Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 09-03-2021, 06:32 AM   #41
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,246
Quote:
Originally Posted by purplesky View Post
....I am sure a good CFP acting as a fiduciary would have the same concerns as several other people in this thread. ...
And just why are you so sure? Are you a CFP? A CPA?

Money is fungible. When you input $x of your spending need into FIRECalc, FIRECalc doesn't know if that $x includes mortgage payments, car payments, coccaine, hookers or whatever. So if OP says that they are 100% success on FIRECalc then it doesn't matter.

You rail against car payment or any debt in retirement carte blanche... context matters and it is situational.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-03-2021, 06:40 AM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,246
Quote:
Originally Posted by PaPa-T View Post
Hello, running through the numbers and think we are going to pull the trigger in Dec. 2021. We are both 55 yes old. We have 1.2m in 401k and 200k cash from sale of our lake house. Our kids bought a investment property on lake norman NC. We will become renters for the first time in our lives. Thought this would stabilize our costs of home repair...we are planning on doing a72t which amounts to 44k and supplement with cash from house for the 5 years required. This will give us a total of 76k to live on. Rent is 1800 and we have two car payment of 650 combined. Concerned about if this is enough especially with the healthcare wildcard. Can't get price until we are retired. Estimating 1000 a month.
Quote:
Originally Posted by PaPa-T View Post
Thank you for all of the replies. Fire calc says 100% ,so looks like we are good to go! Can't wait for every day to be saturday!
Quote:
Originally Posted by PaPa-T View Post
When I run the ss numbers on government site it says I have the 40 credits. Taking it 62 gives me 2024 a month. How do you change it for retiring at 55? Thought once you have the credits the number is good.
FWIW... FIRECalc with $1.4m, 50 year time horizon, $23k SS starting in 2028 (2021+62-55), $11.5k spouse SS starting in 2028, all rest defaults.... 95.5% success for $76k of spending.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 09-03-2021, 11:22 AM   #43
Dryer sheet wannabe
 
Join Date: Aug 2021
Location: North rose
Posts: 14
Awesome thank you for running through that. Looks like we are good to go!
PaPa-T is offline   Reply With Quote
Old 09-03-2021, 11:25 AM   #44
Thinks s/he gets paid by the post
 
Join Date: Jun 2021
Posts: 1,049
Quote:
Originally Posted by PaPa-T View Post
Awesome thank you for running through that. Looks like we are good to go!
Have you figured out what is the SS amount that you will get at age 62 using the precise calculator?
RetiredHappy is online now   Reply With Quote
Old 09-03-2021, 02:26 PM   #45
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,246
Quote:
Originally Posted by PaPa-T View Post
Awesome thank you for running through that. Looks like we are good to go!
You'll need to assess that for yourself by putting in your specific numbers and assessing if your spending is really only $76k, but it is looking favorable.

On SS, the number that they provide assumes that you continue working and making the same as you did last year until your FRA, but there are calculators where you can replace that assumption with zero earnings from now until FRA. For most people the difference is negligible... IIRC mine was $15/month (not worth it to work another 10 years!).
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 09-03-2021, 03:41 PM   #46
Dryer sheet aficionado
 
Join Date: May 2017
Posts: 39
PaPa-T, regarding health insurance, if you are going to get the Obamacare ACA, you can target a low price policy and get it by controlling the amount you receive from the 72-t. If you cannot do the rule of 55 by leaving your 401k with your employer, and you roll the 401k to an IRA, you can split off as many IRAs as you want with whatever $ amount you want in each. Pick the $ amount you need in one IRA and do a 72t on that IRA only so that you stay below the ACA income threshold.
fishfactory is offline   Reply With Quote
Old 09-03-2021, 03:47 PM   #47
Full time employment: Posting here.
 
Join Date: Sep 2014
Posts: 599
Quote:
Originally Posted by pb4uski View Post
And just why are you so sure? Are you a CFP? A CPA?

Money is fungible. When you input $x of your spending need into FIRECalc, FIRECalc doesn't know if that $x includes mortgage payments, car payments, coccaine, hookers or whatever. So if OP says that they are 100% success on FIRECalc then it doesn't matter.

You rail against car payment or any debt in retirement carte blanche... context matters and it is situational.
In retirement I will probably build a new home and have a very affordable mortgage payment if rates stay at around 3%.
I would finance a Tesla or a Rubicon 392 or a Rubicon 4xe if auto loan rates are super low. I have no problem with low cost debt in retirement.

Like many people in this community I will have a pension that covers my basics and healthcare until age 65. I am lucky.

PaPa-T like most Americans will not have the stability of a pension to cover basics until collecting SS.
A good CFP acting as a fiduciary is obligated to advise 55 year olds with
PaPa-Ts retirement portfolio size about the risk involved.
Without healthcare covered for 10 years.
The FIRECalc leaves out some of the overall equation.

Everyone kind of agrees PaPa-T can retire early at age 55 if he wants.
Car lease or not.

We all know the markets will keep going to the moon forever.
purplesky is offline   Reply With Quote
rent not going up?
Old 09-03-2021, 03:52 PM   #48
Dryer sheet aficionado
sroby2020's Avatar
 
Join Date: Jan 2021
Posts: 46
rent not going up?

