Hi, I am ready to jump ...

[Ready-to-Jump]

Work is killing me and I am ready to jump off a bridge , so I am looking for advice or maybe just a push (not off of a bridge) to start retirement. I'm 59 1/2 and my wife is two years younger. We have ~$2.1 M in 401K, traditional and Roth IRAs, and taxable savings/mutual funds (~80% stock, 20% fixed/bonds - will probably move to 70-30 mix)). Of that, $100K is in a fairly liquid fund designed as emergency savings. Currently we live on ~$60K/yr and just paid off the mortgage. I hope to wait until age 66 to collect SS (~$24K/yr) and my wife will get half that amount as she teaches part time. I have a small pension, $3K/yr at 65. Otherwise, no income except $5K/yr my wife will make for a short time. I ran FIRECalc using a number of scenarios (spending, investment rates, etc.) and get a 100% success rate for all, up to a spending level of $90K. Have also run a similar tool on Fidelity and gotten positive results.

We have additional funds set aside for a new car, and phones/computer to replace work equipment. We will likely sell the house (~$250 - 300K) in a few years (or sooner) and downsize. However, I'm assuming this will be essentially a break even proposition. Obviously, health care and disability insurance (currently thru work) are the biggest financial concerns. I'm assuming my mortgage payments (~11K/yr) will go to cover thses costs so that I won't have any additional expenses.

Any advice? Ideas on forming an income stream? Based on your experience, have I missed anything or made poor assumptions?

BTW, I have followed the forum for 5+ yrs and have learned a lot. Love FIRECalc! Look forward to any and all advice.

 

[REWahoo]

The best advise I can give you is take a look at this before you jump...or fall...or lean too far : http://www.early-retirement.org/for...-answer-before-asking-can-i-retire-69999.html

 

[Ready]

Welcome! I would guess that if you run your $60K expense figure through Firecalc it will give you 100% success. At first glance you look more than sufficient financially to cover your expenses. I would just make sure the $60K is realistic, and covers unexpected expenses like major home repairs and eventual car replacements. If so, I can't imagine why you wouldn't take the plunge. Good luck with it!

 

[growing_older]

Sounds like you have a pretty big margin of safety in these numbers. Enjoy your new lifestyle.

 

[Live And Learn]

Welcome ! Please stay away from bridges until you figure this out.

I doubt $11k / year out of a $60k budget will not cover medical and LTC. You may be able to get ACA subsidies until you are Medicare eligible - you should look into that.

Definitely read the post that REWahoo pointed out - its a gem !

If FIRECalc says you can spend 90 instead of 60 then that 30k cushion is more than enough to cover those two expenses.

 

[robnplunder]

Jump? How high? Looks like you are set to retire financially. Good luck in whatever you decide to do.

 

[wingfooted]

That $2MM plus SS at age 60 is within what I would call the twilight zone of ER. You can probably make it if all goes well but a limited amount of room to maneuver or to handle unexpected outcomes.

Have you rerun the numbers for 'one more year'. What is the new WR result and and would it be worth delaying ER.

 

[2B]

You don't need disability insurance once you retire. There are no lost wages to protect. Heath insurance is another matter. Many people underestimate how much it really costs until too late. You can get COBRA for 18 months which is pricey but probably cheaper than buying your own policy. Check on eHealthinsurance.com for what a policy for you and your wife would cost. A high deductible plan could easily cost $12k/yr. A subsidy is available if you can control your income. I suggest you wait until the heath site for your state gets fully operational before you try to check there. Make sure you also include taxes in your income needs.

FireCalc is one of the more conservative programs I've seen. Unfortunately,it's based on past performance and not the future. It's a shame someone can't fix that but we have to go with the best we can do. Most measures say you've got plenty for your living costs and you have options to reduce them if necessary. I think you've got enough money to retire. Good luck.

 

[Katsmeow]

That $2MM plus SS at age 60 is within what I would call the twilight zone of ER. You can probably make it if all goes well but a limited amount of room to maneuver or to handle unexpected outcomes.

Have you rerun the numbers for 'one more year'. What is the new WR result and and would it be worth delaying ER.

Is this meant to be humorous and I'm just not getting the joke? Or, are you serious?

I am sure that there are people with $2 million plus SS who at age 60 couldn't retire. But, I don't really think there is much doubt here where they OP says they currently live on $60k and just paid off the mortgage. He will get $24k SS at 66, his wife will get $12k, and he will have a $3k a year pension in about 5 years. Firecalc gives 100% with spending up to $90k which is 150% of what he is spending now. He also has additional funds set aside for some one time expenses.

