Need opinions on my decision

Tetto

Recycles dryer sheets
Joined
Dec 18, 2016
Messages
405
Location
New England
Hi Folks,

DW and I are at a decision point in our life. We’ve accumulated 1.8mm in 401k, IRA and Trad IRA and cash. Zero debt, house paid off. I’ve researched the ACA (I’m 58, her 62) pretty well up to and including contacting a broker and talking everything through. We qualify (in CT, New London county) for a Gold BCBS plan, dental and vision coverage, and full health. 18k deductible as a family 🤷🏼‍♂️… for $11 bucks a month (as long as our AGI stays at $55k/year) if I input $60k, it floats to $70/month. Not bad at all!! My plan is to take SS at 70($4400/mth), her next year at 63 (~$1400/mth). I’m having trouble accepting/determining if we’re good to go. I’m pretty sure we are covered, but I can’t make that jump yet. Caveat, most of our assets are in 401k, pre tax. Not sure it matters too much at this point. Around 1.3mm pre tax.

What do you think? FireCalc says 100% in any scenario I manipulate, my FA (fee only…) says we are good to go too. But I’m extremely conservative and agonize over this decision. Thanks for any inputs!!

Tetto
 
I think no matter how much you have, you'll always be questioning if you're good to go. It looks like you are good. However, if at some point you see that your funds are dwindling faster than you anticipated, you can always make adjustments - possibly take your SS earlier, or maybe pick up a part-time job. Don't think about it too much, or you will definitely have analysis paralysis.
 
Your numbers look good, firecalc says 100%, so seems OK to me.
Have you answered the "can I retire " questions in the Early Retirement FAQ section?
 
When I was ready to retire I ran our situation through virtually every free retirement calculator known to man and they are gave me a green light. No regrets. One of the best decisions that I ever made. While it is hard to say since you didn't disclose what you need to live on but if your advisor and FIRECalc say you are good to go then you are probably good to go.

Have you considered downshifting to part-time? My employer had a formal program where you could work reduced hours for reduced pay and I did that for many years before totally quitting work. To them 50% of me was better than 0% of me.
 
Keep an eye on the DW's SS income - i.e. that with that and future withdrawals in the future, it doesn't push your income into a loss of subsidy range.
 
I cannot judge. Only you know for certain.

I retired at 59. I did not admit it to myself but I could have easily retired at 55. When I did start to be serious about retiring at 58 I realized that I had more equity that I imagined and as it turned out over the years my base spending was less than anticipated. Travel was higher...a major part of our expenses.

Looking back, what really stopped me from retiring at 54 or 55, notwithstanding my imaginary excuses, was that I was simply 'not ready'. I had a great job that I loved and worked for an excellent employer for the previous 25 years.

At 59 I was ready. And I knew a package was on the way so I had a few months to wind down, coast, and make post retirement plans with my spouse. My spouse and friends could not imagine me not working. I walked away and never looked back.

I believe that financials is only one part of the retirment equation. The timing has to feel 'right' for you. If it does not...simply wait a while.
 
Sounds like you're good to go. If you and your wife don't have a Roth IRA yet, consider opening one up and contributing to it. If only one of you is working, you can make contributions for both of you. Once you are retired, you'll need to pay federal and state taxes on Roth IRA conversions, which will affect your ACA.
 
When I was ready to retire I ran our situation through virtually every free retirement calculator known to man and they are gave me a green light. No regrets. One of the best decisions that I ever made. While it is hard to say since you didn't disclose what you need to live on but if your advisor and FIRECalc say you are good to go then you are probably good to go.

Have you considered downshifting to part-time? My employer had a formal program where you could work reduced hours for reduced pay and I did that for many years before totally quitting work. To them 50% of me was better than 0% of me.
Thanks- good idea! I’ve calculated precisely what we need to live on, both me and the FA and independently the numbers were very close to each other. So the gross income for us to qualify for subsidies is wholly adequate. We are under that number by 30% what we need.
 
Keep an eye on the DW's SS income - i.e. that with that and future withdrawals in the future, it doesn't push your income into a loss of subsidy range.
This is a good watch out. I’ll adjust whatever withdrawals accordingly. Plus it saves the stash and allows it to keep growing.
 
Your numbers look good, firecalc says 100%, so seems OK to me.
Have you answered the "can I retire " questions in the Early Retirement FAQ section?
I did and have taken a hard look at everything. This is my conundrum, it seems we’re good to go, but my conservative nature has an iron grip on my ability to rationalize. I’m probably over thinking, but the plan is to say adios to work in 1.5 years. This will, I think, allow me to calm down and slide out the door. Hopefully.
 
No one can tell you when YOU will be comfortable with pulling the retirement trigger - it's a decision we all have to come to ourselves. FIRECALC and other calculators can give you odds your plan would have worked in the past, or future with Monte Carlo sims - but that doesn't take into account a) your risk tolerance, b) how accurately you've estimated future spending, or any number of other variables. Some people are comfortable with a 75% probability of success, others are looking for a 200% probability (having a nest egg 2X the 100% spending estimate) - only YOU can decide that. You should NOT listen to random strangers online, who have nothing invested in your situation IMO.
 
