I need some opinions on my break down and ideas.

giovannicaldo

Confused about dryer sheets
Joined
Jan 13, 2012
Messages
8
Location
san jose
At age 58, I think I am ready for semi-retirement and want some opinions on my break down and ideas.

Current situation:
My wife will continue to work another 4 years before she can retire and take her pension. I will retire from a School District but continue a part time side hustles until I get tired of it.

Expenses at retirement will be: $145K this includes, ($15K taxes, $15K medical, $8K LTC, $25k travel)

Currently we have the following assets:
Home: $600k (Paid For)
Tax Deferred Savings: $1.1m
Roth IRA: $191K
Stocks & Bonds: $350k
Cash/Savings: $300K

Income after retirement:
Pension: $45K My annual
Pension: $40K Wife annual
Side Hustle: $25K annual


1. I have $250K in a 457 account that I want to roll into a traditional IRA when I leave my job, then roll it into a Roth, paying taxes on it that year. I am trying to determine how much that will cost me.
2. I have my Medical paid for a total of 5 years or until I am 63.
3. At age 63, I will start taking Social Security, and use that income to pay for medical insurance through my wives employer. Wife has medical for life through her employer and spouse can be added.
4. I will switch to Medicare in two years when I reach the qualifying age of 65.


My biggest fears:
Leaving a good career that is boring and not to rewarding
Running out of money and wishing I would have just worked 1-2 more years.

What am I missing? Thank you!
 
+1 on Firecalc
Do the pensions have a COLA?
What are the projected SS payments?
 
Are you doing 100 % joint and survivor for both pensions? Have you run a comparison vs. postponing SS of the higher earner and taking healthcare costs out one of the pensions to protect the survivors' cash flow? Have you calculated the cost of Roth conversions if spread over several years vs. one year?
 
Agree that FIRECalc is the place to start.

In general, it sounds like you have decent income and assets, but an hour with FIRECalc will tell you volumes about your situation.

As far as converting to Roths - you may need some tax advice or at least some estimates through something like TurboTax or similar. Doing it all at once could be expensive (and there are other potential gotchas depending when you do it in relation to the start of Medicare, etc.)

Welcome to the Forums.
 
Running your situation through FIRECalc and reporting the results to us.
I suspect that you will find that your expenses are too high compared to your retirement income sources and retirement savngs, but the information is incomplete. We live pretty high on the hog with a lakeside summer home and a winter home, modest travel, etc and don't spend anywhere near $145k a year.
 
At age 58, I think I am ready for semi-retirement and want some opinions on my break down and ideas.

Current situation:
My wife will continue to work another 4 years before she can retire and take her pension. I will retire from a School District but continue a part time side hustles until I get tired of it.

Expenses at retirement will be: $145K this includes, ($15K taxes, $15K medical, $8K LTC, $25k travel)

Currently we have the following assets:
Home: $600k (Paid For)
Tax Deferred Savings: $1.1m
Roth IRA: $191K
Stocks & Bonds: $350k
Cash/Savings: $300K

Income after retirement:
Pension: $45K My annual
Pension: $40K Wife annual
Side Hustle: $25K annual


1. I have $250K in a 457 account that I want to roll into a traditional IRA when I leave my job, then roll it into a Roth, paying taxes on it that year. I am trying to determine how much that will cost me.
2. I have my Medical paid for a total of 5 years or until I am 63.
3. At age 63, I will start taking Social Security, and use that income to pay for medical insurance through my wives employer. Wife has medical for life through her employer and spouse can be added.
4. I will switch to Medicare in two years when I reach the qualifying age of 65.


My biggest fears:
Leaving a good career that is boring and not to rewarding
Running out of money and wishing I would have just worked 1-2 more years.

What am I missing? Thank you!
Here are some things that caught my eye (I retired at 50, and am currently 57):
* The $250K in a 457 account that you want to roll into tIRA, and then roll into Roth. To determine how much taxes, add the $250K into your expected AGI for this year and that will tell you what bracket you're in (it looks like either the 32% or 35% bracket). Personally I would spread out the Roth conversion to minimize your taxes.

* If you plan on taking SS at age 63, keep in mind that if your wife's income is not similar to your income, then you will be impacting your up to 50% spousal benefits .

* Since you're close to 59.5 years old, I would withdrawal money from your stocks/bonds & cash/savings for the next 1.5 years, then start your withdrawals from your tIRA and 457. I would also consider small Roth conversions each year to get you to the high end of your AGI tax bracket.

In terms of running out of money, once you're both retired you will see what your expenses really are and can adjust accordingly.
 
"Expenses $145K, Spending $15K taxes, $15K medical, $8K LTC, $25k travel 145K - 63K = 82K
My advice would be work on reducing the other 82K spending. You get an A in savings and D- in expenses :)
 
"Expenses $145K, Spending $15K taxes, $15K medical, $8K LTC, $25k travel 145K - 63K = 82K
My advice would be work on reducing the other 82K spending. You get an A in savings and D- in expenses :)
My take is more like this:

Expenses: $145K
Income in retirement: $85K (2 pensions)
4% of assets: $1,941K X 0.04 = $77K
Total: $162K per year

What am I missing? Oh, yeah. SS at 63.
 
My take is more like this:

Expenses: $145K
Income in retirement: $85K (2 pensions)
4% of assets: $1,941K X 0.04 = $77K
Total: $162K per year

What am I missing? Oh, yeah. SS at 63.
I agree but have questions for OP.

How long will the $25K side hustle (hate that term) go on?
Is the OP's spouse eligible for SS.
Are the two pensions COLA'd.
Do the pensions have survivors benefit.

Generally, what would happen to income relative to expenses if one of you is no longer in the picture.
 
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