I think it's time-maybe

[birdie]

Have admired the intelligence of all of you for some time now. Always thought the day would come when I'd actually post and solicite feedback. Well here I am.
61 years old. DW is 59. Kids grown up and gone. Proud to have sent them to the colleges of their choice. It wasn't easy but they are debt free and so are we with regard to college.
Assets total $5M, with $2.7M in after tax account. $1.8M in 401K. Balance of $500,000 in wife's 401K. Pension is $42,000 annually should I begin now. That's single life option, no benefit to DW. My Social Security would be $24,000 at age 62. I'm inclined to start collecting at 62 as breakeven at 65 is close to 14 years. Why wait? Owe $280,000 on home valued at $$470,000. Also own condo in warm climate valued at $130,000. This paid for.
Huge concern, health insurance which I estimate at $15,000 annually. Lastly I do not live extravagantly but to live tomorrow like I live today is $120,000 annually. (Mortgage and taxes are in this number)
Firecalc says all is good- but I'm afraid anyway.
Any words of wisdom you good people?


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[petershk]

Looks pretty good.

Quick and dirty. If you pay off the house it's about 4.5m investable. If you add the 15 to the 120 you are at a 3% withdrawal rate before SS or pension. Throw that in and it seems like you're getting as close to perfect as possible.

Assuming the other stuff is answered I'd do it.

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[Rickt]

Congratulations!
With $42k in annual pension and $5M invested in taxable/ira/401k accounts you shouldn't have any problems sustaining your lifestyle.

Yes you do have some GOOD problems viz: "Hmm....which account do I withdraw from".
Happy retirement. Cheers!

 

[aaronc879]

With the assets you have there probably isn't any worry but since your pension dies with you, you may want to make sure to maximize what your wife gets from SS in case she outlives you by a decade or two. That may mean you postponing SS until full SS age and certainly means your wife waiting until her full SS age or maybe even age 70 to maximize the benefit if there's reason to believe she'll outlive you by many years. Either way, with your assets, you should be in great shape to FIRE anytime you choose. Congrats.

 

[rodi]

I agree with Aaron - the only concern I would have is if you predecease your wife.

You need $120k/year to spend.
Subtract out the pension - that leaves $78k that you'd need to withdraw from your $5M portfolio.
That's a 1.56% WR...

 

[DrRoy]

Seems to me also that you are in pretty good shape. You don't say how long you have on the mortgage but after that you should in even better shape. No worries.

 

[Senator]

I was the same way. At 56, I have ~3M in assets, most rental property equity. Decent rental income. More than enough to meet my lifestyle, and them some.

Here are some of my posts over the years.

http://www.early-retirement.org/forums/f28/how-do-you-get-the-courage-70605.html

http://www.early-retirement.org/forums/f28/finally-getting-the-courage-77876.html

Keep looking at the numbers. Slice, dice and analyze them 100 ways to Sunday. Realize that even at 70 years of age, the numbers will look the same. Then, once you are comfortable, jump.

 

[travelover]

.......
Any words of wisdom you good people?

Yea - don't go into work on Monday, or ever again. You've got it covered about twice over.

 

[kimcdougc]

What or what are you waiting for?

 

[MuirWannabe]

I'm not yet retired although within 18 months. Planning to retire with smaller nest egg, higher spending, younger, and no pension. So from my perspective I can't imagine what you're waiting for. Good luck.

Muir


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[Whisper66]

Congratulations Birdie - you are easily FI and free to retire if you choose to.
I have same expense outlook as you, am several years younger (55) and lower assets....now retired quite happily with no concerns after reviewing my numbers from many angles.

If you wish to get a stronger sense on how good you are, rerun Firecalc setting the "Investigate" tab option to "Given a success rate, determine spending level for a set portfolio, or portfolio for a set spending level". This will give you an idea of how much leeway you really have in yearly expenses. You'll find you have a LOT of leeway with your numbers. If that's not convincing enough, run I-ORP and you'll get similar results using totally different tool.

Enjoy your retirement.

 

[pb4uski]

.....Huge concern, health insurance which I estimate at $15,000 annually. Lastly I do not live extravagantly but to live tomorrow like I live today is $120,000 annually. (Mortgage and taxes are in this number)
Firecalc says all is good- but I'm afraid anyway.
Any words of wisdom you good people? ....

