Hi everyone
I have been lurking here on the forum for many years and it is finally happening! Last summer, I updated my plan and targeted 2026 (age 57). However, last week I was RIFed, but from how I see it, the severance package and other good news is covering the gap.
About us:
Age: 55 / DW 55 / Son 18 year old freshman in college
Income: was $200k / DW $60k
Financial Assets: $2.6M
Taxable: $150k
Roth: $675k
Current 401k: $500k
Other IRA/401k: $1200k
529: $100k.
Retirement Income:
SS: Plan is $51k / $16k at age 70 / 62
Pension: $5k at age 65
Spending:
Base pretax spending: $101k including $14k for medical, $18k for travel and entertainment
College Expenses: $40k for three more years, but $28k is covered by scholarships. Planning to convert $35k to our son’s Roth. This was another favorable change from my Summer plan. Spring tuition is already paid.
Housing: $18k annual P&I on a 3.25% mortgage paid off in 2045. Included in the base expenses above. House is worth $700k per Zillow.
The Plan:
DW wants to keep working at least until 2025. She is a teacher and started a new job at a refreshingly well-administered school, so she does not feel an immediate need to quit.
This year: Expenses covered by DW’s job and my severance
Next Year: $60k DW + $28k 529 (no penalty due to scholarships) + $42k 401k rule of 55.
57-61: Mix of remaining excess 529 funds, 401k, and Roths to stay below the ACA limit.
62-69: DW starts collecting $16k social security. Our small pensions start at 65.
70+: My $51k social security starts
I am planning to increase involvement with volunteer activities I am already doing, run a ½ marathon in the fall, and clean out the closets. If I get bored, I may take on a low-stress part time job but that is not the preferred plan.
Concerns:
I’ve ran this plan through Firecalc with spending grossed up to $130k for taxes and got a 100% success rate, Fidelity’s retirement score is 120, and the various other online tools I’ve been obsessively checking also report a 95%+ success rates.
My biggest concern is that I am over a 5% withdrawal rate at ages 58-61. It then drops to the mid 4% range until I take my SS at age 70 and it drops to 2%, falling to under 1% near the end of the plan.
I also plan to meet with Fidelity and get their feedback and give DW another point of reference.
Am I missing anything? How concerned do you think I should I be about those high withdrawal rates?