Contemplating Retirement

[DP73]

Have been a long-time lurker at this site and have gained lot of valuable information from the forum over the years. Following is our current financial status:

Both of us age 52. DW retires as a teacher in May. Burned out form teaching middle school. I am currently contemplating retirement too but am hesitant.

Our Retirement accounts: $2.5 M (730K Roth; rest in trad/401k)

Taxable Account: 600K

Kids 529: $177K (DS graduates in May has job lined up; DD has 3 more years + Grad school)

House paid off

DW will get yearly pension of ~10K (non-Cola) after June

Healthcare plan ~1000/mth with DW state plan (if I decide to FIRE)

Other expenses ~ 80K/yr

SS for DW @62 $11K

SS for myself @70 46K

My current salary ~150K

Have been beefing up the taxable account by decreasing the contribution to the retirement account. Will plan to use Rule 72(t) for closing the income gap until 59.5.

FireCalc gives 100% success rate even with 120K yearly spending.

Feel a bit nervous about my decision. Work is no longer enjoyable and not planning to work for anyone else. Enjoy trading and managing our as well as family’s portfolio.

Any suggestion/advice greatly appreciated.

 

[Koolau]

Welcome to the Forum. I'm guessing most here will say "Go ahead and retire. You're golden."

I understand the hesitation. I stayed long after I was financially independent because I still liked my j*b. That doesn't seem to be the case in your situations.

I don't have any magic words for you, but unless you feel the "need" to have a j*b, I'm not sure what your hesitation is. Perhaps you need to concentrate on what is holding you back. Once you figure that out, it should be easy to say "good bye" to the w*rkforce.

Check back often with your progress. I'm sure others will chime in with helpful (mostly) comments.



Good luck.

 

[Midpack]

Your numbers work out, the biggest financial obstacle to early retirement for most is healthcare. You mention it in your OP - only you know how robust your healthcare plans are to span the 13 years to Medicare.

And then there's safety factor. There are some here who waited to retire until they had 2X or greater the nest egg Firecalc calculated to be 100% "safe." There are others retired with closer to an 80% success rate in Firecalc and they've done just fine. Of course returns have been pretty great for 20 years or so. Some have lots of secure income (pensions, etc.), others have nothing but SS. No one can choose what you need to sleep at night...

 

[MichaelB]

Any suggestion/advice greatly appreciated.

My suggestion is to relax and enjoy life.

If you haven’t seen it, you might find this thread helpful Some Important Questions to Answer Before Asking - Can I Retire?

 

[DP73]

Welcome to the Forum. I'm guessing most here will say "Go ahead and retire. You're golden."

I understand the hesitation. I stayed long after I was financially independent because I still liked my j*b. That doesn't seem to be the case in your situations.

I don't have any magic words for you, but unless you feel the "need" to have a j*b, I'm not sure what your hesitation is. Perhaps you need to concentrate on what is holding you back. Once you figure that out, it should be easy to say "good bye" to the w*rkforce.

Check back often with your progress. I'm sure others will chime in with helpful (mostly) comments.



Good luck.

Will do thanks. My hesitation is change from being working for past 30+ year and transitioning to retirement life.

 

[DP73]

Your numbers work out, the biggest financial obstacle to early retirement for most is healthcare pre-Medicare. You mention it in your OP - only you know how robust your healthcare plans are to span the 13 years to Medicare.

Thanks for the reply. Will continue to look for options in ACA too.

 

[DP73]

My suggestion is to relax and enjoy life.

If you haven’t seen it, you might find this thread helpful Some Important Questions to Answer Before Asking - Can I Retire?

Will do thanks.

 

[Dtail]

If one would search for threads as to "I should have worked longer" type topics, I am sure you would find minimal examples.

 

[Koolau]

Will do thanks. My hesitation is change from being working for past 30+ year and transitioning to retirement life.

That's one of those things that most don't get a chance to "try out" before they "jump" into retirement. If you've ever taken a very long vacation or if you have the opportunity to take unpaid leave, it might help to ease your mind.

BUT, most of us just jump and pull the ripcord. Most of us make it okay and end up wondering why we didn't jump sooner. No guarantees, of course.

