Author Topic: Need some help on retirement in 2 years !  (Read 1076 times)

bobfnbw

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Need some help on retirement in 2 years !
« on: April 09, 2018, 08:35:25 PM »
Need some help in deciding whether to retire in 2 years and to take Social Security then or defer. My plan is to take SS at age 62 which should be roughly 1800 per month. My plan is to buy a sailboat and do some traveling with it. My wife will continue to work as a teacher and as she is 4 years younger will not be eligible for her teachers retirement for another 5-6 years. After buying the boat and refit costs, I should have roughly 200K in investments in a 403B assuming the market doesn't make some big crash in the next year. I put in 25% of my income presently.

Question is, if I defer SS till 66 and 8 months, I will get more per month, (2600 vs 1800) but not sure what I will lose in taxes since we file jointly. Wife makes ~75K or so. Take the SS at 62 and run with it, or defer and use savings to live on (figure I would need around 1500 per month, or 18000/year.) What would you do?
I expect, with luck to make 15 years past retirement, say 77 or so. Maybe more, but sure don't expect to make 85. But who knows...
 If I defer taking SS, with no income other than the 403b or 18,000 per year, how will that drop my SS payment when I take it at 66 years and 8 months? How could I find that out....
Thanks for fielding my question...
Bob

bobfnbw

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Re: Need some help on retirement in 2 years !
« Reply #1 on: April 09, 2018, 08:44:41 PM »
Sorry for the double post... seemed to hang on my computer....

formerlydivorcedmom

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Re: Need some help on retirement in 2 years !
« Reply #2 on: April 10, 2018, 08:14:40 AM »
Have you spent a great deal of time travelling around on a sailboat?  I ask because this was essentially my dad's retirement plan, but after he spent a week crewing a boat around the Gulf for some friends, he decided that local day trips were more to his taste.  This impacted his choice on which boat to buy.  (His best friend, OTOH, lives on a sailboat in the South Pacific and loves the lifestyle.)

If you actually live to your 77th birthday, you'll earn the following:
retire at 62:  (77-62) * 12 months * 1800/month = $324,000
retire at 66 and 8 months:  ( (77-67) * 12 + 4 months in age 66) * 2600 = $322,400

Either way, your monthly SS should be plenty for you to live on ($21,600/year or $31,200/year).  A 4% withdrawal rate would give you an extra $8k/year.  That should cover any taxes.


Easye418

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Re: Need some help on retirement in 2 years !
« Reply #3 on: April 10, 2018, 09:36:13 AM »
Need some help in deciding whether to retire in 2 years and to take Social Security then or defer. My plan is to take SS at age 62 which should be roughly 1800 per month. My plan is to buy a sailboat and do some traveling with it. My wife will continue to work as a teacher and as she is 4 years younger will not be eligible for her teachers retirement for another 5-6 years. After buying the boat and refit costs, I should have roughly 200K in investments in a 403B assuming the market doesn't make some big crash in the next year. I put in 25% of my income presently.

Question is, if I defer SS till 66 and 8 months, I will get more per month, (2600 vs 1800) but not sure what I will lose in taxes since we file jointly. Wife makes ~75K or so. Take the SS at 62 and run with it, or defer and use savings to live on (figure I would need around 1500 per month, or 18000/year.) What would you do?
I expect, with luck to make 15 years past retirement, say 77 or so. Maybe more, but sure don't expect to make 85. But who knows...
 If I defer taking SS, with no income other than the 403b or 18,000 per year, how will that drop my SS payment when I take it at 66 years and 8 months? How could I find that out....
Thanks for fielding my question...
Bob

Bob,

I don't have any input for you, but I am hoping you could provide input from you to me at 28 years old.

Tell me the things you wish you would have done, did do and are happy about them, did do and regret, and things that will drastically help me in the next 25 years?

Thanks.

bobfnbw

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Re: Need some help on retirement in 2 years !
« Reply #4 on: April 10, 2018, 11:14:51 AM »
Easye that's a good question.
I wish I had gone to collage right after  high school into a field that would earn me more money and have a fuller work experience than I did. Instead I went into the army thinking I would do that for 20 years, but after a few knew it was not for me. The life experience was good, but the loss in time maybe not so good. I am in the medical field now, and while it pays well now after 32 years, it wasn't always that way, and I can't say that I love doing what I do. I am good at it, but don't yearn to go to work. Counting down the days.
I wish I had taken more care of my body. There's a youtube video of Warren Buffett that talks about getting a car at graduation, free, but the only car you will ever get. Then talks about how your body is like that. Watch it.
I wish I have traveled more. I traveled a lot as a travel nurse in the states, but it was mostly work. Not for pleasure.
I wish I had learned another language. I had the opportunity twice. Once in grade school, with Ukranian, and fought learning it, once  after with spanish which I know some, and plan to learn more in my sailboat travels.
I have done a lot of backpacking and outdoors stuff. I gave me a lot of pleasure. I wish I had done more.
I wish someone had taught me the true meaning of money at  a early age. My parents had no clue, school is a big failure in that, the internet did not exist. I learned slowly and painfully, it cost me more than I can say.
So, take care of your body, learn something new every day, read a lot, travel, learn the value of money and how to earn it, keep it and grow it, learn to be self sufficent and live below your means. Don't be taken in by people trying to sell you stuff you don't need. Live for the moment, but plan for the future. Always  understand that our actions have consequences, so think before you act. Don't jump into relationships, but carefully think it out before you commit to something that might set you back a decade or more......
Hope that helps.
Bob.

bobfnbw

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Re: Need some help on retirement in 2 years !
« Reply #5 on: April 10, 2018, 11:27:57 AM »
Have you spent a great deal of time travelling around on a sailboat?  I ask because this was essentially my dad's retirement plan, but after he spent a week crewing a boat around the Gulf for some friends, he decided that local day trips were more to his taste.  This impacted his choice on which boat to buy.  (His best friend, OTOH, lives on a sailboat in the South Pacific and loves the lifestyle.)

