cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Your post retirement spending is likely to be only somewhat related to your pre retirement spending. You'll still eat, wear clothes (presumably), drive a car sometimes, etc. If you plan to travel extensively or take up diamond collecting, your spending may rise with those newly introduced costs. All things being equal, many have found that post retirement spending is 20% or more less than their pre retirement spending. Many "guides" suggest that you'll lose some spending needs while gaining others and it will hit parity.
But...it depends...
I'd do a reasonable base budget, then add in some fudge factors for everything you're going to need to replace in the next ten years (cars, furnace, water heater, stove, furniture, televisions)...if you can figure out how much you'll spend on that stuff over the next decade, take a chunk of that and add it to your budget. Then add 10-30% "fill" to cover unexpected stuff, to suit your tolerance for risk and the unknown. There are a brazillion internet sources for budget templates, and if you look hard enough around here you'll find that ESRBob and I compared some budget stuff and I consolidated and posted what I ended up using for a template.
A big change for some ER's is that they start doing for themselves what they used to pay others to do. No more child care, gardeners, maids, oil changers, plumbers...so factor in what you can do or are willing to try out yourself.
Will you still eat out a lot or cook at home more? Get rid of your dry cleanables?
I think you get the idea. Spend a day or so figuring this all out, make a spreadsheet, and refer to it and make adjustments as more real data comes your way. I'd advise erring on the conservative side.
Be advised that the freebie company paid medical could evaporate at any time. If you're healthy that may be less of a problem...you could get yourself a high deductible policy and an HSA and skid along until medicare. If you've got preexisting conditions and some issues...factor that possibility into your plan.
Vanguard offers "lifestrategy" and "target retirement" funds, largely based on market indexes. Lifestrategy funds retain their 'shape' while 'target retirement' funds constantly adjust their holdings to become more conservative over time. Buy one to suit your risk tolerance and forget about it. You'll pay under .25% total expenses to the fund and automatically pocket what EJ is going to charge you plus the higher fund fees and trading costs they'll hand you. Its not a perfect solution, but its probably better than what an investment adviser will do to you put you into. To be fair, some advisers are good guys that will help the financially helpless avoid major screwups. Or you can just invest on autopilot as described above and save 1-2% on annual expenses. When you're making 3-5% after taxes and inflation on your money...a percent or two is a pretty big deal.
Lastly, as noted your portfolio size and guesses at your spending needs puts you a bit on the ragged edge. Calculators are fine for what they are, but sometimes I think we overplay the need for 100% probable success rates while planning. Nothing is guaranteed, so the final question is how good of an improviser are you and will you eagerly accept some potholes or will you regret your decision to get out early. Someone willing to cut their spending in half during a couple of bad investing years can easily turn 60 or 80% success rates into 100%.
But...it depends...
I'd do a reasonable base budget, then add in some fudge factors for everything you're going to need to replace in the next ten years (cars, furnace, water heater, stove, furniture, televisions)...if you can figure out how much you'll spend on that stuff over the next decade, take a chunk of that and add it to your budget. Then add 10-30% "fill" to cover unexpected stuff, to suit your tolerance for risk and the unknown. There are a brazillion internet sources for budget templates, and if you look hard enough around here you'll find that ESRBob and I compared some budget stuff and I consolidated and posted what I ended up using for a template.
A big change for some ER's is that they start doing for themselves what they used to pay others to do. No more child care, gardeners, maids, oil changers, plumbers...so factor in what you can do or are willing to try out yourself.
Will you still eat out a lot or cook at home more? Get rid of your dry cleanables?
I think you get the idea. Spend a day or so figuring this all out, make a spreadsheet, and refer to it and make adjustments as more real data comes your way. I'd advise erring on the conservative side.
Be advised that the freebie company paid medical could evaporate at any time. If you're healthy that may be less of a problem...you could get yourself a high deductible policy and an HSA and skid along until medicare. If you've got preexisting conditions and some issues...factor that possibility into your plan.
Vanguard offers "lifestrategy" and "target retirement" funds, largely based on market indexes. Lifestrategy funds retain their 'shape' while 'target retirement' funds constantly adjust their holdings to become more conservative over time. Buy one to suit your risk tolerance and forget about it. You'll pay under .25% total expenses to the fund and automatically pocket what EJ is going to charge you plus the higher fund fees and trading costs they'll hand you. Its not a perfect solution, but its probably better than what an investment adviser will do to you put you into. To be fair, some advisers are good guys that will help the financially helpless avoid major screwups. Or you can just invest on autopilot as described above and save 1-2% on annual expenses. When you're making 3-5% after taxes and inflation on your money...a percent or two is a pretty big deal.
Lastly, as noted your portfolio size and guesses at your spending needs puts you a bit on the ragged edge. Calculators are fine for what they are, but sometimes I think we overplay the need for 100% probable success rates while planning. Nothing is guaranteed, so the final question is how good of an improviser are you and will you eagerly accept some potholes or will you regret your decision to get out early. Someone willing to cut their spending in half during a couple of bad investing years can easily turn 60 or 80% success rates into 100%.