Hello from Deepintheheart of Texas!

[ParaDoc82]

Howdy Ya'll!

I am actively investigating FAT FIRE.

Questions:
What do you think of this overall financial position for my retirement at 55 or sooner?

My wife and I are both 48 years old. Both retired from military (O5 and O4 respectively). I am at 90% VA disability, My wife is at 80% VA disability. We are both practicing PAs (I am in Urgent Care, wife is in Women's Health) in Texas. Current gross income with retirement, disability and both of us working is in the $300,000 neighborhood. We are sitting on 1.5M in investments collectively (Still in aggressive Large US Cap mutual funds, as we have guaranteed lifetime income with our retirement and VA disability.) 750K of our investments are in Roth, 750K in non-qualified investments. Historical return on our investments is 8-12% over the past 10 years. This year's return is at 16% as of the date of this posting. We have been maxing out our Roth(s) for the past 3 years, and intend to do so until we each retire. We will transition our investments to more conservative holdings when the market dictates or we both stop working.
Passive income a month = $11,000/mo ($132,000/yr) (COLA adjusted for life, and already receiving)
SS benefit estimate is $4600/mo ($55,200/yr) for us both at 62
Life Insurance: Me - $250,000; Wife: $1M; Daughter $250,000

Liabilities
220K left on the mortgage
50K for new car loan (thanks hail storm)
6 year old daughter (undergrad college is already paid for, not an issue)
- Currently in private school and we want to keep it that way as long as we can afford it. (10-12K/yr)
We pay for TRICARE Prime ($250/month). So healthcare is covered for use and our daughter until she turns 21.

I am looking to retire as soon as possible, and maintain a 175K - 200K income starting at 55 (in 7 years).
My wife loves her job and wants to work at least to 60. She pulls 80K/yr from her work.
I have no problem reigning in my spending until 55, if I can retire before 55. I have run hundreds of retirement and FATFIRE calculators and they all point to 55-60 as the magic mark of 3M in the bank to retire.

HOWEVER! Most calculators don't let me take into account of $11,000/month of passive income (COLA adjusted BTW). I just cannot see the need to work once I get out from under that car payment.

If I don't work tomorrow or ever again. Our household income is still $210,000/year (until my wife retires, then it drops to $132,000/yr with 1.5M invested and earning 8-10%. We live comfortably, but we are not spend-thrifts (my car is a 2009). Any expenditure over $200, I talk to my wife about and vice versa. We eat out 2-3 times a month as a family. I do restore old cars but do so from a careful financial perspective. My other hobbies are not financially consuming and not relevant to retirement financial consideration.

Folks, I often wake up and think, "Do I NEED to be getting up to work, or is this literally "muscle memory" as I don't know any other way of living? My financial advisor gave me the green-light to retire at 55 with a 97% success rate of the principle continuing to grow and never touching the nest-egg.

I want to retire in the next few hours, if financially feasible and not eating ramen noodles for lunch and dinner for the rest of my life.

Thanks for any input!

ParaDoc82

 

[MarieIG]

Welcome to the ER Forum Paradoc82.

Two links that many have found helpful with their retirement planning process are Frequently Asked Questions and FireCalc.

FireCalc does allow for you to insert pension income.

When reviewing your parameters, I would also take into consideration reduction of any income should one spouse survive the other by a number of years. Also, while your wife is thrilled with her employment now, that could be subject to change for a variety of (perhaps unexpected) reasons. You may want to allow her some leeway to RE as well should she want to / or need to, pull the plug.

Thank you both for your service.

MarieIG

 

[ParaDoc82]

Welcome to the ER Forum Paradoc82.

Two links that many have found helpful with their retirement planning process are Frequently Asked Questions and FireCalc.

FireCalc does allow for you to insert pension income.

When reviewing your parameters, I would also take into consideration reduction of any income should one spouse survive the other by a number of years. Also, while your wife is thrilled with her employment now, that could be subject to change for a variety of (perhaps unexpected) reasons. You may want to allow her some leeway to RE as well should she want to / or need to, pull the plug.

