Another "Am I Financially Ready" Post Spawned by One Of The Polls

[Ed B]

The current poll and discussion about percentage of retirement income compared to w*rking income has been helpful even with the debate of what to count as income in retirement.


As i plan for my ER i am a little intimidated at the large reduction on paper from my working gross income to my projected gross income in retirement. But I do not live on the BIG number so I don't know why it bothers me as much as it does.

Firecalc shows my wife and I to be ready financially for a Feb 1, 2019 retirement. That is with all expenses except clothing budgeted. I forgot clothing. The expense budget includes $1200/mo medical premiums, $300/mo pharmacy, and $350/mo out of pocket medical. My wife will have been on Medicare for almost a year by the Feb 1, 2019 date so I am budgetting for my insurance premium, her part B & D, deductibles, plus an extra $1000 out of pocket medical expense after deductibles. I also include a generous hobby allowance, current spending that could be trimmed such as satellite TV and mobile data plans. With all that and more my expenses are $5000/mo rounded up. My planned revenue will be $76000 gross or about $5800 per month after tax. My head says this is enough especially with a $20,000 emergency fund at the ready, there is an emotional hurdle as i look at the steep drop gross income before and after ER.

If I begin taking social secirity at 62 my income from pension and SS will be a little over $83k. Then my portfolio will be for cost of living increases and more play money. According to FIRECalc putting off SS until 65 or 67 doesn't hurt our chances for success even though I would have to draw about 6.5% to bridge between ER and the start of SS.

Am i missing something or am I ready to take that step on Feb 1, 2019? My wife is ready for me to retire today.

 

[Walt34]

Unless you want to wear nice suits in retirement don't concern yourself too much about clothing. Most of us retirees resemble homeless people as far as clothing goes. My newest flannel shirt is four years old and I have a jacket purchased during the Ford administration.

 

[CardsFan]

Unless you want to wear nice suits in retirement don't concern yourself too much about clothing. Most of us retirees resemble homeless people as far as clothing goes. My newest flannel shirt is four years old and I have a jacket purchased during the Ford administration.

I'm not quite that frugal, but since retiring a year ago, I have spent less than $150 on clothing. DW shop's at Kohl's, and she is probably close. I keep kidding her that one day they will pay her when she checks out. She actually has come close a couple of times.

 

[exnavynuke]

Two things.
1. I'd recommend you run a tax simulation with your planned income sources. You may be over-estimating your tax liability depending on your income sources before SS/pension.

2. I'd also recommend you run Firecalc scenarios for retiring now and next year as well. You may be working longer than you need to based on the results you seem to have gotten so far, and it would be a shame to spend more time working just to die with even more money.

 

[Ready]

You have enough cushion to retire without needing to worry. I believe many of us go through the same thought process, and we each have a different comfort level for how much cushion we need to have in our numbers to feel comfortable.

Some people are comfortable with no cushion, others want to be able to spend double their actual expenses before they pull the plug.

Have you given thought to whether your newfound free time might be filled with extensive travel, hobbies, or other things that could increase your expenses above what you are used to while working full time? Will you feel deprived if you can't spend more than $5K/month without worrying about it?

 

[Ed B]

You have enough cushion to retire without needing to worry. I believe many of us go through the same thought process, and we each have a different comfort level for how much cushion we need to have in our numbers to feel comfortable.

Some people are comfortable with no cushion, others want to be able to spend double their actual expenses before they pull the plug.

Have you given thought to whether your newfound free time might be filled with extensive travel, hobbies, or other things that could increase your expenses above what you are used to while working full time? Will you feel deprived if you can't spend more than $5K/month without worrying about it?

Thanks for all the responses.

Yes, I have thought about what I would do. All my grandkids live very close and i am blessed to be a big part of their lives, so photography especially at my grandkid's events will be one thing. I will also photograph high school sports more often and do more artistic photography. I have pretty good equipment now, but there is always a shiny new lens to covet.

I am also very involved in my Church in everything from teaching to nursing home visits. I will be able to do more there with little extra expense.

I am also an Emergency Services District Commissioner and i can be more active in this capacity. There is no compensation but I am reimbursed for yearly conferences so not much extra expense here.

I raise, train and compete in AKC beagle field trials also. This costs money but it also generates revenue and runs at a slight deficit at the moment. I will have more time to train my own beagles and train other people's beagles once I retire. The primary extra expense will be fuel as i drive to and from forestry service land to work the dogs more often. Its about an hour drive each way. But I budgetted $600/month for gasoline (total) and $400/month in misc hobby expense with this in mind. These training and competition expenses are seasonal....mainly Oct thru March. I have the option of making my hobby pay for itself, and this is an area where I can cut back in tough times.

 

[brucethebroker]

Like many other retirees(or, semi-retirees), I was surprised how much money you can actually save once retired. More free time to research good deals, shop on discount days, and travel off season. Less car use (can you sell one?) and the huge deal maker, downsizing your home. No need for a gym membership when you walk and bicycle most places. etc.
Hobby and travel expenses are discretionary and can be dialed back if needed. Go for it!

 

[Ed B]

Thanks again for the responses.

I am really feeling at peace with the Feb 1, 2019 date. I play more and more with FIRECalc and we are solid. The only reason I am waiting until then is I need to have knee replacement surgery either December 2017 or early 2018 --- at least a year after the heart stint this past November. I am going to do that while still employed and under the employer's healthcare for the surgery and the rehab. After that is done, I will be ready. I may pull the trigger in the Summer or 2018, but for sure right after the 1st of the year 2019.

I'll add reading BlueCollarGuy's post here was very reassuring too. It is easy to get caught up in the "I have enough, but could use some more" trap.