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RichardW 11-13-2020 07:51 AM

Hello! Need a sanity check.
Hey all,

I'm fairly new to this site and you've provided some very valuable information for me. I always thought I'd be forced to work till at least 62 due to the high cost of health insurance. But now I think I understand how to work my MAGI# to enable me to actually retire at 58 1/2! I've crunched the numbers so many times and various ways but I feel like I'm missing something.

The facts:
I'll be 57 late December, DW is 57 now, she has not worked since 2008
My two boys are grown and now married, DW watches pre-school grandchildren few days a week till school full time starts. My house is paid off ($325k), my two late model vehicles are paid off and we carry no other debt. All monthly expenses are paid by credit card and paid off in full every month. This enables me to track my exact monthly expenses.

401k: $496,000 (60% in 2025 Target Fund, 40% in S&P 500 fund)
Vanguard: $435,000. (100% in Vang Growth Index)
Cap One 360: $17,000
HSA Acct: $7000

Both 401k and Vanguard acts are a mix of Roth and Traditional IRA.

At 60 I receive $2200 monthly pension
At 62 my projected SS for both myself and DW total $2700 per month

Monthly expenses have been $1700-1800 (covid has kept them low)
Yearly property tax $5200

Projected expenses (post-Covid):
Monthly living: $2500 ($30,000 yr) Fluffed higher
RE taxes: $433 ($5200 yr)
ACA (est): $533 ($6400 yr)
Travel: $1250 ($15,000 yr). We've been bitten by the travel bug.
Misc/unplanned $416 ($5000 yr)

Total expenses: $61,600

Firecalc results are 100%

My salary is approx $130k and I find that a little hard to walk away from. I've worked in Procurement for an Aerospace mega corp for 28 years and the stress level is thru the roof. Too many meetings, schedules, deadlines, spreadsheets! I'm ready to call it a day but I need to be sure.

Appreciate any input!

mickj 11-13-2020 07:54 AM

Looks good to me!

VanWinkle 11-13-2020 08:02 AM

I think you could delay SS to increase the amount DW would get in case of early demise. You could run your SS numbers here https://opensocialsecurity.com/ to see what may work best for you.

The rest looks doable, but 3% may be a better withdrawal rate for your age of retirement. That would give you about 57000 with pension and withdrawals and delaying SS to full retirement age. Run the numbers and then decide which way to go.


cooch96 11-13-2020 10:14 AM

You have almost a Million in retirement funds to live off for 3 years until you can supplement that with your pension. I'd say you've got it made in the shade.

But maybe it's best to not blow it all incase those pension benefits get clipped in some sort of catastrophe.

MikeWillRetire 11-13-2020 11:57 AM

Your pension and social security will just about cover your expenses from age 62 onward, provided that the pension has a cola.
You will spend around $200k from your portfolio from age 58 to 62. That will leave about $730k. At a 3.5% withdrawal rate, you could spend an additional $25k per year if the pension has a cola, less if it doesn't.

OldShooter 11-13-2020 12:28 PM


Originally Posted by RichardW (Post 2509935)
... I need to be sure. ...

Sadly, there is no "sure" for any of us. The best we can hope for is a feeling that success is a high probability and, then, only qualitatively.

Lots of people here are good at crunching and commenting on retirement $$. You're seeing that. One thing, though, that seems to be routine is ignoring or arm-waving about inflation.

25 years looks like a reasonable time horizon for you, so let's see what then-year dollars you will need to have the same buying power as today's $61,600.

At 2%, the Feds current target rate, in year 25 you will need to be spending about $102K to maintain.
At 3.11%, our country's long-term average IIRC, about $136K (more than double).
At 4.2%, approximately the US average over the last 40 years, about $195K. (!)

So what to do? DW and I own serious six figures in TIPS. That's one approach and, given that we are 73YO it will probably be adequate. With a 25 year horizon I'm not sure what we would do.

Remember, too, that no retirement analyzer or model can predict the future. All FireCalc is telling you is that if you had retired 25 years ago you'd be in pretty good shape today. Will the next 25 be like the last 25? Let me go get my Magic 8 Ball.

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