Looking for input/advice please

[Alectoris]

So this is the post mentioned in the introduction thread.

I'd appreciate any honest assessment from you folks who have done it or are aspiring to pull off an early retirement.

The numbers and data are truish, I may have rounded a very little bit here and there, but they are pretty realistic

I'm 48 and single. Likely to never get married.

Current income: ~200K (gross)

Current accounts:

401K: 420K It's a higher expense account with less than great options, but it is what it is.

Vanguard taxable account: 572K Mostly index funds. Some individual stocks.

Vanguard IRA: 70K. Again, mostly Vanguard funds.

Vanguard Roth IRA: 95K Mostly Vanguard index funds.

My Vanguard portfolio has garnered a bit over 10% annually since 2005.

AA of all the Vanguard funds is 93% stock and 7% bond.


HSA: 63K Smattering of somewhat conservative funds.


The only debt that I have is about 170K on my mortgage.

As for savings:

IRA, HSA and 401K are maxed out every year.

I also put away about 30K/year in the non-tax advantaged account.

If any of you would be so kind, I'd love to hear your thoughts.

[omni550]

Will you be eligible for a pension? SS?

omni

[travelover]

Do you have a good handle on what you'd need to spend annually in retirement? It is really the ratio of assets to spending that counts.

[Alectoris]

SS at around 2k/month. No pension, I live in microcorp land.

As to assets to spending, I'm thinking about 3K a month for basic living. No debts. This is one of the things that I need to refine, which is a basic budget.

I know that I'm doing well with about a 50% savings rate, but I need to dial in a hardline budget.

Thanks all!

[Dtail]

If you retire early, what are your plans for medical coverage?
Your WR not including SS appears reasonable, so if you could lock in medical, it looks pretty good to me.

[gauss]

Quote:

Originally Posted by Alectoris SS at around 2k/month. No pension, I live in microcorp land. As to assets to spending, I'm thinking about 3K a month for basic living. No debts. This is one of the things that I need to refine, which is a basic budget. I know that I'm doing well with about a 50% savings rate, but I need to dial in a hardline budget. Thanks all!

Hi Alectoris.

If your income is 200k and you have a 50% savings rate then your spending/taxes is ~ 100k per year.

Granted that you will pay significantly less in income/payroll taxes in retirement. I would still want to see how you will get down from 100k to 36k spending.

FWIW The way that I handled this was to always track all of my expenses in quicken along with categories. I was then able to see what my expenses would be in retirement based on real data.

Is the 2k/month SS based on starting to draw at age 67?

Welcome Aboard!
-gauss

[Walt34]

Before you do actually retire you will want to have firm, solid answers to these questions:

http://www.early-retirement.org/foru...ml#post1399715

[Alectoris]

Quote:

Originally Posted by gauss Hi Alectoris. If your income is 200k and you have a 50% savings rate then your spending/taxes is ~ 100k per year. Granted that you will pay significantly less in income/payroll taxes in retirement. I would still want to see how you will get down from 100k to 36k spending. FWIW The way that I handled this was to always track all of my expenses in quicken along with categories. I was then able to see what my expenses would be in retirement based on real data. Is the 2k/month SS based on starting to draw at age 67? Welcome Aboard! -gauss

Thanks for making me think!

I need to clarify a bit. I was basing my savings on net income, which is about 120K. I save ~60k per year so that's 60k in expenses. Mortgage, which should be eliminated at retirement, is 21K per year. That leaves 39K in expenses. There are several expense items that I have to carry now due to work that will be eliminated. Unfortunately, I had to look into healthcare costs which are currently paid by employer. After looking at plans, the lost work expenses may be relegated to insurance coverage. BOOO!

You made me dig and answer my own question, thanks! I'll hopefully be able to pull out more than 36k/year, I wanted to set that as a bare bones level.

As to SS, I visited the quickcalc on the SS website and I think that if I entered the right numbers by stopping earnings at 58 I would get 2k/Month starting at age 62. My regular report where I work until normal retirement age and start withdrawals at 67 was around 3K I believe.

[gauss]

Glad to be of assistance!

-gauss