You may find that once DW retires, you'll get the urge to join her sooner than later. DW left the w*rkforce before I did. I wouldn't say I was jealous, but it was one more reason for me to bail out.

For me, my w*rk assignment was changed and I had no desire to stay after that. IOW the decision was all but made for me. I could have stayed, had I needed the money, but going from something I loved to something I hated from one week to the next made the jump pretty easy.

You'll get this all sorted out soon enough. You've taken care of the "hard" part by getting your finances in order. The psychological stuff will follow soon, I'm pretty sure.

As we often say, "Come on in, the water's fine."

 

[orbops]

Thanks for the reply. Will continue to look for options in ACA too.

You should try using this calculator for estimated ACA costs.

Health Insurance Marketplace Calculator | KFF

The Health Insurance Marketplace Calculator, updated with 2025 premium data, provides estimates of health insurance premiums and subsidies for people purchasing insurance on their own in health insurance exchanges (or “Marketplaces”) created by the Affordable Care Act (ACA).

www.kff.org

In terms of budgeting possible health care costs, whether you are on your DW plan, or ACA, assume that you may have to hit the max out of pocket on any given year.

I retired early at 50 when I was too burned out of the corporate business. Best decision I ever made.

 

[imjustawarrior]

You should retire. It is great!

The best thing to ensure you do not run out of money is to have flexibility in your budget. If you are 100% with flexibility, then there is no reason to wait.

 

[SlowlySaving]

I use FireCalc too and it definitely helps with the confidence. One scenario I ran a few days ago was what kind of spending could we do if Social Security went away. Something to consider with all the services being cut. In regards to the health care, does that include for your kids also. We currently have two kids on our plan and we plan to carry that expense until they both have jobs that include it.
Sounds like you have everything else planned out well. Best of luck on your decision!

 

[pb4uski]

Will do thanks. My hesitation is change from being working for past 30+ year and transitioning to retirement life.

That's one of those things that most don't get a chance to "try out" before they "jump" into retirement. If you've ever taken a very long vacation or if you have the opportunity to take unpaid leave, it might help to ease your mind.

BUT, most of us just jump and pull the ripcord. Most of us make it okay and end up wondering why we didn't jump sooner. No guarantees, of course.

You may find that once DW retires, you'll get the urge to join her sooner than later. ...

As we often say, "Come on in, the water's fine."

In some cases you can "try it out" but not sure in OP's case. Both I and two of my sisters downshifted to part-time work before fully retiring and in each case we could have gone back to full-time if we wanted to. In my case, virtually everything was pro-rata... 50% of salary, 50% of bonus, 50% of vacation pay accruals, etc. The only thing that was different was health insurance... you got health insurance if you were 50% time or more and all paid the same rate per pay period... less than 50% time health insurance wasn't offered.

 

[pb4uski]

You are all set financially. I consider using the $600k of taxable account funds and perhaps Roth contribution withdrawals from 52-59-1/2 and leave the 72t as Plan B.

You could also do Roth conversions to take advantage of your low tax bracket in early retirement. And yes, you can do withdrawals of past contributions and Roth conversions at the same time, just be sure to keep careful records.

From the data that you provided, it looks as if your DW may get a little more SS once you start SS. Check out possible SS claiming strategies at opensocialsecurity.com. Be sure to check the little box and select options applicable to you.

 

[Koolau]

I use FireCalc too and it definitely helps with the confidence. One scenario I ran a few days ago was what kind of spending could we do if Social Security went away. Something to consider with all the services being cut. In regards to the health care, does that include for your kids also. We currently have two kids on our plan and we plan to carry that expense until they both have jobs that include it.
Sounds like you have everything else planned out well. Best of luck on your decision!

It can't hurt to run FireCalc assuming SS goes away. But that would be way down my list of black swans. Nor have I heard of any recent service cuts at SS.

It probably does make sense to run FIRECalc with the possible proposed cut we will see around 2032 if changes aren't made.

