Age 52 How much do we really need to FIRE?

[momoney]

I lost my job and the job search is not going very well. (That's for another thread )

We have no debt.

I've calculated our expenses at:

$53,000 essential (with ACA healthcare).
$9,000 discretionary expenses.

Social security at 67:
Me: $3200
Wife: $900

$370 month pension at 62

FIREcalc is showing $1,750,000 has a 100% success for a 35 year retirement.

 

[Jerry1]

I think that number is too high. Not sure what all you’ve entered into FIRECalc but $1.75M seems very high for $62K annual spend, which will be reduced by SS and pension in time.

Personally, I’d guess something around $1.5M or less. Keep working the numbers in FIRECalc.

ETA: I just did a basic FIRECalc run using only the inputs on the first page and I get your number. It looks like you’re not adding in the additional data into the model. Take a look at all the tabs and ask questions if you don’t understand what’s being asked.

 

[monte1022]

Are you including taxes, vehicles, required home repairs/replacements, etc in your estimate? If you are already at goal then you could give RE a go and decide later on a part-time position. Reliable help doing almost anything commands a premium these days.

 

[Spock]

I'd double check the SS numbers... specifically spousal benefits. I suspect the SS numbers posted are individual benefits. If timed for it, lower benefit spouse would be 50% of higher benefit spouse.

 

[Time2]

I lost my job and the job search is not going very well. (That's for another thread )

We have no debt.

I've calculated our expenses at:

$53,000 essential (with ACA healthcare).
$9,000 discretionary expenses.

Social security at 67:
Me: $3200
Wife: $900

$370 month pension at 62

FIREcalc is showing $1,750,000 has a 100% success for a 35 year retirement.

I agree, I get 100% success of $1,750,000 withdrawing $60,000 a year.
But, you will receive SS, I think your wife can collect 50% on your account, or $1600. So combined you will have $4,800 a month or $57,600 a year plus the $370 a month, $4,400 a year from the pension. By opening the tabs, each of these amounts can be added with the time they start. This will cause the nest egg needed to start to be reduced.
Someone needs to chime in about how inflation is handled in FireCalc, is the spending amount increased by the inflation rate each year?
Edit to add,

I see FireCalc default setting is "Constant Spending Power: Future spending will be about the same as entered above, adjusted for inflation. This keeps the approximate spending power constant during the term of your retirement."


I have been trying to see what FireCalc did after adding his SS $38,400 and her SS $17,200 starting in 2037 and the $4,440 pension starting in 2032. I got no change in the $1,750,000 needed, Can't figure out what I'm doing wrong.
I assume it would reduce the starting amount needed.

 

[ivinsfan]

I agree, I get 100% success of $1,750,000 withdrawing $60,000 a year.
But, you will receive SS, I think your wife can collect 50% on your account, or $1600. So combined you will have $4,800 a month or $57,600 a year plus the $370 a month, $4,400 a year from the pension. By opening the tabs, each of these amounts can be added with the time they start. This will cause the nest egg needed to start to be reduced.
Someone needs to chime in about how inflation is handled in FireCalc, is the spending amount increased by the inflation rate each year?

Maybe, a lot of this depends on age difference and when is the best time to collect SS is. The OP should do some research.

 

[Aerides]

Per your intro thread you looked fine then, but had a slightly higher egg and expenses. Just make sure you don't go "we can cut out all the fun and retire" and think that will work for a long happy life. Be realistic about expenses in a way that you don't feel the pinch.

4 decades of under estimating your real needs and wants is a long time.

At 52, if you don't feel ready, you should explore another career, a lower income, or part time work to supplement your savings, and delay the time you'll need to live off them.

 

[RetiredHappy]

Just want to double check on the SS numbers. If you are using SS statement, it assumes that you will keep working until 67 with your benefits at $3,200. Since you are stopping at 52, make sure you run the calculator to reflect not having anymore contributions into SS after 2023. It should be lower if it has not already been accounted for.

Your spouse should get half of the higher income earner at Full Retirement Age or her own, whichever is higher. In this case, if it is indeed $3,200, wife should receive $1,600 at her FRA.

