When to call it a day? (or taking those last steps towards retirement)

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First, sorry for the alt-id.  I have quite a few fatwalleters as co-workers and don’t want to publicize this too widely.

The situation:

Every year around tax time, I do a complete financial inventory.  I do a complete net worth statement, look back at income and expenses from the prior year, etc.  Years ago, I had set a goal (and decision point) of $2 million in net worth.  At the point we hit that goal, I was going put in place a strategy for exiting the working world.  Well, this year, we hit that goal… so…

The facts:

  • Net worth of $2.1 million, almost equally divided between cash/short term liquid assets, an equity leaning investment portfolio, tax deferred 401k/IRA investments, and a paid off house.
  • I’m 55, wife is 51.  No kids.
  • Both of us have worked approximately 30 years.  I maxed out social security (not by much) for about the last 15 years.  Wife’s income varied a lot, but expect that her social security will be about 60% of max.
  • Plan has always been to sell the house, buy in a less expensive market.  Based on value of the current house and what we are looking at, we’ll pocket between $150 and $200k in cash on the transaction.  We expect our property taxes to go from around $12k per to year to around $6k.
  • Only a small ($300/month) defined benefit pension that kicks in when I hit 65.
  • Neither of us have employer provide healthcare, so will be buying on the open market until Medicare kicks in.  We’re both very active and in good health.
  • Annual spending has been consistent for the last decade.  We’re spending $70k in current dollars all in per year with very little variance.  This includes property taxes, health insurance premiums (we’ve had to pay out of pocket for the last several years), all of the basics, home maintenance, cars, vacations, emergencies, etc.
  • We have two vehicles, averaging 10 years old and 100,000 miles.  Both were sub-$25k new when purchased but are still in good condition and running well.
  • Combined income is around $18k per month when we’re both working.  Wife tends to work short term contracts, so income drops to around $13k per month when she’s off.
  • We want to maintain the same lifestyle.

My thinking:

  • By most retirement calculators and rules of thumb, based on our savings and spending, we’re right at the cusp of being able to retire. 
  • I’d like to have a bit more wiggle room, especially given our ages.  It seems to me, that every year we work lets our savings grow, lets us put away a few more dollars, and means that our savings has to last less time.
  • I have no issue working a part-time job in retirement.  It’s just not going to be doing what I do now.

My plan:

  • I’m thinking of setting a Target of working 920 days combined between the wife and I.  This is basically 4 man-years of work (365 days per year minus 52 weekends, 10 holidays and 20 vacation days).  Every day either of us works, we knock a day off the countdown (i.e. when we’re both working, it’s two days… when I’m working and the wife is on unemployment, it counts as 1.5 days).  This gives us a definite goal, shortens the time our money has to last, and allows us to create a bit of a cushion.
  • This gives us time to ‘get our house in order’;  adjust our portfolios, determine our exact retirement locale, get the house ready for sale, etc.
  • We’ll continue to re-evaluate as we approach the Target.

I’d love to hear your thoughts and suggestions on my plan… and thing else we should be considering or doing in the short term.Thanks in advance.

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yeah... that's my math as well... though more likely to go 3ish years and then do some part time work in retirement to s... (more)

AlmostDone (Mar. 30, 2017 @ 8:45p) |

OP has not mentioned any health risks, familial or otherwise. it's reasonable to expect to live until 60...but 75? 85? t... (more)

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I would say try to stick it out a few more years, and bankroll as much as you can.

After a few years, look to transitioning into a part time roll, and consider your wife continuing her short-term contracts. Some more questions, do you have any hobbies? If not what are you going to do with the extra 2000-2500 hours per year that you used to be at work? Are you going to be bored, or are you going to pick up an expensive hobby? These are things that will effect your health and finances.

Plan looks pretty good in general.

I'd be concerned about health insurance costs over the next few years. There is a lot of uncertainty with whats happening with the laws right now. Might go your way or not.
One alternative is to try and look to find a part time job that has health insurance to coast into retirement. PT jobs with insurance are rare but they exist.

