You're in great shape and can retire now if you want to. I think there's so much information in your case study (which is a good thing!) that it's muddying the water. You don't need your investments to cover all your expenses for 30 years, you just need to bridge the gap until your social security and pension start.
All numbers below assume that income, expenses, social security, and pensions are inflation adjusted, so I'm just working in 2023 dollars.
Income streams
$25k, 2023 - 2026, DH income (based on him working $20 - $35k until he's 63 or 64)
$24k, starting 2030, DH social security at age 67
$24k, starting 2036, your pension at age 65
$24k, starting 2041, you social security at age 70
$12k, rental income ($10.4k net + $1.8k water bill reduction, rounded to nearest $1k)
Investments
$1.08M, 75/20/5 stocks/bonds/cash
Spending
$55k, including $700 per month healthcare and $5k per year taxes
Link to cFIREsim results:
https://www.cfiresim.com/0fed1999-4723-4544-8a43-07d9558f3481In no historical 30 year scenario do you even come close to running out of money.
Withdrawal rate estimates
2023 - 2026: income $37k, withdrawal $18k, withdrawal rate 1.7%
2027 - 2029: income $12k, withdrawal $43k, withdrawal rate 4.0%
2030 - 2035: income $36k, withdrawal $17k, withdrawal rate 1.6%
2036 - 2040: income $60k, exceeds spend rate
2041 - onward: income $84k, exceeds spend rate
Factors that may negatively impact this plan:
- This does not include large irregular expenses, like a new car or roof. I still think you have plenty of buffer to absorb a $10k expense here or there.
- Medical costs. At your ages and with a ~$55k income (you should check your 2022 taxes to see how the rental property affected your income, but I'm assuming it's income - expenses), you are likely to qualify for large tax credits, and your current budget of $700 per month will likely cover most if not all of your ACA premiums. Depending on your healthcare use, you may have out of pocket expenses on top of that. You can check out existing plans online to get a better idea of costs. Tax credits may decrease (and your costs increase) when DH moves to Medicare.
- The rental may not be a great investment, but it sounds like your DH is more comfortable with rental property than stock market investing. The rental property may be a necessary compromise for marital harmony.
Factors that may positively impact this plan:
- Rental income could be increased if you take on yard work and/or property management.
- DH may want to continue working in some capacity past age 63/64
- You may want to do some part time work
- Taxes will be lower when your income decreases
- Rental income will likely increase over time as rent increases with inflation but the mortgage does not