48 y.o. hoping to Lean FIRE in 3 years

[hmrambling]

I am a 48 year old married looking to retire in 2027 at age 51. My wife and I live in LCOL Louisiana.


Assets:
I have $218,000 in retirement savings invested primarily in stock and bond index funds (allocation: 65% stocks, 30% bonds, 5% cash). This is across a 457b, Roth IRA, and HSA. I also have $12k in I-bonds and $7k in T-bills for my emergency fund, as well as a $30k HYSA. My wife works but I have not included her income or assets.


Income:
I earn $6900/mo from my full time job and $500/mo from a part-time job. At 51, I can start collecting $5400/month from my state pension. I also receive $1900/mo (tax free) in veteran's compensation. At 67 I expect $150/month from Social Security - this is the amount after WEP GPO. In retirement I may continue part-time work ($500 mo) - I just sit at a desk at a library lol.

Expenses:
Our monthly expenses are about $3000, including $600 mortgage, $375 utilities, $200 gas, $300 restaurants, $400 groceries, $250 insurance, etc. We tithe and donate a percentage of income as well. My healthcare is covered by the VA so I don't use my HSA. State will pay 75% of my insurance premiums for private insurance when I retire. I'm on track to pay the house off in 10 years. Parents are deceased, no kids. We keep older vehicles that I maintain. We have emergency funds and ability to work part-time. I provided a detailed monthly expense breakdown, based on actual tracked spending. The expenses listed are expected retirement expenses. I'm eligible for long term care through VA, if needed. No major lifestyle changes are planned.


No reason to believe I won't live to at least 85. My wife works so she would have her income if I died prematurely, plus she is the beneficiary for all my accounts and life insurance. I did not account for change in tax status if she passes first however we only have debt on the house ($124K). Her retirement plan is similar to mine however I have 27 years in the system. She has less than 20 in the system so she will not be retiring right after me. She will be able to collect SS survivor benefits *until* she retires if something were to happen to me.

I have run the numbers and...before pulling the trigger, I would welcome this community's perspective on anything important I may be overlooking or could better optimize for a successful early 51 retirement. Please let me know if any other info would be helpful!

 

[jim584672]

I am a 48 year old married looking to retire in 2027 at age 51. My wife and I live in LCOL Louisiana.


Assets:
I have $218,000 in retirement savings invested primarily in stock and bond index funds (allocation: 65% stocks, 30% bonds, 5% cash). This is across a 457b, Roth IRA, and HSA. I also have $12k in I-bonds and $7k in T-bills for my emergency fund, as well as a $30k HYSA. My wife works but I have not included her income or assets.


Income:
I earn $6900/mo from my full time job and $500/mo from a part-time job. At 51, I can start collecting $5400/month from my state pension. I also receive $1900/mo (tax free) in veteran's compensation. At 67 I expect $150/month from Social Security - this is the amount after WEP GPO. In retirement I may continue part-time work ($500 mo) - I just sit at a desk at a library lol.

Expenses:
Our monthly expenses are about $3000, including $600 mortgage, $375 utilities, $200 gas, $300 restaurants, $400 groceries, $250 insurance, etc. We tithe and donate a percentage of income as well. My healthcare is covered by the VA so I don't use my HSA. State will pay 75% of my insurance premiums for private insurance when I retire. I'm on track to pay the house off in 10 years. Parents are deceased, no kids. We keep older vehicles that I maintain. We have emergency funds and ability to work part-time. I provided a detailed monthly expense breakdown, based on actual tracked spending. The expenses listed are expected retirement expenses. I'm eligible for long term care through VA, if needed. No major lifestyle changes are planned.


No reason to believe I won't live to at least 85. My wife works so she would have her income if I died prematurely, plus she is the beneficiary for all my accounts and life insurance. I did not account for change in tax status if she passes first however we only have debt on the house ($124K). Her retirement plan is similar to mine however I have 27 years in the system. She has less than 20 in the system so she will not be retiring right after me. She will be able to collect SS survivor benefits *until* she retires if something were to happen to me.

I have run the numbers and...before pulling the trigger, I would welcome this community's perspective on anything important I may be overlooking or could better optimize for a successful early 51 retirement. Please let me know if any other info would be helpful!