 

[DP73]

I use FireCalc too and it definitely helps with the confidence. One scenario I ran a few days ago was what kind of spending could we do if Social Security went away. Something to consider with all the services being cut. In regards to the health care, does that include for your kids also. We currently have two kids on our plan and we plan to carry that expense until they both have jobs that include it.
Sounds like you have everything else planned out well. Best of luck on your decision!

Yes, plan includes kids healthcare until they are set.

 

[Exchme]

Enjoy trading and managing our as well as family’s portfolio.

This idea is the only point where I would put up a caution flag. Portfolios tend to be like a bar of soap. The more you handle them, the smaller they get.

 

[DP73]

This idea is the only point where I would put up a caution flag. Portfolios tend to be like a bar of soap. The more you handle them, the smaller they get.

Fully agree and plan to trade small amount on side. Not with the retirement portfolio.

 

[smickey]

I’m a long time lurker as well and decided to chime in given that I had the same hesitation to retire. I retired 3 years ago at 58. Work was ok, but I viewed it mostly as a time-waster and an excuse to delay the challenges of retiring to a life with a different identity and structure. I came to the realization that I was trading time for money that I would not spend. Retiring with vitality and good health became a priority and I was putting this at risk as each year passed. I think that the money aspect in retirement, for many, is unjustifiably overweighted. Many expenses can be adjusted as necessary and most of the important things (and enjoyable experiences) are free! Retirement has pros and cons, but the upside outweighs the downside, at least for me. Most importantly, it frees up the time to focus on pursuits that add value to your life, whatever that is for you.

 

[38Chevy454]

I have said it here many times, yours is an emotional issue, not a logical issue. Logically you have sufficient savings and are in good shape for retirement. But emotionally you are hesitant to make the change from employment to retirement. I did not dislike my job, but my quality of life was when I went out the gate, not in the gate. I was an engineer, but never really defined myself just by my work. Sure it was my career and source of income (and savings), but it also was just a means to the end result of becoming retired. I guess being an engineer I knew the math worked and just had confidence in my plan.

If it helps, run some other retirement calculators, like Fidelity Retirement Planner. You did not get to this financial success point by not being aware. So just keep up that and convince yourself it is OK to retire.

 

[brett]

We only had three plans when I retired.

The first was to sell our home, downsize, and place what was left in storage.

The second was to travel internationally for 7-9 months

The third was to rent when we returned home and figure out then where we wanted to live and what we wanted to do .

Worked out just fine for us. It has been 13 great years since early retirement.

 

[NeilDH]

I’m 17 months in, with net worth less than yours by about half a million, no pension. (Your DW teacher pension only $10K a year?) DW and I took the plunge at the same time. I’ve written about it a couple times on this site. DW has had very little trouble psychologically; I have had more, but I think I’m figuring it out. In any case I sure love having the time to figure it out and try things. And I really enjoyed that first summer.

 

[street]

Your numbers what I can see would be fine to retire. You always need a backup plan. The most important plan after the numbers work out is what you are going to retire too.
You will know when it is time to go. Good Luck!!

 

[Cujet]

Thought I'd say hello. I am 61, almost a year in to a slightly early retirement. So while my experience is not decades down the road, I do have some observations.

My wife had a terrible accident with an unlicensed illegal about 3 weeks after I retired. She was seriously injured, our beautiful F150 4x4 was totaled, insurance paid half what the truck was worth. I purchased a new truck half a year later $66K

Homeowners insurance doubled and doubled again. I was paying over $53,000 for health, car and home insurance. Allstate even continued to withdraw the premium for the totaled truck for 6 months despite repeated requests.

AT+T decided that my DirecTV account needed sports channels. If it does not burn fossil fuel, I don't like it. I don't watch sports of any kind. DirecTV increased my costs to something more than $4000/yr.

My wife is not wasteful with money in any way. Yet she does not actively manage monthly charges, that's up to me.

My point: I could not have predicted the direction this went. Despite my complaints, nearly a year down the road, I have not yet made a 'savings withdrawal'. Cutting out the nonsense is essential.

 

[DP73]

Wow. That’s a lot to happen in the first year. Hope your wife is doing well now. I am glad to hear that so far everything has worked well financially. For me the takeaway is to have surprise large purchases need to be planned out.