Author Topic: 15 months, maybe ??  (Read 1015 times)

Plaintired

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15 months, maybe ??
« on: July 10, 2021, 07:10:37 AM »
I will be eligible to retire in 15 months at 60. My wife,54, is already retired.
Our gross income now is $92k.  Our base expenses amount to $38k.
We think 50k a year would enable us to keep our standard of living.
Our cola’d pensions would provide 36k net, per year and we would draw
12k a year from our IRA’s and 401k’s until starting SS at 67 and 62.
The retirement account balances should total to around $600k in 15
months.
Health insurance will be provided by my employer and the cost will
be paid from my pension check.

Am I missing anything ? I’ve reviewed expenses, determined Social
Security benefits,  rebalanced the retirement accounts to 50/50,
and budgeted for future large expenses. 

getmoneyeatpizza

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Re: 15 months, maybe ??
« Reply #1 on: July 10, 2021, 08:35:34 AM »
You're fine. 4% withdrawal of 600k is 24k plus your 36k pension puts you at 60k a year forever not even counting your SS.

Plaintired

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Re: 15 months, maybe ??
« Reply #2 on: July 10, 2021, 08:45:57 AM »
I suppose my worry is if the 4% rate of return works as well with smaller nest eggs .

getmoneyeatpizza

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Re: 15 months, maybe ??
« Reply #3 on: July 10, 2021, 09:29:53 AM »
The rule doesn't change based on size. Even a 3% withdrawal is 18k + 36 pension is 54k. 54k is 16k more than what you say you are spending now.

Relax and plan something fun to do in 15 months.

MrThatsDifferent

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Re: 15 months, maybe ??
« Reply #4 on: July 10, 2021, 11:43:45 PM »
You’re fine. Your pension covers most of your expenses. What’s the extra $12k for? Are your expenses optimized? What will you do when you retire?

Plaintired

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Re: 15 months, maybe ??
« Reply #5 on: July 11, 2021, 09:46:20 AM »
The extra 12k will probably be spent on travel and as cushion for unexpected expenses.
The budget is always a work in progress.

MrThatsDifferent

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Re: 15 months, maybe ??
« Reply #6 on: July 11, 2021, 02:47:05 PM »
$12k is a lot for travel and for the next 2-5 years, travel outside of the US is going to be a challenge because of COVID. It’s fine to have that cushion. My 2 cents: start planning all of your holidays at least a year in advance. Research where you want to go, the best times to visit, what you want to do there and build budgets accordingly.

If the budget is a work in progress, do the work and try to get ahold of it so you are always in charge of every dollar spent, this will greatly assist you as you continue to manage your money well.

RWD

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Re: 15 months, maybe ??
« Reply #7 on: July 11, 2021, 04:11:43 PM »
I suppose my worry is if the 4% rate of return works as well with smaller nest eggs .
It's not a 4% rate of return, it's a 4% safe withdrawal rate. Your actual rate of return might be more or less than 4%.

Plaintired

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Re: 15 months, maybe ??
« Reply #8 on: July 11, 2021, 07:55:15 PM »
Yes, withdrawal rate , not rate of return.  As far as travel, we’ve got a lot of trips planned.
Trying to make up for a career that made travel difficult .

Dicey

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Re: 15 months, maybe ??
« Reply #9 on: July 11, 2021, 08:03:13 PM »
Yes, withdrawal rate , not rate of return.  As far as travel, we’ve got a lot of trips planned.
Trying to make up for a career that made travel difficult .
Are you doing any travel hacking? It's a great way to stretch a buck.

Plaintired

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Re: 15 months, maybe ??
« Reply #10 on: July 12, 2021, 05:10:18 AM »
No travel hacking. Hopefully, we will be able to take advantage of cheaper airline fares
once work schedules no longer in the way.

deborah

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Re: 15 months, maybe ??
« Reply #11 on: July 12, 2021, 05:46:59 AM »
There are many ways to make travel cheaper.

One of them is to think about the experience you want. Many people want a luxury holiday, but to me, a few days of luxury and a few days of camping, or of cheap accommodation would be much better than luxury all the way. Cheaper hotels often have washing machines whereas luxury accommodation usually has expensive laundry service. Interspersing them also makes the luxury more luxurious. Inexpensive cafes often have more local vibe than more expensive restaurants. Camping gets you closer to nature and more remote - who really cares about no Internet, pit toilets and no showers if you’re in the middle of nowhere with amazing scenery for only a few days, and your next few days have wonderful facilities?

When I went to Alaska, I wanted to see the inner passage. Using the ferries of the Alaskan marine highway rather than a cruise meant I met the locals, stayed at the towns I really wanted to stay at, and did the tours I wanted to do. I also booked an RV relocation to go the other way (RV from Seattle to Anchorage, and ferry back) so I could see the interior as well. This was just about the only way to get a one way RV and it was also much cheaper. At one point, instead of the ferry, I booked a short plane trip, which gave me another perspective, without booking a tourist flight.