Is it possible to retire now (40's)?

[AbbA]

Hi, I would love to present details about our finances and seek opinions and guidance. I must admit that even though I work in accounting I'm not thrilled about analysis on PF stuff. Some people (e.g. pub4uski) are able to deconstruct numbers and tell whether a poster's 'pot' is in great shape or not.
So here it goes…. Bear with me as it's long.

My DH will turn 51 quite soon and I'm 44. We have 2 children: 8th and 5th graders. We live in a city in one of Southeast states (somewhere between GA and VA).
Our house that we bought new is paid for. Two Toyota sedans were bought new and are 17 & 8 y.o. Our expenses have ranged between $55k and $60k a year over the last 5-6 years. We don't have cable or any streaming subscriptions and haven't owned Apple products thus far either. I would say that $35-40K are necessities (including $5k for tutoring).

DH earns $160k and I earn $85k. However, my salary used to be $65k before this year. I left my previous employer in Jan'19 after 15.5 years. I don't think I landed in a better place either. OTOH, if I hadn't come to this company, I probably wouldn't have left the old place either. I suppose the extra $20k and better commute seduced me out of the toxic work culture, but after 7 months here I can tell that corporate America sucks and if I was sure everything would be fine when I didn't earn another dime I would be out yesterday or last year.
I sometimes (often actually over the last few years) think that I would love to be a SAHM, clean our house at my pace, go grocery shopping on the weekdays when traffic is calmer, exercise after driving kids to school, read or do some bigger jobs like paint a room or two, research laminate/vinyl flooring/carpet because after living in our house for 16+ years it could use some updating.
However, I think I'm prone to anxiety because I have so many fears. I'm afraid that our savings will drop a lot after I stop working. What if my SAHM dream wears off after a while and I begin thinking I'm not contributing my full 'worth' to our family. What if my DH loses his job or god forbid becomes ill after losing it?
Health insurance has always been through DH's employer. DH would like to continue working until at least 55 if not longer. However, since his multi-national company likes performing reorgs you never know when one of them might affect his position. Therefore I would like forum's opinions on our finances as if neither of us works anymore.

Our saving journey for retirement didn't start until 2000. We were born and raised in Europe.

529 Plan has $70k ($40k in Vanguard total stock & int'l funds + $30k in Vanguard bond fund) and not included in the below numbers.

401k's: mine is $400k and his is $800K.
Roth IRA's: $125k/each x 2 = $250k
Have been saving in HSA through DH's plan. Its balance is $40k.
Taxable accounts (mostly dividend blue-chip stocks) are worth $700k (yield close to 3% combined).
Cash savings or rainy day fund: $140k + $110k in I-bonds though hoping I-bonds could be earmarked for children's colleges.
Total is $2.4M or $2.3M if I-Bonds go to the college pot in case we cannot cashflow or save more for college expenses.

Overall try to keep 70/30 AA (more conservative in 401k's since we don't have bonds in taxable if we ignore I-Bonds).

We should get some miniscule NON-COLA pensions but I don't know how to value them.
DH's company discontinued his pension plan in 2011. Today its balance is $70k and it seems to earn some interest because it grows $1,500-$2k/year :-(. Fidelity forecast tool says that he'd get $600/mo. at age of 65 if he stopped working on 8.31.19 (whatever that means). He might be allowed to take a lump sum at that time too (this is my vague recollection talking).
I know for sure that my former employer does NOT allow to take a lump sum. After leaving the company, I received a letter saying that my monthly benefit would be $1,100/mo. under the single-life annuity form of payment if I begin taking in 2040. However, I can receive a reduced benefit starting in 2030 or if I change it to joint annuity.

I tried to calculate our SS benefits using this link: https://www.fool.com/retirement/2018/10/19/heres-the-new-2019-social-security-benefit-formula.aspx
If I did it correctly, I got $1,260/mo. for myself and $2,360/mo. for my husband. I hope that SS will not disappear in our lifetime and will get at least 80% which would be $1k/mo. for me and $2k/mo. for DH or $36k/year for both of us.

