Single F 53 No kids $700,000 investments with low expenses annually, can I retire?

[Harris4crna]

Sounds like in retrospect it was wise to hang in longer. With the 2022 inflation increase, I can imagine it would have been difficult to keep a 30k budget. Don't know how you do it. The wife and I are close to 80 -100k per year and we only have expenses with no debt. Needless to say, we don't live frugal, but we don't live exuberant either.

Congratulations

 

[NeilDH]

Sounds like in retrospect it was wise to hang in longer. With the 2022 inflation increase, I can imagine it would have been difficult to keep a 30k budget. Don't know how you do it. The wife and I are close to 80 -100k per year and we only have expenses with no debt. Needless to say, we don't live frugal, but we don't live exuberant either.

Congratulations

Same. But it appears you’ve been noodling this out for four years now and you know what you’re doing. It looks tight, but I think you know what’s right for you at this point.

 

[pb4uski]

Congratulations Lynne!

 

[Koolau]

Congratulations on arriving at retirement. Please keep in touch with us about how it's going.

 

[reneeh63]

I'd warn you not to count on the continued support of your partner, especially since it is a relatively large portion of your income - there are many reasons that amount might not continue or could be lessened over time. And collecting SS at 62 severely cuts into your benefit, as you know.

I haven't read everything so perhaps there are extenuating circumstances that lead you to believe you have few alternatives, but I'd try to find some additional income if I were you, including working another few years and saving as much as possible, especially given a mortgage that won't be paid off for another 15 years - risky.

 

[Flieger]

I'd warn you not to count on the continued support of your partner, especially since it is a relatively large portion of your income - there are many reasons that amount might not continue or could be lessened over time. And collecting SS at 62 severely cuts into your benefit, as you know.

I haven't read everything so perhaps there are extenuating circumstances that lead you to believe you have few alternatives, but I'd try to find some additional income if I were you, including working another few years and saving as much as possible, especially given a mortgage that won't be paid off for another 15 years - risky.

I respectfully disagree. With $1MM and such low expenses, I wouldn't work longer. From experience, life happens.

Flieger

 

[Harris4crna]

I'd warn you not to count on the continued support of your partner, especially since it is a relatively large portion of your income - there are many reasons that amount might not continue or could be lessened over time. And collecting SS at 62 severely cuts into your benefit, as you know.

I haven't read everything so perhaps there are extenuating circumstances that lead you to believe you have few alternatives, but I'd try to find some additional income if I were you, including working another few years and saving as much as possible, especially given a mortgage that won't be paid off for another 15 years - risky.

Disagree as well. You have trial and tested since original post. You know. Enjoy, and keep us posted.

 

[aaronc879]

Seems like you have more than enough. I am retired at a younger age than you with less money than you. I do have a paid off house worth $200K, no debt. I spend well less than your $30K so I know $30K is easily doable for a frugal person who is able to manage their income for max ACA subsidies. Congrats on retirement.

 

[dobig]

Op could buy SCHD and make close to $40k year in dividends with 10% yearly dividend growth to keep up with inflation.

 

[Koolau]

Op could buy SCHD and make close to $40k year in dividends with 10% yearly dividend growth to keep up with inflation.

WADR, two issues with that being 1) lack of guaranteeing those continuing results and 2) lack of overall diversity across markets and asset classes. As always, YMMV.

 

[Time2]

I'd warn you not to count on the continued support of your partner, especially since it is a relatively large portion of your income - there are many reasons that amount might not continue or could be lessened over time. And collecting SS at 62 severely cuts into your benefit, as you know.

I haven't read everything so perhaps there are extenuating circumstances that lead you to believe you have few alternatives, but I'd try to find some additional income if I were you, including working another few years and saving as much as possible, especially given a mortgage that won't be paid off for another 15 years - risky.

I pretty well agree that is a little short of enough to have a comfortable life. I would work longer or at least expect to have a part time job for many years.
"Having money isn't everything, but lack of money can be!"

 

[pacergal]

Congratulations!

 

[Lynne3560]

Thank you for the well wishes and things to consider. Let's say I completely errored in my spending rate and it's really 50 grand a year. Essentially a 5% draw from my nest egg. If we use simple math and claim my funds (rounding to 1MM) make 0% for five years, I'll have $750000 at 62. Ssa.gov says I'll bring in 2000 (future dollars not figured in) or 24,000 annually. My $750,000 starts making 6% average rate of return and I withdraw 3.5% = 26,000 yearly to add to 24,000, I continue to bring in 50 grand and my 750,000 at that withdrawal rate is perpetually repeating. This math does not include partner's financial contributions, not once. And future dollars social security would be more like $27,000 annually at time of application. I feel spending is decent to live on and withdrawal rates are safe to protect assets from a quick spend down. Check my math.

