Is the third time the charm?

[SouthBeachGuy]

Happy Holidays!

I hope to share my journey to retirement in 2023 which was not a straight path.

In 2017, I was laid off from a F500 in a leadership role I was 52. I got a job as an individual contributor and worked there for 3 years. (less compensation) The commute and the culture got to me, and I fired in to retirement. I did have a child in medical school so I thought if the right opportunity I would go back to work to help them.

So in past 3 years as was fairly content in a new job/new company and did help my child pay completely for school

Unfortunately, another company (hedge fund) purchased the company this year and the workload and stress is unbearable. I gave my notice to start my retirement in the beginning of 2023 since it will impact my health if I stayed any longer. My team of 5 people went down to 2 and at that point I said NO MORE

Info
Age 57 Married
401K/IRA $900K (60/40)
Tax Brokage (50/50) + cash ~$600K
House $600K (no mortgage)
No debt (Cars paid) CC paid monthly

FRA SS $3300 / Spouse $1650
Yearly Budget $80K Average
Health Care ACA $150 / month by capping income

I have some flexibility in my budget since 30-40% is discretionary. Firecalc shows 100%

Please let me know if you have any feedback or suggestions

 

[38Chevy454]

My suggestion is have fun being retired.

Sounds like you are good with 100% Firecalc. Just make sure your budget expenses have included all the taxes and insurance. That's an area easy to miss for some people. Otherwise 30-40% discretionary provides lot of cushion.

 

[Vacation4us]

What’s your plan till FRA? Deplete the 600k? Where is the 80 k coming from? 10 years to FRA and 2.5 till you can access the 401K.

I wish you the best but I am not seeing how firecalc could say 100% success if you haven’t calculated taxes on that 80 k. After taxes 80 k isn’t 80k.

You do you!

 

[SouthBeachGuy]

What’s your plan till FRA? Deplete the 600k? Where is the 80 k coming from? 10 years to FRA and 2.5 till you can access the 401K.

I wish you the best but I am not seeing how firecalc could say 100% success if you haven’t calculated taxes on that 80 k. After taxes 80 k isn’t 80k.

You do you!

===========================================
good feedback thanks

Using several retirement planning software but with Right Capital. Since withdrawals are coming from brokage/cash (after tax) at first (so taxes in the are very low but are factored in the detailed plan) effective tax rate no greater than 10% during the lifetime of the plan

Note I dont plan to user the rule of 55 for earlier 401k withdrawn and plan to leave it in as long as I can.

Other options are work part-time, career change, or downsize house. Will try to target SS at 70 (4100+2000) depending

 

[Koolau]

Welcome to the forum and thanks for the introduction. Be sure to check back often and share what's going on in your new (FIRE'd) life!

 

[pacergal]

Welcome to the Forum, look forward to hearing more from you.
Feel free to ask any questions along the way, folks here willingly share their knowledge.

 

[Exchme]

Happy Holidays!

I hope to share my journey to retirement in 2023 which was not a straight path.

In 2017, I was laid off from a F500 in a leadership role I was 52. I got a job as an individual contributor and worked there for 3 years. (less compensation) The commute and the culture got to me, and I fired in to retirement. I did have a child in medical school so I thought if the right opportunity I would go back to work to help them.

So in past 3 years as was fairly content in a new job/new company and did help my child pay completely for school

Unfortunately, another company (hedge fund) purchased the company this year and the workload and stress is unbearable. I gave my notice to start my retirement in the beginning of 2023 since it will impact my health if I stayed any longer. My team of 5 people went down to 2 and at that point I said NO MORE

Info
Age 57 Married
401K/IRA $900K (60/40)
Tax Brokage (50/50) + cash ~$600K
House $600K (no mortgage)
No debt (Cars paid) CC paid monthly

FRA SS $3300 / Spouse $1650
Yearly Budget $80K Average
Health Care ACA $150 / month by capping income

I have some flexibility in my budget since 30-40% is discretionary. Firecalc shows 100%

Please let me know if you have any feedback or suggestions

Doublecheck your SS benefits. The default number you get at SSA.gov is to assume you continue to work. You have to enter your future earnings as zero to get the true number. I ask because the $3300 benefit at FRA is pretty close to the max - for a 57 year old, you would have had to be maxing out SS since early in your career.

Does your wife have 10 quarters of her own income making her eligible for her own SS benefit or is it coincidental that hers is half of yours?

Did you look at opensocialsecurity.com to see what combination of ages for claiming give you the most lifetime benefit? It's the most powerful tool I know of for that, I've even seen posts at Bogleheads where Social Security employees recommend opensocialsecurity.com to folks as the government doesn't have an equivalently powerful tool. Are your finances OK if one of you passes early, losing the smaller SS benefit while the other lives a long time?

 

[pb4uski]

What’s your plan till FRA? Deplete the 600k? Where is the 80 k coming from? 10 years to FRA and 2.5 till you can access the 401K.

I wish you the best but I am not seeing how firecalc could say 100% success if you haven’t calculated taxes on that 80 k. After taxes 80 k isn’t 80k.

You do you!

I disagree.

For a MFJ couple under age 65 even if the entire $80k withdrawal was taxable, $87k of withdrawals would result in $7k of federal income tax and $80k available to spend. Besides the OP already stated that they would be managing income for ACA, which means that their taxes from ER at age 57 to Medicare at age 65 will be negligible and then begnning at 65 they get a larger standard deduction.

I'm guessing that the OPs plan is to use taxable from 57 to 59-1/2, then a mix of tax-deferred and taxable from 59-1/2 to 65. And in 5 years after the turn 62 they have the option to turn on SS if the SHTF.

If you input the OPs situation into FIRECalc you get 100% success. If you then use the Investigate tab to solve for safe spending at 95% success that is $86,536 and the OP indicated that 30-40% of their spending is discretionary, so I don't see any reason for alarm.

Actually, their plan is very similar to our plan. Retired at 56 with a healthy slug of taxable money and lived on that from ER at 56 until now. Now past FRA but taxable should hold us in addition to a small pension and DW SS until I start collecting at 70. All is well.