Hi – I am new to the board. I am 56 years old with a 55 year old DW and am trying to set a date. Less than a year ago I left megacorp after 33 years and began drawing a pension that is $49,000/yr after taxes in retirement (some COLA is possible but not anticipated). I took another job and have been living off of my pension and saving money from my new job (at a rate of ~$84,000/yr). Our expenses are ~$34,000/yr which includes health insurance costs in retirement from megacorp and projected out of pocket health care costs as the largest single category in my budget ($10,200). House, cars, etc are paid for (no debt). I do have a $150,000 HELOC at 2.5% interest that I maintain at ~$15,000 - $20,000 for flexibility. If it drops below $15,000, I have to pay some insignificant but irritating account charges. To avoid those charges when it drops to ~$15,000, I transfer $5000 to my brokerage account and hope that I can invest with a return of more than 2.5%. It’s currently close to the $15,000 lower limit. I have the following investment assets:
$550,000 401K
$130,000 IRAs
$ 40,000 Roth IRAs
$140,000 After tax brokerage account
-----------
$860,000 Total investments
My current plan is to use a withdraw rate of a maximum of 4% of total current asset value / 12 per month. I would not worry about taxable vs non-taxable in determining this value, but would make the withdraws in the most tax efficient way possible. I would plan to withdraw only for travel, special occasion or needs, etc. Unused withdraws would be available for a period of 6 months if they were not taken. The firecalc website gives safe spending rates of ~$75,000 - $82,000 with the major variable being how the funds are invested. Note that this amounts to a withdraw rate of $26,000/yr to $33,000/yr from investments (or a 3% to 3.8% withdraw rate respectively – not 4%). My DW will have a pension and SS that will be much less than the above (~$15,000 /yr at age 62). I am choosing to treat this as a safety factor and not include it in the calcs. My pension is leveled to provide constant income once SS is taken, so I have excluded my SS from the calcs. In this situation does it matter if I have $860,000, $900,000, or a $1,000,000 in total investments?
$550,000 401K
$130,000 IRAs
$ 40,000 Roth IRAs
$140,000 After tax brokerage account
-----------
$860,000 Total investments
My current plan is to use a withdraw rate of a maximum of 4% of total current asset value / 12 per month. I would not worry about taxable vs non-taxable in determining this value, but would make the withdraws in the most tax efficient way possible. I would plan to withdraw only for travel, special occasion or needs, etc. Unused withdraws would be available for a period of 6 months if they were not taken. The firecalc website gives safe spending rates of ~$75,000 - $82,000 with the major variable being how the funds are invested. Note that this amounts to a withdraw rate of $26,000/yr to $33,000/yr from investments (or a 3% to 3.8% withdraw rate respectively – not 4%). My DW will have a pension and SS that will be much less than the above (~$15,000 /yr at age 62). I am choosing to treat this as a safety factor and not include it in the calcs. My pension is leveled to provide constant income once SS is taken, so I have excluded my SS from the calcs. In this situation does it matter if I have $860,000, $900,000, or a $1,000,000 in total investments?