Thank you both for your service.

MarieIG

Good Morning MarielG!

You are most welcome! We enjoyed our time in the military. Hard, but satisfying.

Thank you for the input! Not sure how I overlooked that calculator (or I forgot I did it more likely). I just employed all applicable variables that may represent our spending options and market performance between the "Spending Models" and "Your Portfolio". The success rates have been over 90% without exception.

My wife has 100% flexibility in when she wants to retire. She is very committed to her work and it brings her great joy and satisfaction. But I whole-heartedly endorse us waking up together and having unrushed morning coffee and long morning chats.

ParaDoc82

 

[Koolau]

I agree that FIRECalc is very flexible and likely will meet your needs. Based on the figures you've supplied and the income you'll be receiving, it sounds like you're in good shape for Early Retirement. I'd run FIRECalc to see exactly when, but you've done some good planning and execution so far. I wouldn't worry too much about a car payment nor your mortgage. You'll likely have those going forward unless you take from your savings next time you need a new car.

Run the figures a couple of times and check back. I'd at least wait a few more hours to retire.

 

[Surewhitey]

We were surprised at how fast the booty grew by the last mil while w*rking. Less than 5 years for us with very conservative choices. I suspect that we'll see a nice drop someday though, so we plan for that probably too much.

If 3 mil is the goal, you should have no problem with 55. If you want $200k to spend until 62, that's only $68k annually for ~7 years at 55. $3 mil will get you closer to $100-120k annually so you may not need this, especially if your wife is still going. Then it's less.

Having a young daughter would definitely change the equation too. Enjoy her while she wants to... I'm not a college must-er, but you didn't mention anything for this... Ours did just fine with local college and way less outflows.

Good job so far, though. All the guaranteed income is definitely a gift to have.

 

[38Chevy454]

I think you have done great so far and are close to retirement. Your pensions are big help, and then SS after 5 or more years depending when you retire. You can do higher withdrawal before SS. Tricare has your medical covered for low costs. Biggest risk I see is your younger daughter and expenses getting her through school and college.

You don't mention monthly budget, it seems with your income and not excessive spending that you either have HCOL area or ssving a high percentage. You are probably closer to retirement than you are thinking.

 

[pacergal]

Welcome to the forum!

 

[Dtail]

Welcome to the forum.
What is your current spending and desired spending in retirement?
Unless your spending is very high, I can't imagine Firecalc not providing a 100% success rate.

 

[ParaDoc82]

I think you have done great so far and are close to retirement. Your pensions are big help, and then SS after 5 or more years depending when you retire. You can do higher withdrawal before SS. Tricare has your medical covered for low costs. Biggest risk I see is your younger daughter and expenses getting her through school and college.

You don't mention monthly budget, it seems with your income and not excessive spending that you either have HCOL area or ssving a high percentage. You are probably closer to retirement than you are thinking.

My daughter’s college is covered by my wife’s GI bill, other than incidentals.

 

[ParaDoc82]

I think you have done great so far and are close to retirement. Your pensions are big help, and then SS after 5 or more years depending when you retire. You can do higher withdrawal before SS. Tricare has your medical covered for low costs. Biggest risk I see is your younger daughter and expenses getting her through school and college.

You don't mention monthly budget, it seems with your income and not excessive spending that you either have HCOL area or ssving a high percentage. You are probably closer to retirement than you are thinking.

All the numbers I have run (and what my financial advisor has stated) state at 55 yo, we can have a monthly income (with wife working) of $15,000. If my wife wants to retire then. we can still have $15,000/mo and still have growth. The monthly budget is 12-13K. The monthly surplus is paying off my auto shop (personal use) 20k left on that loan. I want it paid off by JAN/FEB 2025.

 

[ParaDoc82]

Welcome to the forum.
What is your current spending and desired spending in retirement?
Unless your spending is very high, I can't imagine Firecalc not providing a 100% success rate.

Good Morning Dtail!

