Building the courage to take the plunge?...

[pb4uski]

If I am going to retire this year (end of June), I must decide very, very soon.

Part of me worries if I have enough. ($1.2m in my TDRA, $170K in cash savings, $0 debt, $150k in credit-HELoC, my retirement age is 67, now I am 62.)
And causes me to think I might be better to wait another year. I also feel like their are a number of things I could finish at work to make quitting easier on my co-workers. If I work another year I will put about $15k more into my TDRA and likely build up $20 to $30k in liquid savings.

OTOH, I am not getting younger. I get 20.5% of my salary for 5 years if I retire now, also they keep me on the very good health plan for $300/yr until i turn 65. Whereas, if I retire next year only get 20.5% for 4 years.

I have worked so long, I am almost afraid to stop having money coming in. I did not think it would be that un-nerving. ...

You have $1.37 million. With a 50/50 asset allocation, you could withdraw almost $50k annually for 38 years, to age 100, and never run out of money. Your expenses are ~$36k a year. And that ignores SS and your 20.5% salary for 5 years.

Don't fret about taxes too much. If you have $50k of income (like retirement account withdrawals) then your federal tax would only be $4k (single, under 65), so not too bad and well within the $50k of safe withdrawals and your $36k a year of "normal" spending.

I suggest that you retire now and not forgo the 20.5% of salary for a year.

We are creatures of habits and change is hard, but you're all set. Go for it.

 

[glasswave]

If you understand your current (and desired retirement) spending you are halfway there. It seems like you are concerned about taxes, but at your suggested spending levels it doesn't seem like that is a big deal. And you don't need to be exact, just include a fudge factor of say 10% for taxes at the spending levels you have described.

Second, regarding your post where you say "And causes me to think I might be better to wait another year." Everyone leaves money on the table when they retire. Early, standard or late, it doesn't matter, you are leaving money on the table. Around here, we call your statement OMY syndrome, One More Year. You can always work one more year for money, when does it stop?

Thank you. This reply has been very helpful.

I generally pay about 35-38% of my income in taxes. I have a hard time estimating taxes in retirement because the rules are all very different.
I am not sure of this but I gain the impression that you don't pay SS & Medicare taxes on TDRA account withdraws. Correct?
One source says this is because you have already paid SS & MC taxes when you earned it, but AFAIK, I did not pay those taxes on my employer contributions.. I also don't understand why you pay income tax on the interest you have earned on your TDRA. That interest seems to be capital gains to me, but somehow capital gains is for rich people and interest income is for poor people, it seems.

Nonetheless taxes in retirement is not easily estimated for me, but I am pretty sure about this:
I received $4500 "in pocket" dollars each month, I should be able to survive in pretty much the same lifestyle as I do now, while setting about $1k to $1.5k/mo aside to build a cash reserve for unexpected big expenses or luxury cash outlays such as budget travel or large ticket purchases.


~~~~~~

 

[glasswave]

Taxes ARE expenses so should be a part of your expenses for the purpose of retirement planning (and for FIRECalc.)

Yes, I know taxes ARE expenses. To me, they are more of a yearly thing than monthly expense and taxes in retirement appear to be much different than they are for me now. I pay about 35-38% of my gross in taxes now, but my understanding is that it will be less if I take early retirement.

As far a fireCALC goes, I cannot do my job, learn fireCALC and learn how to estimate retirement taxes in the time frame I have in which to make this decision, so we will just have to consider me a failure in that regard.


~~~~~~

 

[pb4uski]

...I have a hard time estimating taxes in retirement because the rules are all very different.
I am not sure of this but I gain the impression that you don't pay SS & Medicare taxes on TDRA account withdraws. Correct?
One source says this is because you have already paid SS & MC taxes when you earned it, but AFAIK, I did not pay those taxes on my employer contributions.. I also don't understand why you pay income tax on the interest you have earned on your TDRA. That interest seems to be capital gains to me, but somehow capital gains is for rich people and interest income is for poor people, it seems.