Good luck. Your numbers don't seem lean to me at all.

 

[DrRoy]

If your pensions are COLA then you should be pretty even with your current income.

 

[Surewhitey]

You look more than fine without a catastrophic event. I'd be in now if you got the pension...

 

[pjigar]

Good luck. Your numbers don't seem lean to me at all.

I would also double check your expense number based on your actual expenses *today* + healthcare cost + long term lumpy expenses (roof, car, furness, etc.). Based one you income and expenses, you would/should have saved/invested $2000-$3000 every month. Those investments should have compounded (over your 10-20 year working career) way more than your current portfolio. So either your income went up recently or your expenses have been higher all along. Double check your assumptions. As the statisticians say: garbage in = garbage out.

 

[Surewhitey]

I would also double check your expense number based on your actual expenses *today* + healthcare cost + long term lumpy expenses (roof, car, furness, etc.). Based one you income and expenses, you would/should have saved/invested $2000-$3000 every month. Those investments should have compounded (over your 10-20 year working career) way more than your current portfolio. So either your income went up recently or your expenses have been higher all along. Double check your assumptions. As the statisticians say: garbage in = garbage out.

I initially compared our progress to his @ his age, then I discounted my thought because of 2 pensions that more than cover his needs even if the expenses are 50% more... Income in your later years can really be a boost. This is our experience anyway.

 

[ncbill]

OP is good to go.

My FIL retired around the same age with modest retirement savings as well.

But with a COLA pension & essentially free retiree health care.

Had a kidney transplant nearly a decade ago & the VA covered what Medicare didn't.

Next spring will mark 30 years retired for him.

 

[pjigar]

I initially compared our progress to his @ his age, then I discounted my thought because of 2 pensions that more than cover his needs even if the expenses are 50% more... Income in your later years can really be a boost. This is our experience anyway.

I hear you: the guaranteed income is good in RE years. FWIW I was trying to point out that the expense estimation may be off. If expenses are more than (guaranteed) income then OP may have a problem.

 

[hmrambling]

I would also double check your expense number based on your actual expenses *today* + healthcare cost + long term lumpy expenses (roof, car, furness, etc.). Based one you income and expenses, you would/should have saved/invested $2000-$3000 every month. Those investments should have compounded (over your 10-20 year working career) way more than your current portfolio. So either your income went up recently or your expenses have been higher all along. Double check your assumptions. As the statisticians say: garbage in = garbage out.

Correct.

My income went up last year. I moved jobs while still remaining with the state. Also, I only started pursuing my veterans benefits in the past three years. Sadly, I was unaware that I was eligible for veterans compensation so that's 20+ years that I haven't been receiving veterans compensation.

Between the job change and veterans compensation, I'm able to max out my 457b and iBonds, plus have been buying T-bills.

 

[hmrambling]

You look more than fine without a catastrophic event. I'd be in now if you got the pension...

I have to have 30 years of service, then I can retire at any age. I'll make my 30 in 2027.

 

[NgineER]

You will be good to go provided your expenses are what you say they are.

Welcome to the forum!

 

[Fermion]

$7300 a month is lean?

I need to go on a diet.

 

[MarieIG]

Do you have any kiddos?

Also, I don't see enough info on your DW's situation if you get hit by a beer truck the day after you retire.

 

[jim584672]

I would also double check your expense number based on your actual expenses *today* + healthcare cost + long term lumpy expenses (roof, car, furness, etc.). Based one you income and expenses, you would/should have saved/invested $2000-$3000 every month. Those investments should have compounded (over your 10-20 year working career) way more than your current portfolio. So either your income went up recently or your expenses have been higher all along. Double check your assumptions. As the statisticians say: garbage in = garbage out.

I have been sub $16K a year for the last 9 years. $7,300 a month isn't lean to me.

 

[aaronc879]

Nothing lean about a $5400/mo pension at age 51. Living in a LCOL area you should be good with just the pension, anything else is gravy and not at all lean. Just hang in until that pension and you are easily good for life.

 

[Aerides]

Does your COLA pension have survivor benefits that will transfer to your wife?

