Hello all,
I'm looking (hoping) to retire in about 4.5 years and just want to get a check up from the group and also any tips or suggestions on what we can change to better prepare.
Basic Info:
- I'm 50 and DW is 51
- DD is still in college but will be out in 18 months. Currently cash flowing her tuition and living expenses.
- Gross HH income of ~$340K all W2
- Current living expenses are about (only recently started tracking closer) $130K to $140K per year AFTER TAX(does not include DD's college costs). I've
also included home repair, auto replacement, annual vacation, small extraordinary capex items accruals in this number so feel pretty good about it.
Only thing that could be higher is our desire to travel more but that's discretionary.
- Currently saving about $85K per year, which will hopefully increase to about $115K per year when DD gets out of school in 18 months.
- I Will have no pensions but will receive max benefit of $3,844 when turn 67. This is as of 2024 and am not sure if this will inflation adjust?
- DW didn't work much outside the home but has gotten the 40 quarters. Her benefit would be about $800 if she starts at 62 and $1,100 if wait
until 67.
-Own house that's worth about $700K, no mortgage. No other debt.
Current Portfolio:
- Total ~$3.1MM
- Roughly 60/40 equity fixed income.
- $580K in Roth
- $1.3M in tax deferred
- $145K in HSA (have about $20K in receipts saved if needed)
- $1.1MM taxable
Using a 5% real rate of return for the next 4.5 years puts total portfolio at $4.3MM. Using 3% it's about $4MM. At a 3% withdrawal rate, that's a range of $120K to $130K per year GROSS. And, I'm giving no credit to SS benefits that would kick in 12 years after I retire.
One big factor on the expense side that de-risks the plan a bit is health insurance. My employer has an retired employee benefit where as long as an employee is 55 YO and has been with the company a certain number of years, the employee can maintain their coverage at the subsidized employee rates until 65. It's great insurance and rates are relatively cheap.
It seems doable although not a ton of wiggle room. Am I being realistic? Too optimistic or conversely too pessimistic?
Initial questions (BUT PLEASE don't just answer these, looking for any and all thoughts:
- Have not really thought about a withdrawal strategy. My initial thought would be taxable first, HSA up to "free" reimbursements, then ROTH and
along the way convert the heck out of the tax deferred since taxes should be pretty low for a while. Am I on the right track?
- Any tips or resources on strategies for how to approach SS? I get that if you don't need the money it seems it always makes sense to wait until
FRA. Any different strategy with DW's modest benefit?
So, what else should I be thinking about or doing at this point? As always, thanks everyone on this board.
Gutrageous
I'm looking (hoping) to retire in about 4.5 years and just want to get a check up from the group and also any tips or suggestions on what we can change to better prepare.
Basic Info:
- I'm 50 and DW is 51
- DD is still in college but will be out in 18 months. Currently cash flowing her tuition and living expenses.
- Gross HH income of ~$340K all W2
- Current living expenses are about (only recently started tracking closer) $130K to $140K per year AFTER TAX(does not include DD's college costs). I've
also included home repair, auto replacement, annual vacation, small extraordinary capex items accruals in this number so feel pretty good about it.
Only thing that could be higher is our desire to travel more but that's discretionary.
- Currently saving about $85K per year, which will hopefully increase to about $115K per year when DD gets out of school in 18 months.
- I Will have no pensions but will receive max benefit of $3,844 when turn 67. This is as of 2024 and am not sure if this will inflation adjust?
- DW didn't work much outside the home but has gotten the 40 quarters. Her benefit would be about $800 if she starts at 62 and $1,100 if wait
until 67.
-Own house that's worth about $700K, no mortgage. No other debt.
Current Portfolio:
- Total ~$3.1MM
- Roughly 60/40 equity fixed income.
- $580K in Roth
- $1.3M in tax deferred
- $145K in HSA (have about $20K in receipts saved if needed)
- $1.1MM taxable
Using a 5% real rate of return for the next 4.5 years puts total portfolio at $4.3MM. Using 3% it's about $4MM. At a 3% withdrawal rate, that's a range of $120K to $130K per year GROSS. And, I'm giving no credit to SS benefits that would kick in 12 years after I retire.
One big factor on the expense side that de-risks the plan a bit is health insurance. My employer has an retired employee benefit where as long as an employee is 55 YO and has been with the company a certain number of years, the employee can maintain their coverage at the subsidized employee rates until 65. It's great insurance and rates are relatively cheap.
It seems doable although not a ton of wiggle room. Am I being realistic? Too optimistic or conversely too pessimistic?
Initial questions (BUT PLEASE don't just answer these, looking for any and all thoughts:
- Have not really thought about a withdrawal strategy. My initial thought would be taxable first, HSA up to "free" reimbursements, then ROTH and
along the way convert the heck out of the tax deferred since taxes should be pretty low for a while. Am I on the right track?
- Any tips or resources on strategies for how to approach SS? I get that if you don't need the money it seems it always makes sense to wait until
FRA. Any different strategy with DW's modest benefit?
So, what else should I be thinking about or doing at this point? As always, thanks everyone on this board.
Gutrageous
Statistics: Posted by gutrageous — Sat Jul 27, 2024 5:23 pm — Replies 9 — Views 1366