Our yearly income "bucket" with all incomes at 55 is $391,000 based on my Financial Advisor's calculations. The "Outflows' at 55 are $232,059 ($159,775 surplus). After 55 the inflow equalizes with outflow, and we still have marked growth with VERY conservative return estimates and making most variables "Worst Case Scenario short of Nuclear War". These numbers make me happy. But I think I am in a state of disbelief that we may have "made it"...

Welcome to the forum.
What is your current spending and desired spending in retirement?
Unless your spending is very high, I can't imagine Firecalc not providing a 100% success rate.

 

[ParaDoc82]

This is the yearly flow of cash starting at 55. These numbers are shocking to me. I wanna stop as soon as I can, honestly. What do all the FIRE Gurus think when they see these kinda numbers?

 

[pb4uski]

... What do all the FIRE Gurus think when they see these kinda numbers?

Stop the world and let me off.

 

[Diogenes]

OP, perusing the various "can I retire" threads for persons of a comparatively young age (under 50), yours is the most secure, if not outright the most secure, in recent memory! Between your generous and guaranteed pension, well-resolved healthcare situation, and spouse's work-plans, the decision for whether to retire or not, isn't really financial. It's a matter of whether you enjoy working or not, and whether you have compelling activities outside of work. If the answer to both is "yes", then most assuredly retire... literally, tomorrow! If the answer to only one of them is "yes", then ponder the pros/cons, and maybe do the proverbial OMY. If the answer to neither is "yes", then don't retire.

 

[braumeister]

Glad you found the forum. My only comment on your input is that you seem to be relying on firstcommand.com as your "financial advisor." I've looked at them, and can't help but see that their reviews on multiple sites are average at best. So I would take what they tell you with a grain of salt.

Feel free to ask any questions, at any level of detail here, and you'll most likely get the best advice anywhere. And the price is right.

 

[ParaDoc82]

OP, perusing the various "can I retire" threads for persons of a comparatively young age (under 50), yours is the most secure, if not outright the most secure, in recent memory! Between your generous and guaranteed pension, well-resolved healthcare situation, and spouse's work-plans, the decision for whether to retire or not, isn't really financial. It's a matter of whether you enjoy working or not, and whether you have compelling activities outside of work. If the answer to both is "yes", then most assuredly retire... literally, tomorrow! If the answer to only one of them is "yes", then ponder the pros/cons, and maybe do the proverbial OMY. If the answer to neither is "yes", then don't retire.

Diogenes,

Thank you for your careful and thoughtful response! The answer to them both is a resounding yes. Practicing medicine when you don't need it to pay bills or secure your retirement is an enormous risk. Lawsuits are a thing both founded and frivolous. I don't want to be part of either of them. Why incur risk, if there is no upside to that risk other than larger numbers that I likely won't ever use? In my mind it is an unmitigated risk at this stage of my life. Thank you again for the input, and it is a wonderful feeling to be in this situation.

ParaDoc82

 

[ParaDoc82]

Glad you found the forum. My only comment on your input is that you seem to be relying on firstcommand.com as your "financial advisor." I've looked at them, and can't help but see that their reviews on multiple sites are average at best. So I would take what they tell you with a grain of salt.

Feel free to ask any questions, at any level of detail here, and you'll most likely get the best advice anywhere. And the price is right.

Good Evening Braumeister!

Thank you for taking the time to reply to my post, and the warm welcome. I completely agree that First Command are conservative to a fault. But we have been with them since 2003. I like my advisor, he's a bit young, but he is not the mind behind the decisions, merely the executor of the corporate investment strategy they peddle. But when we are looking at a NW of upwards of 3M at 55 years old and a constant upslope with no "level off" or downward curve of the NW, it's kind of "the enemy of good, is better"... so I'm cool with their service / performance thus far. We were successful (hopefully) despite the conservative nature of their investing strategy.

ParaDoc82

 

[ParaDoc82]

Welcome to the forum!

Thanks Pacergal! I am glad to have a need for this forum.

