I am 54, wife 51, two boys 16 & 13. I am fortunate to have had a very well paying job and have saved diligently. I have $3 MM in assets, most in tax deferred accounts and $500K equity in my home. I also am fortunate to have a DB pension which would pay $70K a year, although I have opted to take part (about a third) as a lump sum. I have something called the Rule of 80 which says next year when I am 55 and have 26 years of service I can retire on a full pension (no actuarial reduction). I also have employee paid medical for all four of us until my wife turns 65. I will earn the max SS payment of about $24K in today's dollars and my wife about $14K.
I have used FIREcalc and Fidelity Retirement Income Planner extensively and it looks pretty good maybe about 80% success rate (to my wife's age 95). The principal issue I have is my wife has a very expensive hobby (show horse) which costs us over $25K a year or about 1/6th of my AT retirement budget. She gets a lot of joy from this hobby so I really don't want to rock the boat. She has offered to go back to work when I retire (she is a nurse and easily employed here in the Philly area) to help support her hobby. Issue there is the first 3 years after I separate from my employer I get payouts of $360K a year, representing the lump sum pension in year 1 and deferred bonus in years 2 & 3, so I expect to be in the 35% bracket and she would cede half her income to Uncle Sam.
As I have had 4 cancer diagnoses in the past (beat them all Thank God), I am really not expecting to live to 95 and am keen to retire at 55 to enjoy what I can of retirement before the chemo and radiation catch up with me. I had extensive radiation to my heart and lungs and although currently healthy I expect the treatments took their toll. I have worked very hard to get two advanced degrees and then to advance in my career and it is time to enjoy the fruits of my labors.
Any thoughts and suggestions welcome. I am thinking I will take the reduced pension option that gives my wife 100% of my benefit when I pass. Also forgot to mention she gets a small pension $9800 a year at age 65 and we were thinking of opting out on a 50% survivor benefit for me. Her two grandmothers lived to 93 and 99.
Oh forgot to mention my current asset allocation is 90% equities and 10% fixed. I was only about 60% in equities going into the bear market, had $1 MM+ in cash because I thought subprime mortgage / real estate bubble would end badly. Put $750K to work in the market between June and November of last year and now my net worth is back to within 5% of what it was at the market peak. I plan to reduce my equity exposure to between 50 and 75% in retirement.
I have used FIREcalc and Fidelity Retirement Income Planner extensively and it looks pretty good maybe about 80% success rate (to my wife's age 95). The principal issue I have is my wife has a very expensive hobby (show horse) which costs us over $25K a year or about 1/6th of my AT retirement budget. She gets a lot of joy from this hobby so I really don't want to rock the boat. She has offered to go back to work when I retire (she is a nurse and easily employed here in the Philly area) to help support her hobby. Issue there is the first 3 years after I separate from my employer I get payouts of $360K a year, representing the lump sum pension in year 1 and deferred bonus in years 2 & 3, so I expect to be in the 35% bracket and she would cede half her income to Uncle Sam.
As I have had 4 cancer diagnoses in the past (beat them all Thank God), I am really not expecting to live to 95 and am keen to retire at 55 to enjoy what I can of retirement before the chemo and radiation catch up with me. I had extensive radiation to my heart and lungs and although currently healthy I expect the treatments took their toll. I have worked very hard to get two advanced degrees and then to advance in my career and it is time to enjoy the fruits of my labors.
Any thoughts and suggestions welcome. I am thinking I will take the reduced pension option that gives my wife 100% of my benefit when I pass. Also forgot to mention she gets a small pension $9800 a year at age 65 and we were thinking of opting out on a 50% survivor benefit for me. Her two grandmothers lived to 93 and 99.
Oh forgot to mention my current asset allocation is 90% equities and 10% fixed. I was only about 60% in equities going into the bear market, had $1 MM+ in cash because I thought subprime mortgage / real estate bubble would end badly. Put $750K to work in the market between June and November of last year and now my net worth is back to within 5% of what it was at the market peak. I plan to reduce my equity exposure to between 50 and 75% in retirement.