If I quit, we lose my $19k contributions to the 401k plus additional savings in our taxable account. DH contributes $24k to his pre-tax 401k + $5-6k to HSA (the rest is co. match). His co.match to 401k is 10% or $16k.

Questions to the forum:
1. I have never tried FireCalc yet...have to read on how to use it. If anyone has fun running scenarios on it, maybe you can tell me what answer you get and I'll compare to mine later.

2. I've heard that when you have a good size savings it's not as meaningful to save towards the end. Supposedly, there is a snowball effect at that point. Would it be applicable in our situation?

3. What do you think the sequence/methods of using our assets should be in order to be 'tax efficient'?
A) Is it better to start getting reduced pensions starting at ages of 55 and do reduced Roth IRA ladders or wait until 65 so we can increase Roth IRA conversions?

4. I know if my DH is in good health shape and continues working, I could easily quit working now, but if we're both out, healthcare is a huge wild card especially in the current political environment

5. Are there any resources/books to read to keep positive attitude about life? I'm a terrible worrywart!! I tend to worry about my children, my husband, my parents. It somehow in my mind ends ends up being a financial destruction if anything happened and therefore I should continue working. I haven't experienced a panic attack but would like not to worry so much.

6. The older child wants to be a doctor , so guess what I worry about? How in the world can we pay for that education? I personally hope she changes her mind in HS. If not, then I hope she goes to study in Germany. If not, maybe she'll be super smart and lucky to get scholarships, etc. If not, then I'm concerned about her being so deep in red before getting that MD.

Thank you so much in advance!

 

[WhenIsItTime]

You are an accountant, provided good data, and asked good questions. Kudos! I suggest you learn Firecalc. Instructions are on fine print of each page/tab and it’s fun. Helped me when I got it right for my situation and then did some manual sensitivity analysis by increasing expenses and/or reducing returns. I wouldn’t have got the same confidence from others replies (absolutely no disrespect to smart folks I here).

 

[Floridatennisplayer]

Sweet lady...... everything will be fine. You will get fantastic advice here to lead you on your way. You being an accountant will love the in-depth numbers analysis you will receive here from so many experienced people here. Realize that you are well ahead of most people your age. Worry is Satan’s toy for you. You guys are in great shape.

The corporate world now is toxic. I’ll bet you can find something part time from home..remotely and re-enjoy (is that a word?) your life again. Hang in there for a while and check out the responses. From my non anal accountant 40,000 viewpoint....you will be just fine.

 

[DrRoy]

What would you do for health insurance? Is that cost factored in?

 

[joeea]

Our expenses have ranged between $55k and $60k a year over the last 5-6 years.

Have you gotten a handle on what your expenses will be in retirement, including taxes, healthcare, and everything you want to do?

I tried to calculate our SS benefits using this link: https://www.fool.com/retirement/2018/10/19/heres-the-new-2019-social-security-benefit-formula.aspx
If I did it correctly, I got $1,260/mo. for myself and $2,360/mo. for my husband. I hope that SS will not disappear in our lifetime and will get at least 80% which would be $1k/mo. for me and $2k/mo. for DH or $36k/year for both of us.

You should get your numbers from ssa.gov and use them in https://opensocialsecurity.com to start to consider when you each should begin to collect your benefits.

You should consider spending a few hours with a fee-only fiduciary financial adviser. This will help you get a clearer picture of where you stand relative to your goals. I suspect you'll find that you are in great shape and that this will help ease some of your worries.

Good luck.

 

[Aerides]

Retiring together with your assets and expenses in your 40's isn't a concern. It's the young kids - their impact on your expenses can vary significantly, and healthcare is going to be your biggest wildcard. I'd doing a lot of research via healthsherpa, and budgeting $25k per year while you have 4 ppl to cover, for several more years.

So, if you retire now, but DH keeps working (and has the family covered via his job insurance) that's probably going to make it much more realistic. Even if he doesn't stay till 55, even 2 or 3 sounds good - assuming there's an aggressive savings rate there, and that you two are on the same page and ok with a split plan.