If you actually live to your 77th birthday, you'll earn the following:
retire at 62:  (77-62) * 12 months * 1800/month = $324,000
retire at 66 and 8 months:  ( (77-67) * 12 + 4 months in age 66) * 2600 = $322,400

Either way, your monthly SS should be plenty for you to live on ($21,600/year or $31,200/year).  A 4% withdrawal rate would give you an extra $8k/year.  That should cover any taxes.

I have owned 3 sailboats and for me, the joy is in the travel not necessarily in the sailing part, although I love that as well. The thought of living at home and maybe sailing once in a while, while most of my time is spent in front of a TV or doing stuff around the house is not something I  would want to do.
I get seasick. I am not a fan of small tight spaces. I like my comforts like air conditioning and clean sheets. But still yearn to see the world by sail. Never have  been offshore, so maybe I wouldn't like it as much as I think, but the other choices I have are not as attractive.  I live on the Gulf of Mexico in Texas, so yes I could get a small boat and sail when I wanted to, and still might do that, but the dream is hard to resist. And the places I want to see are difficult if not impossible to see other than by sailboat.
Thanks for taking the time to run the numbers. After I posted this, I sat down and did a spreadsheet to see what they are if I took SS at 62, delayed till 66 and 8 months or 70. Seems to me that it makes sense to take it at 62 as I thought. If I live to 85 I might regret it, but since most of my family doesn't see the front side of 70... I will take my chances. Also, if I did defer SS, I would have to tap my 403b, and that might be more costly in the long term. Not sure I can count on SS for the next 20 years since its tied to politicians that might change things not in my favor.  The 4% withdrawal rate you speak of is investing the 403b and taking out ~8K per year I gather? Hopefully I can live on 1500 per month and bank 300/month or 3600/year but no way of knowing that at this point.
Thanks for your knowledge and time.
Bob

Easye418

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Re: Need some help on retirement in 2 years !
« Reply #6 on: April 10, 2018, 11:34:40 AM »
Easye that's a good question.
I wish I had gone to collage right after  high school into a field that would earn me more money and have a fuller work experience than I did. Instead I went into the army thinking I would do that for 20 years, but after a few knew it was not for me. The life experience was good, but the loss in time maybe not so good. I am in the medical field now, and while it pays well now after 32 years, it wasn't always that way, and I can't say that I love doing what I do. I am good at it, but don't yearn to go to work. Counting down the days.
I wish I had taken more care of my body. There's a youtube video of Warren Buffett that talks about getting a car at graduation, free, but the only car you will ever get. Then talks about how your body is like that. Watch it.
I wish I have traveled more. I traveled a lot as a travel nurse in the states, but it was mostly work. Not for pleasure.
I wish I had learned another language. I had the opportunity twice. Once in grade school, with Ukranian, and fought learning it, once  after with spanish which I know some, and plan to learn more in my sailboat travels.
I have done a lot of backpacking and outdoors stuff. I gave me a lot of pleasure. I wish I had done more.
I wish someone had taught me the true meaning of money at  a early age. My parents had no clue, school is a big failure in that, the internet did not exist. I learned slowly and painfully, it cost me more than I can say.
So, take care of your body, learn something new every day, read a lot, travel, learn the value of money and how to earn it, keep it and grow it, learn to be self sufficent and live below your means. Don't be taken in by people trying to sell you stuff you don't need. Live for the moment, but plan for the future. Always  understand that our actions have consequences, so think before you act. Don't jump into relationships, but carefully think it out before you commit to something that might set you back a decade or more......
Hope that helps.
Bob.

Thanks for the feedback Bob.  I hope you get to retire when you want and everything you hoped to get out of your retirement. 

Cheers.

formerlydivorcedmom

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Re: Need some help on retirement in 2 years !
« Reply #7 on: April 10, 2018, 11:41:01 AM »
I have owned 3 sailboats and for me, the joy is in the travel not necessarily in the sailing part, although I love that as well. The thought of living at home and maybe sailing once in a while, while most of my time is spent in front of a TV or doing stuff around the house is not something I  would want to do.
I get seasick. I am not a fan of small tight spaces. I like my comforts like air conditioning and clean sheets. But still yearn to see the world by sail. Never have  been offshore, so maybe I wouldn't like it as much as I think, but the other choices I have are not as attractive.  I live on the Gulf of Mexico in Texas, so yes I could get a small boat and sail when I wanted to, and still might do that, but the dream is hard to resist. And the places I want to see are difficult if not impossible to see other than by sailboat.
I HIGHLY encourage you to find a way to sail offshore for at least a few days before you invest in a new-to-you boat for world travel.  Just in case....

My dad ended up using his boat fund to fly to various areas and hop on someone else's boat for a ride to some of the little islands. That way he got to see some of the places, experience some of the travel, scuba dive in the most beautiful places in the world, but minimize the parts he didn't like.  It helps that he was a people person and had "buddies" all over the world.

On another lifestyle note...is your wife comfortable with you taking off for weeks or months without her, or will most of your travel be together in the summer during her break? 

And yes, the 4% comment was the amount you can take out of your 403(b) if you have it invested.