 

[Time2]

I have been trying to see what FireCalc did after adding his SS $38,400 and her SS $17,200 starting in 2037 and the $4,440 pension starting in 2032. I got no change in the $1,750,000 needed, Can't figure out what I'm doing wrong.
I assume it would reduce the starting amount needed.

Maybe, a lot of this depends on age difference and when is the best time to collect SS is. The OP should do some research.

I didn't make it clear, I put in $60K income $1,750,000 nest egg and 35 years, I found $1,740,000 will return 100% Then I added in receiving his and her SS check at a later date and the pension. These made no difference it was still $1,740,000 to get 100% success. It should have reduced the nest egg needed.

 

[Al18]

You have feedback from 3 people that Firecalc is broken. Time to try another program or two. Off the top of my head, multiply your current investable assets by 3.5% to get an idea of how much you can withdraw per year in retirement. Recheck your calculations every 6 months.

Create 3 spending levels of my retirement and decide where you want to retire at.
1. Minimal retirement - stay in current house with no mortgage, keep up with house maintenance, buy a new car every 20 years, eat out twice a week and no vacations.
2. Better retirement with current house, 3-4 weeks vacation and replace 2 cars every 10 years.
3. Best retirement with buying a new house and a lake house, 2-3 months vacation per year, and having a new Corvette, Porsche and Ferrari every 4 years.

In my opinion, unless your are very, very smart or very, very lucky in stock holdings, you’ll likely need to work in some capacity until you are 55, so you have 35 years of good earnings which your SS benefit is calculated.

 

[Time2]

You have feedback from 3 people that Firecalc is broken.

I have reviewed the thread, I don't see any feedback that FireCalc is broken.
Show me. Thanks

 

[Jerry1]

I have reviewed the thread, I don't see any feedback that FireCalc is broken.
Show me. Thanks

Agree. I don’t think there’s anything wrong with FIRECalc. I think the OP needs to enter more data into the program to get better information.

 

[Kork13]

It seems to me that targeting 100% success is unnecessary, and in most cases will drive over-saving & delayed retirement & an excessively large residual estate upon death. 95% is a more practical target, I think.

By the by .... Pretty sure I figured out the 'problem' with FIRECalc giving such unusually high figures. When you enter the SS amounts, it asks for the ANNUAL amount. I'm guessing that you folks are inputting the monthly amount.

Using the numbers provided by OP & FIRECalc's success rate function (on the 'Investigate' tab), it calls for a $1.21M starting portfolio to achieve 100% success over 35 years. For the more reasonable 95% success, $1.1M starting portfolio. Using instead a 50% spousal benefit ($1600/mo), 100% success calls for $1.16M, and 95% success for $1.04M.

In any case, not nearly so much is required.

 

[disneysteve]

It seems to me that targeting 100% success is unnecessary, and in most cases will drive over-saving & delayed retirement & an excessively large residual estate upon death. 95% is a more practical target, I think.

By the by .... Pretty sure I figured out the 'problem' with FIRECalc giving such unusually high figures. When you enter the SS amounts, it asks for the ANNUAL amount. I'm guessing that you folks are inputting the monthly amount.

Using the numbers provided by OP & FIRECalc's success rate function (on the 'Investigate' tab), it calls for a $1.21M starting portfolio to achieve 100% success over 35 years. For the more reasonable 95% success, $1.1M starting portfolio. Using instead a 50% spousal benefit ($1600/mo), 100% success calls for $1.16M, and 95% success for $1.04M.

In any case, not nearly so much is required.

I really need to sit down and run FIRECalc again. I haven't done it recently. Now that I've been per diem for over a year, I've become more convinced that I really don't need to be working at all and definitely not the 8 hrs/wk that I've been doing mostly. Not that 8 hrs/wk is any big deal but I could cut back to 4 and we'd be find.

 

[pb4uski]

Agree. I don’t think there’s anything wrong with FIRECalc. I think the OP needs to enter more data into the program to get better information.

+3

 

[Kork13]

I really need to sit down and run FIRECalc again. I haven't done it recently. Now that I've been per diem for over a year, I've become more convinced that I really don't need to be working at all and definitely not the 8 hrs/wk that I've been doing mostly. Not that 8 hrs/wk is any big deal but I could cut back to 4 and we'd be find.

