Would you like groceries with that?
New Yorker said:
Health Insurance is a benefit of retirement for both of us as is Free telephone service. Out of pocket medical is like $5.00 co-pay for Dr's appts. and $15. for a script. The rest all has to come out of the $10,314! I am not sure this is doable. New Yorker
Welcome to the board, NY!
Let's start worrying this problem constructively.
The short answer is that if you're not sure, then don't retire. If you're not working now, then one constructive way to worry over this situation would be to bring in some more income.
The more complicated answer might work out without requiring extra employment. One rule of thumb for a 4% safe withdrawal rate would be to have 25x as much times in savings as your annual (unfunded) expenses. However you can see that one flaw in FIRECalc's percentages is the assumption that you're going to die within the next 20 years. You don't want to have to actually ensure that you don't live past that "dead"line.
You seem to have an estimate of about two-thirds of your expenses, but if you're feeling close to the line then you need to get a better fix on your annual expenses. Start tracking EVERYTHING today and keep it up for a couple years. At the end of one month you could multiply by 12 for a rough estimate, at the end of three months you'll have a better estimate from multiplying by 4, and after a year you should be feeling pretty confident that you know what you're spending. You might be surprised how small daily or weekly expenses add up. If they're not important to you then they could be cut out in favor of funding your retirement, as long as you don't cross the line from "frugality" to "deprivation".
Take a look at your "occasional" expenses-- a new roof, a replacement car, new appliances, a kid's wedding, one or two fantasy vacations over the next few years, whatever's important to you. You'll also have to take a guess at your medical coverage costs, although at age 65 you'll probably be kicked off to Medicare and have to buy your own part "B" coverage. (I'm 20 years away from that stage so I'm just going on what my father-in-law tells me about this.)
Some of your current expenses (hopefully) won't last forever. For example you're just about done with college tuition & mortgage payments. SS will kick in a few months (perhaps you should add that to the income side of your budget). I believe FIRECalc has an after-tax box but you could also add up a year's taxes (income federal/state/locality/city, property, & investments) and add those expenses to your annual budget. You also mention that you're selling a timeshare and you may be able to raise additional cash by selling off others in the coming years. Your cashflow should improve considerably after a couple years and especially in five years.
Your current budget is a potentially scary picture, but you can refine it with the above suggestions. That work will remind you of other income & expenses to add in to the picture. When you feel that you have a good handle on the expenses, consider whether you want to start taking SS at age 62 (that's what I'd do) or if you can delay it until age 65 for another 25%. The payoff difference is about 15 years, which you perhaps may feel exceeds your life expectancy, but your spouse may appreciate having that extra 25% if she's collecting survivor's benefits.
I wouldn't mess with your investment allocations and I wouldn't buy any new products (like *shudder* annuities or bonds) until you've cleared up your picture on expenses for the next few years. But you might want to read a library copy of Bud Hebeler's "J.K. Lasser's Your Winning Retirement Plan" and read through
his website for another way to monitor your withdrawals. He uses an annual withdrawal calculation with annual revisions instead of a 4% thumbrule.
Don't worry if you mess up and run out of money. John Galt promises to put you up at his place in exchange for expressing himself in posts like that... hmmm, on second thought, I'd keep worrying constructively.