Quote:
Originally Posted by PaPa-T View Post
We are renting from our daughter and so. In law so no worries of rent going up.
That is not a given and should not be expected. Occasional COL increases should be the norm. They just won't gouge you.
sroby2020 is offline   Reply With Quote
Old 09-03-2021, 04:05 PM   #49
Confused about dryer sheets
 
Join Date: Sep 2021
Location: Pinehurst, NC
Posts: 2
Just an FYI. I retired at 56 and have had my medical insurance through the marketplace. It is basically catastrophe insurance, so plan on paying for your medical expenses (excluding annual physicals). If you are able to control what your taxable income is (ie: how much you pull out of your 401K) and live on that plus some savings you can have your entire monthly medical insurance premiums subsidized.
fuelie60 is offline   Reply With Quote
Old 09-03-2021, 04:11 PM   #50
Confused about dryer sheets
 
Join Date: Sep 2018
Posts: 7
Quote:
Originally Posted by pb4uski View Post
You'll need to assess that for yourself by putting in your specific numbers and assessing if your spending is really only $76k, but it is looking favorable.

On SS, the number that they provide assumes that you continue working and making the same as you did last year until your FRA, but there are calculators where you can replace that assumption with zero earnings from now until FRA. For most people the difference is negligible... IIRC mine was $15/month (not worth it to work another 10 years!).
SS averages the 35 highest earning years. If the OP has less than 35, then zeros will be averaged to get to 35 years. If the OP has 35 or more earning years, the zero years will not affect the SS amount.
CyPlainsDrifter is offline   Reply With Quote
Old 09-03-2021, 04:13 PM   #51
Full time employment: Posting here.
 
Join Date: Sep 2014
Posts: 599
Quote:
Originally Posted by fishfactory View Post
PaPa-T, regarding health insurance, if you are going to get the Obamacare ACA, you can target a low price policy and get it by controlling the amount you receive from the 72-t. If you cannot do the rule of 55 by leaving your 401k with your employer, and you roll the 401k to an IRA, you can split off as many IRAs as you want with whatever $ amount you want in each. Pick the $ amount you need in one IRA and do a 72t on that IRA only so that you stay below the ACA income threshold.
Hopefully the ACA can survive for another 10 years. Would anyone be surprised if the ACA attacks finally work. Not looking good folks. Legislative risk is a real problem.

The millennial generation will probably figure out Healthcare once they have full control of the ship.
After they throw the baby boomers off the ship. lol
purplesky is offline   Reply With Quote
Old 09-03-2021, 04:20 PM   #52
Recycles dryer sheets
 
Join Date: Aug 2019
Location: Southeast
Posts: 126
I think your healthcare estimate is low. You can go one websites like BCBS and view the marketplace options. We have COBRA now, which is $1130/month for a high deductible plan. I am estimating about $2000/month for a worse plan than we have now when we have to use the marketplace after COBRA and before Medicare.
KarenF is offline   Reply With Quote
Old 09-03-2021, 04:23 PM   #53
Confused about dryer sheets
 
Join Date: Sep 2021
Location: Pinehurst, NC
Posts: 2
It depends on your AGI. If your AGI is low enough you will get subsidies to help pay for the premiums.
fuelie60 is offline   Reply With Quote
Old 09-03-2021, 04:41 PM   #54
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,549
Quote:
Originally Posted by CyPlainsDrifter View Post
SS averages the 35 highest earning years. If the OP has less than 35, then zeros will be averaged to get to 35 years. If the OP has 35 or more earning years, the zero years will not affect the SS amount.
To clarify - the initial estimate you get from SS assumes you will continue to receive the same income you did last year, until FRA.

Assuming your current salary is higher than when you were younger (which is the case for just about everybody), if you stop working before FRA, your SS payment will be lower than the initial estimate.
mrfeh is offline   Reply With Quote
Old 09-03-2021, 05:00 PM   #55
Thinks s/he gets paid by the post
 
Join Date: Jun 2021
Posts: 1,049
My SS at 62 is about $600 a month between working until 53, which I did, and all the way until 62. I had only contributed into the SS system for 18 years, at the maximum level for 14 years.
RetiredHappy is online now   Reply With Quote
Old 09-03-2021, 05:48 PM   #56
Recycles dryer sheets
 
Join Date: May 2020
Location: Midwest
Posts: 148
Quote:
Originally Posted by PaPa-T View Post
Hello, running through the numbers and think we are going to pull the trigger in Dec. 2021. We are both 55 yes old. We have 1.2m in 401k and 200k cash from sale of our lake house. Our kids bought a investment property on lake norman NC. We will become renters for the first time in our lives. Thought this would stabilize our costs of home repair...we are planning on doing a72t which amounts to 44k and supplement with cash from house for the 5 years required. This will give us a total of 76k to live on. Rent is 1800 and we have two car payment of 650 combined. Concerned about if this is enough especially with the healthcare wildcard. Can't get price until we are retired. Estimating 1000 a month.
OK...we will get about $90K/yr from our pension (approx $2M value).
We will have NO house payment & NO car payments.
Health insurance about $1100/mo.
Rent of $1800 & Car payments of $650?
Wouldn't make me comfortable.
Librarian is offline   Reply With Quote
Old 09-03-2021, 08:31 PM   #57
Recycles dryer sheets
 
Join Date: May 2019
Posts: 86
$76k/1,4MM=5.43 withdrawal ratio. Although that's during the years without any SS. Sounds thin to me, but I'm pretty conservative, particularly after pulling the plug.

