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New to retirement I think
Old 07-26-2020, 05:30 AM   #1
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New to retirement I think

Hi I’m new here and recently furloughed, now a severance package and I’m gone at age 62. Need some advice and understanding of my financial situation which hopefully is ok and that I can enjoy retirement without having to go back to work, so here goes. Married with combined savings of $1M. Wife still working for 2 years because of excellent health care coverage for both of us, she is also 62. We both have pensions which the combined amount is $51K before tax. Home is not paid for which is ok, same with vacation home. We currently make enough to cover all expenses but might need to start taking money out of something at age 63 to make ends meet. I know this sounds odd, but will we be ok?? And is it necessary that I go back to work??
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Old 07-26-2020, 06:09 AM   #2
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Have you run Firecalc? A bit more info would help. Are the pensions cola'd? What will your SS be for you and your wife? And finally, what are your expenses?
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Old 07-26-2020, 06:16 AM   #3
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No on fire Calc. We will get well over $62k on SS at full age for retirement and average monthly expenses run around $10k per month which includes about $2k for entertainment.
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Old 07-26-2020, 06:26 AM   #4
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Joe, please check this out: Some Important Questions to Answer Before Asking - Can I Retire?
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Old 07-26-2020, 06:29 AM   #5
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No on fire Calc. We will get well over $62k on SS at full age for retirement and average monthly expenses run around $10k per month which includes about $2k for entertainment.
Not enough info to answer meaningfully, so FIRECALC is probably the best place to start, then ask questions?

Here you go https://www.firecalc.com/
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Old 07-26-2020, 06:32 AM   #6
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No on fire Calc. We will get well over $62k on SS at full age for retirement and average monthly expenses run around $10k per month which includes about $2k for entertainment.
Does well over 62k in SS mean 62-63k?
Are the pensions COLA'd?
I would try the Firecalc retirement calculator which is connected to this site. Many of us can assist in handling questions about it.
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Old 07-26-2020, 06:33 AM   #7
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You are probably close, but you have lots more work to do to confirm whether you are or not.
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Old 07-26-2020, 06:40 AM   #8
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No on fire Calc. We will get well over $62k on SS at full age for retirement and average monthly expenses run around $10k per month which includes about $2k for entertainment.
So after 70 you should be fine, as you'll have at least $113K in combined annual SS and pension income, and about $120K in annual expenses. The big issue is bridging the gap between now and then. FIREcalc can give you more insight into that part, but my guess is, since it sounds like you will have your wife's health insurance up until you both qualify for Medicare, you will not have to deal with private health insurance, one of the biggest issues with retiring before age 65 even despite the ACA (which has made it easier, but has not completely eliminated the health insurance "gap" for those retiring before age 65).
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Old 07-26-2020, 07:21 AM   #9
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63,500
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Old 07-26-2020, 07:30 AM   #10
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63,500
Are pensions cola'd, as that input in Firecalc can produce a larger difference of success rates.
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Old 07-26-2020, 07:38 AM   #11
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Not sure how to answer that question it’s a teachers pension at $48k and I get a small one from a previous employer which totals $4k
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Old 07-26-2020, 07:42 AM   #12
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Not sure how to answer that question it’s a teachers pension at $48k and I get a small one from a previous employer which totals $4k
https://firecalc.com/

You’re not likely to get a meaningful answer otherwise. What’s your FIRECALC probability of success?
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Old 07-26-2020, 07:42 AM   #13
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Not sure how to answer that question itís a teachers pension at $48k and I get a small one from a previous employer which totals $4k
I played around with Firecalc a bit for you at the default settings and with a cola pension the success rate with retirement to 95 y.o. is at 100% and with a non cola it is at 90% success rate.
Though this doesn't include your wife working 2 extra years.
Sounds like you are right about there.
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Old 07-26-2020, 07:49 AM   #14
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Thanks for your help ��
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Old 07-26-2020, 07:57 AM   #15
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She makes $101k a year and is working for 2 more years, I will get about $50k total between now and next March then my severance is over.
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Old 07-26-2020, 08:00 AM   #16
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Home is not paid for which is ok, same with vacation home.

All the details matter, but Iíll comment on this one. Would seem appropriate to consider on expense/budget assumptions a provision for maintenance/furnishings/repairs of two properties. Maybe travel costs between two depending on location and if visits would change in retirement.

If you have equity in both it would give you some flexibility and worst case option to sell one.
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Old 07-26-2020, 08:05 AM   #17
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Not sure how to answer that question it’s a teachers pension at $48k and I get a small one from a previous employer which totals $4k
I guess in that case that the teacher has a homework assignment to find out if those pensions are COLAed or not.

We're ready and willing to help, but you also need to be willing to help yourself.
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Old 07-26-2020, 09:03 AM   #18
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Sounds as if you have spending issues rather than income issues. My idea of retiring is not thinking about taking on another job.
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Old 07-26-2020, 09:28 AM   #19
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Sounds as if you have spending issues rather than income issues. My idea of retiring is not thinking about taking on another job.
That's another good point; you should have a detailed budget rather than an estimate. That way you can make more informed decisions and think about questions like: Are you willing to cut or eliminate that $2K/month for entertainment, or is that worth going back to work for?
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Old 07-26-2020, 09:33 AM   #20
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It appears that you have a couple of mortgages including in your $120k spend. Do those drop off in the next ten years or so? That would help your numbers.
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