Nonetheless taxes in retirement is not easily estimated for me, but I am pretty sure about this:
I received $4500 "in pocket" dollars each month, I should be able to survive in pretty much the same lifestyle as I do now, while setting about $1k to $1.5k/mo aside to build a cash reserve for unexpected big expenses or luxury cash outlays such as budget travel or large ticket purchases. ...

It is easy to estimate your taxes in retirement. Check out IRS & State Tax Calculator | 2005 -- 2025 If you had $4,500 of tas-deferred retirement account withdrawals each month then your federal income tax bill would be $4,441.50 based on 2025 tax rates and deductions. If you live in a state that has an income tax, then add that in.

No SS or Medicare taxes on tax-deferred retirement account withdrawals, just income taxes on withdrawals.

Growth of tax-deferred retirement accounts is ordinary income and not capital gains. That is why if you have taxable account savings it is better to fill that with stocks if possible since qualified dividends on stocks and long-term capital gains on stocks are tax preferenced. By holding stocks in tax-deferred accounts you are effectively converting tax-preferenced income to ordinary income.

 

[Al18]

Looks like Utah has a flat 4.55% state income tax, which comes out to $2457 per year based on $4500 withdrawals each month, from a retirement account.


Your state taxes will likely be lower if some of your income comes from qualified dividends or stock sales from a brokerage account.

 

[Gumby]

FIRECalc does not do taxes. On the first tab, your annual spending number should include enough to pay any taxes. And on the investigate tab, if you are looking for max spending for a particular success rate, you need to first take the taxes off to see what you will have left to spend. FIRECalc also calculates everything to present value using the inflation rate specified.

Regarding taxes:

Social Security and Medicare taxes are paid only on wage income. I'm not sure what exactly you mean by TDRA, but if it is like a 401k or IRA, you will need to pay income taxes on withdrawals, but not SS or Medicare taxes.

Don't worry about the income taxes on your social security and medicare employer contributions. That's why up to 85% of your eventual social security check will be taxed - to recover the amounts that were not taxed earlier.


At this point, I recommend spending whatever free time you have refining your knowledge of your expected spending, including taxes, because that's what drives everything else. Once you know that, you can make an informed decision. Even if you renew your contract for a year, you'll still need to learn these things and run the numbers so you don't find yourself in the same jam a year from now.

 

[glasswave]

Get rid of guestimates and "all I can tell you is" - you can do better!

Go through your actual expenses line by line, dollar by dollar, with a 2-3 year look back. Get an actual total. Add up everything from cards, from bank debits, from checks written. Include property taxes, annual expenses, and then figure out lumpy stuff (everyone needs a new roof, a new car, eventually). Then figure in some line for income taxes, estimate healthcare, etc.

It doesn't take more than an hour or two to do that. But it's incredibly easy to be wrong with guestimates, and almost as easy to validate the real numbers. Avoid the temptation to say "oh I won't need to spend THAT thing again once retired" just keep it in there and assume it will be replaced by something else you don't know now that you'll want/need.

Thanks for the encouragement..
My brain does not function is such a way that I could complete the task you describe in a few hours, I'd need about 10x that. In addition, the requirements of exceeding expectations in a demanding professional position, meeting my personal obligations and indulging my impulse for continuous dopamine bumps makes it extremely hard to complete tasks like you suggest or even keeping up on my laundry for that matter.

Also, my expenses do not work the same as others. If I take 3 months traveling and trekking in Pakistan, my expenses actually go down significantly from if I stay in the United States. If I take 3 months traveling around the USA staying mostly in hotels and buy/sell a 370z convertible to do so, my expenses shift in another direction. If I AirBnB my house it adds another complication.

I am not saying that the task cannot be done.. It's on my list along with a million other uncompleted tasks, if I could just keep track of my keys maybe I could find the time to get right after it.

