Well, today was my last day at work. I am one of those who accepted the Fork in the Road-Deferred Resignation Program with the retirement option. So, at 56/6, I am nervously and cautiously in FIRE mode. My 'official' retirement date, which is when my pension will kick in is actually not be until 12/30/25 since I will be on admin leave until that day when I will be 57/3. But for all intent and purposes it is retirement. Or, let's call it a hybrid retirement. DW is retiring in May 2025 at 59.
I am nervous because with the lower pension and in my opinion, only an OK net worth, I need to cautious and make sure our nest egg lasts a long time.
How does this look to you? Here is where we I stand:
From the 12 E-R 'Can I Retire' thread.
Miscellaneous:
I am nervous because with the lower pension and in my opinion, only an OK net worth, I need to cautious and make sure our nest egg lasts a long time.
How does this look to you? Here is where we I stand:
- Age at ER: Him: 57/3, Her: 59/0
- Debt free
- No mortgage
- No car payments
- Expecting to invest ~$100k-120k in house remodel right after ER using existing cash
From the 12 E-R 'Can I Retire' thread.
- Expenses: Actual numbers per my Excel budget planning:
- Pre-Retirement: ~$5700/mo, $68400/yr (non-discretionary and discretionary)
- Post-Retirement: ~$5300/mo, $63600/yr. (adjusted lower to due to deficit as a result of lower pension income)
- Health care insurance premiums included with expenses. Not included are maximum deductible or out-of-pocket expenses.
- Kids are adults and independent. They will get whatever is left when we checkout.
- No major lifestyle changes planned other than traveling when the time and money is right, replacement of cars when needed, and house repairs/maintenance. I do fly private small airplanes as a hobby. Currently in a club with but would not mind getting into an aircraft partnership with a few people at a cost of ~$10k/yr and ~$40k initial investment.
- ER income (adjusting using 2% COLA, 15% effective tax):
- Year 2026 to 2028: ~$6600 mo./~$79000 yr. (gross), [~$4400 mo./~$53000 yr. (net)]
- Pension: ~$3800/mo. (gross)
- Pension supplement: between ~$1800/mo. (gross) (stops at age 62 in 2030) (No COLA)
- State pension (DW): ~$850/mo. (gross)
- Year 2028 to 2030: ~$7900 mo./~95000 yr. (gross) ~$5500 mo./~$65500 yr. (net)
- If DW takes SS at 62: ~$1300/mo.
- Year 2031+: ~$10500/mo./~126000 yr. (gross) ~$7600 mo./~$91000 yr. (net)
- Lose pension supplement
- If I take SS from at 62: ~$2500/mo.
- Extra income: Part-time job as motorcycle instructor and possibly flight instructor (if certification completed in 2025) will be extra money to also fund any retirement needs or BTD items.
- Year 2026 to 2028: ~$6600 mo./~$79000 yr. (gross), [~$4400 mo./~$53000 yr. (net)]
- Pension is ~90+% accurate. COLA taken into consideration at a modest 2%
- SS numbers obtained from SSA.
- All taxes estimated using 15% effective tax. Estimating will stay below the 22% tax bracket.
- Nest egg as the time of posting:
- TSP(401k): ~$1.45mil (~1.26mil traditional, ~$197k Roth)
- Stocks: ~$250k
- MMA: ~$93k (4.2% yield)
- Emergency Fund: ~$20k (4.2% yield)
- Checking/Savings: ~$20k (0.01% APY)
- House: $550k
- Will we die before 85? No idea. Currently, health is good and parents are in their late 70’s.
- FIRECalc: If all input values are correct, which I am not sure of, FIRECalc returns a 100% probability of success. The copy of Right Capital return similar results. Using the ‘Investigate’ tab in FIRECalc for a 95% probability of success the spending level can increase to over $147k. This will be 100% more than the currently estimated budgeted expenses!
- If the unexpected comes up this will need more attention. The worst scenario will be if I check out. My pension income will drop 75% for DW. She will receive a one-time lump sum work life insurance payment of $25k and a one-time lump sum term-life insurance payment of $550k if I check out before summer 2033. Taxes will be painful. I estimate DW will require ~5% annual distribution from traditional and Roth to be in ok condition and more than 5% for better quality of life.
Miscellaneous:
- With these numbers I am expecting an income deficit of ~$700/mo., $8400/yr. The plan is to cover any shortages using interest/dividend income, profits from investment/options profits (if realized) and the part-time instructor jobs (motorcycle and flight).