outright. Property taxes are outrageous here so this is the only way to get expenses down. We don't need this huge house after the kids are off to college anyway and we want to move closer to DH's family.
Bad news is that DH has a life threatening illness. We do not know if he has 2 years or 20 years to live. The reality is that I will probably be widowed for a very long time. For me, I am more scared of running out of time with DH than with running out of money. I want to enjoy those happy years together before my lonely years as a widow begin.
DH has a $700K insurance policy that we plan to keep at least until I am 60. If DH survives that long, we can gradually decrease the policy amount depending on his health and the state of medical progress on his disease. It sounds harsh but with DH's illness, we probably won the insurance gamble and it would be stupid to cancel it unless it becomes cost prohibitive. The premiums greatly add to our expenses but are pretty important with our situation. In addition, expenses go down after DH passes, due to his high medical, insurance, and other costs. If I were to pass away, DH would receive a $400K policy on me.
If DH passes away before retirement, I could switch to full time to save more if needed and delay retirement. I also have the possibility of working very part time after retirement if I want to, to keep my foot in the door and my skills up.
We have been doing detailed expense tracking with Quicken for the last year. Using these numbers our estimated expenses after retirement and downsizing homes is $100K/year, including property and income taxes and including allowances for increased medical costs and some other factors. If it is just me, my expenses would be $70K.
After retirement, we plan to travel a little more and do more camping and have included that in our budget. I am looking forward to having the time to do more of those simple things like reading, playing games, and doing our other hobbies.
DH has suggested that we might downsize and buy a fixer upper at retirement and spend time fixing it up since we are both skilled at home repair. I wonder if this is realistic because because of H's age and illness. I don't know if we would have the physical ability to continue to do these projects at that time.
We created several detailed spreadsheets. Assuming 3.5% inflation, a SS COLA of 1.5%, and investment returns of 6% we are ok. We performed several what if analyses assuming DH passes at different ages, and assuming that I live to 95. We think the best approach would be for DH to delay SS until 70. If he passes early, I would start widow survivor benefits at 60 or 62 and then switch to my SS when I am 70 (9 years later). The life insurance would cover me until I started collected SS.
I ran things through FireCalc and it said we were at 100%, but I did not go into details on the asset allocations. I was glad that I was able to model the pension and SS factors correctly in FireCalc, unlike the other calculators I tried.
What do you all think?