 

[Dtail]

Just did a quick Firecalc calculation assuming your SS numbers are based on collecting at 62 y.o.
You are at 100% success given your current spending and investments going out to 95 years.
Your maximum yearly spending potential while remaining at 100% is ~ 95k.

It appears you are in good shape overall.
You should try to estimate the lumpy large expenses and maximum healthcare exposure.

 

[ckelly78z]

I can't see a problem with you dropping out of the rat race, and being an attentive SAHM, that would do both kids, along with yourself a world of good. If the DH could remain in the workforce for a few more years to ensure the kids have a secure college funds/future might be the best scenario, while also providing insurance benefits, and saving more for F.I.R.E. Good luck.

 

[tb001]

Based on *very* rough calculations, I think you’re probably in good shape. That said, I think you need to go through expenses and look at what they would be inclusive of everything (taxes, healthcare, accruals for new car replacements and home repairs, etc). Also make sure that you’re including spend for all of the extra projects and things you may want to do now that there’s more time.

Your savings should support 70-80+ annual spend, just looking at a 3-3.5% withdrawal rate, but that doesn’t account for pensions, SS, changing expenses as kids leave, etc.

I would spend some time with firecalc and see what that looks like for you across various scenarios. We have young kids at home as well and found the manual spend feature to be helpful, as it let us easily adjust spend across the years as kids get more/less expensive.

One note—spend some time on health insurance. 30k is probably a reasonable budget, but don’t forget vision and dental expenses. And they don’t go to zero after 65. We looked at healthcare costs in 5 yr buckets. It gets expensive as you get older!

Are there potential opportunities for consulting for your DH if he were to be let go? It seems like if you’re not at 100% yet, it wouldn’t take much extra income to get there.

We’re in a similar situation. I would love to be a sahm and think it would make our household run so much smoother. But I also know I have so many projects I’d like to do and want to have the extra savings to be able to do them.

 

[SnowballCamper]

I'd keep one of you working at this point for two reasons.

1. Health insurance. My guess is that you have employer based coverage now, so that cost probably goes up significantly in retirement.

2. Two kids with college aspirations can be a big lumpy expense that would be on the earlier side of retirement.

I think Firecalc is great to answer the question, "Can I retire?" After you're comfortable with it check out https://www.i-orp.com to answer the question, "How am I going to retire?"

And thanks for submitting your question with all the information.

 

[SumDay]

5. Are there any resources/books to read to keep positive attitude about life? I'm a terrible worrywart!! I tend to worry about my children, my husband, my parents. It somehow in my mind ends ends up being a financial destruction if anything happened and therefore I should continue working. I haven't experienced a panic attack but would like not to worry so much.

Yoga and the meditation that goes with the practice. I've been doing it for 12 years, and while I won't say I NEVER worry these days, it's certainly much less than it was before I started. It's the one thing I do just for me.

 

[ivinsfan]

Retiring together with your assets and expenses in your 40's isn't a concern. It's the young kids - their impact on your expenses can vary significantly, and healthcare is going to be your biggest wildcard. I'd doing a lot of research via healthsherpa, and budgeting $25k per year while you have 4 ppl to cover, for several more years.

So, if you retire now, but DH keeps working (and has the family covered via his job insurance) that's probably going to make it much more realistic. Even if he doesn't stay till 55, even 2 or 3 sounds good - assuming there's an aggressive savings rate there, and that you two are on the same page and ok with a split plan.

Well yes, and no one plans for a divorce or an early death of a spouse but stuff happens. Your DH needs some term life insurance if you stop working. Be aware in the back of your mind that if you split up some scrambling will be required. Any chance you could do part time or seasonal work to keep current and retain your professional licenses? Less hours, maybe less pay but your keep your professional life current.

 

[tb001]

FWIW, in looking again, I didn't realize the 529s weren't fully funded. It depends on how much you want to contribute, but I'd want those on track to pay for their education if that's your intent.

Also, my estimate of 30k for healthcare may be high--you should be able to manage expenses for ACA. I would want to be sure you have reserves for it, in case subsidies go away, but it should be significantly less.

