I would love to hear your thoughts on our situation

Thanks for all your feedback. It's not a bad deal, but I certainly don't feel "retired"! We're on a cruise in July, so July will fly by pretty quickly. About mid August, I'll let them know that I WILL be done soon and I'll pick a date. By the way, is there some other tool as good as Firecalc that I can use? I'm not finding anything as comprehensive out there. AND....I seem to have this overwhelming need to check my numbers over and over!!!
 
There's a list of standard questions somewhere on this forum - I couldn't find it this morning.

So I'll try to remember:
- Does your $4,500 include taxes?
- Replacing a roof or a car?
- Do you have children, and if so, any chance of boomerang children?
- Would you continue your hobby job if one of you had a serious health problem, and if not, would that be a problem?
- You'd like to travel, is travel expense in the $4,500?
 
Retiredmajor said:
Update: I planned to retire on June 9th, but they are having trouble replacing me. I gave 3 months notice and they have conducted several interviews but weren't happy. So....I have agreed to stay on part-time for a while. I set my own hours/days and essentially come and go as I want. I have planned vacations and am taking them.
Click to expand...
I had the same experienc. It was surprisingly enjoyable.
 
Independent said:
There's a list of standard questions somewhere on this forum - I couldn't find it this morning.

So I'll try to remember:
- Does your $4,500 include taxes?
- Replacing a roof or a car?
- Do you have children, and if so, any chance of boomerang children?
- Would you continue your hobby job if one of you had a serious health problem, and if not, would that be a problem?
- You'd like to travel, is travel expense in the $4,500?
Click to expand...

Hey Independent...thanks for the questions.
- The $4500 does not include taxes, but I have a tax guy and i've explored what taxes will be roughly. They are not a problem.
House is new and cars are late model and paid for! No major expenses that I can foresee.
-Kids are married and successful - doubt any issues there!
- I can do the hobby job easily next year and the year after, in fact it might go on for 2, 3, 4 or 5 years. This year I'll earn @ $50K at it and next year could be about the same. Obviously, a catastrophic illness would change that, but we are both in very good health, run, work out, bike, hike, etc. The job is a teaching job, not physical.
- Travel is not in the $4500 monthly budget, but I estimate that we will spend @ $5K - $7K on travel each year. Even with that, it pushes me to just over 60K spend per year.
So, hobby job, plus pension, plus SS at age 62 plus Tricare Healthcare, plus $700K in nest egg is my plan! Major
 
Retiredmajor said:
......By the way, is there some other tool as good as Firecalc that I can use? I'm not finding anything as comprehensive out there. AND....I seem to have this overwhelming need to check my numbers over and over!!!
Click to expand...


I used www.i-orp.com to double check using a different tool. This tool is also discussed often here and used by many. Has good help screens and author answers questions emailed to him.
 
The tax interactions between SS payments, RMDs, earnings etc. are complex, so you may benefit from running your situation through a program like ESR Planner. I don't know if iORP will help, but it doesn't take much to fill in your data there too.

Your hesitation to ER isn't surprising. I think most of us here have felt it when we quit our full time jobs. I think it is the very characteristic that makes us capable of ER that gives us the jitters too. But ER is glorious!
 
Retiredmajor said:
Hey Independent...thanks for the questions.
- The $4500 does not include taxes, but I have a tax guy and i've explored what taxes will be roughly. They are not a problem.
House is new and cars are late model and paid for! No major expenses that I can foresee.
-Kids are married and successful - doubt any issues there!
- I can do the hobby job easily next year and the year after, in fact it might go on for 2, 3, 4 or 5 years. This year I'll earn @ $50K at it and next year could be about the same. Obviously, a catastrophic illness would change that, but we are both in very good health, run, work out, bike, hike, etc. The job is a teaching job, not physical.
- Travel is not in the $4500 monthly budget, but I estimate that we will spend @ $5K - $7K on travel each year. Even with that, it pushes me to just over 60K spend per year.
So, hobby job, plus pension, plus SS at age 62 plus Tricare Healthcare, plus $700K in nest egg is my plan! Major
Click to expand...
Thanks. Having self-supporting kids is a big deal these days.

I'm assuming that TriCare is a pretty good deal.

I look at the long term and say that after you quit working, and start SS, and pay off the house, you'll have about $47,400 of COLA'd income to cover about $32,400 of basic spending. (I'm assuming $400 of your mortgage payment is taxes and insurance.)

Taxes on the $47,400 should be minimal. No telling how long you'll want to travel. The $10,000 cushion in your plan should cover it.

Your newer house will eventually need repairs, and your newer cars will eventually need to be replaced. But, again, the travel doesn't continue forever.

In the short term, it looks like your job and military pension cover spending including mortgage. Even if you didn't have the job as long as you expect, it seems that you could cover your shortfall before SS with "modest" withdrawals.

Long term care insurance might cost $5,000 per year *. But, you've got a $700k nest egg and a house. I think most people would consider that plenty for LTC.