Also, the 1.2 is only 1.2 if you're able to pull it out without any taxation. If you feel you'll owe taxes along the way, you'd need to reduce the principal and re-run the numbers. We prefer to convert the IRA to Roth via a ladder. So if you chose that route, it's adding some taxable income in addition to your exclusion amount you're probably figuring upon.

As long as you don't have substantial unexpected costs that would prematurely drain the cash fund, you might be OK, but I've learned it's possible to hit Max out of pocket medical expenses for the first time of our lives which combined with premiums can hit $25k/year for an unknown timeframe. If that happens along with a new car...well, you see where I'm heading. It can be more difficult (not impossible) to get future car loans after your income is now living off the investments vs a job so it's possible that you'd need a larger downpayment or paying in cash vs the current loan environment.
__________________
Just left the game, well it's been 3 years, a little less nervous. AA=70/0/30
May the LORD bless you and keep you; may His Face shine upon you and be gracious unto you; May He give you His peace!
I am He is offline   Reply With Quote
Old 09-03-2021, 08:39 PM   #58
Recycles dryer sheets
 
Join Date: Feb 2018
Posts: 421
Retirement is not ag age thing, it is a finance/lifestyle thing. I know one couple who retired in their 40's and another who retired in their early 50's. In each case, when they retired, they had no debt and did not (and still do not have) lavish lifestyles - well, not lavish compared to their net worth.
A net worth of 2 million would be really rich in some areas and barely making it in others.
Play Devil's advocate - what if your kids decide they need the money and want to sell that rental property? What (if married), they get divorced? Chances are, at least one of you will live into your 90's - will the money last until then (the4% rule was based on 30 years in retirement).
imnontrad is offline   Reply With Quote
Old 09-03-2021, 09:35 PM   #59
Recycles dryer sheets
 
Join Date: Feb 2018
Posts: 133
Nobody has a crystal ball and I certainly don’t know nuttin’ but I only offer this as food for thought.

I retired 3 1/2 years or so at 52. My biggest concern was sequence of return risk & a black swan event. I modeled my portfolio in Portfolio Visualizer. I was comfortable with the number after a 25% drawdown so I pulled the trigger. Of course the markets have been very strong so it seems those concerns are less likely to happen for me. It’s anybody’s guess if it will hit you but you are retiring during a lot of turmoil or maybe this is the new normal. Nonetheless, it’s different.

My comfort level was to be 100% debt free. That’s neither right or wrong but was best for ME. 3 years on ACA Bronze below 400% FPL has been very good. We are very happy with our carrier. One year we had health issues so we lost the bronze “gamble” we came out way ahead the other two years.

I had planned for extra discretionary spending in our retirement budget. I have used quicken since the early 90s so I had a good idea of our spending habits. We have really enjoyed traveling. We revisited the numbers and made the decision to increase discretionary to travel more..

I guess the short answer is “life happens” and nobody knows what is going to happen tomorrow. Just have a worse case plan in your arsenal if everything goes sideways. Plan for the worst, hope for the best

Best wishes for a successful retirement!
Conundrum is offline   Reply With Quote
Old 09-03-2021, 10:09 PM   #60
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 10,961
Quote:
Originally Posted by sroby2020 View Post
That is not a given and should not be expected. Occasional COL increases should be the norm. They just won't gouge you.
Quote:
Originally Posted by PaPa-T View Post
We are renting from our daughter and so. In law so no worries of rent going up. I will do all the upgrades for their investment house so it's a pretty good arangment.
We actually have a similar arrangement with our niece. She rents us the old "homestead" and keeps the rent rather low (we rent full time but only occupy about 4 months/year so utilities are minimal as are repairs. That way she never has to worry about fixing the place up for a new renter - with all the problems unknown renters can bring.) Also, we never complain when, for instance, the old wall paper starts falling off in the bathroom. We just fix it. It's a family based symbiosis. Family is so important in life.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
40 yrs of age from Hawaii and hoping to retire in 15 yrs. DailyGrind Hi, I am... 10 03-07-2011 05:17 PM
School Phobia - 13 yrs. old. wolf Other topics 18 04-29-2010 06:25 PM
35 year old looking to ER in 10 yrs gomo Hi, I am... 6 01-15-2010 02:10 PM
Maryland Female 31 yrs old new to planning for retirement Newtothis Hi, I am... 7 10-22-2009 06:35 PM
My Retirement Situation (38 yrs old) Shabber FIRE and Money 23 09-03-2006 02:17 AM

» Quick Links

 
All times are GMT -6. The time now is 09:58 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.