 

[Vacation4us]

Your savings is great. The big issue I see is health insurance. If your husband helps working this is a non issue for the next 4 to 5 years but he will still have 10 years until Medicare you have 21 years.

You could definitely be a SAHM with 1 income at this point. How does your husband feel about you staying home? If he is not a fan could he agree to part time work? If it was me I would start searching for a part time opportunity. Then save all of your part time income. Live on the 1 income only. If all goes well over a year or 2 quit and be a permanent SAHM or continue working if you find a balance your happy with.

Women definitely are more prone to be worrywarts in my opinion. My husband teases I have a hamster in my head that won’t stop running on his wheel. Unfortunately he is right. Exercise and vacationing helps a little. I am hoping retirement will help a lot! You need to find what works for you. A full time job, 2 kids, and a house to run is a lot.

You and spouse have an adequate nest egg IMHO the fine print is your spouse. Is he on board with you leaving the work force before him?

 

[Taxman59]

Welcome to the Forum. I was very tired of the rat race and this forum allowed me to relax a bit as I used the resources (FireCalc and the other posters). The 529 account seems a bit low, though if you are in North Carolina (plenty of German companies in the Charlotte Area), the state schools are top notch and very affordable. Others has covered the healthcare risks/costs. Look for your "lumpy" expenses and if the healthcare costs are covered (either through DH continued employment or adding $$ to the budget), then you are good to go.

 

[HI Bill]

...no one plans for a divorce or an early death of a spouse but stuff happens.

While not planning to divorce, after watching my 68 year-old parents divorce, I decided that I needed a financial plan, just in case. In my case, that meant determining what the 'split' would be, and w#rking a few years longer so that I could still implement FIRE plans without fear of needing to return to the w#rk force, and still being able to maintain my planned standard of living. I certainly hope to stay with my wife until I'm no longer on this earth. But people change, and people leave.

 

[AbbA]

Well yes, and no one plans for a divorce or an early death of a spouse but stuff happens. Your DH needs some term life insurance if you stop working. Be aware in the back of your mind that if you split up some scrambling will be required. Any chance you could do part time or seasonal work to keep current and retain your professional licenses? Less hours, maybe less pay but your keep your professional life current.

Thanks for the reminder. Yes, he's insured. $500k term insurance will expire in 8 years and another $250k will lapse after he turns 65. $160k is through his job while he's employed.

 

[AbbA]

Is he on board with you leaving the work force before him?

That's a good question . He seems to be on board that I could stop working, but I don't feel the final nudge because he hears my worries too that maybe we need to save more. He's a very calm person overall and doesn't show that he's worried...
This is the last year when the kids will go to the same school together. It will be rough when the elder child starts HS next year. And traffic!!!! It's just insane here

 

[AbbA]

How does your husband feel about you staying home? If he is not a fan could he agree to part time work?

In regards to a PT job, it feels that it's not really worth it unless I *want* to do it instead of *need* to do it. You start as a part-timer and as time goes on you become almost a FT employee at a PT pay. That's what I've heard from other accountants. I don't have CPA licence and I don't aspire to have it .

Ideally, I would like to quit soon and decompress for a while, but that's wishful thinking probably. It will be hard to find a job once there is a gap on the resume. Salary will be low if anyone wants to hire me. What if I lose interest in working professionally after a few years? So, I just keep dreaming while driving to work and back...

 

[AbbA]

What would you do for health insurance? Is that cost factored in?

No, it's not. Yep, I wonder what other people do about it too. What would be good websites to start looking up available plans for individual states? If families don't qualify for ACA plan (which I hear/read is crumbling), how/where to they look for private insurance plans? I know that BCBS is in many states including ours, so I would guess I can visit their website, but aren't there websites that aggregate information of various plans and let you compare?

 

[AbbA]

Have you gotten a handle on what your expenses will be in retirement, including taxes, healthcare, and everything you want to do?

You should get your numbers from ssa.gov and use them in https://opensocialsecurity.com to start to consider when you each should begin to collect your benefits.