In any respect, it is not going to get itself sorted in the time in which I have to make this decision.


~~~~~

 

[mebden]

I have an "active account" that has both checking and savings. I use this account to try an monitor my yearly/monthly/daily living expenses. I have other accounts for the bulk of my liquid funds. So now, I have $3000 month put in my "active account" checking and the rest put in "active account" savings. At the end of my person fiscal year (late May), I reset my "active account" to $3000 in checking and $4500 in savings. My next check (I get 2 per month) brings checking up to $4500 and the rest goes in "active account" savings. On the next year I reset and repeat.

No, not really. I don't really know what those big ticket items are going to be, that's why I am always trying to put money in savings. I want to add AC and a new cloth top to my classic car. I don't know what those costs will be. I am also trying to get out of a storage unit because a big corporation ran out the retired couple that owned it and now they are ram-rodding price hikes and screwing over all the long-term tenants. I need to get another storage shed, but I do not know what that will cost.


~~~~~~

Buy a metal shipping container and have it dropped on your property and paint it to match the house and you have your own storage unit

 

[Chuckanut]

Easy for me to say as I have an accounting/finance background... This comment must be in jest, but is kind of funny. Takes too much time to learn Firecalc, so gonna work another 2,080 hours instead.

I think you'll find many folks here who did retire, used a tool like Firecalc to learn the numbers, test scenario's, and build confidence/understanding of financial preparedness. Stick with it. Should make more sense and you change numbers, read fine print on each page, and see differences in outcomes modeled. Maybe a friend/family member you can confide it could help.

I ran two calculators - FireCalc and a Monte Carlo calculator from the Vanguard site. Both showed I could retire.

The only remaining issue was medical insurance (this was pre-Obamacare.). Once I found a good source for that, the decision was easy. After watching several friends and several dear family members pass in their 50’s to their mid 60’s, the decision was not hard.

 

[glasswave]

Easy for me to say as I have an accounting/finance background... This comment must be in jest, but is kind of funny. Takes too much time to learn Firecalc, so gonna work another 2,080 hours instead.

I think you'll find many folks here who did retire, used a tool like Firecalc to learn the numbers, test scenario's, and build confidence/understanding of financial preparedness. Stick with it. Should make more sense and you change numbers, read fine print on each page, and see differences in outcomes modeled. Maybe a friend/family member you can confide it could help.

I suppose the statement was made in sarcastic jest on my part. I don't have the time to do all that everyone is asking before this decision needs to be made and if I don't retire this June 30th then yes, I pretty much need to work another year, and the demands of my job generally consume a great deal more than 40 hours per week.


~~~~~

 

[glasswave]

FIRECalc does not do taxes. On the first tab, your annual spending number should include enough to pay any taxes. And on the investigate tab, if you are looking for max spending for a particular success rate, you need to first take the taxes off to see what you will have left to spend. FIRECalc also calculates everything to present value using the inflation rate specified.

Regarding taxes:

Social Security and Medicare taxes are paid only on wage income. I'm not sure what exactly you mean by TDRA, but if it is like a 401k or IRA, you will need to pay income taxes on withdrawals, but not SS or Medicare taxes.

Don't worry about the income taxes on your social security and medicare employer contributions. That's why up to 85% of your eventual social security check will be taxed - to recover the amounts that were not taxed earlier.


At this point, I recommend spending whatever free time you have refining your knowledge of your expected spending, including taxes, because that's what drives everything else. Once you know that, you can make an informed decision. Even if you renew your contract for a year, you'll still need to learn these things and run the numbers so you don't find yourself in the same jam a year from now.

TDRA = Tax deferred Retirement account. I don't what type of account it is. It is not a 401k or IRA but I get the impression that it starts with a 40 and has another number and different letters behind it.

SS.gov estimates that I will get about 3k month if I take SS at age 67 ($3.9k at 70). If I take SS while I am in early retirement and getting this 20.5% I would very like be subject to severe tax penalties.

And BTW, If take early retirement, I will have a big increase in health insurance expenses when I turn 65 and am forced onto Medicare. If I keep working, I can stay on my work plan, but when I start medicare, my expense will go from twenty something a month to $400 to $800 per month or something. At least that's how I understand it.

