Hi from NYC...planning retirement in under 8 years - How are we doing?

[NYC1967]

Hi everyone,

Glad to join to group - I heard of it from bogleheads. Here is our info....

Husband wants to retire 12/2026 (60y) - Me 6/2030 (62y)

We own our home which is worth about 500,000.

Him 55 -- Her 54- Cash Savings $37,500

Combined yearly salary about - $155,000 - him $110,000 - her $45,000

TOTAL COMBINED PORTFOLIO $1,355,470.00 - our Allocation is 50/50)

HIM TOTAL 401k $870,000.00 (Stocks) (70% stock/30% bond)


HIM Current Contributions (6%) - company matches 82% of our 6% )


HIM Total Vanguard $ 84,500.00
ROTH IRA 48,000 VTSAX (stock)
Traditional IRA 16,700 VBTLX (bond)
SEP Ira - 19,800 VBTLX (bond)

HER TOTAL 403B - Total $ 84,800.00 Fixed 7% 0/100% (bond).
HER Current Contributions (13%)
Fixed 7% - 100%

HER Total Vanguard $ 322,657.00
ROTH IRA- 85,900 VTSAX (stock)
Traditional IRA 236,000 VBTLX (bond)
SEP 757.00 VBTLX (bond)

current contribtions - $500 month to ROTH (VTSAX)

Two Children 19/21
NY 529 $41,300 (will be used in the next 2 1/2 years for younger sons college - will cashflow when it runs out)
Currently cash flowing older sons college - graduates in June


His Projected SS @62yr ($2,104)….. @67yr ($3,074)…..@70yr ($3,826)

Projected Full Pension (no penalty) @ 57 years old lump sum approx $700,000 or
Full Life $2,400 month (we would take 100% spousal so would be reduced) NO COLA

HER Projected SS @62yr ($1,288)…..@67yr ($1,952)

Pension (1) @ 63 years old $500 month NO COLA
Pension (2) @ 65 years old 9/2032) $725 month NO COLA (spouse would get 50%)

This is where we are.....

Any recommendations? Do u think retirement is possible when we want it?

As for spending in retirement? We want to be able to spend about 80,000 year (I think)..

 

[MBAustin]

Welcome NYC! If you haven't found them already, we have a helpful list of things to think about as you are planning:

Some Important Questions to Answer

Your last line is very important. Tracking your spending in detail for at least a year or two will help you be confident in understanding your income needs.

Have you run FIREcalc (link at bottom of each page here) or any other retirement calculators?

With more college expenses on the horizon, it will probably be hard to increase your retirement savings a lot in the next few years, but if you can cut spending in other areas to do that, you'll have more of a cushion. Delaying SS until 67 or later makes a huge difference so that may be something you want to factor in.

There are lots of helpful folks here, so ask questions whenever you think of them, and you may also find previous threads that address some of your concerns.'

We're glad to have you!

 

[Out-to-Lunch]

Welcome aboard!

 

[NYC1967]

Welcome NYC! If you haven't found them already, we have a helpful list of things to think about as you are planning:

Some Important Questions to Answer

Your last line is very important. Tracking your spending in detail for at least a year or two will help you be confident in understanding your income needs.

What would be the easiest way to track our spending?

Have you run FIREcalc (link at bottom of each page here) or any other retirement calculators?

I will play around with FIREcal -

With more college expenses on the horizon, it will probably be hard to increase your retirement savings a lot in the next few years, but if you can cut spending in other areas to do that, you'll have more of a cushion. Delaying SS until 67 or later makes a huge difference so that may be something you want to factor in.

We will prob delay my husbands till 67 and take mine at 63. That is what we are thinking as of now.

There are lots of helpful folks here, so ask questions whenever you think of them, and you may also find previous threads that address some of your concerns.'

We're glad to have you!

Thanks for the welcome

 

[NYC1967]

Welcome aboard!

Thank you!

 

[38Chevy454]

If your budget is really $80K, including all insurances and taxes, then you are probably OK for your plan. Let's use real rough numbers and assume you get 5% return on the $1.355M, plus your contributions, approx $1.8-1.9M after 5 years time; and the amount once your DH retires in basically 5 years. Could be more depending on portfolio returns. Using 4% withdrawal on $1.8-1.9M gets you to almost at your budget, and you only need that for 2 years. Then SS and pensions can cover half or better of the budget. Or delay SS and the pension still reduces the withdrawal rate. Once both of you receive SS and pensions, you are good shape with low withdrawal rate reqd. The question is how to cover the time between retirement and when SS and pensions kick in.


For better analysis, agree to put numbers into Firecalc or similar retirement calculator.


Why is your 403b invested 100% bonds? That is going to be a tough environment in rising rates inflationary times. Given your timeframe is even longer for retirement, I would suggest to make that 70% equities or maybe more. Unless you are very risk averse, being 100% bonds will likely lose real value in next 1-3 years or whenever rates and inflation stabilize out.

 

[NYC1967]

If your budget is really $80K, including all insurances and taxes, then you are probably OK for your plan. Let's use real rough numbers and assume you get 5% return on the $1.355M, plus your contributions, approx $1.8-1.9M after 5 years time; and the amount once your DH retires in basically 5 years. Could be more depending on portfolio returns. Using 4% withdrawal on $1.8-1.9M gets you to almost at your budget, and you only need that for 2 years. Then SS and pensions can cover half or better of the budget. Or delay SS and the pension still reduces the withdrawal rate. Once both of you receive SS and pensions, you are good shape with low withdrawal rate reqd. The question is how to cover the time between retirement and when SS and pensions kick in.


For better analysis, agree to put numbers into Firecalc or similar retirement calculator.





Why is your 403b invested 100% bonds? That is going to be a tough environment in rising rates inflationary times. Given your timeframe is even longer for retirement, I would suggest to make that 70% equities or maybe more. Unless you are very risk averse, being 100% bonds will likely lose real value in next 1-3 years or whenever rates and inflation stabilize out.

My 403b is invested 100% in stocks because it is a guarantee 7% Fixed rate of return always.

 

[NYC1967]

Also, for my husband we are thinking of taking the lump sum which is about 700,000 instead of the 28,000 per year. What do u think of taking the lump sum?

 

[Dtail]

I played around with your numbers a bit in Firecalc with a couple of assumptions and it returns a 100% success rate in addition with a maximum spending of ~110k at 100% success rate.

 

[NYC1967]

I played around with your numbers a bit in Firecalc with a couple of assumptions and it returns a 100% success rate in addition with a maximum spending of ~110k at 100% success rate.

Great news! Thanks so much.....

 

[Dtail]

Great news! Thanks so much.....

Additionally that is with both of you retiring in 2026.