Late 50s, retirement in view, but still murky

[Skeptic]

I've lurked for long enough in this informative and entertaining forum. It's time to "Hi, I'm" myself.

I'm 57 and married; kids out of the house and mostly independent. Our net worth is about $2.6M, with $1.6M in a Fidelity 401k, $0.7M in several after-tax funds (mostly Vanguard), and $0.3M in cash. No debt. I'm looking to be in the class of 2019, but my DW will probably keeping w*rking for the love of it (certainly not for the negligible salary) for another 5 years.

As far as expenses are concerned, I'm still not sure. Mint sez we spent $114K last year but nearly half of that was tithing and extra taxes (over and above what was withheld from salary). I expect tithing to go down pretty drastically when Megacorp stops paying me; and we actually kinda paid taxes twice this year, as after a big bill in the spring we had to start paying 'em in installments. So I'm not sure what that will come to when it reaches equilibrium after retirement---maybe around $80K/yr?

Besides the money questions, I guess I wonder about what I will be retiring *to*. I'm naturally a pretty indolent guy, to a degree that I don't think is going to fly with my DW when it's not just weekends anymore. I'm still trying to figure out how I can be a productive member of society in retirement. I have for years done a lot of volunteer music in hospitals and nursing homes (not to mention church and coffee shops), and I've got vague ideas of doing more with that, but "vague" is the operative word.

 

[COcheesehead]

I am right behind you. Targeting a 2021 FIRE date. I think about what I am going to do all the time and I have settled on themes that are important to me:
Travel
Adventure
Athletics
Teach
Learn
Each of these categories will have different activities associated with them of my choosing. Travel is straight forward, but for adventure I want to kayak more. Athletic events will be filled with my bicycling. Teach is my volunteering. Learn is to play the guitar. Each of these areas will change form time to time, but as long as I fill these themes, I think I will be happy.

 

[mamadogmamacat]

I retired to both relaxation (as in no more work and no more mgmt to deal with) and to more of what i already did for joy: a myriad of church activities plus fun with my elderly crew of cat and dog therapy animals. I suppose once the money is right for each of us, it jut becomes a question of where our joy lies. Spending time discovering this, if one has not already done so, applies also, assuming of course there is either little risk, or pad in the budget for it, of "discovering" activities that are not affordable.

 

[ChrisTexas]

Unless your whole life revolves around your job, you will be happy with the flexibility when you retire. You will be useful to others who need help through volunteering, church, etc. You will find new hobbies and passions. As far as the needed income, I think I will need as much when I retire as now but I do a current calculation of how much of my salary goes to SS, required retirement at work, and 401/IRAs (which all add up to $34K). So out of my current annual income of $128K I really only live on $94K. Thus if I plan for $100K or so in retirement I will be doing great. I also plan to work 10 hours a week tutoring so that will fill up a couple of days with worthy work. I am 55 less than 5 years from FIRE.

 

[jollystomper]

I am a year older than you (58) but your numbers are similar to mine, with the exception of me having a pension. To estimate our retirement expenses we subtracted all charitable and gift expenditures. We then used a tax program to estimate, based on reduced income from pension/retirement accounts, our taxes. That gave us a "required" spending estimate and showed us how flexible we could be with gifts/donations on our retirement income. We were pleasantly surprised by the results, so you may be as well.

As for what you are retiring to... that is the age-old question. I just what to retire to things of my choice that keep me mentally and physically alert and active for as long as I can. I can fit a lot of hobbies/volunteering into that . It sounds like there are already volunteer things you like to do, so that could it a start, with opportunities to be flexible with other things later on. I've decided that, if anyone ever asks me "what you will do when you are retired?", my answer will be "make me an offer" .

 

[Skeptic]

Thanks all for the words of encouragement. For what to do, y'all are all pretty confident in your choices, and that sounds great. But is the implication that if you're *not* confident that you know what you're going to do in retirement, you shouldn't do it?

Concerning expenses, I took my cue from jollystomper's approach. I first subtracted tithing and taxes from Mint's account of our total annual expenses to arrive at an estimate X for total annual expenses less those two categories. Then I estimated our total retirement expenditures X*C by adding those two categories back in at their new retirement rates, as it were. This led to solving the following equation

X*C = X + 10%*X*C + 20%*X*C

for C, where 10%*X*C is the charitable tithe of what I'll be spending in retirement and 20%*X*C is an estimate of the government's share. The result came to about X*C ~ $90K, which is enough more than my $80K guess to make me think the exercise was worthwhile. Does tht analysis seem to make sense?