Ready to Leave Corp Life

S

srsatin

Confused about dryer sheets
Joined
Aug 25, 2013
Messages
2
Hi Everyone,

This is such a valuable forum - thanks in advance for your feedback. I am ready to get out of corporate life. I'm 52, wife is 51. Wife can retire in 2026, but loves her job and has no intention of retiring. If I retire, how much income could I comfortably withdraw? Here's or situation...

Married, 19 y/o kid is sophomore in college - (remaining tuition, housing costs, etc. are paid for)
Combined $1.5M in pretax accounts ($1.25M in 401k's, $250k in wife's 403b)
No mortgage
Wife makes gross $70k, and has good benefits which we would rely on if I retired. She is eligible to retire next year, but will keep working and enter DROP (a state deferred retirement program) in which she will continue to be paid her current salary, and will have her annual pension deposited into an interest bearing account for later rollover/withdrawal when she does decide to retire. She can do this up to 8 years. She will eventually have a pension of approx. $30k, but, again, no intentions to stop working.

I know expenses are a big factor, but I'm wondering if I stopped working, how much I could withdraw without our retirement account being diminished too quickly? Would I just use 72T?

Thanks for advice!
 
We need alot more information. Is the $70K per year that your wife makes continue to be available for spending? How much of that annual pension goes into this "DROP" account? Is this separate from the $70K? What what age is she eligible for her $30K a year pension, COLA or no COLA for her pension? What are your SS amounts, at what age?
 
Yes, more info needed. Like will either of you be getting SS and if so, how much? Is her $39 k pension fixed or COLAed?

Suggest that you run your situation through FIEECalc and use the last option on the Investigate tab to calculate safe spending at 95% success rate.

With just your 1.5m, 49 year time horizon, 60/40 AA and her $30k pension starting in 8 years (assuming the pension benefits are fixed) I get safe spending of $59k, but that doesn't consider her earning until she retires.
 
Thank you! She would continue working and earning her 70k salary likely for another 7 years and is still available for spending. (until she turns 58, she’s 51 now). In addition, she is eligible for her pension of 30k next year at 52. It is Cola’d (3% annually) and 100% of it will be deposited into an interest bearing account (4%) annually for those 7 years. We would take social security at 62 with works be combined approx. $3500 per month.

Thanks again for the insight!
 
How much are you spending currently and for the past few years? Put your investable in Firecalc and see if you income can match your spending.
I am 3.5 years in the DROP right now, gonna pull the plug early in a few months. Good Luck!
 
I retired at age 60, health was a factor, as was my inability to do my job to anybody's satisfaction. I've been retired a year now, and it's been glorious. Money evaporation shocks even me. An accurate assessment of expenses shows that I'll need to cut costs like crazy.

A new F150, $66K due to a terrible crash with an unlicensed illegal driving a dump truck, not even 3 weeks after I retired. Associated med bills, over $42K. Allstate paid half my old truck's replacement value. Half. And continued to charge premiums for 5 months, refunded 1. Oh, and doubled my premiums.

Health, auto and home insurance is unreal expensive. It was over $52K/yr to insurance companies, I've cut that back but I need to go 'bare' (no ins). The ins co's are emptying my checking acct at a stunning rate (automatic billing)

Worse than that, I have health issues and my trusted docs move from one practice to another. That means a $350 'new patient' charge, every single time. Just this year alone, I'm in the $2000 range for new patient fees, just to see the same specialists for my prescriptions. Note: I won't live 2 days without them.

Inflation is a real problem too. I'm only one year in and many items/prescriptions and specific foods I need are 20-50% higher.

