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I would love to hear your thoughts on our situation
Old 06-05-2017, 09:35 AM   #1
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I would love to hear your thoughts on our situation

Hi, I'm looking for input! I feel pretty confident in our situation, although our Financial Advisor is very confident and Firecalc shows us a solid. maybe I'm just scaring myself! The thought of not working full time is making my head spin!! Here's our situation:
  • I'm 60, she's 59
  • We have $700K in IRA and 403b
  • We have $50K in savings
  • Only debt is house payment which is $1800 per month (inc tx and ins)
  • House will be paid off in 9 years (3.125% interest)
  • Monthly expenses = $4500 (inc house payment)
  • I have a hobby job that can earn approx $20K - 30K a year
  • I have a Military pension that pays $15,000 per year
  • We have Tricare Healthcare through Military- no premiums, just pay as you go (85/15)
  • Combined SS at 62 will be $2700 month ($32,400 annually)
  • I'm retiring later this year, she just retired
  • Our plan is to live off pension, savings and hobby job for next year and a half until I collect SS. Might have to draw a little from Nest Egg, hopefully not
  • She collects SS 10 months after me
Input or thoughts?
Thanks Major
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Old 06-05-2017, 10:56 AM   #2
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....Input or thoughts? ...
You worry too much.
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Old 06-05-2017, 12:14 PM   #3
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I have no doubt that I worry to much! I've just never NOT worked and it's a bit of a freaky concept. I've been reading other threads here since I found this site, so I know I'm not alone. I really like this forum and it's helping me get more informed. I'm grateful for that!
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Old 06-05-2017, 12:28 PM   #4
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Your golden , your so close to collecting soc sec id say your a lock to get the promised amount.
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Old 06-05-2017, 12:29 PM   #5
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You worry too much.
hey PB ur lucky they closed the link, i had a ton of proof to what i posted.
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Old 06-05-2017, 12:31 PM   #6
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Old 06-05-2017, 12:41 PM   #7
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Originally Posted by Retiredmajor View Post
Hi, I'm looking for input! I feel pretty confident in our situation, although our Financial Advisor is very confident and Firecalc shows us a solid. maybe I'm just scaring myself! The thought of not working full time is making my head spin!! Here's our situation:
  • I'm 60, she's 59
  • We have $700K in IRA and 403b
  • We have $50K in savings
  • Only debt is house payment which is $1800 per month (inc tx and ins)
  • House will be paid off in 9 years (3.125% interest)
  • Monthly expenses = $4500 (inc house payment)
  • I have a hobby job that can earn approx $20K - 30K a year
  • I have a Military pension that pays $15,000 per year
  • We have Tricare Healthcare through Military- no premiums, just pay as you go (85/15)
  • Combined SS at 62 will be $2700 month ($32,400 annually)
  • I'm retiring later this year, she just retired
  • Our plan is to live off pension, savings and hobby job for next year and a half until I collect SS. Might have to draw a little from Nest Egg, hopefully not
  • She collects SS 10 months after me
Input or thoughts?
Thanks Major
$4,500/month = $54k/year - 20k/year job = 34k/year - 15k/year pension = 19k/year - 32.4k/year SS = 13.4k/year excess cash flow. If you get rid of job you would have a 6.6k shortfall/year while you still have the mortgage for 9 years for a total of $59.4k you'd need to make up from the $700k of your investments. Once the mortgage is paid off, even without the job, you'd have all of your expenses covered by just SS combined, with the $15k pension excess money that you can save/spend PLUS the balance of your investments still sitting there untouched.

So, my thoughts are it looks like you're on track to leave a bunch of money to someone when ya'll pass away if you don't start spending more... if you're not planning on setting up your heirs or funding a charity when you pass, I'd get to seeing where you can maximize your quality of life with some additional spending. FIRECalc tells me you have a 95% success rate at a spending level of ~$63.6k/year (on top of the $1,800/month mortgage, so $84.6k/year until that is paid off). You're currently under-spending that by ~$31k/year....
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Old 06-05-2017, 01:56 PM   #8
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exnavynuke....thanks for your reply and for turning my numbers over. I know....the numbers look solid and I don't REALLY doubt them. It's my mind!! I've been a planner all my adult life and of all the things I could get wrong in my life, THIS is not one of them!! My wife is skittish and she's making me a little skittish....that's playing into this, too. Maybe I'll feel better when I actually pull the plug?
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Old 06-05-2017, 02:10 PM   #9
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Originally Posted by Retiredmajor View Post
Hi, I'm looking for input! I feel pretty confident in our situation, although our Financial Advisor is very confident and Firecalc shows us a solid. maybe I'm just scaring myself! The thought of not working full time is making my head spin!! Here's our situation:
  • I'm 60, she's 59
  • We have $700K in IRA and 403b
  • We have $50K in savings
  • Only debt is house payment which is $1800 per month (inc tx and ins)
  • House will be paid off in 9 years (3.125% interest)
  • Monthly expenses = $4500 (inc house payment)
  • I have a hobby job that can earn approx $20K - 30K a year
  • I have a Military pension that pays $15,000 per year
  • We have Tricare Healthcare through Military- no premiums, just pay as you go (85/15)
  • Combined SS at 62 will be $2700 month ($32,400 annually)
  • I'm retiring later this year, she just retired
  • Our plan is to live off pension, savings and hobby job for next year and a half until I collect SS. Might have to draw a little from Nest Egg, hopefully not
  • She collects SS 10 months after me
Input or thoughts?
Thanks Major
Is your Military pension COLA-ed? Will your wife continue to receive this pension if you predecease her?