 

[Koolau]

Thank you for the well wishes and things to consider. Let's say I completely errored in my spending rate and it's really 50 grand a year. Essentially a 5% draw from my nest egg. If we use simple math and claim my funds (rounding to 1MM) make 0% for five years, I'll have $750000 at 62. Ssa.gov says I'll bring in 2000 (future dollars not figured in) or 24,000 annually. My $750,000 starts making 6% average rate of return and I withdraw 3.5% = 26,000 yearly to add to 24,000, I continue to bring in 50 grand and my 750,000 at that withdrawal rate is perpetually repeating. This math does not include partner's financial contributions, not once. And future dollars social security would be more like $27,000 annually at time of application. I feel spending is decent to live on and withdrawal rates are safe to protect assets from a quick spend down. Check my math.

Inflation would be my only caveat to your plan. High inflation might be an issue.

I'd run FIRECalc with your numbers to see what it says about success. My gut says you're golden.

 

[TickTock]

OP,

Your math looks sound to me. The only caveat I have is: make sure that $50k / yr is a good all-in number. Taxes, healthcare premiums and costs, lumpy expenses.

 

[YellowSubmarine]

I say hold off. With any debt (mortgage), it can be a monkey on the back. There's little room for error with your budget. I went through burn out 2-3 times over my 37 year career. A book helped me greatly..."What Color Is Your Parachute". It helped me cope in times of need. Good luck with your decision.

 

[Koolau]

I have always thought in terms of back-up plans. What if(?) kinds of questions.

What if there is significant inflation? What if I become ill? What if my insurance premiums triple? Those kinds of things. Then I plan my back-ups for how I'll deal with them.

I don't obsess and I keep it at a high level (no "what if the price of gas goes up a dollar?").

When you're pretty sure you can handle life's "what ifs" then you're probably ready to pull the trigger on retirement.

 

[Dtail]

Thank you for the well wishes and things to consider. Let's say I completely errored in my spending rate and it's really 50 grand a year. Essentially a 5% draw from my nest egg. If we use simple math and claim my funds (rounding to 1MM) make 0% for five years, I'll have $750000 at 62. Ssa.gov says I'll bring in 2000 (future dollars not figured in) or 24,000 annually. My $750,000 starts making 6% average rate of return and I withdraw 3.5% = 26,000 yearly to add to 24,000, I continue to bring in 50 grand and my 750,000 at that withdrawal rate is perpetually repeating. This math does not include partner's financial contributions, not once. And future dollars social security would be more like $27,000 annually at time of application. I feel spending is decent to live on and withdrawal rates are safe to protect assets from a quick spend down. Check my math.

Without running your numbers on Firecalc, it would appear to be fine.
What is your discretionary spending %
The 3.5%WR should be good in perpetuity based on historical sequencing results, but if you had to cut, do you have the willingness/discretionary funds to do so?

 

[Flieger]

I think you are ok. As mentioned, you actually do have some other income from "partner", and you were conservative with 0% for 5 years.

I also don't worry about mortgage since 9I assume) it is already in your spending calc. Also (assuming it is not an ARM), it does not increase over time. At that point it's a cash flow game. Keep spending in check and you should be AOK.

Flieger

 

[marinauser]

The problem with assuming a particular annual rate of return is that the market doesn't work that way if you are invested in the stock market. The market is up 0-20% some years and down 0-20% in other years. And, once in a while it is down or up much more that that. So you risk is sequence of returns. If in your first year retired, your investments are down 10%, your 5% withdrawal rate the second year, if you need to access the money, is not 5% of say $800k, it is 5% of $720K - get the rare two down years in a row down, or a 20-30% down year, and you can see what happens to your nest egg. And no one knows what the investment returns will be your first couple of years. I believe that is why some responses believe you need more cushion that you currently have. Ultimately, the question is how much, and what kind of, risk you are comfortable with.

 

[FIYes]

Congratulations Lynnne! You hung in there to reach your goal. Enjoy your retirement.

 

[Dtail]

The problem with assuming a particular annual rate of return is that the market doesn't work that way if you are invested in the stock market. The market is up 0-20% some years and down 0-20% in other years. And, once in a while it is down or up much more that that. So you risk is sequence of returns. If in your first year retired, your investments are down 10%, your 5% withdrawal rate the second year, if you need to access the money, is not 5% of say $800k, it is 5% of $720K - get the rare two down years in a row down, or a 20-30% down year, and you can see what happens to your nest egg. And no one knows what the investment returns will be your first couple of years. I believe that is why some responses believe you need more cushion that you currently have. Ultimately, the question is how much, and what kind of, risk you are comfortable with.

I understand what you are getting at, but keep in mind that the 4% guidance was developed with the SORR concept in mind.
If one takes out the worst 5 or 6 worst starting years to retire, the average safe WR% would be 6.5%.
Thus a potential key factor is can one cut from or want to cut from their discretionary expenses if bad SORR takes place in the first few years.

 

[GenXguy]

I'd warn you not to count on the continued support of your partner, especially since it is a relatively large portion of your income - there are many reasons that amount might not continue or could be lessened over time. And collecting SS at 62 severely cuts into your benefit, as you know.

I haven't read everything so perhaps there are extenuating circumstances that lead you to believe you have few alternatives, but I'd try to find some additional income if I were you, including working another few years and saving as much as possible, especially given a mortgage that won't be paid off for another 15 years - risky.

Yeah, definitely don't want to count on a partner that might not be there down the road, even if you have $1M is stash.