You should consider spending a few hours with a fee-only fiduciary financial adviser. This will help you get a clearer picture of where you stand relative to your goals. I suspect you'll find that you are in great shape and that this will help ease some of your worries. Good luck.

Not sure how much I can trust a FA... That's probably a topic for another day.

I don't think I can see very far into the future. My assumption is that if all goes well, today's spending of $55k would remain the same or be a bit lower in retirement, but medical/dental insurance premiums/copays/OOP expense would need be added on top of $55k.
Non-discretionary expenses would be $25k-$30k for the two of us (food, car expense, property insurances and taxes, and utilities), so I add another $20k-25k for travel/fun/discretionary which can be cut down if needed.

Payments for today's tutoring/children's activities could be part of our travel budget. After traveling quite a bit with the kids in the USA and Europe, I don't know if I'll feel like flying so much unless I can stay long in one place. My husband feels the same way. The kids keep us very busy that we appreciate quiet whenever we can get.

Tax estimating is not easy, but I don't think they would be very high until RMD's kick in. How do other people estimate taxes? Play with Taxcasters, TT by using various income amounts?

 

[FlaGator]

Hi, I would love to present details about our finances and seek opinions and guidance. I must admit that even though I work in accounting I'm not thrilled about analysis on PF stuff. Some people (e.g. pub4uski) are able to deconstruct numbers and tell whether a poster's 'pot' is in great shape or not.
So here it goes…. Bear with me as it's long.

My DH will turn 51 quite soon and I'm 44. We have 2 children: 8th and 5th graders. We live in a city in one of Southeast states (somewhere between GA and VA).
Our house that we bought new is paid for. Two Toyota sedans were bought new and are 17 & 8 y.o. Our expenses have ranged between $55k and $60k a year over the last 5-6 years. We don't have cable or any streaming subscriptions and haven't owned Apple products thus far either. I would say that $35-40K are necessities (including $5k for tutoring).

DH earns $160k and I earn $85k. However, my salary used to be $65k before this year. I left my previous employer in Jan'19 after 15.5 years. I don't think I landed in a better place either. OTOH, if I hadn't come to this company, I probably wouldn't have left the old place either. I suppose the extra $20k and better commute seduced me out of the toxic work culture, but after 7 months here I can tell that corporate America sucks and if I was sure everything would be fine when I didn't earn another dime I would be out yesterday or last year.
I sometimes (often actually over the last few years) think that I would love to be a SAHM, clean our house at my pace, go grocery shopping on the weekdays when traffic is calmer, exercise after driving kids to school, read or do some bigger jobs like paint a room or two, research laminate/vinyl flooring/carpet because after living in our house for 16+ years it could use some updating.
However, I think I'm prone to anxiety because I have so many fears. I'm afraid that our savings will drop a lot after I stop working. What if my SAHM dream wears off after a while and I begin thinking I'm not contributing my full 'worth' to our family. What if my DH loses his job or god forbid becomes ill after losing it?
Health insurance has always been through DH's employer. DH would like to continue working until at least 55 if not longer. However, since his multi-national company likes performing reorgs you never know when one of them might affect his position. Therefore I would like forum's opinions on our finances as if neither of us works anymore.

Our saving journey for retirement didn't start until 2000. We were born and raised in Europe.

529 Plan has $70k ($40k in Vanguard total stock & int'l funds + $30k in Vanguard bond fund) and not included in the below numbers.

401k's: mine is $400k and his is $800K.
Roth IRA's: $125k/each x 2 = $250k
Have been saving in HSA through DH's plan. Its balance is $40k.
Taxable accounts (mostly dividend blue-chip stocks) are worth $700k (yield close to 3% combined).
Cash savings or rainy day fund: $140k + $110k in I-bonds though hoping I-bonds could be earmarked for children's colleges.
Total is $2.4M or $2.3M if I-Bonds go to the college pot in case we cannot cashflow or save more for college expenses.

Overall try to keep 70/30 AA (more conservative in 401k's since we don't have bonds in taxable if we ignore I-Bonds).

