JohnnTexas
Dryer sheet wannabe
- Joined
- Nov 7, 2014
- Messages
- 16
Hi there. I have been reading posts here for a while. All this info is useful in considering retirement and have my wheels spinning.
A little background on me.
- Wife and I are both 51. Both work in sales with decent incomes.
- I have a pension from old mega corp job with 20 years with a lump sum option or an annuity option. My current job also has a pension but only with an annuity option. Both pensions have a COLA.
- Our goal is to retire at 59.5 yrs old.
-so far we are in good health and do the best to take care of our health as we age.
- Currently $1.8M in retirement funds (401Ks, profit sharing, some old company stock pension lump sum).
- current home equity (not included in the $1.8M) is $600,000 with $150,000 mortgage balance. We plan to pay off balance in the next 3-5 yrs to be debt free. We will probably downsize a bit as we near retirement and possibly buy a 2nd home for the winter months.
- 4 kids. Oldest is married and on her own and 2 in college and youngest in high school. The youngest will be done with college when we turn 57. We currently cash flow all college costs so no debt incurred by kids when they graduate.
- Wife and I will both qualify for SS and will probably delay until 65- 70 yrs old or close to that.
- I am assuming a conservative 5% growth on the $1.8M over the next 9 yrs will grow the portfolio to about $2.8M and that doesn't t account for the annual contributions of self and employers match so I feel that is a conservative figure.
- while retirement is still 8 yrs away, I have an all in budget of $150,000 in annual spending once retired to maintain quality lifestyle we desire.
So, here is my logic that I am questioning:
Expenses of $150,000 x 30 years (age 60-90) = a total spend of $4.5M. I am sure that as we age our annual budget will drop as we won't travel as much so there is some fluff in the spend figure.
Projected Income Streams:
-SS for self $30,000 per year x 25 years (age 65-90) I discounted the SS figures about 20%) = $750,000
-SS for wife $30,000 per year x 25 years (age 65-90). I discounted the SS figure about 20%). = $750,000
- Pension from old mega corp if I take the annuity is $2,630 (50% Joint Survivor) (age 65-90) = $2,630 x12 x 25= $789,000
- Projected pension from current gig if I retire at 59.9 with 16 years of employment is $2,856 (50% joint survivor) = $2,856 x12 x25 yrs = $859,500
Total from revenue stream = $2,437,500 (for the 25 year period of age 65-90)
Less total projected spend of $4.5 M = $2,062,500 shortfall that I would need to spend from my portfolio which at the age of 59.5 should be $2.9M which in theory would leave me with about $840,000 balance in my portfolio.
These calculations don't include the continued growth on the portfolio. Balance from age 60-90 so I anticipate that the balance could be higher at age 90 that the $840,000 noted above.
-Also the expense figure of $150,000 per year provides for $24,000 annual spend for health care pare,kim's from age 60-67 but if I stay with current company I will get subsidized healthcare at age 60 when I retire so the expenses are a guesstimate but I believe on the heavy side.
What do you all think of this math logic? Are we on the right track to retire early at age 59.5?
Thanks in advance for your input.
A little background on me.
- Wife and I are both 51. Both work in sales with decent incomes.
- I have a pension from old mega corp job with 20 years with a lump sum option or an annuity option. My current job also has a pension but only with an annuity option. Both pensions have a COLA.
- Our goal is to retire at 59.5 yrs old.
-so far we are in good health and do the best to take care of our health as we age.
- Currently $1.8M in retirement funds (401Ks, profit sharing, some old company stock pension lump sum).
- current home equity (not included in the $1.8M) is $600,000 with $150,000 mortgage balance. We plan to pay off balance in the next 3-5 yrs to be debt free. We will probably downsize a bit as we near retirement and possibly buy a 2nd home for the winter months.
- 4 kids. Oldest is married and on her own and 2 in college and youngest in high school. The youngest will be done with college when we turn 57. We currently cash flow all college costs so no debt incurred by kids when they graduate.
- Wife and I will both qualify for SS and will probably delay until 65- 70 yrs old or close to that.
- I am assuming a conservative 5% growth on the $1.8M over the next 9 yrs will grow the portfolio to about $2.8M and that doesn't t account for the annual contributions of self and employers match so I feel that is a conservative figure.
- while retirement is still 8 yrs away, I have an all in budget of $150,000 in annual spending once retired to maintain quality lifestyle we desire.
So, here is my logic that I am questioning:
Expenses of $150,000 x 30 years (age 60-90) = a total spend of $4.5M. I am sure that as we age our annual budget will drop as we won't travel as much so there is some fluff in the spend figure.
Projected Income Streams:
-SS for self $30,000 per year x 25 years (age 65-90) I discounted the SS figures about 20%) = $750,000
-SS for wife $30,000 per year x 25 years (age 65-90). I discounted the SS figure about 20%). = $750,000
- Pension from old mega corp if I take the annuity is $2,630 (50% Joint Survivor) (age 65-90) = $2,630 x12 x 25= $789,000
- Projected pension from current gig if I retire at 59.9 with 16 years of employment is $2,856 (50% joint survivor) = $2,856 x12 x25 yrs = $859,500
Total from revenue stream = $2,437,500 (for the 25 year period of age 65-90)
Less total projected spend of $4.5 M = $2,062,500 shortfall that I would need to spend from my portfolio which at the age of 59.5 should be $2.9M which in theory would leave me with about $840,000 balance in my portfolio.
These calculations don't include the continued growth on the portfolio. Balance from age 60-90 so I anticipate that the balance could be higher at age 90 that the $840,000 noted above.
-Also the expense figure of $150,000 per year provides for $24,000 annual spend for health care pare,kim's from age 60-67 but if I stay with current company I will get subsidized healthcare at age 60 when I retire so the expenses are a guesstimate but I believe on the heavy side.
What do you all think of this math logic? Are we on the right track to retire early at age 59.5?
Thanks in advance for your input.