Also, I wouldn't bank on her working (financially) after you retire. How long till she can collect her pension? That gap in the years is the one to look out for, as it can be a difficult time when one spouse retires much earlier than the other.

 

[hmrambling]

Does your COLA pension have survivor benefits that will transfer to your wife?

Also, I wouldn't bank on her working (financially) after you retire. How long till she can collect her pension? That gap in the years is the one to look out for, as it can be a difficult time when one spouse retires much earlier than the other.

I plan to select the retirement option to take out the most which means she won't get my pension unless I die before I take out what I contributed to the pension. I'd have to die before I'm 54, otherwise I'll have drawn it all out.

Our budget really doesn't rely on her income, though. Therefore I haven't factored her income into retirement. I pay all the house bills and my expenses.

On the other hand, she just got a PhD so I don't know why she wouldn't work after I retire. She pays car maintenance, fuel, car insurance, her food, her vet bills, and her apartment (she works at a university out of town).

When she has 20 years of service, she can take an actuarially reduced pension. Alternatively, her pension will be about the same as mine when she gets 30 years in. Provided that she stays in the same system, in about 13 years, she will have the same retirement I have (she'll have 30 years of service).

 

[SnowballCamper]

Welcome to SIRE (secure income retired early)!

I'd suggest you have the conversation about the survivor benefit on the pension.
FWIW DW and I are each beneficiaries on the other's pension. But we might be closer in age than your situation.

 

[hmrambling]

Do you have any kiddos?

Also, I don't see enough info on your DW's situation if you get hit by a beer truck the day after you retire.

No kids.

No parents.

If I get hit by a beer truck the day after I retire, she gets:

My pension contributions: ~ $100K

My Roth IRA: $163K~ish

My 403b: $90K~ish

Life insurance: $100K

Mortgage: -$100K

Cash accounts, t-bills, iBonds: $60K

My HSA: $17K

SS Survivor: $450mo. She's subject to WEP so that will be reduced to $150 mo after she retires

Because a beer truck is not a service connected, she would not get VA compensation. If I stepped out in front of the bus because I was depressed, she gets the VA comp.

House: $225K

She will be 10 years away from having the same pension I have. If she no longer wants to work, her actuarially reduced pension will be half in which case she'll have about $2500/mo from her pension.

She might do better with me dead.

 

[Teacher Terry]

Your wife has to sign off on not having a survivor pension and she would be a fool to do so.

 

[hmrambling]

Welcome to SIRE (secure income retired early)!

I'd suggest you have the conversation about the survivor benefit on the pension.
FWIW DW and I are each beneficiaries on the other's pension. But we might be closer in age than your situation.

She's one year older.

Our career paths/lengths are different because she took off work when she pursued her education and I worked through while I was going to school.

She just took almost 5 years getting her PhD while I took care of the house bills and such.

She's at the beginning of her college instructor career after being a public school educator. She'll have the full benefits I have. She has me listed as a beneficiary but we've selected the option to take the most out for retirement. Each of us only gets the others contributions back if the other dies.

 

[hmrambling]

Your wife has to sign off on not having a survivor pension and she would be a fool to do so.

She's listed as my beneficiary on my pension. However I have the option to take out the highest option. The highest option means she would get my remaining contributions when I die.

We have Opt 1, 2, 2A, etc. employee makes that choice.

 

[pacergal]

I think you look fine. Secure income changes the amount you need to save for retirement, especially COLA'd.
If you are paying the majority of household bills, then I assume your DW is banking most of her income from now until retirement?

Both of you look to be able to retire without problem.

DH and I both have pensions, but we chose 100% survivor.

Welcome to the forum!

 

[ncbill]

She's listed as my beneficiary on my pension. However I have the option to take out the highest option. The highest option means she would get my remaining contributions when I die.

We have Opt 1, 2, 2A, etc. employee makes that choice.

At your age & being ex-military I bet adding an add'l 10 year term life insurance policy would come at a reasonable cost, should you so choose.

 

[Koolau]

I think you're probably golden. Having said that, I always like having a good chunk of savings that I don't really need - if that makes any sense. IOW over-prepare. But that's just me.



Keep us posted on how things are w*rking out. Sounds like you will do the Early Retirement & Financial Independence community proud!