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Trying to figure out if I can ER in a year
Old 10-18-2013, 10:33 PM   #1
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Trying to figure out if I can ER in a year

I致e been watching from the weeds for about nine months and have finally joined the forum. I知 excited to find a group of kindred spirits.

I知 hoping to partially ER in about a year and I知 trying to make sure I知 not missing something I need to know or think about.

I am currently 54 and my husband is 64. We have no children. He has been retired for about 13 years and draws two pensions, both of which increase each year by almost the amount of CPI. (About 80% of the pension income will be available to me as a survivor benefit if necessary.) He will take social security at FRA. I plan to work part time until I知 62 when I will take social security. Our basic living expenses (food, shelter, insurance, health care and taxes) are a little more than covered by the pensions and my husband痴 social security. We own our home and have no debt.

To maintain our current lifestyle, we will initially need to withdraw 3% or less from our retirement assets, first from taxable accounts (about 15% of our assets, good for about six or seven years by my estimate) and then tax deferred, and shouldn稚 have the need for a 4% withdrawal rate until I知 at least 70. I have run our scenario through a number of retirement calculators and get a green light on all of them. The biggest, scariest unknown, of course, is health insurance.

I know about recommended SWR, sequence of returns risk, RMD and early withdrawal penalties on tax deferred accounts, taxability of SS benefits, and enough to put together a 田ouch potato portfolio to keep investing expenses as low as possible. I need to learn more about how to create an income stream, though I致e done some reading on the subject. What other things should I be considering? Is there something major that I知 missing in my planning process?

Thanks in advance for your thoughts.
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Old 10-22-2013, 09:02 AM   #2
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Knowing that you "don't know" something is a powerful tool ! It sounds like you are in great shape. For Healthcare you can look at what the exchanges are costing and factor that into your calculations.
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
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Old 10-22-2013, 01:11 PM   #3
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Fidelity's RIP calculator does a good job at attempting to predict(you must break out monthly costs). You do have to create an account, but you don't have to fund it.
Sounds like you're well prepared.

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Old 10-22-2013, 03:39 PM   #4
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Originally Posted by OutdoorsNW View Post
.....I need to learn more about how to create an income stream, though I致e done some reading on the subject. What other things should I be considering? Is there something major that I知 missing in my planning process?....
I've been retired 22 months and see no need to create an income stream. My WR is ~3% as well and I'm living solely on withdrawals until I tap into pensions and SS in my mid-late 60s and 70.

I spend income from my taxable portfolio but that would only provide ~1/3 of our annual spending. The rest comes from the nestegg. I know in good years that appreciation on the taxable portfolio and income and appreciation on the tax-deferred and tax-free portfolios will be larger than my withdrawals and in poor years it will be less but it will all even out over time. As long as my WR isn't excessive I see no need to create income streams - money is fungible and $1 of income can support our spending needs the same as $1 of principal.
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