sanity check on my numbers

[raaizin]

Hi my name is Ray. My wife is retiring next month and it got me thinking of my own retirement. I think we are ok but would like a sanity check to see if I missed something. Which forum would be the correct one to post some numbers. It is a little scary to stop working as I have worked my whole adult life and could use a little reassurance as I am the money person in the house and wife has little expertise in this area, as much as I have tried to educate her in 30 years of marriage

 

[Mdlerth]

We are major data nerds here

Welcome to the forum. This is a good place to start.

It's sufficient to confine your data to percentages, since whether you plan to retire on 10 thousand a year or ten million a year the equations are the same.

For example, "I have 80% of my pile in IRAs invested 75% equities, 25% bonds. The other 20% is split 50/50 in low-fee index funds. No debt. Employer-provided retiree health care coverage up to Medicare age.

When I punch out in 2 years at age 55, I will live off my taxable accounts to age 59.5, at which time a WR (withdrawal rate) of 4.1% from the IRAs will cover all projected expenses. DW will take SS at FRA, and I will at 70; from there our WR drops to 1.4%. FIRECalc gives me 100% success even if I plug in 1.3x our anticipated expense."

If you present a case something like this, everyone will applaud your enviable situation!

 

[rodi]

Welcome to the forum. For a good sanity check you'll need to present spending (can be as a percentage of nest egg), any income sources (pension? Rental income? Side hustle?).

Plus any thing specific to your plan.... Like 'will sell expensive home and move to a lower cost area'. Or 'enjoy private jet travel and plan to spend 20% of nest egg on travel'.

 

[raaizin]

Ok here not sure how to convert to percentages so I will give pure numbers

I am 57 wife 55


We both get medical and SSI suplemental paid when we hit 65
1.3 mil in 401k 700k in fixed fund yield 2% 600k in primecap mutual fund

wife has 400k in fund which is guaranteed 7% return

700k in non taxable mutual funds.

debts 15k home equity line of credit no other debt
real estate taxes 9k

current income 205k would like to keep current income. I figure not having to pay SSwithho;ding and Medicare will be my raise.

pensions 107k
interest wifes fund 28k
withdraw 70k from my 401k from 57-62yrs take SSI at 62 and decrease withdrawl to 50k since SSI is 20k. Wife would take SSI 70



Any issues, like I said earlier it is hard for me to stop working but would like to get out since work is no longer enjoyable. I just would like a sanity check to see If I am missing something.

 

[Dtail]

Ok here not sure how to convert to percentages so I will give pure numbers

I am 57 wife 55


We both get medical and SSI suplemental paid when we hit 65
1.3 mil in 401k 700k in fixed fund yield 2% 600k in primecap mutual fund

wife has 400k in fund which is guaranteed 7% return

700k in non taxable mutual funds.

debts 15k home equity line of credit no other debt
real estate taxes 9k

current income 205k would like to keep current income. I figure not having to pay SSwithho;ding and Medicare will be my raise.

pensions 107k
interest wifes fund 28k
withdraw 70k from my 401k from 57-62yrs take SSI at 62 and decrease withdrawl to 50k since SSI is 20k. Wife would take SSI 70



Any issues, like I said earlier it is hard for me to stop working but would like to get out since work is no longer enjoyable. I just would like a sanity check to see If I am missing something.

What is your expected yearly expenses in retirement, or did I not interpret your info correctly?
Also curious, what type of fund guarantees 7%?

 

[joeea]

current income 205k would like to keep current income.

Does that mean you hope to spend $205k/year in retirement?

pensions 107k

COLA? Joint and survivor?

1.3 mil in 401k 700k in fixed fund yield 2% 600k in primecap mutual fund

wife has 400k in fund which is guaranteed 7% return

700k in non taxable mutual funds.

So you have a portfolio of $2.4M in total to carry you for a 40-45 year retirement?

 

[raaizin]

1)4k a month covers expenses....anything over that we can save or spend as we wish

2)205k gross..I figure take home 140k yearly

3)pensions have full survivor benefits

4) 7% guaranteed by union contract NYC

5) 2,400,000/45 years is 53k a year without appreciation..Only taking 70k first 5 years.

Also wife can take SSI which I have not factored in,so I can reduce withdrawls by 20k if she takes at 62 or 30k if she takes at 70

I cant see how we will run out of $$$ besides in all honesty we will not need all 205k just worst ncase scenario..

 

[Dtail]

1)4k a month covers expenses....anything over that we can save or spend as we wish

2)205k gross..I figure take home 140k yearly

3)pensions have full survivor benefits

4) 7% guaranteed by union contract NYC

5) 2,400,000/45 years is 53k a year without appreciation..Only taking 70k first 5 years.

Also wife can take SSI which I have not factored in,so I can reduce withdrawls by 20k if she takes at 62 or 30k if she takes at 70

I cant see how we will run out of $$$ besides in all honesty we will not need all 205k just worst ncase scenario..