My thoughts, I'm all in favor of early retirement, it is wonderful. Just be ready financially.
 
srsatin said:
Thank you! She would continue working and earning her 70k salary likely for another 7 years and is still available for spending. (until she turns 58, she’s 51 now). In addition, she is eligible for her pension of 30k next year at 52. It is Cola’d (3% annually) and 100% of it will be deposited into an interest bearing account (4%) annually for those 7 years. We would take social security at 62 with works be combined approx. $3500 per month.
Click to expand...
For folks whose financial-picture is heavily affected by defined benefit pensions (workplace, or SS), the emphasis is on attaining full eligibility-age, rather than amassing some tidy sum. The "ER" part is more contingent on doing one's time, than on becoming "FI". In the opposite scenario, a person might have a very substantial portfolio indeed, but feel stymied by worry or dread over bear markets, underperforming investments, or the hypothetical financial disaster of the moment... and not trust FireCalc etc.... such a person becomes "FI" far before actually doing "ER".

The other question is, what happens when one spouse retires, while the other keeps working. What kind of domestic dynamic would that be?
 
Diogenes said:
For folks whose financial-picture is heavily affected by defined benefit pensions (workplace, or SS), the emphasis is on attaining full eligibility-age, rather than amassing some tidy sum. The "ER" part is more contingent on doing one's time, than on becoming "FI". In the opposite scenario, a person might have a very substantial portfolio indeed, but feel stymied by worry or dread over bear markets, underperforming investments, or the hypothetical financial disaster of the moment... and not trust FireCalc etc.... such a person becomes "FI" far before actually doing "ER".

The other question is, what happens when one spouse retires, while the other keeps working. What kind of domestic dynamic would that be?
Click to expand...
In Our life it isn't an issue. My wife is a volunteer and does a sideline gig to stay busy and is just what makes her happy. She enjoys people etc. and being busy. For me I'm outdoor frantic and love being at the ranch and that isn't something that she enjoys.

Our interests are so different it works beautiful for us and we love to be together but also love our free spirit as well.

This arrangement may not work for all but it does for us and we don't have to be tied at the hips to have to have that love for each other.

I know others if one can't see the other one or then one isn't happy. That works for them so it does matter how each are built.
 
Cujet said:
I retired at age 60, health was a factor, as was my inability to do my job to anybody's satisfaction. I've been retired a year now, and it's been glorious. Money evaporation shocks even me. An accurate assessment of expenses shows that I'll need to cut costs like crazy.

A new F150, $66K due to a terrible crash with an unlicensed illegal driving a dump truck, not even 3 weeks after I retired. Associated med bills, over $42K. Allstate paid half my old truck's replacement value. Half. And continued to charge premiums for 5 months, refunded 1. Oh, and doubled my premiums.

Health, auto and home insurance is unreal expensive. It was over $52K/yr to insurance companies, I've cut that back but I need to go 'bare' (no ins). The ins co's are emptying my checking acct at a stunning rate (automatic billing)

Worse than that, I have health issues and my trusted docs move from one practice to another. That means a $350 'new patient' charge, every single time. Just this year alone, I'm in the $2000 range for new patient fees, just to see the same specialists for my prescriptions. Note: I won't live 2 days without them.

Inflation is a real problem too. I'm only one year in and many items/prescriptions and specific foods I need are 20-50% higher.

My thoughts, I'm all in favor of early retirement, it is wonderful. Just be ready financially.
Click to expand...
What kind of health insurance do you have? I pay full freight, i.e. no ACA subsidies, but I don't pay $350 for new patient charge or $2000 for new patient fees. I do pay an extra annual membership fee to my concierge PCP - $2K pp ($4K for 2 of us). I dropped to Bronze plan this year to save a few dollars when compared to a Silver Plan but my deductible is getting a little ridiculous. After paying for my $60 co-pay at check-in, I just received another bill for $200. So far I am still ahead with my Bronze plan.
 