No time like the present! The nice thing about FIRECalc is that doing a rough run really is quite fast & simple, as long as you have your basic numbers ready. Current portfolio value, estimated expenses, estimated SS, any pension, any ongoing work income ... that's really about all you need.

 

[Time2]

Agree. I don’t think there’s anything wrong with FIRECalc. I think the OP needs to enter more data into the program to get better information.

I'm not the OP, just the complainer! As I've said, I've ran it plain, $60k income, $1.74M nest egg and 35 yrs, no problem 100% success.
Then I add in the SS and pension on the "Other Income/Spending" Tab.
It doesn't change a thing. Why?

 

[Jerry1]

I'm not the OP, just the complainer! As I've said, I've ran it plain, $60k income, $1.74M nest egg and 35 yrs, no problem 100% success.
Then I add in the SS and pension on the "Other Income/Spending" Tab.
It doesn't change a thing. Why?

I’m not sure why. In a post above, someone mentioned that there might be an issue with annual vs monthly. Obviously it’s hard to know what’s happening without being able to see you input. Kork13 seems to be getting reasonable results. Just need to work the problem.

 

[Time2]

I’m not sure why. In a post above, someone mentioned that there might be an issue with annual vs monthly. Obviously it’s hard to know what’s happening without being able to see you input. Kork13 seems to be getting reasonable results. Just need to work the problem.

Yes, you must put in the SS and pension in amounts yearly. So That's not my problem. Off to try again.

 

[Kork13]

I'm not the OP, just the complainer! As I've said, I've ran it plain, $60k income, $1.74M nest egg and 35 yrs, no problem 100% success.
Then I add in the SS and pension on the "Other Income/Spending" Tab.
It doesn't change a thing. Why?

Did you go to the first page & reduce your starting portfolio value? Or otherwise use the success % test on the Investigate tab?

If you do neither of those, you're just re-running the same scenario with extra SS/pension income.

 

[CRLLS]

I guess I'm the only one who doesn't think planning to age 87 is a good plan. My current plan is to age 100 and I'm thinking on testing out another 5 years. Medical science is constantly changing. I'd rather die with a million in the bank than try to live another 5-10 years destitute and at the will of the state not matter how low that possibility might be.

When I was doing our planning calculations, I used several calculators to make me comfortable with not returning to work after being downsized at age 55, not just Firecalc. FWIW, DW didn't feel so comfortable with it and returned to work for a few years.I picked up a part time consulting gig for a few years. It all helped but still wasn't absolutely necessary. It did help me to sleep better at night. I am over conservative financial planning, not so much with my investing.

 

[momoney]

I guess I'm the only one who doesn't think planning to age 87 is a good plan. My current plan is to age 100 and I'm thinking on testing out another 5 years. Medical science is constantly changing. I'd rather die with a million in the bank than try to live another 5-10 years destitute and at the will of the state not matter how low that possibility might be.

I'm just basing it on males not living past early 80s in the family. I guess you could look at it the other way around as well. I worked all those extra years when I was younger and in better shape and I didn't need to.

 

[momoney]

Are you including taxes, vehicles, required home repairs/replacements, etc in your estimate? If you are already at goal then you could give RE a go and decide later on a part-time position. Reliable help doing almost anything commands a premium these days.

I think I have most expenses accounted for.
I have $9000 in discretionary expenses to play around with for a big ticket item.

 

[momoney]

I'd double check the SS numbers... specifically spousal benefits. I suspect the SS numbers posted are individual benefits. If timed for it, lower benefit spouse would be 50% of higher benefit spouse.

Thanks for pointing that out.

 

[Jenna]

I'd double check the SS numbers... specifically spousal benefits. I suspect the SS numbers posted are individual benefits. If timed for it, lower benefit spouse would be 50% of higher benefit spouse.

Yes- I was thinking the spousal benefit is 50% of the higher earning spouse. SS is very confusing. There are individual benefits and spousal benefits.

I like Toms Book for an overview. And he will answer your question via email if it's not covered in his book. For instance, a familiy member was married to a man-9 years, divorced him, remarried him and he passed 8 months later. He was able to give her advice. He is a former SS employee

https://amzn.to/3rU3AD1