Have you looked at tax burden before and after retirement to see how things might change in that respect?

Maybe I missed this, but how is the $2.1mm net worth divided up? It'd be helpful to know how much is in taxable vs tax-deferred vs home equity.

Well looks great and I really like how you've handled it. Probably better than 99.5% of America does. Love your yearly reviews. So you probably CAN retire at any point now. My thoughts:
1) Healthcare- this is the biggest concern. Probably the biggest reason to work for a few more years to make sure you are insurable. Who knows what trump will do (or any president). Being active doesn't mean one of you won't get cancer or something. I'd plan for large healthcare expenses.
2) Housing- so you had a big house when you work, but a small one when you retire? And no kids? Why have the big house in the first place? Just sayin...
3) What is your retirement plan? For me I enjoy my work- I'm less worried about when I will retire, and enjoy the feeling that I COULD retire whenever I want- and choose not to. Maybe you could find a fun place to live and work short hours?

daw4888 said:   I would say try to stick it out a few more years, and bankroll as much as you can.

After a few years, look to transitioning into a part time roll, and consider your wife continuing her short-term contracts. Some more questions, do you have any hobbies? If not what are you going to do with the extra 2000-2500 hours per year that you used to be at work? Are you going to be bored, or are you going to pick up an expensive hobby? These are things that will effect your health and finances.

Thanks for the response... that's the basic plan.  I figure giving ourselves the 920 Target gives us something specific to shoot for and means that we'll bank a few more years of savings.

My role doesn't tend to lend itself to part-time, but the wife's does... so that is an option in the short term.

As for how we'll spend our time, we each have low cost (hiking, fishing, cooking, working out) hobbies that we'd like to spend more time on plus we do some charity volunteer work that we'd like to increase.  We've discussed doing a short (3 month?) trial retirement before selling the house and moving to ensure that we're mentally ready.

Thrilla said:   Maybe I missed this, but how is the $2.1mm net worth divided up? It'd be helpful to know how much is in taxable vs tax-deferred vs home equity.

  • Net worth of $2.1 million, almost equally divided between cash/short term liquid assets, an equity leaning investment portfolio, tax deferred 401k/IRA investments, and a paid off house.

Thanks again for the responses...

Healthcare is my biggest unknown. One of the benefits of working a few more years is that it allows the current situations with the ACA and any future plans to settle out before we make a final decision.

As for housing, the plan is to buy small enough to maintain and big enough to support visits from family and friends. We've set the upper end at $300k and figure that it's both a place to live and an equity part of our portfolio. Our current house is bigger than it needs to be, but we live in an area where finding anything that's smaller than 4 bedrooms and 2500 sq ft is nearly impossible (and those that do exist don't resell well).

We do plan on moving somewhere fun... the hiking boots are ready to go and the skis are waxed (and if you don't believe you can ski cheaply, you haven't tried).

AlmostDone said:   
Thrilla said:   Maybe I missed this, but how is the $2.1mm net worth divided up? It'd be helpful to know how much is in taxable vs tax-deferred vs home equity.

  • Net worth of $2.1 million, almost equally divided between cash/short term liquid assets, an equity leaning investment portfolio, tax deferred 401k/IRA investments, and a paid off house.



Got it, so around $500k in each of those 4 categories you mentioned?  Therefore, about $1mm in taxable, $500k in tax-deferred, and $500k primary residence?

And based on your other comments, you're looking to sell the home and purchase another one for $300k - $350k? 

One thing I would suggest (if you have the flexibility to do so) is that you make your move prior to your actual retirement so that you can get a closer feel for what your expenses will be.  You mentioned moving to a "less expensive market" but these things are typically difficult to estimate until you're actually living in the situation.

Maybe work a plan to see about going part-time or something? Keep some income and insurance. Then, maybe work on some sort of self-employment scenario that supports your retirement interests. This way, you have something to do, a little income, and something to write off some expenses against your income.

