When to pull retierment trigger

[Northwestie]

New to the site. 

I'm a scientist, my wife a teacher.  We have a small house in Seattle that we paid up this year, we both turn 60 next year - that little house likely would fetch $500k.   We have $1.1M in retirement accounts.

We are both pretty cautious, never buy new cars - I bike a lot.  Our retirement funds are in Index and bond funds.  We would like to retire in the next couple years but are a bit nervous about the stock market and its anemic returns of late.  We do travel but either camp in the dirt or when overseas use public transport and "under-appreciated" lodging. 

And then there is medical coverage between now and 65.   So, just curious what others are doing in that 60-64 range.  Thanks all.

[cautiouspessimist]

This decision is going to be based on how much money spend/expect to spend per year. Based on what you have described, I don't imagine you're spending more than 40k per year. As such, you are below the '4% rule' already, even better if you move to a cheaper area after selling your house. I can't tell you what to expect for medical costs for that age range, though.

[BarkyardBQ]

http://www.madfientist.com/safe-withdrawal-rate/

[needmyfi]

Yes other posters are correct, it depends on your current spending and desired retirement spending.  Have you used firecalc? Excellent retirement calculator.  You can use the "investigate" option which will tell you your annual income at different levels of risk.

For healthcare check with your HR to see what Cobra payments will be and see if you can get a retirement package to see you through to medicare.  Don't be shocked if you have to budget $800 to $1000 a month for Cobra but that won't last forever.  Also check state exchanges and verify that they aren't asset dependent.  Nail this all down before you pull the plug. We used online sources to verify our ACA premiums after Cobra runs out. It was incredibly affordable in my opinion.

We are retiring on a third of your stash in 17 months.   Rental income will provide almost a third of our income, SS at 62 (husband) a little more than a third of our income and the rest will come from our stash. 

My guess is that 1.1 million, plus SS and /or teachers pensions will provide a nice cushy retirement especially with no mortgage.

[needmyfi]

Also forgot to add, don't know if you will have SS or teachers retirement or some of both.  Sign into the Social Security site, they will tell you what your payments will be depending on when you choose to start them.  Enter this into firecalc for different starting years and levels.  We used a 95% confidence level and decided to take my husbands ss at 62 and wait 10 years on mine.

[Eric]

Sorry, you can't retire until you learn how to spell retirement.  :)  So that's step one!

I think the second step is to track your current spending if you don't already.  Then you can use that to set a budget for the amount you'd spend in retirement.  Here's a good post about setting a retirement budget:

http://rootofgood.com/developing-a-retirement-budget/

[Northwestie]

Good links - am bit more homework needed.  Thanks

[Gone Fishing]

Take a close look at what you are paying in management fees on your retirement funds.  If you are not in Vanguard or similar low cost funds, you could be paying over $10k a year in unnecessary fees.

[geekette]

Definitely check healthcare.gov.  You will be able to get insurance there until Medicare time. The pricing (with subsidies) is income based, not asset based, as long as you have income over the poverty line (somewhere just over $15k for 2 adults, I believe). 

There's a ton of info on the ACA on this site and others, but it does require a bit of math... 

[needmyfi]

 Check premiums every year, but last time I checked rules was 2013.  Seems like rule at the time was you were expected to exhaust Cobra. (18 months) before Aca would kick in.  It seemed like the law was vague, but that was the prevailing interpretation.  Boy I sure hope I'm wrong on this one!  Aca silver plan will cost us a lot less than 18 months of Cobra.  (890 a month for us, will be much higher for someone with current Cadillac plan).    Cathy...? 

That is for states with no state exchanges.  Op also needs to check in state

[geekette]

There's no requirement to go on COBRA at all.

From Healthcare.gov:
If you decide not to take COBRA coverage, you can enroll in a Marketplace plan instead. Losing job-based coverage qualifies you for a Special Enrollment Period. This means you have 60 days to enroll in a health plan, even if it’s outside the annual Open Enrollment Period.

[needmyfi]

Woo hoo!!!  Made my dh go to work today-poor bastard.  That means an extra $6000 to 7 to the stash.   Going to call an agent in homestate to verify but that is great news. Wasn't it at one time up for question?

We ran fire calc with higher additional spending first two years in to account for higher Cobra.  Will have to run again.  Thanks.

[Inquisitive1]

http://www.madfientist.com/safe-withdrawal-rate/

That is a great article, thanks for sharing. The correlation with the Shiller earnings yield is very interesting.

Cheers,

[ImCheap]

And then there is medical coverage between now and 65.   So, just curious what others are doing in that 60-64 range. 

Reading between the lines of your OP, does not sound like you spend a ton/year. Depending on where you are pulling your income from in those 60-65 years you may want to look at the ACA. Does not cost anything to kick the tires!