Need some input (Help)

[Lovetoski]

A few years ago I signed up for the class of 2018. Now that it is getting closer I'm hoping to not get held back. The wife is concerned and trying to hold me back. I would like to get some input. Below is our situation.

Me
-I plan to retire February 2018 at age 46
-$1.8million invested
-Pension at age 62 $260/month (nonCOLA)
-Social Security at 62 $1600/month (assuming 70% payment)
-Need to generate $65,000/year

Wife
-Plans to retire in 10 years (2027) at age 50
-Pension at age 65 $750/month (COLA)
-Social Security at 62 $800/month
-We Will have combined $2.4 million invested when wife retires
-We Need to generate a combined $92,000/year when wife retires

Would like input on a couple of things.
1) Do you think the financials above work.
2) Wife is concerned about a major accident (biking, skiing, kayaking) or if one of us get cancer. Does anyone have similar concerns and if so are you planning any additional insurance for accident or cancer?

Thanks and has anyone been skiing yet?

 

[Senator]

Did you account for taxes? $92K will means about $15- 20K in taxes.

Will you wife really want to work for anther 10 years after she sees you gallivanting around?

$1600 in SS for you seems high, double check that since you likely have many of the 35 years with 0s in them.

 

[2017ish]

My initial reaction is why not retire in 2022, or thereabouts, at same time as Wife? From my purely subjective position, I can't imagine retirement being worthwhile without DW and I embarking upon it together. (Although, for health insurance/COBRA reasons, I may cut out one month before she does....)

From Social Security numbers, looks like your income is considerably higher, so maybe even before 2022 if you both keep working.

Of course, YMMV.

 

[2017ish]

Did you account for taxes? $92K will means about $15- 20K in taxes.

....

My quick calculations (granted, after 375 ml of wine....): on 110,000 income for MFJ, with standard deductions and no PEP phaseout, $13,867.50 taxes for a net of $96,132.50. Of course, that assumes it is all coming out of Standard IRA/401k.

 

[Senator]

My quick calculations (granted, after 375 ml of wine....): on 110,000 income for MFJ, with standard deductions and no PEP phaseout, $13,867.50 taxes for a net of $96,132.50. Of course, that assumes it is all coming out of Standard IRA/401k.

I am not sure what Idaho state taxes are, but in MN they are close to 7%.

 

[Lovetoski]

Thanks. Answers to questions below.

Yes I accounted for taxes

Yep meant to multiply by 70% and then didn't. Number should be $1120. I will have 31 years of income with social security withholding.

Reason for me retiring now is job is sucking life out of me. Job hasn't quite started sucking life out of wife yet.

 

[pb4uski]

....Reason for me retiring now is job is sucking life out of me. ...

Change jobs? A dear friend changed jobs in his mid-50s... loved his new job so much he is still working 10 years later. You can always retire from the new job if that one sucks. Happy wife....

What does Firecalc say?

 

[racy]

...The wife is concerned and trying to hold me back.

Or, change wives?

 

[ivinsfan]

What is your DW SS 800 at 62....this tells me she is the lower earner in the family and at 40 is feeling money pressure..what is the income split in your home?

 

[Fermion]

You have 31 years of SS at age 46? You had meaningful income at age 15?

 

[Lovetoski]

Yes I had income at 15. Meaningful? Obviously my income has increased with time and yes it is approximately double of my wife's at this time.

Yes I have ran fire calc. Seems to work in firecalc

 

[Surewhitey]

If she has reservations in an up- market, she'll really stress in a down one. I personally think you are fine. House paid off? Monthly expenses? Keeping expenses low will minimize taxes.

We have a decent post tax accounts to manage this...

 

[bradaz2488]

I plugged your numbers into FireCalc and got 100% success rate if you use CPI for inflation rate and 85% if you use a 3% inflation rate. Assumes wife live till 95 and used 75% in stocks. IMHO if your plan to retire at 46 has some high risk elements and no buffer if future healthcare cost and inflation are higher then expected, which is a real possibility. If it were me I would either work longer to save more $ or figure how to reduce my expenses to get a +95% success rate using 3% inflation.
Just my 2 cents.. I tend to be very conservative and plan for the worst and hope for the best.

 

[UtahSkier]

Answering the important questions first...

I have 2 days of skiing in so far. Skied 17000 vertical feet yesterday as I warm up and condition my knee. Not much snow, but it is cold and the groomed runs are nice enough. I also purchased new skis

At your age, you have many financial moving parts. I recommend you do what I do... move the entirety of you financial life into Quicken and use the lifetime planner (QLP) to model your retirement.

Once your model works to your satisfaction, you can walk DW through the numbers to give her the confidence she needs. The reports and graphs are helpful for this effort.

I model the portfolio with all kinds of anticipated spending and income events. This gives me an annual withdraw to work with.

I also use the budgeting tool to model what my needs for money are and make sure I can live within the annual withdraw provided by the portfolio.

 

[whatnot]

Your assumptions are that DW will work 10 more years because j*b is not sucking the life out of her -- Yet! That can change very quickly with: new boss, change in j*b responsibilities, illness or seeing you enjoy your freedom.
So your $2.4 mil is a soft number. I would plug away a couple more years at current or new job to firm this projected goal will be achieved.

 

[brucethebroker]

My DW would have been upset if, as she walked out the door each morning for work, I was retired, in PJ's, drinking coffee and reading the paper/computer. Or even worse, I was still in bed.