As long as you're happy with your lifestyle, it looks like you're good to go.


* The only source of online premium info I can find is here: https://www.ltcfeds.com/ltcWeb/do/a...ent=calculate&ctoken=mDq833Cy&ctoken=mDq833Cy and those rates a probably lower than non-federal workers can get.
 
I like the Fidelity Retirement Income Planning tool. Used it many times to validate our ER. Also ran our numbers by a professional FA to get another opinion.
 
Here's an update on our situation.....and thanks for all the advice!


I was working part-time while they looked for my replacement and they have now found someone. I officially retired last Friday, Nov. 3rd. However, another department hired me to lead a Lean Project for them that will have me working maybe 2 days a week for a total of 15 hours a week or so through January. I enjoyed working part time for the last 5 months, so this will be nice.


I'll turn 61 in December. Our nest egg has grown and our savings are the same. Next year we plan to live off my Army pension, savings and my hobby job, which earned $50K this year. Next year, hobby job earnings should be the same or even better now that I have more time. My hobby job keeps me busy about 6 days a month and is something I really enjoy.


I may take SS at 62, but more than likely I'll just hold off year to year until I feel I need to take it.


Feels weird to not work full time, but I'm on the journey!


This is a great site and I've learned a lot from all of you! Major
 
Something just doesn't seem right to me. Not trying to pry. You're a retired O4 and your pension is ONLY $15,000 a year?

Mike
 
wrigley said:
Something just doesn't seem right to me. Not trying to pry. You're a retired O4 and your pension is ONLY $15,000 a year?

Mike,

I was active duty Army as an enlisted soldier and after I was discharged I joined the National Guard, attended OCS and became an Officer. Retirement from the National Guard is based on a point system and kicks in when you reach age 60. I wish it was more but I'm grateful for it, and the fact that it's tied to a COLA, and the Tricare Healthcare that my wife and I now enjoy. :)
Click to expand...
 
Retiredmajor said:
wrigley said:
Something just doesn't seem right to me. Not trying to pry. You're a retired O4 and your pension is ONLY $15,000 a year?

Mike,

I was active duty Army as an enlisted soldier and after I was discharged I joined the National Guard, attended OCS and became an Officer. Retirement from the National Guard is based on a point system and kicks in when you reach age 60. I wish it was more but I'm grateful for it, and the fact that it's tied to a COLA, and the Tricare Healthcare that my wife and I now enjoy. :)
Click to expand...

Ahhhhhhh.......that clears it up. I work with many Army national guard warrant officer helicopter pilots. Most of them are b^tching about having to wait until age 60 to start drawing their pensions. They too are grateful that they will at least see something then. My wife retired from the Navy reserves and also has to wait until age 60 for her pension.

Mike
Click to expand...
 
Retiredmajor said:
joeea, thanks for your response. I understand your point of view. My wife and I are actually in very good health and have good longevity in our families. I think that's part of the reason I feel as I do about taking SS at 62. We want to travel and cruise and hike and bike and do the things we want now as opposed to penny pinching a bit until 70 and then collecting SS. We have children and grandchildren in various parts of the country and visiting them will be nice. If we wait until 70 or later to do those things, our energy level is bound to be lower and we may not have the same drive or physical ability.

At least that's how we feel but I came here for opinions and I appreciate yours. Maybe as I watch the markets and we settle into retirement, I'll change my mind. Every year I wait my SS increases approx 8%!
Click to expand...

I think you are on solid ground with your plan. I would make sure that the amount of SS you have figured into the plan is correct. Claiming at 62 reduces your SS by 25% and her claim at 62 will reduce any spousal benefit she might receive on your earnings record. I am not saying you are wrong, just make sure and double check those numbers with someone savvy on SS benefits.

I agree to enjoy in the 62-70 years as you will have more spunk:dance:

As far as being nervous about the change to retirement, that is completely normal. It lasted about 3 weeks for me and then I realized I was on full time vacation. What a relief for the mind and soul. You will start enjoying things that you thought were mundane before retirement. Stay in good healthy shape and enjoy a long retirement.

Best to you

VW
 
Here's an update on our situation and THANKS to this site for all the great readings and knowledge I've gained. I did "retire" in June of 2017, but continued part-time though October 2017 at just less than half time. My wife is fully retired now and volunteers and goofs off! I now have 3 part-time jobs and am enjoying the heck out of life because these are all things I've CHOSEN to do:

  • I work for my old company 2 days about every 2 weeks, running a process improvement project.
  • My hobby job is my passion and I work 1 full day a week, plus misc emails and calls during the week (very light volume). In 2018 I'm on track to earn @ $50K
  • In 2 weeks I will start as a zip line guide, helping to run a local zip line business where I assist customers on the line and make sure everyone gets through safely and has fun. I get to zip line all day and rappel. I'll probably work 2 days a week or so.
  • We went hiking for 4 days in Arizona about 3 weeks ago and tomorrow we head out to California for a week.
We have not touched our nest egg yet, which has grown by about $50K and I don't anticipate we will in 2018. I anticipate my hobby jobs will continue into 2019 so I'm thinking I won't collect SS at age 62. I'll just go year by year and evaluate that as I go. I'll hold off as long as I can.