I think the one thing to be careful about is health. You can be in good health one day and something could happen that changes that rather quickly, whether an accident or something unexpected (it happens to healthy people), like heart attack or something (even young and healthy folks can have this happen). Sure, you can buy insurance on the market, or you could do something part-time that is lower stress that provides it at a good cost.

Thrilla said:   
AlmostDone said:   
Thrilla said:   Maybe I missed this, but how is the $2.1mm net worth divided up? It'd be helpful to know how much is in taxable vs tax-deferred vs home equity.

  • Net worth of $2.1 million, almost equally divided between cash/short term liquid assets, an equity leaning investment portfolio, tax deferred 401k/IRA investments, and a paid off house.



Got it, so around $500k in each of those 4 categories you mentioned?  Therefore, about $1mm in taxable, $500k in tax-deferred, and $500k primary residence?

And based on your other comments, you're looking to sell the home and purchase another one for $300k - $350k? 

One thing I would suggest (if you have the flexibility to do so) is that you make your move prior to your actual retirement so that you can get a closer feel for what your expenses will be.  You mentioned moving to a "less expensive market" but these things are typically difficult to estimate until you're actually living in the situation.

Thanks.  That's something we've talked about... we likely can't fully do that (though might have some possibilities of working remotely), but have talked about buying the retirement home as a vacation home (and rental) before we actually retire to give us a better feel for some of the realities.

Dus10 said:   Maybe work a plan to see about going part-time or something? Keep some income and insurance. Then, maybe work on some sort of self-employment scenario that supports your retirement interests. This way, you have something to do, a little income, and something to write off some expenses against your income.

I think the one thing to be careful about is health. You can be in good health one day and something could happen that changes that rather quickly, whether an accident or something unexpected (it happens to healthy people), like heart attack or something (even young and healthy folks can have this happen). Sure, you can buy insurance on the market, or you could do something part-time that is lower stress that provides it at a good cost.

  Agreed... and (assuming that I like the job) I'd be more than willing to do something part-time in retirement that provides benefits... Starbucks barista here I come!

AlmostDone, my wife & I are in a roughly similar point in our lives and talking a lot about retirement too. It's been mentioned a few times now, but healthcare cost uncertainty is far and away the biggest obstacle for us. I like your idea of a 'working day' countdown as a way to stay patient. I'm afraid if there are in fact significant changes put in place over the next year or two that I will be skeptical that THOSE are going to last and will still see any assumptions as high risk. But hopefully by then our savings will have increased enough to feel comfortable making the decision.

you're annual spending is $70k/year and you want to maintain your current lifestyle with 2.1MM?

If you're rate of return is 3% and you increase spending by 1% a year, you're good for a while
If you're return is 3% and you increase spending by 4% a year, you're out of money in 24 years (not including SS)

SlimTim said:   AlmostDone, my wife & I are in a roughly similar point in our lives and talking a lot about retirement too. It's been mentioned a few times now, but healthcare cost uncertainty is far and away the biggest obstacle for us. I like your idea of a 'working day' countdown as a way to stay patient. I'm afraid if there are in fact significant changes put in place over the next year or two that I will be skeptical that THOSE are going to last and will still see any assumptions as high risk. But hopefully by then our savings will have increased enough to feel comfortable making the decision.
  I'm with you... waiting to see where Trump and the ACA shake out.  I'd be one of those folk more than willing to buy a true catastrophic policy and self-insure for 'normal' healthcare costs.

imbatman said:   you're annual spending is $70k/year and you want to maintain your current lifestyle with 2.1MM?

If you're rate of return is 3% and you increase spending by 1% a year, you're good for a while
If you're return is 3% and you increase spending by 4% a year, you're out of money in 24 years (not including SS)

Agreed... plan is only to increase spending at the rate of inflation (in general)... and if I can't keep an investment portfolio in place that at least tracks inflation over the long term, I'm doing something wrong.

And despite the 'sky is falling' talk, I do believe we'll collect something in SS.

AlmostDone said:   
imbatman said:   you're annual spending is $70k/year and you want to maintain your current lifestyle with 2.1MM?