We should get some miniscule NON-COLA pensions but I don't know how to value them.
DH's company discontinued his pension plan in 2011. Today its balance is $70k and it seems to earn some interest because it grows $1,500-$2k/year :-(. Fidelity forecast tool says that he'd get $600/mo. at age of 65 if he stopped working on 8.31.19 (whatever that means). He might be allowed to take a lump sum at that time too (this is my vague recollection talking).
I know for sure that my former employer does NOT allow to take a lump sum. After leaving the company, I received a letter saying that my monthly benefit would be $1,100/mo. under the single-life annuity form of payment if I begin taking in 2040. However, I can receive a reduced benefit starting in 2030 or if I change it to joint annuity.

I tried to calculate our SS benefits using this link: https://www.fool.com/retirement/2018/10/19/heres-the-new-2019-social-security-benefit-formula.aspx
If I did it correctly, I got $1,260/mo. for myself and $2,360/mo. for my husband. I hope that SS will not disappear in our lifetime and will get at least 80% which would be $1k/mo. for me and $2k/mo. for DH or $36k/year for both of us.

If I quit, we lose my $19k contributions to the 401k plus additional savings in our taxable account. DH contributes $24k to his pre-tax 401k + $5-6k to HSA (the rest is co. match). His co.match to 401k is 10% or $16k.

Questions to the forum:
1. I have never tried FireCalc yet...have to read on how to use it. If anyone has fun running scenarios on it, maybe you can tell me what answer you get and I'll compare to mine later.

2. I've heard that when you have a good size savings it's not as meaningful to save towards the end. Supposedly, there is a snowball effect at that point. Would it be applicable in our situation?

3. What do you think the sequence/methods of using our assets should be in order to be 'tax efficient'?
A) Is it better to start getting reduced pensions starting at ages of 55 and do reduced Roth IRA ladders or wait until 65 so we can increase Roth IRA conversions?

4. I know if my DH is in good health shape and continues working, I could easily quit working now, but if we're both out, healthcare is a huge wild card especially in the current political environment

5. Are there any resources/books to read to keep positive attitude about life? I'm a terrible worrywart!! I tend to worry about my children, my husband, my parents. It somehow in my mind ends ends up being a financial destruction if anything happened and therefore I should continue working. I haven't experienced a panic attack but would like not to worry so much.

6. The older child wants to be a doctor , so guess what I worry about? How in the world can we pay for that education? I personally hope she changes her mind in HS. If not, then I hope she goes to study in Germany. If not, maybe she'll be super smart and lucky to get scholarships, etc. If not, then I'm concerned about her being so deep in red before getting that MD.

Thank you so much in advance!

First, you should be very satisfied with the lives you have built and what you have done with them Your story confirms the idea of America as a land of opportunity is still alive

I tend to start with the high level and use detail to confirm/refute. My high level on your situation:

1. About $1,000,000 in post-tax accounts ($700K + $140K+ $100K). Straight line math, that's 15+ years at your current $60K annual burn rate. That will get DH to 66 (SS eligible) and you to 59.
2. About $1.1 million in tax-deferred. In 15 years when DH is 66 (assuming taxable account is drawn down first), this would be ~2.5+ million at 6-7%. Should be enough to get both you to the end.
3. $70K in 529s with with 4-7 years before drawing down. Make the kids go to state schools, get all the state-based scholarships and call it good. No loans, they can work to fill the gaps. The potential MD has a long academic road ahead, and if she's not "super smart", she probably won't make it. I don't think you should feel compelled to pay for it.
4. If there is marital agreement, max out your benefits (401K, etc.) and leave your job soon to be a SAHM. You can afford it, and the years ahead for your kids are critical, and being able to support their activities, and just be a positive presence in their lives, will pay off for them. And you
5. I am a single parent (father, mom's gone) and I have seen the difference between Moms and Dads. My late wife shared many of your concerns-health care, possibility of layoff and loss of income, the generic "what if" that could complicate things. They are well-founded. In my experience, they are low probability events. You have to get comfortable with the risk of those, or get comfortable believing you can adjust and work through them if they happen. My kids and I were able to deal with the death of their mother, my retirement at 55 and a relocation. All of us are doing fine, so it's possible. Sample size of one

The best part is you have choices, something many don't have. As long as you continue to be prudent in your decisions, you will be OK

 

[AbbA]

Thank you, FlaGator, for your constructive answer. I liked how you broke down the numbers for me. It's very helpful while I study FireCalc. Your story also shows that it is meaningful spending time with the kids before they leave the nest and while you're alive. I feel sad that your wife didn't have the chance to see her children grow.

