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Somewhat worried.
Old 09-26-2021, 02:58 PM   #1
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Somewhat worried.

I'm down to the 2 year mark where I hit 59.5 yr old. I want to retire. I worry that I'm not prepared. I'm no financial guru, if someones having a heart attack, a broken bone, or have been shot, I'm game for fixing/aiding that, but finances, pfffft. I'm not clueless, I've done things that retirement advisors have suggested. I'm 100% debt free, own my home and the one next door with 10 acres of land, and 3 vehicles under 2 years old. I currently make about 80-90k yr. I figure in retirement, I'll only need 50-60k yr. So far my wife and I have built 4 traditional 401k's to a total of 1.75m, hoping to have 2m total in 2 more years. It seems like a big number, but I'm always worried if it's adequate. Is this adequate?
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Old 09-26-2021, 03:01 PM   #2
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If you are confident that $50-60K is enough in retirement then $2M is more than enough.
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Old 09-26-2021, 03:13 PM   #3
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I'm down to the 2 year mark where I hit 59.5 yr old. I want to retire. I worry that I'm not prepared. I'm no financial guru, if someones having a heart attack, a broken bone, or have been shot, I'm game for fixing/aiding that, but finances, pfffft. I'm not clueless, I've done things that retirement advisors have suggested. I'm 100% debt free, own my home and the one next door with 10 acres of land, and 3 vehicles under 2 years old. I currently make about 80-90k yr. I figure in retirement, I'll only need 50-60k yr. So far my wife and I have built 4 traditional 401k's to a total of 1.75m, hoping to have 2m total in 2 more years. It seems like a big number, but I'm always worried if it's adequate. Is this adequate?
Here are some questions that will help you determine how ready you are. https://www.early-retirement.org/for...ire-69999.html
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Old 09-26-2021, 03:19 PM   #4
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It appears to me you should be fine, but I would:

1. Go back and look at your total actual annual spending for the last 3-5 years. Don't include retirement contributions, savings, FICA, or state and federal taxes

2. Use the highest of these for a run in Firecalc (unless it is an outlier, then I would use the average). Here, you will need to guestimate you future state a federal taxes and include them in spending. Also include an allowance for "one of" expenses (new car, new roof, new HVAC, etc.)

3. Don't forget to include SS or an pension you may have coming. Some people discount SS by 25%. Your call on that.

4. Also, use the investigate tab to see what you could spend with 100% success (based on past history). I think you might be pleasantly surprised.

Good luck.
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Old 09-26-2021, 03:33 PM   #5
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Old 09-26-2021, 03:35 PM   #6
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It sounds like you are fine financially and you should add in the total SS estimates whether discounted or not.
Try the Firecalc tool, as mentioned previously. Many folks here can assist with any Firecalc question.
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Old 09-26-2021, 04:18 PM   #7
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Old 09-26-2021, 04:29 PM   #8
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The FIREcalc tool that people are mentioning is at http://www.firecalc.com.

Note that there are a series of green tabs across the top ("Start Here", "Other Income/Spending", etc.) which provide places for you to enter additional information (such as your Social Security), and where the investigate tab is located.
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Old 09-26-2021, 04:58 PM   #9
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I think you are fine. with 2M you can withdraw $60K/year with only a 3% WR which is fairly conservative. In 2 more years you will be close to SS at 62 which should boost your income.


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Old 09-26-2021, 05:58 PM   #10
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You heard from the group that knows, and if they say you are good to go, then I would take their advise.