Last edited:
Wow. With a decade til Social Security and longer to Medicare ---- plus only penalty taxable withdrawals available from very nice tax-deferred vehicles --- IMO retiring dramatically increases financial risks. The pre-tax savings are great, and you can easily receive and reinvest cash flows from various products to turn those accounts into monsters ---- in the future! Reverse the cash flows and start depleting the accounts denies you rich cash flows a decade from now. Just my opinion.
Regards, Dick
 
Do you know your monthly expenses now and what they will be in retirement?
Have you run Firecalc and what did it say?
 
RetiredHappy said:
What kind of health insurance do you have? I pay full freight, i.e. no ACA subsidies, but I don't pay $350 for new patient charge or $2000 for new patient fees. I do pay an extra annual membership fee to my concierge PCP - $2K pp ($4K for 2 of us). I dropped to Bronze plan this year to save a few dollars when compared to a Silver Plan but my deductible is getting a little ridiculous. After paying for my $60 co-pay at check-in, I just received another bill for $200. So far I am still ahead with my Bronze plan.
Click to expand...
Started Bronze this year. But before that, Humana for my wife and I. Over $35,000 per year.
 
I'll answer the question: you can safely withdraw $50,000 / year. That is 4% of $1.25M.

Lots of caveats, but you can start with that.
 
srsatin said:
Hi Everyone,

This is such a valuable forum - thanks in advance for your feedback. I am ready to get out of corporate life. I'm 52, wife is 51. Wife can retire in 2026, but loves her job and has no intention of retiring. If I retire, how much income could I comfortably withdraw? Here's or situation...

Married, 19 y/o kid is sophomore in college - (remaining tuition, housing costs, etc. are paid for)
Combined $1.5M in pretax accounts ($1.25M in 401k's, $250k in wife's 403b)
No mortgage
Wife makes gross $70k, and has good benefits which we would rely on if I retired. She is eligible to retire next year, but will keep working and enter DROP (a state deferred retirement program) in which she will continue to be paid her current salary, and will have her annual pension deposited into an interest bearing account for later rollover/withdrawal when she does decide to retire. She can do this up to 8 years. She will eventually have a pension of approx. $30k, but, again, no intentions to stop working.

I know expenses are a big factor, but I'm wondering if I stopped working, how much I could withdraw without our retirement account being diminished too quickly? Would I just use 72T?

Thanks for advice!
Click to expand...
You being retired and her still working, lots of luck with that.
 
BlessedLife224 said:
What are some concerns with this arrangement?
Click to expand...
I guess if you have to ask, you don't have much imagination.

But seriously, DW retired 2 years ahead of me and we had no serious issues. She became even more a a SAHM to the kids (before that, she w*rked during school hours). It all w*rked out. I hadn't planned to retire so early but changes at w*rk induced me to leave on the Friday after telling my boss of my retirement on a Tuesday. The rest is history - a good one at that.
 
Cujet said:
I retired at age 60, health was a factor, as was my inability to do my job to anybody's satisfaction. I've been retired a year now, and it's been glorious. Money evaporation shocks even me. An accurate assessment of expenses shows that I'll need to cut costs like crazy.

A new F150, $66K due to a terrible crash with an unlicensed illegal driving a dump truck, not even 3 weeks after I retired. Associated med bills, over $42K. Allstate paid half my old truck's replacement value. Half. And continued to charge premiums for 5 months, refunded 1. Oh, and doubled my premiums.

Health, auto and home insurance is unreal expensive. It was over $52K/yr to insurance companies, I've cut that back but I need to go 'bare' (no ins). The ins co's are emptying my checking acct at a stunning rate (automatic billing)

Worse than that, I have health issues and my trusted docs move from one practice to another. That means a $350 'new patient' charge, every single time. Just this year alone, I'm in the $2000 range for new patient fees, just to see the same specialists for my prescriptions. Note: I won't live 2 days without them.

Inflation is a real problem too. I'm only one year in and many items/prescriptions and specific foods I need are 20-50% higher.

My thoughts, I'm all in favor of early retirement, it is wonderful. Just be ready financially.
Click to expand...
So sorry to hear of the issues clouding your early retirement. It sounds like you are managing. I've forgotten if you have a SO and what their contributions might be going forward.