I am not the expert, but it looks like the numbers work. It doesn't look like you will be higher than 3% net WR.

 

[joeea]

I cant see how we will run out of $$$ besides in all honesty we will not need all 205k just worst ncase scenario..

Okay, so then what is your question?

 

[raaizin]

Okay, so then what is your question?

I think it is a solid plan, do you see anything wrong with my plan

 

[street]

raaizin >>> things look great the way I see what you have. I'm no expert but your plan looks solid.

 

[cnocmmz]

Mdlerth
Do not want to steal the conversation but I’ve always wondered if one retires at 55 and doesn’t collect until at least 62 not sure how it is calculated? So, for instance when I go my SS page it will tell me what my ss would be at 62; however, that # is taken in to account that I would be working up to that age and not retiring early and then waiting to collect?

 

[Dtail]

Mdlerth
Do not want to steal the conversation but I’ve always wondered if one retires at 55 and doesn’t collect until at least 62 not sure how it is calculated? So, for instance when I go my SS page it will tell me what my ss would be at 62; however, that # is taken in to account that I would be working up to that age and not retiring early and then waiting to collect?

If you use the "retirement estimator" site, you can fill in zeros from now until 62 and the results will reflect this information accurately.

 

[cnocmmz]

Which retirement calculator

 

[Dtail]

Which retirement calculator

Sorry, see below link.

https://www.ssa.gov/benefits/retirement/estimator.html

 

[OldShooter]

...
4) 7% guaranteed by union contract NYC ...

I'd have someone who is financially savvy, like an investment-oriented CPA look under the hood at that one, specifically: what money is backing the "guarantee?" There are a lot of people in Illinois who think they have guaranteed pensions and who are going to be surprised and disappointed when Illinois goes bankrupt. Chicago may not be far behind and California is a long shot to tank as well. Good thing it is not a larger portion of your assets.

Detroit recent history: https://www.detroitnews.com/story/n...etirees-pension-cuts-become-reality/24156301/

 

[cnocmmz]

Sorry, see below link.



https://www.ssa.gov/benefits/retirement/estimator.html

Yep, just went through it. It seems even though I have been working and paying in, if I leave the work force the numbers tell I would lose a little bit monthly leaving the workforce prior to 62

 

[Dtail]

Yep, just went through it. It seems even though I have been working and paying in, if I leave the work force the numbers tell I would lose a little bit monthly leaving the workforce prior to 62

I left at 57 and so had 35 years of earnings, but first few years not maxed out.
IIRC, not working to 62 caused ~50 monthly decrease.

 

[Backpacker]

I left at 57 and so had 35 years of earnings, but first few years not maxed out.
IIRC, not working to 62 caused ~50 monthly decrease.

Sounds similar to what I calculated. I intend to stop working at 55 and the zero income years between 55 & 62 made very little difference. Really helpful in my decision process to RE.

 

[raaizin]

Sorry, see below link.

https://www.ssa.gov/benefits/retirement/estimator.html

Thanks for the link. Just entered info and my number didnt change. My salary has been pretty consistant so I guess I had enough credit not to decrease my benefit.

 

[raaizin]

I'd have someone who is financially savvy, like an investment-oriented CPA look under the hood at that one, specifically: what money is backing the "guarantee?" There are a lot of people in Illinois who think they have guaranteed pensions and who are going to be surprised and disappointed when Illinois goes bankrupt. Chicago may not be far behind and California is a long shot to tank as well. Good thing it is not a larger portion of your assets.

Detroit recent history: https://www.detroitnews.com/story/n...etirees-pension-cuts-become-reality/24156301/

Thanks I am aware that thing can change. Not much to look into either I get it or we dont. We can always reduce expenses easily if need be but since it is only 15% of our income we arent too worried. We cannot lose principal

 

[nash031]

Looks better than fine to me. You have 105K in pension income alone and own your house. You'd never have to eat cat food.

 

[HI Bill]

If you want to retire early, and want a more accurate estimate (under current law), go here instead:

https://www.ssa.gov/oact/anypia/anypia.html

It's a spreadsheet where you enter your earnings history, year-by-year.

 

[Dtail]

If you want to retire early, and want a more accurate estimate (under current law), go here instead:

https://www.ssa.gov/oact/anypia/anypia.html

It's a spreadsheet where you enter your earnings history, year-by-year.

I use the SSA "Retirement Estimator" which is referenced in your attached article. It is much easier to use and doesn't require any input of earnings history if one will have "zeros" from current year to retirement year.

 

[HI Bill]

I use the SSA "Retirement Estimator" which is referenced in your attached article. It is much easier to use and doesn't require any input of earnings history if one will have "zeros" from current year to retirement year.

Yes, it's easier, but it doesn't give you estimates other than taking SS at 62 if you stop working early. You can, of course, calculate for other ages, but you have to know SSA's percentages.