~~~~~~

 

[Al18]

I believe most retirees on this forum read messages or posted for a couple of years before actually retiring. I had a retirement date in mind, but delayed for another 2 years before actually retiring. If your decision feels rushed, give yourself another year and plan carefully.

 

[Time2]

The standard deduction is $30k or $2500/mo. so your taxes will be pretty low on $4500/mo income.
You need to be very sure of your expenses The difference between $4000/mo. and $5000/mo. is life changing

Yes, I expect low taxes, I would just assume 10% for federal tax and if you have a state tax add that percentage in and call it just one more of your expenses.
Regarding FireCalc, it is not difficult to learn! It also will allow you to do a simple analysis, then you can learn about each tab as you go, most tabs will not apply, but with your 20.5% for a limited time you will need to fill out the Other Income/Spending tab. That is not complicated. You can find an hour to figure it out what date to put in. Go for it. FireCalc is using before tax money, so if you need $42,000 for spending add $4200 for taxes and find a way to generate $46,200 as gross income, or a little more if you have a state tax.

 

[Time2]

Yes, I know taxes ARE expenses. To me, they are more of a yearly thing than monthly expense and taxes in retirement appear to be much different than they are for me now. I pay about 35-38% of my gross in taxes now, but my understanding is that it will be less if I take early retirement.

As far a fireCALC goes, I cannot do my job, learn fireCALC and learn how to estimate retirement taxes in the time frame I have in which to make this decision, so we will just have to consider me a failure in that regard.


~~~~~~

Are you sure about 35-38% in taxes? Are you including SS in that number? That would be an extremely high tax rate. As a married couple you can earn $123,500 and only owe $10,850 in Federal tax, or 8.8% of your gross.
Add the 4.55% for Utah tax (may be less, is that based on gross or AGI) and you are up to 13.35%. This a long way from 35-38%, can you recheck your numbers? Also, do you file MFJ? Numbers will be more if you are filing single.
You can figure out Firecalc in an hour, it is not difficult. All you really need is the basic start here and the tab, Other Income/ spending., put in your SS amount and start dates and highlight the pension button and put in the amount of your 20.5%, and click submit. If after that you have more questions there is a section on this forum for FireCalc Support. I might even add, if you post your expected SS amount, your 20.5% amount and the dates these start and when the 20.5% stop and your nest egg amount, Someone will tell you the maximum you should withdraw, and you could trim that a little to be safe, but FireCalc already computes a safe withdrawal rate.

 

[engineernerd]

Part of me worries if I have enough. ($1.2m in my TDRA, $170K in cash savings, $0 debt, $150k in credit-HELoC, my retirement age is 67, now I am 62.)

OTOH, I am not getting younger. I get 20.5% of my salary for 5 years if I retire now, also they keep me on the very good health plan for $300/yr until i turn 65. Whereas, if I retire next year only get 20.5% for 4 years.
~~~~~~~

Just to be absolutely clear, if you wait another year will your very good health plan still be there for you until you become eligible for Medicare? $300/year is amazing; I pay $1,100 per MONTH for a one-person high-deductible ACA plan.

I agree with others here that your finances sound good enough for you to retire now. I would use a 3.5% withdrawal rate for the rough calculation, which means you’d have $48k a year from your $1.37 million portfolio.

But to me you don’t sound mentally ready to retire. You haven’t investigated your actual expenses to any real degree. You haven’t used FIRECalc to any real degree. You seem not to understand taxes all that well (when you stop working you also stop paying Social Security and Medicare taxes). And most of all, you sound stressed. Nobody thinks well while adrenalized. No exceptions.

MY ADVICE FOR HOW TO NAVIGATE FIRECalc:

I have found that I cannot open any of the other tabs until after I have hit the “Submit” button on the homepage, then clicked “Close the results window.”

The Other Income/Spending tab is where you’d put in your 20.5% and your estimated Social Security benefits.

I recommend sticking with the default Spending Model.

