### Author Topic: non-early retirement, but need help with numbers  (Read 3506 times)

#### susanna

• Posts: 25
##### non-early retirement, but need help with numbers
« on: April 26, 2016, 08:16:27 AM »
TL;DR - I inherited an asset, but I'd like to see if we can retire without it, at age 62-65 or so

I've run a bunch of online calculators such as firecalc and AARP, but would also like feedback from people who are closer to pulling the trigger on retirement and have a better understanding of the calculations. I'll represent my numbers in terms of "x" being annual spending.

Here's the scenario not including this inheritance
Me: 42, spouse: 42, legally married filing jointly, 25% tax bracket

x = annual spending in retirement*
4x = total retirement savings so far**
x times 40% = new annual contributions to tax-advantaged retirement accounts

*I arrived at "x" by taking exactly what we spend now from our net pay, and subtracting our Roth contribs. (In addition to taxes withheld from gross pay, we usually owe the IRS about \$1000/year, which is included in the retirement budget.) We have a mortgage of P&I = \$900, and that will be paid off by retirement, but I left it in the retirement budget to account for any future health expenses.

**The retirement portfolio = index funds at 75/25 stocks/bonds, with a weighted expense ratio of 0.07%. The accounts are 40% Roth and 60% non-Roth, but all are tax-advantaged.

We're both eligible for social security, i.e., we're not public school teachers. I will also have a small non-COLA'd pension of a few hundred a month, but I always leave this out of the online calculators. We have no children.

We seem to be on pace, but online calculators make different (or no) assumptions about taxes and SS, and this can be confusing.

Here's details
Conveniently for our math, the inherited asset is worth "x"; is not liquid, but could be sold. It's an artifact that will appreciate at the rate of inflation and I'm familiar with the marketplace for it. Because reasons, we wouldn't part with this unless we were already eating cat food. We would like to leave it to charity upon our demise, but want to make sure we'll be ok without it.

(Legally, the inheritance is mine, but my spouse wants to be included in the plans, and I respect his feelings.)

Thanks!

#### boarder42

• Walrus Stache
• Posts: 7845
##### Re: non-early retirement, but need help with numbers
« Reply #1 on: April 26, 2016, 08:27:51 AM »
just post the numbers.  but essentially if we assume x to be 50k and you're saving 20k annually and have 200k saved.  in 20 years you could spend 66k per year.  so you'd have more than enough. really you could retire at about 17 years from now conservatively assuming 7% interest.  i dont really understand what your concerns are or why this inherited asset even affects anything.

#### susanna

• Posts: 25
##### Re: non-early retirement, but need help with numbers
« Reply #2 on: April 26, 2016, 08:47:58 AM »
I turned it into algebra in case I want to ask a human I know but don't want to share my numbers with him.

My concerns are because I worry about money, and making big decisions is hard for me, as much a I want to benefit charity. Thanks!

#### boarder42

• Walrus Stache
• Posts: 7845
##### Re: non-early retirement, but need help with numbers
« Reply #3 on: April 26, 2016, 08:49:48 AM »
I turned it into algebra in case I want to ask a human I know but don't want to share my numbers with him.

My concerns are because I worry about money, and making big decisions is hard for me, as much a I want to benefit charity. Thanks!

Yeah the numbers work out identically regardless of the size of x since thats your spending i just put it into numbers for others to see who dont want to do everything in variables.  have you looked into cutting your lifestyle or partaking in other parts of this blog.  you likely can cut your spending more since youre at a 28% rate, there is likely some fluff that could be easily cut.
« Last Edit: April 26, 2016, 08:52:00 AM by boarder42 »

#### acroy

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• Posts: 1699
• Age: 43
• Location: Dallas TX
##### Re: non-early retirement, but need help with numbers
« Reply #4 on: April 26, 2016, 08:53:16 AM »

#### Metric Mouse

• Walrus Stache
• Posts: 5280
• FU @ 22. F.I.R.E before 23
##### Re: non-early retirement, but need help with numbers
« Reply #5 on: April 27, 2016, 06:23:53 AM »
I turned it into algebra in case I want to ask a human I know.

Hilarious!

#### susanna

• Posts: 25
##### Re: non-early retirement, but need help with numbers
« Reply #6 on: April 27, 2016, 10:59:42 AM »
Hi, thanks to all for the input. I have a lot to learn about the shockingly simple math. I never would have thought of our savings rate as 40%, but that's because my denominator is how much we plan to spend in retirement, not how much we're spending now. (Only difference being I removed our Roth contribs from the planned annual spending.)

My concerns have mainly to do with our estate planning. As far as the inheritance going to charity, we have two options when writing our wills.

A) I leave it to the charity upon my demise
B) I leave it to my husband, and then to the charity if he doesn't survive me. He will then rewrite his will to include the charity.

So if we can reach our goals without the inheritance, then option A seems a safer bet. My husband will honor my wishes, but anything could happen. If he were to join a cult, or have other cognitive issues that can't be addressed with a power of attorney, then option B is riskier, in my opinion. Sorry to throw weird scenarios out there but I figure that's what this community is here for. Thanks!

#### boarder42

• Walrus Stache
• Posts: 7845
##### Re: non-early retirement, but need help with numbers
« Reply #7 on: April 27, 2016, 11:43:38 AM »
i mean without knowing the value of x i think that you're stressing way too much over one artifact and where it goes when you die.  just my opinion.  its a thing.

#### susanna

• Posts: 25
##### Re: non-early retirement, but need help with numbers
« Reply #8 on: April 27, 2016, 12:08:15 PM »
Since 60% of our retirement savings is non-Roth tax deferred, should I reduce that portion now by 15% to account for taxes paid in retirement?

#### boarder42

• Walrus Stache
• Posts: 7845
##### Re: non-early retirement, but need help with numbers
« Reply #9 on: April 27, 2016, 12:57:25 PM »
Since 60% of our retirement savings is non-Roth tax deferred, should I reduce that portion now by 15% to account for taxes paid in retirement?

without real numbers there is no way to answer this question if X is 1 dollar you shouldnt be contributing to tax deffered accounts if x is 2MM dollars you should be