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[Golfquest20]

Hello, been lurking and have decided to join in. Sometime in the next 6 months I hope to be quite active here; learning and sharing. Because it is within that timeframe that we hope to FIRE.

I would appreciate feedback on our situation. We have used Firecalc, and ran various scenarios. The outcomes have been in the 100% success range but I’m not certain I’m using the tool to its fullest potential. We have carefully tracked our annual spend rate for the past 5 years. Anyway..

• Me: 49
• DH: 52
• One son: 16
• No debt
• 5 year old house paid off
• Two new cars, both 2019 models, paid off plus used car for son also paid off. All vehicles will be kept for 10 yrs +
• College paid in full in advance, 90% held in 529K/remaining 10% in cash, $ not included below
• With employer I am eligible to purchase retiree health insurance for 3 of us/no subsidy/$36,000 per yr which includes medical, dental and vision. Very expensive but good insurance
• We are also exploring me staying on retiree health insurance so that we have the option to go back to all of us being covered if affordable care falls apart. If we all opt out now, we can never return to the plan. But in the meantime, husband and son would purchase separate policy in the marketplace to lower our overall health insurance costs
• We purchased a single premium long-term insurance policy with an inflation rider. Would cover 60% of nursing home stay for both for 3 years, remainder potentially coming from home sale if care ends up being necessary
• Our current spend rate is $64,000 after tax, including all fixed expenses, discretionary spending, and a lumpy category for home repairs, future cars, etc. We do have room to lower this requirement slightly if necessary; all hobbies and travel are included
• Total annual spend requirement, including $36,000 for health insurance is $100K/yr. between now and age 65 Medicare for both. At that point, I would hope our required spend would be at least 10% to 20% less. Planning horizon would be 95 years old for both. Hopefully $36k for health insurance is the worst possible scenario, we think we can get cost down to under $28K with a part retiree insurance/part affordable care hybrid of sorts
• DH may work part time for next 4 years but would not make more than $20K per year
• $1,976,000 tax deferred (401ks, Trad’l IRA’s) 45 stock/30 bond/25 cash
• $1,355,000 taxable (Including first 4 years spending in laddered CD’s) 46 stock/29 bond/25 cash
• $30,000 Savings/Emergency
• Additional $ set aside not included here for eventual son wedding and to cover his car insurance premium until 24
• All taxable and deferred savings are at Vanguard, Fidelity and T Rowe. CDs at Capital One and local banks
• S.S. retiring now, zeroes for remaining years prior to 65 then taken at 65 for both: $16,500 DH and $15,500 DW if we reduce payout by 40%. At 100% projected payout, also both retiring at 65: $27,000 DH and $26,000 DW. Waiting to draw at 70 more yet but I didn’t run the numbers at that age
• One DH pension/no cola/$7,100 per year at 65 with joint survivorship
• When Dow reached 29,000 we got cold feet and moved some stock fund earnings to cash, hence the conservative allocation above. We got anxious as we are close to pulling the trigger. I guess we just can’t bear to see a large back-up at this point. The fear will pass and at some point we will look for a buying opportunity to get back to 50+ in stocks.

We have many hobbies and like to travel…always seeking ways to travel for less. For the number crunchers here, would we be ok to retire May 1 of this year? Any suggestions on things to do differently?

Thank you so very much!

 

[street]

I'm no expert but with what you have and your expenses you should be golden. You have a great plan and prepared and I think that is huge. I see no problems and should have plenty.

 

[SecondCor521]

Welcome to the forum!

It's a personal decision that's your responsibility, but if I had your numbers and assuming the son was healthy and you had no major issues that you left out, I'd FIRE whenever I didn't want to work any more. You're at $100K spending on $3.2M+ of FIRE stash, so slightly above 3% if my mental math is right. You have budget flexibility and padding.

Also if I were in your shoes, I'd probably try out the advanced calculator at opensocialsecurity.com and see what it recommends and consider following that recommendation. You might end up slightly wealthier claiming later, but in your case it is unlikely to matter to you since you'll probably have enough. It could matter a bit to your son if you are giving your estate to him.

 

[Dtail]

From a retirement calculator standpoint, you are good to go.
Since you have a decent stash in Taxable, have you looked into managing your MAGI for ACA subsidy purposes in order to reduce your potential healthcare expenses before 65 y.o.?

 

[Ronstar]

Enough $. Great plan, but I would rethink future spending. 10-20% spending reduction at 65 makes sense in that you'll be spending less on health insurance, but I wouldn't discount the fact that you may find retirement interests and home improvements/cars/capital costs that cost more $ than you currently plan for.

 

[JoeWras]

• With employer I am eligible to purchase retiree health insurance for 3 of us/no subsidy/$36,000 per yr which includes medical, dental and vision. Very expensive but good insurance
• We are also exploring me staying on retiree health insurance so that we have the option to go back to all of us being covered if affordable care falls apart. If we all opt out now, we can never return to the plan. But in the meantime, husband and son would purchase separate policy in the marketplace to lower our overall health insurance costs

Overall very good plan and it is looking good. As we say here, check Firecalc.

It is wise to consider insurance, including your son, until 24. Take it as it comes, but at least when the son reaches 18, you should engage him in paying the car insurance. There has to be a time to help the son learn what it means to be truly adult. But that's a different subject than pure numbers.

I really appreciate your careful analysis of health insurance (quoted). Some people have no idea. You are very realistic. That's great.

I quoted the retiree insurance for one reason. Read your documents carefully. Sounds like you did, but double check. My insurance works like yours, I can add DW later (and as a matter of fact, I did this year, for vision). However, DW's insurance doesn't work that way. It is a one and done. The spouse has to be on the insurance the day of retirement. There is no adding back for the spouse! When DW wanted to retire, I had to also. Actually, I had to go first to "lose" my health insurance. I kept my retiree at Megacorp by just keeping vision insurance. I can add medical later if required as long as I have at least one kind of insurance active. Check that option with your retiree insurance. Many plans are like this. You can keep the plan as backup by simply retaining dental or vision with an option to add health later, if required.

