Tallman4123
Recycles dryer sheets
- Joined
- Aug 15, 2014
- Messages
- 141
I’ve been lurking on this site for nearly two years, which is about the same time I started to seriously contemplate retirement. I’ve always been oriented more towards saving versus spending, but this site (and several others) has taken my thinking to a more specific level. I’m very grateful to the consistent contributors on this site. Thank you.
Even though I suggest I’m a saver, LBYM is not a tenet my DW and I have lived by - at least not consciously – until I found this forum. Since then, I’ve tracked our spending and shared the results with DW. We’ve made some adjustments in our spending, but still spend at - what I consider - a high rate. We have a great life: we’re healthy (insert wood-knocking sound here), solid dual-income earners and consider ourselves very lucky and blessed. Two grown kids out on their own, with the addition in 2015 of twin grandbabies for whom we just opened and funded 529 plans.
Here are our stats and plan…any and all feedback welcomed!
Me: 58 yrs old
DW: 50 yrs old
Me Qualified: $906k
DW Qualified: $484k
HSAs $ 13k
Non-Qualified: $513k
Home Value: $609k (mortgage paid off in Feb 2015)
Annual Savings
$68k pre-tax into maxed out 401ks, including employer match
$6.65k maxed into HSAs
$102k post-tax (just ramped up to this number after paying off mortgage)
Annual Expenses: $123k per year after tax (includes $25k in travel)
Asset Allocation: 62% equity; 26% bond; 12% cash (my target is 60%, 35%, 5% and I’ll be rebalancing over the next few months). I’ve recently made several moves – mostly within our tax-advantaged accounts – to drive down our overall expense ratio costs to ~ 0.12% and adjust our asset allocation to where I’m comfortable.
Equity holdings include $206k in 14 individual stocks with the remaining balance in low cost index funds. $83k of $206k in stocks is company stock from DW’s former employer 401k. The stock has a cost basis of $13k, so I’m hesitant to move out of the stock because I want to take advantage of the NUA tax break when she begins to withdraw the stock out of the 401k after age 59 1/2.
I am targeting mid-2018 for retirement. DW has stated she will likely keep working for two to three years beyond that date, but possibly part-time at a much reduced comp level. Our plan is to not factor her potential employment in our retirement plan. So I’m going on the assumption that we will both pull the plug mid-2018. Neither of us has a pension available. Nor do we have access to sponsored health insurance, so I’m thinking $15k per year in health insurance premiums and using the HSAs to cover out-of-pocket costs for as long as the HSAs last. That $15k will bring our annual spending up to $138k per year post tax. The plan is to wait to my age 70 (DW age 62) for Social Security. I estimate $58k per year combined total for both of us beginning in 2027.
Since DW can work from anywhere, we plan on moving “back home” shortly after retirement, which is to a lower COL area (currently living in a high COL city for my j*b)). We will downsize (based on real estate cost differential) and should net approximately $150k in the home equity. While the primary COL difference is real estate, I believe there is another $5k to $10k annually in reduced budget costs by moving back home. Again, my preference is to not allow for this in the budget.
I’m working hard to convince myself that we’ll be OK with a 5% withdrawal rate for the 9 years before SS kicks in and then reduce to 3% based on the contribution from social security.
OK, as Churchill said, “A good speech should be like a woman’s skirt; long enough to cover the subject and short enough to create interest.” Very interested in your (always) direct and insightful feedback!
Even though I suggest I’m a saver, LBYM is not a tenet my DW and I have lived by - at least not consciously – until I found this forum. Since then, I’ve tracked our spending and shared the results with DW. We’ve made some adjustments in our spending, but still spend at - what I consider - a high rate. We have a great life: we’re healthy (insert wood-knocking sound here), solid dual-income earners and consider ourselves very lucky and blessed. Two grown kids out on their own, with the addition in 2015 of twin grandbabies for whom we just opened and funded 529 plans.
Here are our stats and plan…any and all feedback welcomed!
Me: 58 yrs old
DW: 50 yrs old
Me Qualified: $906k
DW Qualified: $484k
HSAs $ 13k
Non-Qualified: $513k
Home Value: $609k (mortgage paid off in Feb 2015)
Annual Savings
$68k pre-tax into maxed out 401ks, including employer match
$6.65k maxed into HSAs
$102k post-tax (just ramped up to this number after paying off mortgage)
Annual Expenses: $123k per year after tax (includes $25k in travel)
Asset Allocation: 62% equity; 26% bond; 12% cash (my target is 60%, 35%, 5% and I’ll be rebalancing over the next few months). I’ve recently made several moves – mostly within our tax-advantaged accounts – to drive down our overall expense ratio costs to ~ 0.12% and adjust our asset allocation to where I’m comfortable.
Equity holdings include $206k in 14 individual stocks with the remaining balance in low cost index funds. $83k of $206k in stocks is company stock from DW’s former employer 401k. The stock has a cost basis of $13k, so I’m hesitant to move out of the stock because I want to take advantage of the NUA tax break when she begins to withdraw the stock out of the 401k after age 59 1/2.
I am targeting mid-2018 for retirement. DW has stated she will likely keep working for two to three years beyond that date, but possibly part-time at a much reduced comp level. Our plan is to not factor her potential employment in our retirement plan. So I’m going on the assumption that we will both pull the plug mid-2018. Neither of us has a pension available. Nor do we have access to sponsored health insurance, so I’m thinking $15k per year in health insurance premiums and using the HSAs to cover out-of-pocket costs for as long as the HSAs last. That $15k will bring our annual spending up to $138k per year post tax. The plan is to wait to my age 70 (DW age 62) for Social Security. I estimate $58k per year combined total for both of us beginning in 2027.
Since DW can work from anywhere, we plan on moving “back home” shortly after retirement, which is to a lower COL area (currently living in a high COL city for my j*b)). We will downsize (based on real estate cost differential) and should net approximately $150k in the home equity. While the primary COL difference is real estate, I believe there is another $5k to $10k annually in reduced budget costs by moving back home. Again, my preference is to not allow for this in the budget.
I’m working hard to convince myself that we’ll be OK with a 5% withdrawal rate for the 9 years before SS kicks in and then reduce to 3% based on the contribution from social security.
OK, as Churchill said, “A good speech should be like a woman’s skirt; long enough to cover the subject and short enough to create interest.” Very interested in your (always) direct and insightful feedback!