If you're rate of return is 3% and you increase spending by 1% a year, you're good for a while
If you're return is 3% and you increase spending by 4% a year, you're out of money in 24 years (not including SS)

Agreed... plan is only to increase spending at the rate of inflation (in general)... and if I can't keep an investment portfolio in place that at least tracks inflation over the long term, I'm doing something wrong.

And despite the ' Sky is falling' talk, I do believe we'll collect something in SS.


if you plan to increase spending to match inflation, and if your return matches inflation, you'll be out of money in 30 years.
If you beat inflation by 1% every year, you'll have like $300k in 30 years.
beat it by 2% every year, you'll have like 700k in 30 years.

My takeaway would be, you'll either need to beat inflation by a good margin (a few percentage points), or you'll need to plan on reducing your spending.

And I'm not planning on getting into whether or not you'll be able to collect SS, just stating that I'm not including SS in my calcs.

I'll throw out one idea you may consider. My wife and I retired 10+ yrs ago, sold our house and made a lot of money from it. TX is a high property tax state and our taxes alone were approaching $700-$800/mo; I just checked, the taxes this yr on the house we sold are over $1K/mo. So even if you own your home outright, you are looking at sizeable monthly costs.

We decided to rent in a different part of the state and it's worked out very well. We live in an upscale urban apt for only a few hundred dollars more than our property tax would be. No maintenance costs, no yardwork, can now walk to many places (concert hall, library, restaurants, etc.). We love the option of being able to easily leave and live elsewhere. The property tax savings plus the interest on the cash we made on the house sale just about pays our rent. (Back when interest on CDs was 5%, we were making money!) 

I had always assumed that most apt renters were young people starting out, waiting to buy a house, but a significant number of our neighbors are older, retired like us.

How (and why) the hell do you spend 70k/yr with a paid off house and no kids?

UncaMikey said:   I'll throw out one idea you may consider. My wife and I retired 10+ yrs ago, sold our house and made a lot of money from it. TX is a high property tax state and our taxes alone were approaching $700-$800/mo; I just checked, the taxes this yr on the house we sold are over $1K/mo. So even if you own your home outright, you are looking at sizeable monthly costs.

We decided to rent in a different part of the state and it's worked out very well. We live in an upscale urban apt for only a few hundred dollars more than our property tax would be. No maintenance costs, no yardwork, can now walk to many places (concert hall, library, restaurants, etc.). We love the option of being able to easily leave and live elsewhere. The property tax savings plus the interest on the cash we made on the house sale just about pays our rent. (Back when interest on CDs was 5%, we were making money!) 

I had always assumed that most apt renters were young people starting out, waiting to buy a house, but a significant number of our neighbors are older, retired like us.

  Thanks... our taxes are already $1k+ per month.  In our target locations, it's going to be more like $500 per month.  We've considered renting but there aren't many (any?) rentals available for the type of property we're considering.

scripta said:   How (and why) the hell do you spend 70k/yr with a paid off house and no kids?
  Try this as a starter:

$12k / yr in property taxes
$12k / yr in health insurance premiums
$2.5k / yr in car and homeowners insurance
$2.5k / yr in gasoline
$5k / yr in home and auto maintenance (last year was new shocks and struts on the truck, belts, etc.on the car, $3k in necessary maintenance on the house)
$8k in expenses last year related to moving an elderly relative to a nursing facility (non-typical, but I do plan on having some sort of emergency every year)

That's $44k of the spending right there... we don't dine out, I still shop for groceries with coupons, etc.  Typical other expenses for heat and electricity, $80 for cable, $80 for two cell phones, $40 for internet.  I know where the money goes and am comfortable that it's being properly deployed.

imbatman said:   
AlmostDone said:   
imbatman said:   you're annual spending is $70k/year and you want to maintain your current lifestyle with 2.1MM?