If your numbers are correct then you should be fine, and especially in two year. Good luck and if you keep asking questions these experts will walk you through it.
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Old 09-26-2021, 06:24 PM   #11
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I'm sure you have health insurance and income / property taxes in there too? Just checking.
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Old 09-26-2021, 07:35 PM   #12
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I'm assuming you have SS on top of that. You should be golden and FireCalc will confirm the same.
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Old 09-26-2021, 08:43 PM   #13
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What is your plan for long term care?
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Old 09-26-2021, 09:55 PM   #14
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You've received excellent advice above. Run your numbers and get back to us if you wish. My gut says you are good to go with your plan. Naturally, YMMV.
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Old 09-27-2021, 04:17 AM   #15
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Originally Posted by JohnDevereaux View Post
I'm down to the 2 year mark where I hit 59.5 yr old. I want to retire. I worry that I'm not prepared. I'm no financial guru, if someones having a heart attack, a broken bone, or have been shot, I'm game for fixing/aiding that, but finances, pfffft. I'm not clueless, I've done things that retirement advisors have suggested. I'm 100% debt free, own my home and the one next door with 10 acres of land, and 3 vehicles under 2 years old. I currently make about 80-90k yr. I figure in retirement, I'll only need 50-60k yr. So far my wife and I have built 4 traditional 401k's to a total of 1.75m, hoping to have 2m total in 2 more years. It seems like a big number, but I'm always worried if it's adequate. Is this adequate?
Two points- the 1.75m is really closer to 1.40m due to taxes you may have to pay. You may want to de-risk this close to pulling the trigger so your 1.4m doesn't become 700K in a nasty downturn in equites. I don't have a crystal ball, but it has happened before.

Make sure you have a cash cushion to help control income needed from the 401Ks in the early years. That would also help with ACA subsidies if needed for health insurance.

I'm wishing you the best and a great retirement.

VW
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Old 09-27-2021, 04:27 AM   #16
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If you have $2mm in 401k's, how much in after tax accounts. Having after tax accounts can greatly reduce your taxes and increase your healthcare subsidies via ACA if you work it right.

I'm in a similar boat, but I've split half / half on pre & post tax accounts to maximize our future tax bill & health insurance costs until 65. Hoping to pull the cord (again) in a couple years or when DW gets on board.

your current #'s, with all the above advice, you should be fine. Here's an example of my basic spending and years at which different payouts of pension & reduced SS's and assumptions of inflation (maybe low for this year) and appreciation. Also a 10% budget buffer as we typically spend less than $50k all in.
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Old 09-27-2021, 07:58 AM   #17
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Originally Posted by VanWinkle View Post
Two points- the 1.75m is really closer to 1.40m due to taxes you may have to pay. You may want to de-risk this close to pulling the trigger so your 1.4m doesn't become 700K in a nasty downturn in equites. I don't have a crystal ball, but it has happened before.

Make sure you have a cash cushion to help control income needed from the 401Ks in the early years. That would also help with ACA subsidies if needed for health insurance.

I'm wishing you the best and a great retirement.

VW
Good points. I entered FIRE with way more 401(k) and tIRA than taxable, cash and Roths. I've worked on it (Roth conversions of all tIRAs, titrating withdrawals from 401(k), etc.) and have a manageable if still 401(k) heavy retirement stash. I paid a lot of taxes along the way. I think VanWinkle is correct in how to view your stash (1.4m vs 1.7m). Of course, as long as your 50 - 60 spend level includes the extra taxes, you should still be okay with your plan. YMMV as ever.
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Old 09-27-2021, 03:44 PM   #18
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Here are some questions that will help you determine how ready you are. https://www.early-retirement.org/for...ire-69999.html

Whew, there's a LOT in there! College tuitions aren't an issue. The last child just graduated, paid all college tuitions as they went. I haven't financed the last 4 vehicles I've bought, I pre-planned and saved up for each. I do keep at least a years salary set aside for emergencies. I estimate 2k/mo for health insurance until I reach Medicare eligibility. The SS website indicates I get 1.8k/mo at age 62. I did the FIRECalc, "FIRECalc found that 6 cycles failed, for a success rate of 95.0%." - I'm hoping that's a good thing. Oh, and thanks for the help!
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Old 09-27-2021, 03:52 PM   #19
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I'm sure you have health insurance and income / property taxes in there too? Just checking.



Property taxes here are super minimal. Like a few hundred a year. I'm thinking health insurance for me and the wife will be like 2k/mo? I hope I'm on the high side of that estimation.
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Old 09-27-2021, 03:57 PM   #20
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Originally Posted by SecondCor521 View Post
The FIREcalc tool that people are mentioning is at http://www.firecalc.com.

Note that there are a series of green tabs across the top ("Start Here", "Other Income/Spending", etc.) which provide places for you to enter additional information (such as your Social Security), and where the investigate tab is located.

OMG! Here I thought there was only one page! There are tabs across the top, gonna take me a while to absorb all that!
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