You have plenty to retire now. ($15 +$120)/$5000 = 2.7% which is very reasonable for a 62 yo.

$15k for health insurance is quite a bit more than what we pay but $15k is not unheard of. Have you priced out a good bronze level policy on your state exchange or healthsherpa.com?

Your taxes will likely plummet once you retire. Recalculate your taxes as if you were retired on TaxCaster or with TurboTax by taking out your earnings and making any other appropriate adjustments.

My fear for you is the tax torpedo with so much in tax deferred. You might want to consider deferring starting your pension and SS and do Roth conversions from now until you are 70.

 

[birdie]

You guys are great! Everyone of you. Thank you for your advise. I have not priced out health insurance, and I take some comfort in your perspective pb4uski. And you thoughts on taxes are most helpful too. Whisper66, my task today will be to rerun Firecalc as you suggest. I've never been closer to the exit door but as you all know better than me, there is a time to turn to the next chapter.
Health and happiness to you all!

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[birdie]

You guys are great! Everyone of you. Thank you for your advise. I have not priced out health insurance, and I take some comfort in your perspective pb4uski. And you thoughts on taxes are most helpful too. Whisper66, my task today will be to rerun Firecalc as you suggest. I've never been closer to the exit door but as you all know better than me, there is a time to turn to the next chapter.
Health and happiness to you all!

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Almost embarrassed that my last post was 1/2016 when i said "I was ready", but fact of the matter is my last day of work was 6/15/18! But I am now officially done. As many of you know, taking the plunge is very scary. Anyway, I'm the happiest guy in the world after 39+ years at a corporate desk. DW will work for a few more years as she is a successful real estate broker. Has brought others into her shop and they do a fine job.
For me its been 8 weeks of golf as weather has been excellent. On 9/1/18 ill begin some volunteer work at a local hospital in the childrens area. I pray I can handle it.
I look forward to chatting with you on this site and wish the retirees and hopeful retirees happiness and goog health!

 

[cynicalbuthopeful]

Congratulations Birdie! Enjoy your retirement in health and happiness. You've earned it!

 

[eastnortheast]

Excellent. Glad to hear that the initial "dip into the pool" is going so well.

I am guessing that 6 months from now, you will have a post questioning "why didn't I do this earlier??" LOL

 

[Trawler]

Look to be in great shape ! May want to look at ACA Marketplace prices and if you can delay drawing on Pension and Social security and living off your non 401K assets for a while to manage income. We are do this for Roth conversions while managing income to maximize our ACA Subsidy. We are on a Bronze Plan that is HSA compatible and we recieve about $1,109 per month in subsidy and covers our total premium. At this level allows us to make our income thru Roth Conversions plus other income minus HSA contribution to equal 43,800 per year. Line 37 of 1040. Just a thought to help with the health care premiums and reducing IRA mandatory withdraw later down the road. Been doing this going on 5 years and nice to see Roth growing so rapidly.

 

[foxfirev5]

You've got far more than most. Rock on!!

 

[StuckinCT]

At a 4% withdrawal rate, you could live on 225k pretty easily; conservative withdrawal rate would be 3.5%, ultra conservative 3%. So you add your 42k pension and social security to that, take out taxes and there is your spend rate. Anything less than 3% you are depriving yourself, especially at age 61. You are good to go! I would recommend 3.5%.

 

[birdie]

Here we are 11/2020. I did stop working 6/2018. So 2 1/2 years later, could not be happier. Living easily on ss of $2700 monthly and dividend income of $80K annually. Suplimental health insurance is $160 month for me. Hight deductable plan for DW is $500 monthly. Just paid off mortgage, home value $500,000. DW working and killing it. No plans to touch 401k which is moderately invested and has grown to $3.0M. Taxable account is $4M. Playing tons of golf and volunteering in hospital and Make A Wish. Advise to those looking to retire early, save like you life depends on it. Learn to live on a little less and bank the difference. Wishing everyone health and happiness!

 

[chris2008]

Congrats!
I love to hear that a plan works out and wish you many happy years to come.