Morris4096
Confused about dryer sheets
I am coming out sort of speak. I have followed so many of you on this forum and have read many informative threads. Seeking input to give us confidence to make the move. We have been lucky as hell but feel the time is up. Turning 58 and DW is 54 who retired last year. DW and I have been working since our teens and have been fortunate to always be employed by megacorps and avoided layoffs multiple times over 35 years. Sheer luck. Lived well but no big house compared to neighborhood outside of DC and thus saved a considerable portion of income over the years and invested like clock work from the age of 20. Never worried about money until I started to think about pulling the plug and DW and I are stressed out with decision to cut off income stream. We have no sources of income to come other than SS so what we have in investments has to feed us. Job is killing me , lost confidence in megacorp mgmt and want to leave by spring 2020. DW has good genes and will live to 100 and is worried about having enough to carry her for 45 year retirement horizon. I might be good till mid eighties based on family history.
Projected Expenses In Retirement
House
Insurance $1600
Taxes $7000
Electricity and Gas $3800
Sewer $900
Trash $1000
Water $900
Cable/internet $2400
Cell $2400
House cleaning $3600
House maintenance $4200
Food /Restaurants
Groceries /Liquor $9600
Dining Out $10800
Car Expenses
Gas for 2 cars $7,560
Insurance for 2 cars $4,728
Car maintenance $4,200
Car fund to replace one car every five years $9,600
Health Expenses
Health and dental insurance for family $6600
Out of pocket( copays and contacts and rxs) $4000
Liability insurance (umbrella) $1600
Entertainment /Travel /Pet
Entertainment (movies, Netflix, concerts ,lessons ) $4800
Fitness memberships $4800
Vacation $30000
Pet costs ( vet, food boarding) $3000
Other discretionary expenses
Dry cleaning $1000
Hair/nails/grooming $ 2000
Clothing $6000
Gifts /charity $ 17000
Total Year Budget= $160,000 ( after tax expenses)
Healthcare insurance costs between now and 65 are being subsidized ( 6600 cost to us ) from retirement package. At 65 and then receive subsidy of 3K per year for medicare coverage. Not sure what that will cost for 2 and keeping my daughter insured until she finishes 4 year college in 2028.
Nest Egg
DH IRA $1.1M
DH Lump Sum Pension rollover $1.2M
DW IRA $1.2M
Taxable accounts 2.2M
Portfolio 60 /30 /10 stock/bond /cash….total retirement assets =$5.7M
House value = 600K
529 Plan =300K for daughter college expenses to start in 2023
Social Security Estimates
DH =2400/month at 70
DW = 2000/month at 70
Tax assumptions
I am assuming the my effective tax rate until 70 would be about 20% until social security and RMD kick in and then effective rate might up. Not sure how to model this.
Assuming 160K of expenses annually, I would need to generate 200K before taxes for the first 12 years or so.
Firecalc
Ran model with $5.7M portfolio, 200K before tax income from portfolio and taking social security at 70 . This is about a 3.5% withdrawal rate until SS kicks in. Firecalc outcome is 100%.
Why are we stressed?
We are at the peak of the market and believe sequence or return risk is acute. I do not want to go back to work even part time once I am gone . We could cut back budget in many areas if needed . Do not replace cars every 5 years and do it at 10 years . Cut back on entertainment / travel and restaurants. We have not accounted for long term care insurance but think we can fund long term care with assets . We would appreciate comments and advise on plan for a 45 year retirement …at least for DW. What have we missed? Are we silly to be stressed at this point?
Projected Expenses In Retirement
House
Insurance $1600
Taxes $7000
Electricity and Gas $3800
Sewer $900
Trash $1000
Water $900
Cable/internet $2400
Cell $2400
House cleaning $3600
House maintenance $4200
Food /Restaurants
Groceries /Liquor $9600
Dining Out $10800
Car Expenses
Gas for 2 cars $7,560
Insurance for 2 cars $4,728
Car maintenance $4,200
Car fund to replace one car every five years $9,600
Health Expenses
Health and dental insurance for family $6600
Out of pocket( copays and contacts and rxs) $4000
Liability insurance (umbrella) $1600
Entertainment /Travel /Pet
Entertainment (movies, Netflix, concerts ,lessons ) $4800
Fitness memberships $4800
Vacation $30000
Pet costs ( vet, food boarding) $3000
Other discretionary expenses
Dry cleaning $1000
Hair/nails/grooming $ 2000
Clothing $6000
Gifts /charity $ 17000
Total Year Budget= $160,000 ( after tax expenses)
Healthcare insurance costs between now and 65 are being subsidized ( 6600 cost to us ) from retirement package. At 65 and then receive subsidy of 3K per year for medicare coverage. Not sure what that will cost for 2 and keeping my daughter insured until she finishes 4 year college in 2028.
Nest Egg
DH IRA $1.1M
DH Lump Sum Pension rollover $1.2M
DW IRA $1.2M
Taxable accounts 2.2M
Portfolio 60 /30 /10 stock/bond /cash….total retirement assets =$5.7M
House value = 600K
529 Plan =300K for daughter college expenses to start in 2023
Social Security Estimates
DH =2400/month at 70
DW = 2000/month at 70
Tax assumptions
I am assuming the my effective tax rate until 70 would be about 20% until social security and RMD kick in and then effective rate might up. Not sure how to model this.
Assuming 160K of expenses annually, I would need to generate 200K before taxes for the first 12 years or so.
Firecalc
Ran model with $5.7M portfolio, 200K before tax income from portfolio and taking social security at 70 . This is about a 3.5% withdrawal rate until SS kicks in. Firecalc outcome is 100%.
Why are we stressed?
We are at the peak of the market and believe sequence or return risk is acute. I do not want to go back to work even part time once I am gone . We could cut back budget in many areas if needed . Do not replace cars every 5 years and do it at 10 years . Cut back on entertainment / travel and restaurants. We have not accounted for long term care insurance but think we can fund long term care with assets . We would appreciate comments and advise on plan for a 45 year retirement …at least for DW. What have we missed? Are we silly to be stressed at this point?
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