I recommend comparing your actual portfolio, including your expense ratio, with the default in Your Portfolio.

And last but not least, I recommend selecting the “Investigate changing my portfolio” option under the Investigate tab.

 

[TheWizard]

TDRA = Tax deferred Retirement account. I don't what type of account it is. It is not a 401k or IRA but I get the impression that it starts with a 40 and has another number and different letters behind it.

SS.gov estimates that I will get about 3k month if I take SS at age 67 ($3.9k at 70). If I take SS while I am in early retirement and getting this 20.5% I would very like be subject to severe tax penalties.

And BTW, If take early retirement, I will have a big increase in health insurance expenses when I turn 65 and am forced onto Medicare. If I keep working, I can stay on my work plan, but when I start medicare, my expense will go from twenty something a month to $400 to $800 per month or something. At least that's how I understand it.

~~~~~~

Wrong about Medicare costs. Most people are less than $200 per month per person. High income retirees, well over $100k per year income per person, are assessed various levels of additional costs which can total up to $400/month or more.

I think it would be good for you to take some time to do homework on some of these basic topics that impact your retirement finances...

 

[Gumby]

TDRA = Tax deferred Retirement account. I don't what type of account it is. It is not a 401k or IRA but I get the impression that it starts with a 40 and has another number and different letters behind it.

SS.gov estimates that I will get about 3k month if I take SS at age 67 ($3.9k at 70). If I take SS while I am in early retirement and getting this 20.5% I would very like be subject to severe tax penalties.

And BTW, If take early retirement, I will have a big increase in health insurance expenses when I turn 65 and am forced onto Medicare. If I keep working, I can stay on my work plan, but when I start medicare, my expense will go from twenty something a month to $400 to $800 per month or something. At least that's how I understand it.

~~~~~~

Other tax deferred retirement account possibilities are 457 and 403b. Here is an IRS document describing the various types of plans. Types of retirement plans | Internal Revenue Service The tax treatment is generally the same for all of them, but there are some twists, like the mechanics of required minimum distributions, that vary by the type of plan, so you should try to find out precisely what it is.

What is the 20.5% income for the next 5 years? Is it some sort of pension or is it wages? In general, you only need to be concerned about reductions in your social security if you are less than full retirement age of 67, collecting social security and still receiving wage income of more than $23,400 per year (they take away $1 of social security for every $2 of wage income above that, but you get it back later). Notably, this only applies to wage income. You can collect a private pension and early social security at the same time (I've done it for the past 4 years).

Of course, whenever you have other income and get social security, your total income can cause up to 85% of your social security to be subject to taxation. This occurs whether you are claiming social security early or not.

When you turn 65 and go on Medicare, you will have to pay Part B and D premiums, which are currently $185 per month for Part B and about $46.50 per month for Part D, depending on the precise plan you choose. If you have a really high income (above $106k per year if single), you will be subject to IRMAA surcharges on the Part B and D charges. Then you'll want a Medicare Advantage plan (which would obviate the Part D premium if the plan includes drug coverage) or Medigap plan to cover coinsurance and deductibles. They vary in cost.

For tax planning for future years, I just use the current limits and brackets and assume that they will increase with inflation. Not everything related to taxes is inflation adjusted, but most of the common things are. Here is a quick and dirty list of tax numbers you should know for your planning.

Some important "trigger" income levels for 2025

CORRECTED TO POST #18 Similar to what I did for the last five years, here is a list of important “trigger” income levels for 2025. Numbers are actual AGI/MAGI (i.e. - before standard or itemized deductions) unless indicated as Taxable Income by an asterisk * which means you can add $30,000...

www.early-retirement.org

 

[glasswave]

I believe most retirees on this forum read messages or posted for a couple of years before actually retiring. I had a retirement date in mind, but delayed for another 2 years before actually retiring. If your decision feels rushed, give yourself another year and plan carefully.