You will figure this out. Blessings
 
Koolau said:
So sorry to hear of the issues clouding your early retirement. It sounds like you are managing. I've forgotten if you have a SO and what their contributions might be going forward.

You will figure this out. Blessings
Click to expand...

Managing quite well considering how poorly it was going before. Thanks!
My wife has not worked in 20 years. So her SS will be modest. Her IRA is simply part of our nest egg.

On my bicycle ride this AM, I was thinking about the OP and I came to a conclusion or two about retirement. The first thought was the worker must ask themselves how many years of retirement they want from a list of practical choices. Of course, with an honest assessment of health towards the end being a limiting factor for everyone.

55 to 73.5 is a practical 15 years of retirement (with 73.5 being the current average age of death of a mature American man)
60 to 73.5 is 10 years
and so on. You pick 'ems.
From a practical matter, I can't imagine making 70 if I have another serious health downturn.

My second thought concerns a practical view of funding that retirement.
Inflation using accurate metrics that include rent, home prices, fuel, food, insurance costs and consumer prices:
2020 =1.5%
2021 =10.2%
2022 =13.8%
2023 =6.9%
2024 =3.8%
2025 =3.6%

Total 48.9% over 6 years. That's brutal.
 
Cujet said:
Managing quite well considering how poorly it was going before. Thanks!
My wife has not worked in 20 years. So her SS will be modest. Her IRA is simply part of our nest egg.

On my bicycle ride this AM, I was thinking about the OP and I came to a conclusion or two about retirement. The first thought was the worker must ask themselves how many years of retirement they want from a list of practical choices. Of course, with an honest assessment of health towards the end being a limiting factor for everyone.

55 to 73.5 is a practical 15 years of retirement (with 73.5 being the current average age of death of a mature American man)
60 to 73.5 is 10 years
and so on. You pick 'ems.
From a practical matter, I can't imagine making 70 if I have another serious health downturn.

My second thought concerns a practical view of funding that retirement.
Inflation using accurate metrics that include rent, home prices, fuel, food, insurance costs and consumer prices:
2020 =1.5%
2021 =10.2%
2022 =13.8%
2023 =6.9%
2024 =3.8%
2025 =3.6%

Total 48.9% over 6 years. That's brutal.
Click to expand...
Check real acrptuarial tables. You'll find when infant and early-life mortality falls out, life expectations go waaaaay beyond 73.5. Consider, social security breakevens converge in the early to mid-80s.
Regards, Dick
 
The average life expectancy of a 62 year old male in the US is to 81, to 84 for a female. That's the average, if one is healthy then it would be longer. Cujet's post was probably from birth but is the wrong way to look at it if one is already 62.
 
BlessedLife224 said:
Was this commentary necessary to answer my question?
Click to expand...
No, and I apologize that you took offense. Just my usual smart a$$ approach to much of life. It's probably inexcusable but I hope it's forgivable.

You will note that I then said "but seriously" - One thing I have learned on this forum and in much of the rest of life: Assume the best about people - especially when you can't see their body language or hear the "lilt" in their voice or see the twinkle in their eye or know their quirks already.

Important too: What we think we are saying (in print) is not alway what others hear, so my bad. A little grace among friends goes a long way. We've all been offered a lot of grace. Good to extend it as well. Friends?
 
You must log in or register to reply here.

Similar threads

M
I might be forced to retire early - can I do it?
Koolau
Koolau
R
Hello everyone! Recently retired and still navigating things.
Rieslingfan
R
B
53yo wishing, but wife loves her job.
Koolau
Koolau
P
Impending retirement.... probably
2 3 4
pb4uski
pb4uski
J
50 yo, ready to retire, two teens, wife will continue to work.
NeilDH
NeilDH

Latest posts

Back
Top Bottom