If you're rate of return is 3% and you increase spending by 1% a year, you're good for a while
If you're return is 3% and you increase spending by 4% a year, you're out of money in 24 years (not including SS)

Agreed... plan is only to increase spending at the rate of inflation (in general)... and if I can't keep an investment portfolio in place that at least tracks inflation over the long term, I'm doing something wrong.

And despite the ' Sky is falling' talk, I do believe we'll collect something in SS.


if you plan to increase spending to match inflation, and if your return matches inflation, you'll be out of money in 30 years.
If you beat inflation by 1% every year, you'll have like $300k in 30 years.
beat it by 2% every year, you'll have like 700k in 30 years.

My takeaway would be, you'll either need to beat inflation by a good margin (a few percentage points), or you'll need to plan on reducing your spending.

And I'm not planning on getting into whether or not you'll be able to collect SS, just stating that I'm not including SS in my calcs.

  fair points... and part of why we're going to work a few more years.

AlmostDone said:   
scripta said:   How (and why) the hell do you spend 70k/yr with a paid off house and no kids?Try this as a starter:

$12k / yr in property taxes
$12k / yr in health insurance premiums
$2.5k / yr in car and homeowners insurance
$2.5k / yr in gasoline
$5k / yr in home and auto maintenance (last year was new shocks and struts on the truck, belts, etc.on the car, $3k in necessary maintenance on the house)
$8k in expenses last year related to moving an elderly relative to a nursing facility (non-typical, but I do plan on having some sort of emergency every year)

That's $44k of the spending right there... we don't dine out, I still shop for groceries with coupons, etc.  Typical other expenses for heat and electricity, $80 for cable, $80 for two cell phones, $40 for internet.  I know where the money goes and am comfortable that it's being properly deployed.
Actually it's $42k, but I can see how a few grand can get lost in there. I suspect there's lots of pork in there that can probably be cut (like trading the truck for a more efficient car, unless you need the truck for work or something), but you can certainly afford it now and probably in retirement, so I don't want to derail the thread.

scripta said:   
AlmostDone said:   
scripta said:   How (and why) the hell do you spend 70k/yr with a paid off house and no kids?
Try this as a starter:

$12k / yr in property taxes
$12k / yr in health insurance premiums
$2.5k / yr in car and homeowners insurance
$2.5k / yr in gasoline
$5k / yr in home and auto maintenance (last year was new shocks and struts on the truck, belts, etc.on the car, $3k in necessary maintenance on the house)
$8k in expenses last year related to moving an elderly relative to a nursing facility (non-typical, but I do plan on having some sort of emergency every year)

That's $44k of the spending right there... we don't dine out, I still shop for groceries with coupons, etc.  Typical other expenses for heat and electricity, $80 for cable, $80 for two cell phones, $40 for internet.  I know where the money goes and am comfortable that it's being properly deployed.

Actually it's $42k, but I can see how a few grand can get lost in there. I suspect there's lots of pork in there that can probably be cut (like trading the truck for a more efficient car, unless you need the truck for work or something), but you can certainly afford it now and probably in retirement, so I don't want to derail the thread.

  Correct on the $42k.  Not much pork, but fair point on the truck (SUV actually).  It's paid for and runs well... and we're heading to an area where weather and terrain make rugged 4wd necessary at times... so, we'll live with 18 mpg combined.  

The rest of the budget is quite sparse.  The only item to really cut is about $6-8k per year we spend on vacations.  Last year it was 3 longs weekends of travel (two by car, one by plane), a week domestically, and a 2 week international trip.  We plan on continuing this in retirement.

Really? I would have expected you to increase your travel budget in retirement. I mean what else are you gonna do with yourself

If you have time, check out bogleheads and early-retirement.org, plus put in your numbers in several online retirement calculators (firecalc, cfiresim, fidelity's retirement calculator) and you will see that you are really there, unless you want some cushion by continuing to work.

A conservative 3% withdrawal amount ($60k from $2m) plus another $10k from SS/pension once you receive that ( to get $70k total expenses), means your net worth should last 30 to 45 years (based on those calculators).