I've been reading for a year & I am pretty sure I have enough if the we don't suffer a Great Depression sort of downturn, but If I waited I could probably be better prepared. Given the way my brain functions, there is little guarantee that I won't have unanswered questions and nervousness in a year from now.

I also, worry about having all my ducks in a row so my colleagues will not have the burden of scrapping up my loose ends. A year would give me more opportunity to tie up said loose ends, but there is no guarantee that I would so.

I could always expat to another country if finances start getting too tight.


~~~~~

 

[pacergal]

You have $1.37 million. With a 50/50 asset allocation, you could withdraw almost $50k annually for 38 years, to age 100, and never run out of money. Your expenses are ~$36k a year. And that ignores SS and your 20.5% salary for 5 years.

Don't fret about taxes too much. If you have $50k of income (like retirement account withdrawals) then your federal tax would only be $4k (single, under 65), so not too bad and well within the $50k of safe withdrawals and your $36k a year of "normal" spending.

I suggest that you retire now and not forgo the 20.5% of salary for a year.

We are creatures of habits and change is hard, but you're all set. Go for it.

pb4uski is a numbers guy, if he says you are good, you most likely are golden.

OP-- how much notice do you need to give? Most of the time, 2 weeks is plenty, some some need months.
Firecalc is really not that hard and does not take long to learn. Read each section in each tab and follow directions. I really encourage you to take a little bit of time in your day to run it.
Knowing your expenses is important, but you don't need the exact number to the penny. Look at your bank records/tax records, etc for the past year to give you an idea.

It looks like the company is giving you a greater incentive to retire now, with the insurance discount.
Having 20% of your salary for 5 years is a good hedge and will decrease the draw on your savings in the beginning of your retirement. And will take you to 67 to start SS.

A simple basic math of 4% of your $1,370,000 investments and cash= $54,800 for 30 years.
If you can pay expenses, taxes, and have little fun on that each year, you are fine. It does not include SS or your 20.5% salary for 5 years.
I think you are OK, but YOU have to feel OK about it.

Psychologically, it sounds like you are waffling.
Do Not worry about your colleagues. You don't have to tie up all loose ends before you leave. Really, they will be OK. Look at it this way, if you were fired today, what would they do? There is someone else who can do your job, believe me.
If something happened to you suddenly, they would still move forward.

Good luck in your decision making.
Lots of very knowledgeable folks here to answer questions.

 

[glasswave]

Are you sure about 35-38% in taxes? Are you including SS in that number? That would be an extremely high tax rate. As a married couple you can earn $123,500 and only owe $10,850 in Federal tax, or 8.8% of your gross.
Add the 4.55% for Utah tax (may be less, is that based on gross or AGI) and you are up to 13.35%. This a long way from 35-38%, can you recheck your numbers? Also, do you file MFJ? Numbers will be more if you are filing single.
You can figure out Firecalc in an hour, it is not difficult. All you really need is the basic start here and the tab, Other Income/ spending., put in your SS amount and start dates and highlight the pension button and put in the amount of your 20.5%, and click submit. If after that you have more questions there is a section on this forum for FireCalc Support. I might even add, if you post your expected SS amount, your 20.5% amount and the dates these start and when the 20.5% stop and your nest egg amount, Someone will tell you the maximum you should withdraw, and you could trim that a little to be safe, but FireCalc already computes a safe withdrawal rate.

I was somewhat mistaken. Currently, they take about 30-32% of my gross to cover taxes. I file "single HoHH." I'll take another look at firecalc, but I am not sure I have a hour. I am buried at work right now.

My expected SS amount according to SS.gov is $3k/mo at 67 full retirement age and $3.8k/mo at 70.