Yes, I quite frequently feel that we're such slaves to the money in this country. I was against materialism, but now I'm guilty of constantly thinking about money. I know a few stay at home moms who live in our neighborhood. Lately, when I drive by houses each morning on the way to work, I always wonder: Do they worry about money or savings, do they regret not working... I think I envy them more than the other way around (of course, they don't know about our piggy bank either).

One question: Do you think that our pensions are pretty much worthless because you didn't mention them in your high level review?
I'm not sure if my thinking is wrong, but if inflation stays 2-2.5%, my $1,100 pension will be worth 50% in 20-25 years. If that's correct, then it's not too awful for a few years in retirement. Even today some families of four manage to keep their food budget at $500/month. It could be sufficient for two people for some time. Just need to hope inflation doesn't shoot up.

I appreciate your response, FlaGator.

To All,
Thank you for your comments thus far.
I didn't address one thing yesterday, but I would like to do it now.
Being an accountant doesn't make me a great financial planner because I am OK dealing with the past or today's money but I am not very comfortable forecasting 20-40 years into the future. It feels so abstract. That's how I feel about our pensions...They're not-cola's, so I feel like I probably worked for money that will have little value .

However, I will try to challenge myself and check FireCalc soon for better or worse.

 

[FlaGator]

Thank you, FlaGator, for your constructive answer. I liked how you broke down the numbers for me. It's very helpful while I study FireCalc. Your story also shows that it is meaningful spending time with the kids before they leave the nest and while you're alive. I feel sad that your wife didn't have the chance to see her children grow.

Yes, I quite frequently feel that we're such slaves to the money in this country. I was against materialism, but now I'm guilty of constantly thinking about money. I know a few stay at home moms who live in our neighborhood. Lately, when I drive by houses each morning on the way to work, I always wonder: Do they worry about money or savings, do they regret not working... I think I envy them more than the other way around (of course, they don't know about our piggy bank either).

One question: Do you think that our pensions are pretty much worthless because you didn't mention them in your high level review?
I'm not sure if my thinking is wrong, but if inflation stays 2-2.5%, my $1,100 pension will be worth 50% in 20-25 years. If that's correct, then it's not too awful for a few years in retirement. Even today some families of four manage to keep their food budget at $500/month. It could be sufficient for two people for some time. Just need to hope inflation doesn't shoot up.

I appreciate your response, FlaGator.

To All,
Thank you for your comments thus far.
I didn't address one thing yesterday, but I would like to do it now.
Being an accountant doesn't make me a great financial planner because I am OK dealing with the past or today's money but I am not very comfortable forecasting 20-40 years into the future. It feels so abstract. That's how I feel about our pensions...They're not-cola's, so I feel like I probably worked for money that will have little value .

However, I will try to challenge myself and check FireCalc soon for better or worse.

Thank you for the kind words. Mom had a good run and knew she was leaving solid kids behind . All I had to do was not mess it up

Sorry for not addressing your pensions and SS. They are significant, about 50% of your current spending once received. You will need to "adjust for inflation" obviously, and including them should give you even more comfort.

As for the future, it's a guess. Probability favors the prepared, and I think you've done a good job of working the odds. Spending some time with Firecalc and other forecasting tools will be helpful, if only to help you see historical performance is on your side.

 

[Vacation4us]

I agree an employment gap for you is much harder. I have a friend who was in accounting left and was a SAHM for 10 plus years and complained her pay was lower than when she left. She is now at 50 and divorced getting her CPA. Retirement is just a dream for her.