AlmostDone said:   First, sorry for the alt-id.  I have quite a few fatwalleters as co-workers and don’t want to publicize this too widely.

The situation:

Every year around tax time, I do a complete financial inventory.  I do a complete net worth statement, look back at income and expenses from the prior year, etc.  Years ago, I had set a goal (and decision point) of $2 million in net worth.  At the point we hit that goal, I was going put in place a strategy for exiting the working world.  Well, this year, we hit that goal… so…

The facts:

  • Net worth of $2.1 million, almost equally divided between cash/short term liquid assets, an equity leaning investment portfolio, tax deferred 401k/IRA investments, and a paid off house.
  • I’m 55, wife is 51.  No kids.
  • Both of us have worked approximately 30 years.  I maxed out social security (not by much) for about the last 15 years.  Wife’s income varied a lot, but expect that her social security will be about 60% of max.
  • Plan has always been to sell the house, buy in a less expensive market.  Based on value of the current house and what we are looking at, we’ll pocket between $150 and $200k in cash on the transaction.  We expect our property taxes to go from around $12k per to year to around $6k.
  • Only a small ($300/month) defined benefit pension that kicks in when I hit 65.
  • Neither of us have employer provide healthcare, so will be buying on the open market until Medicare kicks in.  We’re both very active and in good health.
  • Annual spending has been consistent for the last decade.  We’re spending $70k in current dollars all in per year with very little variance.  This includes property taxes, health insurance premiums (we’ve had to pay out of pocket for the last several years), all of the basics, home maintenance, cars, vacations, emergencies, etc.
  • We have two vehicles, averaging 10 years old and 100,000 miles.  Both were sub-$25k new when purchased but are still in good condition and running well.
  • Combined income is around $18k per month when we’re both working.  Wife tends to work short term contracts, so income drops to around $13k per month when she’s off.
  • We want to maintain the same lifestyle.

My thinking:

  • By most retirement calculators and rules of thumb, based on our savings and spending, we’re right at the cusp of being able to retire. 
  • I’d like to have a bit more wiggle room, especially given our ages.  It seems to me, that every year we work lets our savings grow, lets us put away a few more dollars, and means that our savings has to last less time.
  • I have no issue working a part-time job in retirement.  It’s just not going to be doing what I do now.

My plan:

  • I’m thinking of setting a Target of working 920 days combined between the wife and I.  This is basically 4 man-years of work (365 days per year minus 52 weekends, 10 holidays and 20 vacation days).  Every day either of us works, we knock a day off the countdown (i.e. when we’re both working, it’s two days… when I’m working and the wife is on unemployment, it counts as 1.5 days).  This gives us a definite goal, shortens the time our money has to last, and allows us to create a bit of a cushion.
  • This gives us time to ‘get our house in order’;  adjust our portfolios, determine our exact retirement locale, get the house ready for sale, etc.
  • We’ll continue to re-evaluate as we approach the Target

I’d love to hear your thoughts and suggestions on my plan… and thing else we should be considering or doing in the short term.Thanks in advance.

  
Congrats .. great achievement at age 55.
-  I would look into how your social security amount is impacted if you stop now vs. working few years more.  Between two of you - could be large amount - i believe SS website will show you estimate.
-  Why totally stop working though?  Perhaps you can do something part time, or do something on the side based on your profession.  
-  don't know too much of annuity myself - but might be worth to look at using portion of your money to buy a fixed annuity.
 

Have you considered re-balancing this : "an equity leaning investment portfolio," towards bonds. With retirement approaching fast you probably can't afford to ride out any big dips.

elfrozo said:   Have you considered re-balancing this : "an equity leaning investment portfolio," towards bonds. With retirement approaching fast you probably can't afford to ride out any big dips.
 Already part of the plan...


  • This gives us time to ‘get our house in order’;  adjust our portfolios, determine our exact retirement locale, get the house ready for sale, etc.

scripta said:   Really? I would have expected you to increase your travel budget in retirement. I mean what else are you gonna do with yourself
  Agreed... it's definitely one of the reasons to work a bit more... that said, we're moving to an area we already travel to... so eliminates some of the need... 