We are both on DW's since hers is subsidized. Similar insurance from my plan is about 3x more expensive. You know how expensive unsubsidized insurance is!

Anyway, well done. Read carefully. Sounds like you have.

BTW, we finally calculated our spend rate after a full year of retirement. Ours is close to yours, with the exception of health insurance because we have DWs subsidized version. Actually, most everything is close to you. We are 57, so a bit later along. So far, so good.

 

[Dash man]

We were in approximately the same position as you when I retired, but with a higher spend rate. Our portfolio has greatly increased thanks to the ongoing bull markets and a few fortunate individual stock picks. This may not be the case in the next few years, so it’s good to have some in cash, as we have always had.
My retiree health insurance has two options, an 85/15 coinsurance plan and a 60/40 plan with a $1500 higher deductible. The cost of the 60/40 plan is $700/month less expensive, so easily makes up for the higher coinsurance, higher deductibles and maximum out of pocket costs. You may want to look into that if you have the option.
I think you’re good to go.

 

[Golfquest20]

To all who have replied, thanks so much. Lots of good insight, especially around the health insurance situation. We also would like to consider rolling some tax deferred via Roth’s once we’re no longer working full time, but we’re worried about screwing up our eligibility for subsidies if we go the ACA route. I’m trying to figure this out. If DH makes $20k part time, we have $18k in interest, divs, gains then roll over $25k per year I guess we’re still ok? I assume the std deduction comes back off too? Anyway, thanks so very much for all input so far!!

 

[Dtail]

To all who have replied, thanks so much. Lots of good insight, especially around the health insurance situation. We also would like to consider rolling some tax deferred via Roth’s once we’re no longer working full time, but we’re worried about screwing up our eligibility for subsidies if we go the ACA route. I’m trying to figure this out. If DH makes $20k part time, we have $18k in interest, divs, gains then roll over $25k per year I guess we’re still ok? I assume the std deduction comes back off too? Anyway, thanks so very much for all input so far!!

See below rules for the MAGI calculation for potential ACA subsidies. Standard deduction does not come into play.

http://laborcenter.berkeley.edu/pdf/2019/magi.pdf

 

[WyomingLife]

Great plan and thoughtful analysis. Best wishes to you, and I look forward to more of your posts.

 

[LiveBelowMeans]

From your detailed analysis presented, its clear you are all over the numbers. Do it. Enjoy your retirement, you've earned it. JMHO

 

[Trawler]

Great Plan well thought out and IMHO you are good to go! Take some time a read up on the ACA income limits and calculation. With what you have in taxable accounts you should be able to manage ACA MAGI income to what ever level is optimal for you both.

 

[JoeWras]

To all who have replied, thanks so much. Lots of good insight, especially around the health insurance situation.

Golfquest20: hope you stick around and continue to contribute and keep us up to date! You have good insights too, even on first post.

 

[MRG]

Looks very good. I don't think you are going to have any problems. Yeah, jitters are normal and will fade.

 

[MBAustin]

Looks very good. I don't think you are going to have any problems. Yeah, jitters are normal and will fade.

+1

If you don't hate your jobs, I would pick your ER timing based on factors such as receipt of annual bonus or other once-a-year events. I was so miserable that I stayed for one such factor (one more birthday to reduce retiree medical costs a bit) but not for another (retiring two months later so I could push stock option redemptions into the following calendar year to reduce taxes).

My retiree health premium costs have gone up dramatically over 9 years ($350/month to $1200/month) and the deductibles also up ($1,200/year with co-pays to $3,300/year with zero paid until I hit the deductible). But we don't qualify for ACA subsidy due to DH pension so this is still (marginally) better than an open-market plan, plus I will get a monthly subsidy for Medicare when that applies. So do plan for looking into this every year going forward.

Welcome and we look forward to your active participation here!

 

[Golfquest20]

+1

If you don't hate your jobs, I would pick your ER timing based on factors such as receipt of annual bonus or other once-a-year events. I was so miserable that I stayed for one such factor (one more birthday to reduce retiree medical costs a bit) but not for another (retiring two months later so I could push stock option redemptions into the following calendar year to reduce taxes).

My retiree health premium costs have gone up dramatically over 9 years ($350/month to $1200/month) and the deductibles also up ($1,200/year with co-pays to $3,300/year with zero paid until I hit the deductible). But we don't qualify for ACA subsidy due to DH pension so this is still (marginally) better than an open-market plan, plus I will get a monthly subsidy for Medicare when that applies. So do plan for looking into this every year going forward.

Welcome and we look forward to your active participation here!

Exactly, and thanks so much. DH is waiting on March payout for 2019 calendar year bonus. It isn't huge as company had poor year, but still worth waiting on. And I am waiting to close out some options in April. Again, not large but worth waiting a few months for. We both have some add'l incentives geared toward retention, a portion of which are distributed every March. We've been chasing those carrots for several years though. So we are now to the point where we're willing to trade leaving those things on the table for some freedom. We haven't been enjoying our jobs at all for quite a few years now, unfortunately. My employer continues to rightsize and I never seem to be offered a severance. At first I didn't desire one, but now wish it would fall in my lap! I 'fortunately' have been retained which unfortunately means I'm traveling more and more and more. There are 5 managers in the country doing what I do, 5 years ago there were 18. Anyway, we're ready and so glad we came across this site!!

 

[Golfquest20]

Ok, we'll need to take a look at those guidelines then. Didn't realize std deduction wouldn't apply. Thanks again