 

[Nords]

All the numbers I have run (and what my financial advisor has stated) state at 55 yo, we can have a monthly income (with wife working) of $15,000. If my wife wants to retire then. we can still have $15,000/mo and still have growth. The monthly budget is 12-13K. The monthly surplus is paying off my auto shop (personal use) 20k left on that loan. I want it paid off by JAN/FEB 2025.

This is the yearly flow of cash starting at 55. These numbers are shocking to me. I wanna stop as soon as I can, honestly. What do all the FIRE Gurus think when they see these kinda numbers?

Welcome to the forum, @ParaDoc82. If you and your spouse are both retired, with monthly military pension + Concurrent Retirement and Disability Pay greater than your expenses, then you're financially independent.

You could also spend from your investments at the 4% Safe Withdrawal Rate, but at that point (age 55) you're only seven years away from starting Social Security. Both of those additional income sources make you fatFIRE.

If these numbers seem too good to be true for you then you could plug them into FIRECalc, NewRetirement (Boldin), Empower, or (for detailed overkill) a paid copy of Pralana. You might also want to run Mike Piper's Open Social Security calculator, but your ages and earnings histories will probably nudge the lower pension/CRDP to starting SS around 62 and the higher pension/CRDP to start at age 70. However with your income & assets, Mike points out a couple other nuances to starting whenever you want:

How I Actually Use Open Social Security — Oblivious Investor

obliviousinvestor.com

You could run your age 56 tax numbers (after stopping your paychecks) through TurboTax or an online tax calculator, but it depends on whether your military pensions are taxed by your state of residence and by the amount of your Required Minimum Distributions (if any). You're very lightly taxed, and your CRDP isn't even reported to the IRS.

If you plan to stay Texas residents, then (if you haven't already) you could check into your daughter's state college options (beyond her GI Bill and Yellow Ribbon) as well as your own benefits due to your VA disability ratings. Off the top of my head your property taxes may only be exempted at a 100% disability rating, but there may be other benefits that I'm not aware of:

Resources ⋆ Texas Veterans Commission

Veteran Resource Links Active Duty in Texas Welcome to Texas! On behalf of the Texas Veterans Commission, I thank all of our military and their families for their continued service. […]

tvc.texas.gov

My spouse and I are also dual-military retirees, and we're in our early 60s. We've been FI for 25 years and retired for over 22 years. There aren't enough dual-military retirees in the U.S. for a statistically valid study of their finances, but over the last couple decades I've met at least a few dozen. Every one of them has more money than they need for the rest of their lives. They're not buying personal jets or yachts, but they're flying first class and taking all the cruises they want.

Good Evening Braumeister!

But we have been with them since 2003. I like my advisor, he's a bit young, but he is not the mind behind the decisions, merely the executor of the corporate investment strategy they peddle. But when we are looking at a NW of upwards of 3M at 55 years old and a constant upslope with no "level off" or downward curve of the NW, it's kind of "the enemy of good, is better"... so I'm cool with their service / performance thus far. We were successful (hopefully) despite the conservative nature of their investing strategy.

ParaDoc82

I know FirstCommand very well, and you're a military retiree, so I'll be blunt.

FirstCommand is better than doing nothing, and better than being paralyzed by your own analysis. Unless you're dealing with these emotions of behavioral financial psychology, you're wasting your money.

For example, when you enter your data into Empower, you can click a few buttons to determine your total annual expenses of your funds (above whatever other fees you're paying to FirstCommand). Decide how much travel (or other lifestyle expansion) you could enjoy for the money you're paying them, and whether you're receiving the value you think you want.

You could talk with a fiduciary fee-only CFP (I recommend any of the ones in the Military Financial Advisors Association) for either a flat fee for regular investment monitoring, or a project fee for questions like the best way to execute a Roth IRA conversion. MFAA members all understand military retiree finances, they use professional planning software (like RightCapital), and they will not steer you into funds with high expense ratios or upsell you on whole life insurance. You could find similar fee-only CFPs from XYPN, NAPFA, or the Garrett network.