Congrats, looks like you're in a very good shape, more so than most!

The only comment I'd like to add is why not use some of the cash/liquid to invest in a property? Rent would cover mortgage, and with some extra principle payments you could payoff the rental in 10 years, then you could have an extra stream of income when you retire.

AlmostDone said:   
scripta said:   How (and why) the hell do you spend 70k/yr with a paid off house and no kids?
  Try this as a starter:

$12k / yr in property taxes
$12k / yr in health insurance premiums
$2.5k / yr in car and homeowners insurance
$2.5k / yr in gasoline
$5k / yr in home and auto maintenance (last year was new shocks and struts on the truck, belts, etc.on the car, $3k in necessary maintenance on the house)
$8k in expenses last year related to moving an elderly relative to a nursing facility (non-typical, but I do plan on having some sort of emergency every year)

That's $44k of the spending right there... we don't dine out, I still shop for groceries with coupons, etc.  Typical other expenses for heat and electricity, $80 for cable, $80 for two cell phones, $40 for internet.  I know where the money goes and am comfortable that it's being properly deployed.

  Your autos and house are basically killing you.  $12K in taxes for 0.5M house?  Move to a different state.  Like someone else said, get a newer car.

FWIW I'm getting a lot from this website and a book by the same name:
http://www.caniretireyet.com/

OP has a net worth of $2M.

I don't think the question here is to nitpick and slash the budget. They can afford a SUV if they want one, etc.

jerosen said:   OP has a net worth of $2M.

I don't think the question here is to nitpick and slash the budget. They can afford a SUV if they want one, etc.

  Why not?  OP can slash the budget and retire today instead of putting $2K a year in a 10 year old clunker.

king0fSpades said:   
jerosen said:   OP has a net worth of $2M.

I don't think the question here is to nitpick and slash the budget. They can afford a SUV if they want one, etc.

  Why not?  OP can slash the budget and retire today instead of putting $2K a year in a 10 year old clunker.

  
Well thats fair of course but : 

OP said:
We want to maintain the same lifestyle.

 

I think you might be missing the point on the car and truck. $2k in maintenance (tires, shocks, struts, brakes, 100,000 mile service) isn't unreasonable... it's only a problem if it happens every year.

In your shoes, I would keep working at least for 4-5 years. Four man-years that you put is not sufficient IMO.

There is not a whole lot of cushion.
Maybe I am just more conservative.
Your spouse is 51 and could easily live for 30-35 years more. That is a long time and I personally will be uncomfortable with having to plan for that long.

If there is a solid plan to semi-retire, where you/spouse will be working part-time for say 5-10 years and presumably not have to touch your savings, pulling the trigger now could work.

jerosen said:   OP has a net worth of $2M.

I don't think the question here is to nitpick and slash the budget. They can afford a SUV if they want one, etc.

  Maybe not if they want to retire ASAP.

Skipping 53 Messages...
solarUS said:   
nasheedb said:   You're at 2.1 MM net worth now. Let's say your after tax income is $120k a year, and you're living on $70k/year. If you save $4,000 a month, and you get a 6% rate on your investments, in another 4-5 years you will be at $3MM. That leaves you with a much bigger cushion for the future.
OP has not mentioned any health risks, familial or otherwise. it's reasonable to expect to live until 60...but 75? 85? this needs to be considered when planning for retirement.

I personally don't expect to live past about 68....if i'm lucky. family history doesnt support it. i'm watching my similarly-situated (by that i mean build, lifestyle, income, etc) uncle and reckoning based on his outcome. weird, i know.

No real major health risks... quite healthy parents in their late 70's and no major familial risks.  Physically fit with daily exercise.  No major illnesses or conditions, not overweight, non-smoker, couple of drinks a week.  Qualified for 'premier' rates a few years ago for term life.

I'll either get hit by a bus next week or I need to plan to live several more decades.



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