Hi, I've been a lurker for a while and decided I'd get some of your thoughts on my financial readiness. Mental readiness is another story; but I’m sure that is harder to help with on this forum. I’ve been burned out from work for several years now as I’ve essentially had the same high stress/high demand job since college. I dread Mondays and mostly sit around and wait for 4:00 so I can start planning for 5:00. I actually quit about 6 years ago but they talked me into coming back to qualify for my pension which I'm thankful they did. The first few years after that were OK but its bad again.
I'm 51, married and my wife is the same age. We have 2 daughters, one out of college with grad degree and a good job and the other with one more semester of college and her college fund has more than enough for her last year and those funds are not in my numbers below. She gets the remaining balance as a life starter for her. She is in a field that will not need grad school and she has accepted a job offer from her previous internship. Both kids should be self-sufficient… void of life errors.
We have paid off our house and have no debt. Two cars, both paid off and less than 3 years old. No CC debt either.
My investment portfolio is roughly as follows as of 1/1/19:
Retirement Funds (a mix of 401(k) and IRA)
Traditional - $1.175M
ROTH - $400K
Other Taxable -
Vanguard $4.1M
All of the above is roughly an 75/25 stock/bond mix. 95% held in broad based mutual funds with only individual 2 stocks owned. Stock fund split is 70% US / 30% foreign.
Current Salary (including average annual bonus) - $450K.
I carry a $2M term policy that goes another 6 years and a $250K whole life policy (I know, I know) that is almost done. That policy will then just sit there with no payments further due and the existing coverage. Wife has a $200K term policy that we took out when the kids were young to pay for full time care, if needed. It only has a few years left to pay and is cheap.
For Social Security, I ran a calculator to see how retiring early before the 30 year credit averaging and it’s projected at $2K/month at age 65. The haircut for not working until the full 35 credits are earned was only a few hundred per month. My goal would be to defer SSA payments until 70 to let the payments grow. As I understand SSA I'd be able to qualify for the $2K and my wife would get at least $1K as a spousal benefit if her calculated amount was less than that. If that is correct we'd have $3K monthly payments. But I'm just loosely counting on this in my numbers.
FIRE GOALS
I'm already two years past my first FIRE goal. I had a few life events, namely 2 house floods that forced us to end up selling our house for land value and buying a new property that should be safe as it’s off the ground. The good news is it forced us to downsize quicker than we may have otherwise which should cut down on our annual spend. Between flood insurance, IRS casualty loss rules and proceeds from land sale I ended up financially OK. This has all settled down now and we are moving forward with life again.
My current RE goal is late spring of 2019 (age 52). I'd retire with a non-COLA pension of approx. $65K with payments starting at age 58. If I kept working the pension grows at about $4K per year.
I've analyzed our spending over the past 3 years and considered changes in spending such as higher HI. My best guess is our retirement spending would start at around $200K/year. The bulk of the spending goes to (in rough order) taxes (income and property- $35K), HI premiums/deductibles $20K, other insurance (home/car/life/etc.)- $10K, food-$20K, travel-$20K, HOA Dues-$10K, Clothing-$5K, Household-$8K, Gym/Golf-$10K. The rest is miscellaneous including $10K/year to a fund for buying 2 cars every 8-10 years with cash. A lot of this I'm hoping is high but I'd rather be conservative with my thinking.
While I don’t know exactly what’s next it’s possible that I do some consulting on the side to keep some income coming in but it would be significantly less than my current income levels. However, I’d prefer it to be nothing for a while but relax and unwind. I have not included anything for future income in my calcs as that would just be extra.
We both come from long life families so I'm budgeting to age 99. I've run the numbers on numerous models with what I believe are conservative estimates of 5% investment returns, 4% spending increases and 4% inflation and most of the models seem to say GO FOR IT.
I'm 51, married and my wife is the same age. We have 2 daughters, one out of college with grad degree and a good job and the other with one more semester of college and her college fund has more than enough for her last year and those funds are not in my numbers below. She gets the remaining balance as a life starter for her. She is in a field that will not need grad school and she has accepted a job offer from her previous internship. Both kids should be self-sufficient… void of life errors.
We have paid off our house and have no debt. Two cars, both paid off and less than 3 years old. No CC debt either.
My investment portfolio is roughly as follows as of 1/1/19:
Retirement Funds (a mix of 401(k) and IRA)
Traditional - $1.175M
ROTH - $400K
Other Taxable -
Vanguard $4.1M
All of the above is roughly an 75/25 stock/bond mix. 95% held in broad based mutual funds with only individual 2 stocks owned. Stock fund split is 70% US / 30% foreign.
Current Salary (including average annual bonus) - $450K.
I carry a $2M term policy that goes another 6 years and a $250K whole life policy (I know, I know) that is almost done. That policy will then just sit there with no payments further due and the existing coverage. Wife has a $200K term policy that we took out when the kids were young to pay for full time care, if needed. It only has a few years left to pay and is cheap.
For Social Security, I ran a calculator to see how retiring early before the 30 year credit averaging and it’s projected at $2K/month at age 65. The haircut for not working until the full 35 credits are earned was only a few hundred per month. My goal would be to defer SSA payments until 70 to let the payments grow. As I understand SSA I'd be able to qualify for the $2K and my wife would get at least $1K as a spousal benefit if her calculated amount was less than that. If that is correct we'd have $3K monthly payments. But I'm just loosely counting on this in my numbers.
FIRE GOALS
I'm already two years past my first FIRE goal. I had a few life events, namely 2 house floods that forced us to end up selling our house for land value and buying a new property that should be safe as it’s off the ground. The good news is it forced us to downsize quicker than we may have otherwise which should cut down on our annual spend. Between flood insurance, IRS casualty loss rules and proceeds from land sale I ended up financially OK. This has all settled down now and we are moving forward with life again.
My current RE goal is late spring of 2019 (age 52). I'd retire with a non-COLA pension of approx. $65K with payments starting at age 58. If I kept working the pension grows at about $4K per year.
I've analyzed our spending over the past 3 years and considered changes in spending such as higher HI. My best guess is our retirement spending would start at around $200K/year. The bulk of the spending goes to (in rough order) taxes (income and property- $35K), HI premiums/deductibles $20K, other insurance (home/car/life/etc.)- $10K, food-$20K, travel-$20K, HOA Dues-$10K, Clothing-$5K, Household-$8K, Gym/Golf-$10K. The rest is miscellaneous including $10K/year to a fund for buying 2 cars every 8-10 years with cash. A lot of this I'm hoping is high but I'd rather be conservative with my thinking.
While I don’t know exactly what’s next it’s possible that I do some consulting on the side to keep some income coming in but it would be significantly less than my current income levels. However, I’d prefer it to be nothing for a while but relax and unwind. I have not included anything for future income in my calcs as that would just be extra.
We both come from long life families so I'm budgeting to age 99. I've run the numbers on numerous models with what I believe are conservative estimates of 5% investment returns, 4% spending increases and 4% inflation and most of the models seem to say GO FOR IT.