I agree with earlier post to look into changing jobs or finding pt. time work you might enjoy. Then bide your time. One day, your DW will come home after one of THOSE days, venting about her job. THEN is the time to sit down with her and explain the happy options.

IMHO........

 

[Car-Guy]

Or, change wives?

Then he may need to work another 15 or 20 years. That can be really expensive.

Cheaper to keep her.

 

[Mulligan]

My DW would have been upset if, as she walked out the door each morning for work, I was retired, in PJ's, drinking coffee and reading the paper/computer. Or even worse, I was still in bed.

I agree with earlier post to look into changing jobs or finding pt. time work you might enjoy. Then bide your time. One day, your DW will come home after one of THOSE days, venting about her job. THEN is the time to sit down with her and explain the happy options.

IMHO........

I hear ya. I only have a GF of many years who does not live with me and I still catch snide comments almost weekly and I retired 6 years ago. If we had been married there would have been no way I could have got away with this.

 

[pb4uski]

Do you have enough in taxable accounts or Roths that you can withdraw penalty free to support you from when you retire until you are 59 1/2 and can access any tax-deferred funds penalty-free? Or do you plan to withdraw from tax-deferred using SEPPs/72t? Or some combination thereof unless you plan to just pay the 10% penalty.

IOW, not only do you need to "have enough" it also needs to be accessible to you, especially from when you retire until you are 59 1/2.

 

[Lovetoski]

Thanks for all the good input. I really appreciate it.

Yes have a significant amount in a taxable account. Would do a 72t if I had to.

Yes $2.4 is a soft number but was being pretty conservative with estimate. Have a fair amount of "fluff" built in. I know in the end I have to crunch the numbers and decide if I'm comfortable with all the assumptions, but I do like hearing everyone's take.

Thanks and woohoo it is snowing. Keep those snow dancing going. Utah I plan to head to SV this weekend.

 

[haha]

A few years ago I signed up for the class of 2018. Now that it is getting closer I'm hoping to not get held back. The wife is concerned and trying to hold me back. I would like to get some input. Below is our situation.

Me
-I plan to retire February 2018 at age 46
-$1.8million invested
-Pension at age 62 $260/month (nonCOLA)
-Social Security at 62 $1600/month (assuming 70% payment)
-Need to generate $65,000/year

Wife
-Plans to retire in 10 years (2027) at age 50
-Pension at age 65 $750/month (COLA)
-Social Security at 62 $800/month
-We Will have combined $2.4 million invested when wife retires
-We Need to generate a combined $92,000/year when wife retires

Would like input on a couple of things.
1) Do you think the financials above work.
2) Wife is concerned about a major accident (biking, skiing, kayaking) or if one of us get cancer. Does anyone have similar concerns and if so are you planning any additional insurance for accident or cancer?

Thanks and has anyone been skiing yet?

You are counting heavily on your wife's contribution. She would need to keep working well beyond your hoped for retirement date. She doesn't want you to retire yet.

See any possible problems?

Ha

 

[jcretire77]

Welcome fellow Boisean. There are a few of us on the site. Healthcare costs are always a concern and future changes may be more costly vs less. When I was budgeting last year I was planning on around $850 for the two of us, turns out with the increases it is over $1100 for two. Still doable with a lot of fluff in our budget, but make sure you have some buffer.

 

[rayvt]

-I plan to retire February 2018 at age 46
-$1.8million invested

That's not enough to retire on.
What it is, is enough to string you along for long enough to get you in real trouble when you get to the end of the rope.

Wife
-Plans to retire in 10 years (2027)

This is insane. How much of your $1.8M do you think will be left after her divorce attorney gets done with you?

 

[YVRRocketSurgery]

Sorry to go on a bit of a tangent but I'm getting a kick out of all the replies that are surprised and concerned with the ~10 year gap between retirement dates by the OP and his wife.

I'm in a similar situation where I'm potentially looking to retire within 5 years which has the potential to be about 15 years before my wife. This because of a combo of age difference and because I have a DC pension plan while my wife has a pretty strict DB pension plan. Even though I think my investments should generate enough cash flow to cover the core of our combined targeted spend, she hates the idea of leaving a lot of DB pension money on the table and is not super confident with how our numbers will play out. She may/will eventually change her mind but in the mean time, we're starting to discuss ideas on how I'll keep active while tossing around ideas to maximize her time off (sabbaticals, changing roles, going to part time...).

I guess the added advantage of her working longer is that her benefits package is really good and covers us both for a number of health related things. Beyond that, we're trying to build up our combined numbers with enough flexibility to splurge a bit on our travels in retirement but can redirect these discretionary dollars to major unexpected (health) expenses as needed.

 

[Koolau]

My only suggestion would be to look at trimming the projected budget. At least see if a lower standard-of-living back-up lifestyle would be okay if it became necessary. It's way easier (in theory) to spend less than it is to get more nest egg. If your expected life-style requires your budget (and if less would make FIRE unbearable) by all means, go for it. Just be sure to have a back-up plan you can live with.

In my case, I chose an expensive life-style and so far things are working out. But, I'm not married to the life-style. I could be very nearly as happy living someplace else that happens to cost much less. I planned for FIRE and it's working out. If the day comes that it doesn't work anymore, I have many back-up plans built in which will see me through anything but the proverbial "black swan" events we can't really plan for. As always, YMMV.