Purron
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 23, 2007
- Messages
- 5,596
My husband and I have no children, are 52 years old, and have been married for 33 years. We have always been thrifty. We got married at 19 and worked our way through college without any outside assistance – not even a college loan. The struggles in our earlier years of marriage resulted in a frugal life style which continued even when we both got good paying jobs.
I am leaving my gov’t job in just over a month. I’m under FERS and will not be eligible for an immediate retirement since I’m under the minimum retirement age of 56. My husband has worked for local government for nearly 30 years and will be retiring in about a year with a $46K cola’ed pension and an excellent group health insurance for both of us at a cost of about $470/month. I realize this is more than I would pay for health insurance if I stuck it out 4 more years with Uncle Sam, but it doesn’t seem like such a bad deal. In addition, there is no way I could stand working that much longer. We also have a high end LTC insurance policy I purchased through the government. The LTC policy costs $276/month for both of us and will not go up in price. After seeing what my husband’s mother went through after her stoke, we consider LTC insurance a necessity.
We have about $1.1 million in savings. About $600K of this is in tax deferred accounts – IRAs and the government TSP. We also own two homes. Our rental property is paid off and worth about $400K even in today’s market. Our primary residence is worth about $540K with a $160K mortgage. Both properties are located in Fairfax County, Virginia, a suburb of Washington, DC. We have no debt other than the mortgage.
Our plan is to move into our rental, sell our primary residence, then sell the rental after we lived there for 2 years so we can avoid capital gains tax on the sale. Since we bought the rental in 1974 for $54K and have done little to increase the basis, the potential capital gain would be huge.
We are planning to move to the Culpeper, Virginia area in about 3 years after we sell our two homes. Culpeper is about 50 miles from Washington, DC. We like the area and have good friends who retired there. There is a decent regional hospital in the area which adds to the appeal. While we are both in pretty good shape, we realize the access to good health care is critical as we grow older. Right now, we could buy a suitable retirement home for about $425K in Culpeper. The way we figure it, if the value of our two current properties rises or falls, the cost of our eventual retirement home would move in approximately the same direction so it shouldn’t impact our plan in a major way.
We are looking for the simple life. My passion is volunteering with animal shelters and rescue groups. My husband loves gardening, ham radio, and generally tinkering around the house. We traveled a lot in our earlier years but don’t have much desire to travel extensively in retirement. A trip a year to visit our friends in Panama plus a week at the beach would suit us fine.
At age 62, our monthly income will increase by about $44K per year. This includes social security and my deferred government pension. Until then, we will need to supplement my husband’s pension. I have considered purchasing an annuity from my TSP and IRAs, but am frankly not crazy about the idea of turning over so much cash to MetLife (the federal government annuity provider). It seems to me just that just pulling some of the interest on our savings would bring our income up into the $70K range we would like to live on without touching the principal.
My simple plan is to ladder our cash in CDs and use the interest to supplement our income until we hit 62 and receive social security any my small deferred pension. We recently put $200K in an 18 month CD through our credit union (a special rate due to their 60th anniversary) paying 6%. Everything else earns 4% to 5%. I know many of you will think our investment strategy is way beyond conservative. However, we met with a financial planner about a year ago and simple were not comfortable with putting much of our hard earned savings at risk.
We welcome any suggests or comments you have on our plan and look forward to using this site as a resource as we enter retirement.
I am leaving my gov’t job in just over a month. I’m under FERS and will not be eligible for an immediate retirement since I’m under the minimum retirement age of 56. My husband has worked for local government for nearly 30 years and will be retiring in about a year with a $46K cola’ed pension and an excellent group health insurance for both of us at a cost of about $470/month. I realize this is more than I would pay for health insurance if I stuck it out 4 more years with Uncle Sam, but it doesn’t seem like such a bad deal. In addition, there is no way I could stand working that much longer. We also have a high end LTC insurance policy I purchased through the government. The LTC policy costs $276/month for both of us and will not go up in price. After seeing what my husband’s mother went through after her stoke, we consider LTC insurance a necessity.
We have about $1.1 million in savings. About $600K of this is in tax deferred accounts – IRAs and the government TSP. We also own two homes. Our rental property is paid off and worth about $400K even in today’s market. Our primary residence is worth about $540K with a $160K mortgage. Both properties are located in Fairfax County, Virginia, a suburb of Washington, DC. We have no debt other than the mortgage.
Our plan is to move into our rental, sell our primary residence, then sell the rental after we lived there for 2 years so we can avoid capital gains tax on the sale. Since we bought the rental in 1974 for $54K and have done little to increase the basis, the potential capital gain would be huge.
We are planning to move to the Culpeper, Virginia area in about 3 years after we sell our two homes. Culpeper is about 50 miles from Washington, DC. We like the area and have good friends who retired there. There is a decent regional hospital in the area which adds to the appeal. While we are both in pretty good shape, we realize the access to good health care is critical as we grow older. Right now, we could buy a suitable retirement home for about $425K in Culpeper. The way we figure it, if the value of our two current properties rises or falls, the cost of our eventual retirement home would move in approximately the same direction so it shouldn’t impact our plan in a major way.
We are looking for the simple life. My passion is volunteering with animal shelters and rescue groups. My husband loves gardening, ham radio, and generally tinkering around the house. We traveled a lot in our earlier years but don’t have much desire to travel extensively in retirement. A trip a year to visit our friends in Panama plus a week at the beach would suit us fine.
At age 62, our monthly income will increase by about $44K per year. This includes social security and my deferred government pension. Until then, we will need to supplement my husband’s pension. I have considered purchasing an annuity from my TSP and IRAs, but am frankly not crazy about the idea of turning over so much cash to MetLife (the federal government annuity provider). It seems to me just that just pulling some of the interest on our savings would bring our income up into the $70K range we would like to live on without touching the principal.
My simple plan is to ladder our cash in CDs and use the interest to supplement our income until we hit 62 and receive social security any my small deferred pension. We recently put $200K in an 18 month CD through our credit union (a special rate due to their 60th anniversary) paying 6%. Everything else earns 4% to 5%. I know many of you will think our investment strategy is way beyond conservative. However, we met with a financial planner about a year ago and simple were not comfortable with putting much of our hard earned savings at risk.
We welcome any suggests or comments you have on our plan and look forward to using this site as a resource as we enter retirement.
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