Or you could simply take over your own asset management, keep your spending below your income, and enjoy life.

The good news is that while you're wasting your money on a company with a 1980s advisory business model, shaky ethics, and documented worse behavior... you can afford it.

 

[ParaDoc82]

Welcome to the forum, @ParaDoc82. If you and your spouse are both retired, with monthly military pension + Concurrent Retirement and Disability Pay greater than your expenses, then you're financially independent.

You could also spend from your investments at the 4% Safe Withdrawal Rate, but at that point (age 55) you're only seven years away from starting Social Security. Both of those additional income sources make you fatFIRE.

If these numbers seem too good to be true for you then you could plug them into FIRECalc, NewRetirement (Boldin), Empower, or (for detailed overkill) a paid copy of Pralana. You might also want to run Mike Piper's Open Social Security calculator, but your ages and earnings histories will probably nudge the lower pension/CRDP to starting SS around 62 and the higher pension/CRDP to start at age 70. However with your income & assets, Mike points out a couple other nuances to starting whenever you want:

How I Actually Use Open Social Security — Oblivious Investor

obliviousinvestor.com

You could run your age 56 tax numbers (after stopping your paychecks) through TurboTax or an online tax calculator, but it depends on whether your military pensions are taxed by your state of residence and by the amount of your Required Minimum Distributions (if any). You're very lightly taxed, and your CRDP isn't even reported to the IRS.

If you plan to stay Texas residents, then (if you haven't already) you could check into your daughter's state college options (beyond her GI Bill and Yellow Ribbon) as well as your own benefits due to your VA disability ratings. Off the top of my head your property taxes may only be exempted at a 100% disability rating, but there may be other benefits that I'm not aware of:

Resources ⋆ Texas Veterans Commission

Veteran Resource Links Active Duty in Texas Welcome to Texas! On behalf of the Texas Veterans Commission, I thank all of our military and their families for their continued service. […]

tvc.texas.gov

My spouse and I are also dual-military retirees, and we're in our early 60s. We've been FI for 25 years and retired for over 22 years. There aren't enough dual-military retirees in the U.S. for a statistically valid study of their finances, but over the last couple decades I've met at least a few dozen. Every one of them has more money than they need for the rest of their lives. They're not buying personal jets or yachts, but they're flying first class and taking all the cruises they want.


I know FirstCommand very well, and you're a military retiree, so I'll be blunt.

FirstCommand is better than doing nothing, and better than being paralyzed by your own analysis. Unless you're dealing with these emotions of behavioral financial psychology, you're wasting your money.

For example, when you enter your data into Empower, you can click a few buttons to determine your total annual expenses of your funds (above whatever other fees you're paying to FirstCommand). Decide how much travel (or other lifestyle expansion) you could enjoy for the money you're paying them, and whether you're receiving the value you think you want.

You could talk with a fiduciary fee-only CFP (I recommend any of the ones in the Military Financial Advisors Association) for either a flat fee for regular investment monitoring, or a project fee for questions like the best way to execute a Roth IRA conversion. MFAA members all understand military retiree finances, they use professional planning software (like RightCapital), and they will not steer you into funds with high expense ratios or upsell you on whole life insurance. You could find similar fee-only CFPs from XYPN, NAPFA, or the Garrett network.

Or you could simply take over your own asset management, keep your spending below your income, and enjoy life.

The good news is that while you're wasting your money on a company with a 1980s advisory business model, shaky ethics, and documented worse behavior... you can afford it.

Good Morning Nords!

Thank you for such a comprehensive and thoughtful response! Your commentary is a lot to process! I will investigate each of your points. I was thinking of getting a second set of eyes to review our status, plan, tax mitigation strategy, etc. Thankfully, we don't pay much in advisory fees (Point in fact we don't have management fees at this time). But I suspect that is because their model is not to actively manage the portfolio. It appears to be a case of benign neglect that is just making money, rather than an aggressively managed portfolio. (Like riding a wave passively) Great feedback, and investigation points.

P.S. - I miss Hawaii. Extraordinary place to live.