It's still a bit scary after having worked all my life but things are looking good and we are both having fun!



Thanks for all the advice! Major
 
Curious...what is your hobby job? if u don’t mind sharing.
 
I know my post will sound like a "Debbie Downer" but just wanted to give a little different perspective.

Your monthly retirement income (so far) including the hobby, pension, and SS at age 62 comes to approx. $8,000/ month: (hobby-$4,000..pension-$1,200..SS$2,700). This is a great income , but since half comes from the hobby and you still will carry a mortgage for 9 years; maybe continue the hobby job until the mortgage is paid off?

Also, what is the AA of the IRA? A market meltdown would make any withdrawals subject to sequence of returns risk.

You seem to have the healthcare angle covered with Tricare, but someone mentioned LTC insurance. Seriously, look into this. I am your age and when we reach our early 80's and IF we need LTC the average cost of a private nursing home room will cost about $16,000 per month or close to $200,000/year. May not bankrupt you but will definitely take a huge chunk out of whatever future value your income /IRA will grow to. Stay away from the newer "hybrid" LTC policies which are nothing more than a life insurance policy with a LTC rider and require a huge upfront single premium. Shop for a more traditional "use it or lose it" policy where you pay your premiums (which may increase) annually. Or roll the dice.

One last thing. While you work the hobby( and you may already be doing this), it might be a good idea to continue to contribute to the IRA. Also even though your wife is retired with no earned income, she can contribute or open her own spousal IRA. Each of you can contribute $6,500/year as long as one of you still has earned income. MAximize the tax deferred (or tax free growth ) with either a Trad. or Roth IRA.

Good luck.
 
"If I delay SS to age 65, it's age 80 before I come out ahead. I ran the numbers and I just can't see the advantage to that. I may not be alive then and if I am I predict my desire to travel will be less, along with my daily expenses. Does that make sense?"


I think you're still not taking your SS yet, but even if you are, want to share that I agree with your math on this. A lifetime analysis of when to take SS will show that you get a bigger total amount if you wait and live a long time. So, the wisdom is that it's better to defer. But I have assets that I want to continue to hold so they can appreciate more through at least age 65 or 70. So, I'm going to take SS at 62 to cover my financial needs in the short run. After 70 I will have more money from assets I didn't touch as a result of taking SS early, and also have ample pension money. In other words, I don't need more later, and I don't have a spouse but if I did they'd have all the later life income too and not need the little bit more from waiting to take SS at a later age. It defies most retirees' logic but for me it works.
 
akidagain2018 said:
"If I delay SS to age 65, it's age 80 before I come out ahead. I ran the numbers and I just can't see the advantage to that. I may not be alive then and if I am I predict my desire to travel will be less, along with my daily expenses. Does that make sense?"


I think you're still not taking your SS yet, but even if you are, want to share that I agree with your math on this. A lifetime analysis of when to take SS will show that you get a bigger total amount if you wait and live a long time. So, the wisdom is that it's better to defer. But I have assets that I want to continue to hold so they can appreciate more through at least age 65 or 70. So, I'm going to take SS at 62 to cover my financial needs in the short run. After 70 I will have more money from assets I didn't touch as a result of taking SS early, and also have ample pension money. In other words, I don't need more later, and I don't have a spouse but if I did they'd have all the later life income too and not need the little bit more from waiting to take SS at a later age. It defies most retirees' logic but for me it works.
Click to expand...

I understand where you are coming from, but I think you are making some very dangerous assumptions. You are assuming that your assets will appreciate and so take SS early.

I think we have become complacent with all the calculators and when we plug in the "expected investment return," in retirement we plug in ohhhhhh anywhere from 6-8% and even then feel it might be on the conservative side.

Well, during the "lost decade"....Dec. 31, 1999 to Dec. 31, 2009...the S&P 500 had an annualized total return, including reinvested dividends, of -0.95%! 10 years of NADA for the largest 500 US companies!:blink:

This is just the "other side of the coin" scenario. You take SS early at a reduced benefit and those "expected" gains from your portfolio do not materialize.

Another approach might be to take SS somewhere between FRA and age 70. Live off assets in one's taxable/ tax deferred accounts until then taking advantage of tax loss harvesting scenarios in taxable accounts if possible. Also, withdrawing some money from tax deferred accounts will reduce RMD's at age 70 1/2.

I view SS as a guaranteed Gov't backed annuitized benefit with a COLA.

Sure , Uncle SAM may decrease future benefits.....but at least during my lifetime I will collect and collect a larger benefit by waiting.
Uncle SAM can also increase taxes if need be. If my investments do not return the gains I expect....then what? Just another point of view.
 
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