Have you considered delaying your social security until full retirement age or until 70? You will receive more COLA-adjusted income for the rest of your lives if you delay and over the long term that can really add up. You might want to run the numbers and see what that looks like.

Do you have Long Term Care insurance?
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Old 06-05-2017, 02:15 PM   #10
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You can certainly retire and treat that hobby job as more hobby than ever. Your pension and medical situation + ages = no brainer.
Time to put in that two week's notice.
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Old 06-05-2017, 03:25 PM   #11
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How long can you do the hobby job?
Till ss kicks in?
How much would DW get if you pass away tomorrow?
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Old 06-05-2017, 04:32 PM   #12
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Hey all, thanks for the feedback. I'll try to answer all your questions.
Yes, my Army pension is tied to a COLA and she would receive 50 per cent if I passed away. I have $250,000 term life insurance that would also be hers.

I can continue my hobby job for many years, if I want. Eventually I would back off. So far this year I have earned $37,500 at it and I anticipate I'll earn another $12k to $15k. I just got back from a meeting and we are planning next calendar year, which should be about the same.

We do not gave long term care insurance. I haven't thought much about it. Maybe I should?

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?
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Old 06-05-2017, 04:38 PM   #13
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I would run your social security scenario through one of the various analyzers mentioned on this forum. I think it might work out better for the higher monthly payment beneficiary to delay until 70 so that the surviving spouse is guaranteed that amount if one of you passes well before the other one. It's best not to guess on these things. The rules are very complex and the analyzers take all of the guess work out of it.

This one is pretty good as a start:

SSAnalyze - Bedrock Capital Management
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Old 06-05-2017, 05:03 PM   #14
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Yes, my Army pension is tied to a COLA and she would receive 50 per cent if I passed away. I have $250,000 term life insurance that would also be hers.
That's terrific!

Quote:
I can continue my hobby job for many years, if I want. Eventually I would back off. So far this year I have earned $37,500 at it and I anticipate I'll earn another $12k to $15k. I just got back from a meeting and we are planning next calendar year, which should be about the same.
As long as you enjoy this "hobby", it sounds like a great one to have.

Quote:
We do not gave long term care insurance. I haven't thought much about it. Maybe I should?
Unless your potential long term care is covered by your other insurance, it probably makes sense to check it out. It's not covered by Medicare, and long term care can get very expensive in most parts of the country.

Quote:
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?
Well, they are your numbers.

I'm not sure what leads you to suspect you might not be alive then. Do you and/or your wife have medical issues? Short family longevity?

Financially, I plan for a long life. My family has members in the late 90's. By delaying my social security benefits until 70, I should be able to spend more in my 60's and still be well covered through my 90's.
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One concern....
Old 06-05-2017, 06:08 PM   #15
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One concern....

While you mention a military retirement--
Did you determine what impact the WEP (windfall elimination provision)/GPO (government pension offset) would have on any social security you might get?

Is her SS based on her record? If on yours, based on the above WEP / GPO concerns, her benefit would be also reduced. What would be the amount based on her record alone?
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Old 06-05-2017, 06:39 PM   #16
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FI_RElater.....My/our SS is not affected by my military pension. I paid SS from my military pay so WEP is not a factor.
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Old 06-05-2017, 09:25 PM   #17
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exnavynuke....thanks for your reply and for turning my numbers over. I know....the numbers look solid and I don't REALLY doubt them. It's my mind!! I've been a planner all my adult life and of all the things I could get wrong in my life, THIS is not one of them!! My wife is skittish and she's making me a little skittish....that's playing into this, too. Maybe I'll feel better when I actually pull the plug?


I think you will feel better, at least I have. I used to obsess about our numbers and ran them through various models plus had an independent review from my CPA as well as FA before RE. Retired 7 months ago and now I barely look at the numbers. DH & I are having so much fun not having to w*rk that recranking our numbers through models is the last thing on our minds. Luckily the market has kept going up so our NW was up a fair bit when I last looked a few months ago.
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Old 06-06-2017, 06:43 AM   #18
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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%!
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Old 06-06-2017, 08:16 AM   #19
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Agree with the majority: good to go!
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Old 06-06-2017, 09:00 AM   #20
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I have no doubt that I worry to much! I've just never NOT worked and it's a bit of a freaky concept. I've been reading other threads here since I found this site, so I know I'm not alone. I really like this forum and it's helping me get more informed. I'm grateful for that!
I put 50 years into Aerospace (started at a young age), and the thought of NOT working never bothered me.
The problem is if you vegetate you will die in a year. Find other things to do that are your passion. In my case it is flying for Angel Flight and volunteer on a local tourist railroad.
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