Let's say he decided to withdraw 3% a year until SS comes. That 3% alone would cover his expenses. SS and pension will ultimately cover $41k of the $60k a year. Granted his expenses may change during retirement and he should certainly model that. But, even if health care expenses are likely to be higher some expenses are likely to be lower. And he has budgeted his $11k a year of mortgage spending (which he no longer has) to cover all or part of those. Even if his ultimate expenses turn out to be more than $60k with $2.1 million if it was me I wouldn't be trying to figure out if I needed to wait OMY.

If he has no retiree insurance available, figuring out cost of health insurance is clearly much easier now since he can just go and price exchange policies.

 

[wingfooted]

Is this meant to be humorous and I'm just not getting the joke? Or, are you serious?

.

Serious

Health insurance on the new exchanges for older couples -$20K per year

Some portion of the funds are in 401K - tax bite is not zero

IMO, future SS income needs to be viewed with some suspicion as the program will likely be income or asset tested.

OMY can have a significant impact on available funds

 

[Katsmeow]

Serious

Health insurance on the new exchanges for older couples -$20K per year

Some portion of the funds are in 401K - tax bite is not zero

IMO, future SS income needs to be viewed with some suspicion as the program will likely be income or asset tested.

OMY can have a significant impact on available funds

Sure, but he has plenty of cushion to cover all that stuff. Basically, if you can't retire with $2MM, then there isn't hope for the vast majority of Americans. And, I think the vast majority can and do retire with less than $2MM.

 

[Ready]

Sure, but he has plenty of cushion to cover all that stuff. Basically, if you can't retire with $2MM, then there isn't hope for the vast majority of Americans. And, I think the vast majority can and do retire with less than $2MM.

+1

If you can't retire at 59.5 with $2.1M in the bank and no mortgage, then we have a lot of people out there in serious trouble in this country. That has to be at the very top percentage of savings for someone their age.

 

[robnplunder]

Is this meant to be humorous and I'm just not getting the joke? Or, are you serious?

I am sure that there are people with $2 million plus SS who at age 60 couldn't retire. But, I don't really think there is much doubt here where they OP says they currently live on $60k and just paid off the mortgage. He will get $24k SS at 66, his wife will get $12k, and he will have a $3k a year pension in about 5 years. Firecalc gives 100% with spending up to $90k which is 150% of what he is spending now. He also has additional funds set aside for some one time expenses.

Let's say he decided to withdraw 3% a year until SS comes. That 3% alone would cover his expenses. SS and pension will ultimately cover $41k of the $60k a year. Granted his expenses may change during retirement and he should certainly model that. But, even if health care expenses are likely to be higher some expenses are likely to be lower. And he has budgeted his $11k a year of mortgage spending (which he no longer has) to cover all or part of those. Even if his ultimate expenses turn out to be more than $60k with $2.1 million if it was me I wouldn't be trying to figure out if I needed to wait OMY.

If he has no retiree insurance available, figuring out cost of health insurance is clearly much easier now since he can just go and price exchange policies.

+1.

One thing I learned about this forum, it has a lot of financially ultra conservative RE folks. The OP's sitting on so much money and future income to live comfortably for the rest of their lives. Of course, WW III can happen, super volcano can wipe out 1/2 of USA, etc.. But if that happens, we will all be in a same boat.

 

[daylatedollarshort]

Sure, but he has plenty of cushion to cover all that stuff. Basically, if you can't retire with $2MM, then there isn't hope for the vast majority of Americans. And, I think the vast majority can and do retire with less than $2MM.

+3. I suspect the vast majority of households out there retire with way less than $2.1M.

 

[kimcdougc]

I am retired and my husband is retiring this year with only $1,000,000 in the bank per se. Have a pension and a house note but every calculator I use, including the FIRE calculator say we can do it. So you should be good by all means with the expenses you have listed. Go for it and enjoy!

 

[lhamo]

+3. I suspect the vast majority of households out there retire with way less than $2.1M.

+4

Let's revisit the options as OP stated them in the original post:

1) Jump off a bridge

2) Retire early with a $2mill portfolio.

I'd take door #2.

 

[travelover]

Serious

Health insurance on the new exchanges for older couples -$20K per year

Some portion of the funds are in 401K - tax bite is not zero

IMO, future SS income needs to be viewed with some suspicion as the program will likely be income or asset tested.

OMY can have a significant impact on available funds

Is Suze Orman posting here now?

 

[wingfooted]

Is Suze Orman posting here now?

No, but maybe one of her disciples ?

 

[pb4uski]

What happened to the OP? A one-post wonder?

 

[pinejake]

We've got the same $2.1 million in investable assets and a $70K pension. No SS coming our way. No debts.

We plan on spending $130K/yr (includes HI, taxes) and firecalc puts us at 100% success. Checking out this year @ 55 ...

 

[Ready]

What happened to the OP? A one-post wonder?

Gosh, I hope they didn't jump of that bridge!