53 and wanting to slow way down but I don’t have a reliable way to crunch the numbers. I need $60k per year to stop working. I have a job, rental real estate, $160k in IRAs, dog breeding and about seven years of daily expenses set aside in cash. I just don’t know how to plan it out.
I’m 53 and want out ...
- Thread starter GKieffer
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You've come to the right place. It has taken me about half of the two years I've been a member here to get comfortable with the information and tools needed to "plan it out". There's a lot to understand and absorb and a lot of good information here.
Start on the main page of this forum and there is a FAQ section. Read the first post in that section - "can I retire". That's a good start. You'll need to get familiar with some tools. FireCalc is one but be careful. You need to understand the inputs and assumptions. There's a section on that as well. I wish there was an easier answer, but now that you asked the question, the answer requires some time. Don't be afraid to ask questions. The folks on this board are very easy going and helpful. After you get enough under your belt to ask specific questions, try searching. A lot of questions have already been discussed here.
Welcome to the forum and enjoy the journey.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
To me the easiest way is to do a plan in Quicken Lifetime Planner which is included in Quicken Deluxe and higher versions. While FIRECalc is a great tool, QLP is more intuitive and easy to use in my opinion. The main chink in QLP is that it is deterministic planner so it doesn't address sequence of returns risk.
If you don't have access to QLP through a copy of Quicken, you could try FIRECalc.
To be candid, $160k in IRAs... or even $580k in cash and IRAs isn't going to do much for you towards a $60k a year spending need at your young age... so unless your rental real estate is generating some great cash flow it may be premature to seriously consider retiring.
GoBears
Recycles dryer sheets
We need a lot more information. Does that $60K include taxes, medical insurance until age 65, repairs on the rental, replacement vehicles when yours die, dog breeding expenses (what happens if the litter is only 1 or 2 puppies - my brother had this happen twice and took a loss both times), etc?
Have you estimated what your social security benefits will be? Remember that benefits are calculated based on the highest 35 years of earnings - a bunch of zeros won’t help that calculation. I read recently that the average benefit is less than $1400 a month. And the earlier you claim, the lower the benefit.
Think of the IRA and social security as the pots of money that will replace your wages. For a 30 year retirement, a rule of thumb (and your circumstances may differ since you are only 53 and could be looking at a 40+ year retirement) is to figure on a 4% withdrawal rate from your investments (50/50 asset allocation) at time of retirement and then adjust by inflation for annual withdrawals thereafter. With $580K, that works out to $23,200 a year, assuming your cash is invested and your overall allocation is 50% stock/50% bonds. So, you need $36,800 a year from other sources to meet your $60K objective.
Hope this helps.
Have you estimated what your social security benefits will be? Remember that benefits are calculated based on the highest 35 years of earnings - a bunch of zeros won’t help that calculation. I read recently that the average benefit is less than $1400 a month. And the earlier you claim, the lower the benefit.
Think of the IRA and social security as the pots of money that will replace your wages. For a 30 year retirement, a rule of thumb (and your circumstances may differ since you are only 53 and could be looking at a 40+ year retirement) is to figure on a 4% withdrawal rate from your investments (50/50 asset allocation) at time of retirement and then adjust by inflation for annual withdrawals thereafter. With $580K, that works out to $23,200 a year, assuming your cash is invested and your overall allocation is 50% stock/50% bonds. So, you need $36,800 a year from other sources to meet your $60K objective.
Hope this helps.
About $750k in RRE that generates almost $70k per year in revenue and is almost 100% paid for ($32k left on one note).
$60k is net of taxes. Sell About $60k in dogs per year and net $12k (part of my figure). SSI is $1,400+ at 62 and $2,122 at 67. RRE generate about $70k gross on mainly paid for properties and nets about 65% of that after expenses but before taxes. Thanks for the input. I assumed $450/mo. For catastrophic medical coverage. Hope that helps.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
QLP definitiely does.... FIRECalc does as well but sometimes requires a little finnagling... and there are other similar tools that can do so.
Midpack
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FIRECALC will do that and a lot more. Many people miss the options provided in the INVESTIGATE tab. You can enter your spending needs, your income streams and how many years before and in retirement and there's a choice in INVESTIGATE to calculate what portfolio you'll need, how much to save each year, etc. You can also use it as an iterative tool to model all sorts of plans. FIRECALC can do a lot more than some folks realize.
Welcome!
I second Quicken Lifetime Planner. It definitely allows multiple income streams including varying and different start and stop times plus same for a partner/spouse. I really like how it gives a year by year chart that you can click to drill down to specifics for that year. It clearly breaks out things like inflation adjustment, portfolio increase, estimated taxes, etc.
I second Quicken Lifetime Planner. It definitely allows multiple income streams including varying and different start and stop times plus same for a partner/spouse. I really like how it gives a year by year chart that you can click to drill down to specifics for that year. It clearly breaks out things like inflation adjustment, portfolio increase, estimated taxes, etc.
street
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You have some great cash flow and I see a lot of up side for ER. Here is the place to learn and get advise from great people that are willing to help. That said I would make sure I had a AA in stock/bonds that you feel comfortable with going into retirement. You really have some good avenues because of the cash flow you have. Good Luck
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harllee
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Can you try living on just your dog side gig income and the rental real estate income for a few months while banking the money from your job to see how you do? If you can live well without the money from your job you will have more confidence about letting it go .
Probably not but would like to give it a try. Not trying to be “ugly” but I’m the math guy and my wife can’t do basic math without a calculator. It creates tension at times because she thinks I’m bullying her when I’m really just frustrated with trying to explain things she never wants to understand. Been married 28 years so this is a longstanding trend.
harllee
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Maybe have your wife read this thread and other similar threads on this Forum so she can understand what you are talking about? I too use a calculator to do basic math but I retired at age 50 and am still doing great and living large at age 66.
Finance Dave
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atmsmshr
Full time employment: Posting here.
I would venture that with many couples one spouse has financial acumen and the remaining spouse has gifts in other areas of life. Similar situation for me and DW - we recognize this and trust each other's expertise.
HI Bill
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My wife HATES finance. I could read these boards all day long, but after I start talking about what I've read, budgets, or any retirement finance or tax details, she starts to get stressed out. I can never finish talking about what I want/need her input on! In the case of FIRE, she's basically trusting me, without verification, or even understanding of the risks we are taking.
street
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^ yep I have an interest in financial investing and she has no interest. She does take care of all bills etc. and has done a great job. I will say she is very frugal and we trust each other very much when it comes to money matters.
