As a really tired working parent tonight, I am looking for some new sets of eyes on these numbers. Please let me know if I'm missing something.

I estimate my husband will receive a pension roughly around $40,000-$50,000 with survivorship benefits per year (after taxes) when he is eligible to retire in 7 years, more or less. I would like to match this timing and go part time by 2026 with $1,000,000 set aside to draw down between 2%-4% per year, if needed. Is this doable according to these calculations?

If my husband and I currently put away $38,000 in pretax vehicles and $12,000 in Roths this is $50,000 a year added to the current values. At a conservative growth of 5.48% growth for 84 months compounded monthly, I am getting a total account value of $585,232.89. Using the same 5.48% growth on the IRAs compounded monthly, I am getting the value to be $172,258.57. This together adds up to $757,491.46 between the pretax and the Roths in 7 years. The shortfall between $1,000,0000 and $757,491.46 is $242,508.54. I have a modest old pension (in 2018 numbers) for $16,953.67 which I've left alone since it has a COLA. This number grows very modestly year to year so to keep things simple, I am subtracting the shortfall of $242,508.54 from $16,953.67 to get a new shortfall of $194,771.70. If I can stay at my current job for another 7 more years, I can take a lump sum option and roll it over when I leave of roughly $187,363.90. This leaves a new shortfall of more or less $40,000-which if the above makes sense, I can start saving to put away spread out over the next 7 years.

Between my husband's pension and pulling 2%-4% a year on the above (assuming the calculations are right), I can see going part time as a real possibility

So my questions are as follows:

1) Do the calculations above make sense or have I missed somethings?

2) How can I calculate for inflation adjusted numbers/what are some real inflation numbers to use)?? to ensure I am on track to have the option to go part-time?

3) Are taxes calculated after the inflation adjusted numbers? How can I safely calculate this considering the variables?

4) Is this safe to assume the compounding is monthly on the above-it doesn't say on any of the statements I've looked at?

5) Anything else I should be considering?

## Can I downgrade to part-time?

### Re: Can I downgrade to part-time?

1. You are being overly precise. One thing I can almost guarantee is that you will not earn 5.48% every year. You should run scenarios using a range of return rates and see how often you are ok. I like using some of the scenarios in Vanguard market outlook report (see Capital Markets section): https://pressroom.vanguard.com/nonindex ... 120618.pdf

FireCalc is usefull too.

2. Use real returns instead of nominal returns

3. Taxes are part of your expenses. You will have to estimate what they will be.

4. It's much easier to use annual returns in your scenario planning. Using monthly returns is false precision and too complicated.

FireCalc is usefull too.

2. Use real returns instead of nominal returns

3. Taxes are part of your expenses. You will have to estimate what they will be.

4. It's much easier to use annual returns in your scenario planning. Using monthly returns is false precision and too complicated.

### Re: Can I downgrade to part-time?

coffeecup333 wrote: ↑Tue Sep 10, 2019 10:56 pm1) Do the calculations above make sense or have I missed somethings?

You mentioned it below so not sure if you missed it per se, but it is important your work in real numbers or ensure that you understand that the values you have calculated are not real. Just to give you an idea of the impact, my estimate in real terms is about 250k less than yours so it is definitely important.

2) How can I calculate for inflation adjusted numbers/what are some real inflation numbers to use)?? to ensure I am on track to have the option to go part-time?

Most people just subtract out a flat estimated inflation number from the investment growth (say 3%). Obviously this is just a guess which is why many folks choose to hold some inflation protected securities just in case.

3) Are taxes calculated after the inflation adjusted numbers? How can I safely calculate this considering the variables?

It is my opinion that you should only work in real numbers so I generally estimate future taxes this way.

4) Is this safe to assume the compounding is monthly on the above-it doesn't say on any of the statements I've looked at?

These are approximations. I compound annually for a "close enough" estimate but monthly is fine too I suppose. Obviously in the real world, the values of investment accounts are "continuously" compounded, but I don't think this level of detail is necessary or useful since your estimate's margin of error is so large.

5) Anything else I should be considering?

Potential social security and claiming strategy, security of pensions, future expenses including healthcare and long term care (I assume that is how you came up with 1 million?), home equity. There are probably a ton more but those came to my mind first.