It sounds as though you are in good shape financially, Tetto - congratulations on being FI. Now you have the freedom to decide when you are ready to RE. So no matter what, you have succeeded. Have you started thinking about how you want to spend your time after retirement, especially in the first 10 years? If not, exploring ideas and trying things out might lead you to decide to retire sooner, or later.

Personally, I had planned to w*rk until about 57-58, but ended up in a very unpleasant job assignment in 2009 after I had to refuse being considered for my dream job because I would not relocate (DH's health). So after tackling some big expenses (buying and remodeling retirement house, new car, college tuition, etc.) and realizing we had more than enough, I decided my BS bucket was full and pulled the plug, with the help of good folks here who shared their perspectives.. No regrets.

Good luck with your decision making and keep us posted!
 
No one can tell you when YOU will be comfortable with pulling the retirement trigger - it's a decision we all have to come to ourselves. FIRECALC and other calculators can give you odds your plan would have worked in the past, or future with Monte Carlo sims - but that doesn't take into account a) your risk tolerance, b) how accurately you've estimated future spending, or any number of other variables. Some people are comfortable with a 75% probability of success, others are looking for a 200% probability (having a nest egg 2X the 100% spending estimate) - only YOU can decide that. You should NOT listen to random strangers online, who have nothing invested in your situation IMO.
Well, it’s not that I’m asking folks to make a decision for me. Maybe that was bad wording in my part. Really just using this forum for what it’s intended and I’ve seen it used for: commiseration, comparison, viewpoints, personal experiences, watch outs etc, I find this very helpful to enlighten and know I’m on the right track. I will pull that trigger when I’m good and ready however, not when someone here says to. It’s very nice though to see folks’ opinions on my situation and seems to validate what DW and I have been able to accomplish. Thanks for your .02 though, appreciated.
 
Well, it’s not that I’m asking folks to make a decision for me. Maybe that was bad wording in my part. Really just using this forum for what it’s intended and I’ve seen it used for: commiseration, comparison, viewpoints, personal experiences, watch outs etc, I find this very helpful to enlighten and know I’m on the right track. I will pull that trigger when I’m good and ready however, not when someone here says to. It’s very nice though to see folks’ opinions on my situation and seems to validate what DW and I have been able to accomplish. Thanks for your .02 though, appreciated.
 
Those ACA numbers seem low to me, but I haven't looked at 55K AGI, very high deductible or your state.

Do you at some point transition to Medicaire? Do those monthly numbers stay the same?

The estimates I get from various sources for ACA health insurance for me + wife pre-medicaire are always like $8000-$16000 per year. I admit, I havent dug into this much, just accepted the values offered by different sites.

PWF
 
Those ACA numbers seem low to me, but I haven't looked at 55K AGI, very high deductible or your state.

Do you at some point transition to Medicaire? Do those monthly numbers stay the same?

The estimates I get from various sources for ACA health insurance for me + wife pre-medicaire are always like $8000-$16000 per year. I admit, I havent dug into this much, just accepted the values offered by different sites.

PWF
Yep I was suspicious too. I went over it all with the broker, and she validated what I found. She said a real quote might differ by a few bucks, but that’s the real deal. She also said very few folks in CT take advantage of this, even the ones with the means to FIRE. I found this surprising. And yes, we will def transition to Medicare when ready. For my wife it’s 3 years. Me it’s 7 years
 

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Your finances are similar to mine -- DW and I are at about $1.9M in assets (plus some good company stock cushion to be paid out over five years, if the value holds) -- though I'm six years younger than you. And all the calculators are giving me encouraging results, too. We were kinda forced to pull the trigger to leave long careers, and we're going with it. This was seven months ago. I remain nervous like you, but not enough to get a new job. As was said above, we could turn to part-time income if we need to at some point (probably wouldn't even need that much). All on this discussion board have been inspiring and encouraging, many with histories to prove FIRE success. You're looking good!
 
Didn't see you mention your annual expenses. Did I miss something? I could definitely do it on my expenses and your #s.
 
Didn't see you mention your annual expenses. Did I miss something? I could definitely do it on my expenses and your #s.
Yeah, our annual expenses are hovering right around $49K per year as we live now. Its doable for sure, plus we have post tax money to fill the gap and my DW SS starting next yearish, cutting the amount we need from our assets.
 
Didn't see you mention your annual expenses. Did I miss something? I could definitely do it on my expenses and your #s.
Agree, expenses are part of the equation. I use several different calculators, mostly with historical data. I'll enter various levels of expenses like normal situation, big travel plans that year, or if we have to go into LTC in the next 5 years. Those expenses vary all over the place from $80K/year to $140/year. I have to consider taxes. We're in the 12-17% bracket. Our state does not tax retirement income, IRA W/D, SS. There's a few things to consider. We were on ACA for 7 years. That saved us and you have good options.
 
Based on your stated expenses and assets I would say you can retire immediately. I wouldn't wait another day.
 
If the math works, then it's simply up to you to decide. For me, I decided I didn't want to trade time that I would never get back for money I would never need.

Good that you are tracking your expenses, which is the key metric in the equation. What I have found is that we seem to have lumpy expenses, with usually at least one lump per year (AC went out, next year the house needed painting, next year tankless water heater, next year we "needed" to paint the kitchen, etc.). So, plan for a lump or two.
 
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