~~~~~

 

[mebden]

I suppose the statement was made in sarcastic jest on my part. I don't have the time to do all that everyone is asking before this decision needs to be made and if I don't retire this June 30th then yes, I pretty much need to work another year, and the demands of my job generally consume a great deal more than 40 hours per week.


~~~~~

Just remember you can never get back the time you waste working trying to make more money. So, you have to decide what's more important to you your TIME or that stupid OMY thought you have stuck in your head? Just what you have in savings alone put into an online high interest savings account will make you lots of free money and your investments along with dividends will be coming in to. Just for your info I decided to pull the plug at 58 with a lot less than you and I'm actually saving money with all the costs to go to work every day stopped. Also, I got tired of watching way too many people/ friends dying before 60 and not getting to enjoy any of their 45 plus years of working to retire. So, my saying is my time is more important than any more stress related work period.

 

[Texas Proud]

If you can retire now and get 20% of your salary.... and lose that if you keep working...

Then you salary is only 80% of what you think it is!!!

It took a long time for my oldest sister to get that free money now (pension or whatever) if you stop working is a negative amount on your current salary... when she got it she retired as she was only making 40% of what she thought she was getting...

 

[mebden]

I've been reading for a year & I am pretty sure I have enough if the we don't suffer a Great Depression sort of downturn, but If I waited I could probably be better prepared. Given the way my brain functions, there is little guarantee that I won't have unanswered questions and nervousness in a year from now.

I also, worry about having all my ducks in a row so my colleagues will not have the burden of scrapping up my loose ends. A year would give me more opportunity to tie up said loose ends, but there is no guarantee that I would so.

I could always expat to another country if finances start getting too tight.


~~~~~

I also, worry about having all my ducks in a row so my colleagues will not have the burden of scrapping up my loose ends. I'm sorry Glass I thought this above to and I'll guarantee you are very replaceable, and most companies really could give 2 turds about you especially when it comes to terminations if your name pops up your next period so just another stress your adding to your retirement day.

 

[TheWizard]

If you can retire now and get 20% of your salary.... and lose that if you keep working...

Then you salary is only 80% of what you think it is!!!

It took a long time for my oldest sister to get that free money now (pension or whatever) if you stop working is a negative amount on your current salary... when she got it she retired as she was only making 40% of what she thought she was getting...

So for example, if your nominal salary is $100k per year and you can retire tomorrow and get $60k per year pension, then you're only working for $40k per year presently.

I understand that somewhat flawed math.
In reality, many jobs pay you a higher pension the more years you work, and at a gradually increasing salary.
And of course, you are typically putting away lots of $$$ into investments those final working years, increasing your Investible Assets nicely.

But the real question is, using my example above, is that $60k pension, plus whatever other assets, enough to live on in the style you prefer?

 

[glasswave]

Just to be absolutely clear, if you wait another year will your very good health plan still be there for you until you become eligible for Medicare? $300/year is amazing; I pay $1,100 per MONTH for a one-person high-deductible ACA plan.

I agree with others here that your finances sound good enough for you to retire now. I would use a 3.5% withdrawal rate for the rough calculation, which means you’d have $48k a year from your $1.37 million portfolio.

But to me you don’t sound mentally ready to retire. You haven’t investigated your actual expenses to any real degree. You haven’t used FIRECalc to any real degree. You seem not to understand taxes all that well (when you stop working you also stop paying Social Security and Medicare taxes). And most of all, you sound stressed. Nobody thinks well while adrenalized. No exceptions.

MY ADVICE FOR HOW TO NAVIGATE FIRECalc:

I have found that I cannot open any of the other tabs until after I have hit the “Submit” button on the homepage, then clicked “Close the results window.”

The Other Income/Spending tab is where you’d put in your 20.5% and your estimated Social Security benefits.

I recommend sticking with the default Spending Model.

I recommend comparing your actual portfolio, including your expense ratio, with the default in Your Portfolio.

And last but not least, I recommend selecting the “Investigate changing my portfolio” option under the Investigate tab.

If I retire now, or any time before age 65, my very good health and dental will be good until I am 65 at which time, I will need to switch to Medicare.

It's actually around $260/yr or something w/dental. You are right, I tend not to be mentally ready for anything and stress out about any big decisions. I don't think this will change all much if I wait another year.

I'll try and take a good look at fireCALC when I get a chance. Thanks for the hints, they really help.


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