schenbew
Recycles dryer sheets
I’ve been a member of the forum for about 6 months now, and have learned a tremendous amount since joining. All that learning made me realize, and then seriously consider, retirement at the end of 2020. Since I’ll be 58 in December, I hesitate to call it ER, but it’s earlier than I planned on. As a military retiree, I have the benefit of a defined benefit pension with healthcare for DW and I.
I have been working for a great company with a great manager for several years now post-military, but I find myself increasingly thinking about retirement, mostly as a result of reading this forum!
All my lurking encouraged me to do some planning, using the details below. Fearing I might have overlooked something, I’m posting here to see if the combined wisdom of this forum can see something I may have missed. DW and I have lived our entire marriage well below our means, and are wrestling with the idea of retiring at the end of this year and actually spending the assets we spent 30+yrs accumulating while raising 4 DDs. Here are some details:
Age (in Dec 2020): me 58, DW 56
SS benefits at 67: $2.7K/mth, DW’s – $1.3K/mth
Taxable accounts: $365K in indiv stocks and VTSAX
tIRAs: $780K in various accounts, preponderance in the TSP. Intend to aggressively convert to Roth IRAs into the 24% tax bracket once I hit the age 59.5 threshold
Roth IRAs: $450K
Home: 12yr remains on our 15yr mortgage; over $200K in equity today. Plan to remain in place for another 10yrs and then reevaluate based on health and desired lifestyle at that time.
Rental Real Estate: 2 x SFHs ($750K total appraisals, mortgage balances ~ $395K), combined $1,000 month cash flow positive. We plan to sell the rental properties in 5 yrs at age 62 to take the capital gains before IRMAA becomes an issue for our Medicare expenses.
College: 2 DDs down, 2 to go. Existing 529 assets will cover anticipated in-state expenses.
Pension: COLA adjusted $6,700K/mth post tax
Budget: $11.5K/mth based on close tracking for over a year. Plenty of room to scale back if there’s a prolonged period of poor market performance. DW has a 55% survivorship benefit
AA: with a beefy COLA adjusted pension, 90%+ in equities (lots of VTSAX and equivalent funds), with 6 months in emergency cash
I’ve run our scenario through Firecalc, New Retirement Planner, Fidelity’s planner, i-ORP, and Flexible Retirement Planner. All show an ability to draw assets down before taking SS at 67 with an approx. 3.8% or less WR. Once SS kicks in, WR drops to approx. 1.5%. i-ORP says we can achieve a Disposable Income above our budget well into our 90s; Firecalc gives a 100% success rate at levels above our budget.
Bottomline: are DW and I prepared? Are we missing something? The numbers tell me DW and I are, but the concept of spending the assets we so diligently accumulated over the past several decades just makes us uncomfortable. I want to avoid the OMY syndrome.
What say you, wise and insightful ER.org members - are we ready to take the retirement plunge?
I have been working for a great company with a great manager for several years now post-military, but I find myself increasingly thinking about retirement, mostly as a result of reading this forum!
All my lurking encouraged me to do some planning, using the details below. Fearing I might have overlooked something, I’m posting here to see if the combined wisdom of this forum can see something I may have missed. DW and I have lived our entire marriage well below our means, and are wrestling with the idea of retiring at the end of this year and actually spending the assets we spent 30+yrs accumulating while raising 4 DDs. Here are some details:
Age (in Dec 2020): me 58, DW 56
SS benefits at 67: $2.7K/mth, DW’s – $1.3K/mth
Taxable accounts: $365K in indiv stocks and VTSAX
tIRAs: $780K in various accounts, preponderance in the TSP. Intend to aggressively convert to Roth IRAs into the 24% tax bracket once I hit the age 59.5 threshold
Roth IRAs: $450K
Home: 12yr remains on our 15yr mortgage; over $200K in equity today. Plan to remain in place for another 10yrs and then reevaluate based on health and desired lifestyle at that time.
Rental Real Estate: 2 x SFHs ($750K total appraisals, mortgage balances ~ $395K), combined $1,000 month cash flow positive. We plan to sell the rental properties in 5 yrs at age 62 to take the capital gains before IRMAA becomes an issue for our Medicare expenses.
College: 2 DDs down, 2 to go. Existing 529 assets will cover anticipated in-state expenses.
Pension: COLA adjusted $6,700K/mth post tax
Budget: $11.5K/mth based on close tracking for over a year. Plenty of room to scale back if there’s a prolonged period of poor market performance. DW has a 55% survivorship benefit
AA: with a beefy COLA adjusted pension, 90%+ in equities (lots of VTSAX and equivalent funds), with 6 months in emergency cash
I’ve run our scenario through Firecalc, New Retirement Planner, Fidelity’s planner, i-ORP, and Flexible Retirement Planner. All show an ability to draw assets down before taking SS at 67 with an approx. 3.8% or less WR. Once SS kicks in, WR drops to approx. 1.5%. i-ORP says we can achieve a Disposable Income above our budget well into our 90s; Firecalc gives a 100% success rate at levels above our budget.
Bottomline: are DW and I prepared? Are we missing something? The numbers tell me DW and I are, but the concept of spending the assets we so diligently accumulated over the past several decades just makes us uncomfortable. I want to avoid the OMY syndrome.
What say you, wise and insightful ER.org members - are we ready to take the retirement plunge?
