One more ready to retire thread - requesting input on big picture plan

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Topic Author
CherylHall
Posts: 62
Joined: Fri Jul 06, 2012 8:33 pm

One more ready to retire thread - requesting input on big picture plan

Post by CherylHall »

Hi all, would like your thoughts on my (near) retirement timing and big picture plan. Thanks to this forum for so much education!

I would like to retire when I am covered financially – and that may be now/very soon. That has always been the plan and I have just been keeping on keeping on reluctant to pull the trigger. I have my own business – I am currently contracting for one client that is keeping me very busy but the situation with them has changed and I would like to move on as soon as the current contract is completed at the end of this calendar year.

I can do two things a) retire or b) new clients/scale back. New clients would not be difficult to land in my field. Ideally I would like to retire as I have a lot of personal interests that I would like more time to pursue.

Emergency funds: 50K (will be 80K at end of 2021)
Debt: No debt except 125K left on the mortgage @3.1% House value 400K.
Tax Filing Status: Single – no dependents
LCOL area – no plans on moving
Age: 60
Size of portfolio - $1.8M IRA in Vanguard & Fidelity
SS: approx. 40K a year at age 70
Expenses: 4.5K a month edit - this includes healthcare coverage cost - not taxes (need to figure that out
Health care: Excellent health. Covered with a good plan via my business at approx.- 6K a year
Asset allocation: 60-35-5(cash) Have a tiering plan in place for withdrawals. If I retire soon I will do some Roth conversions – still TBD. Unlikely to have any major expenses in the next few years.
Last edited by CherylHall on Sun Oct 10, 2021 3:02 pm, edited 1 time in total.
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Watty
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Re: One more ready to retire thread - requesting input on big picture plan

Post by Watty »

CherylHall wrote: Sun Oct 10, 2021 9:33 am Expenses: 4.5K a month
Do your expenses include your mortgage and healthcare?

If so they they will go down when your mortgage is paid off. I would really look at quickly paying off the mortgage, having a paid off house sure made my retirement numbers work a lot better.

If you business is paying for healthcare now you may need to also do something like budget or an Affordable Care Act policy until you start Medicare. Once you are on Medicare then you may need to also budget to pay for a Medigap supplement.

You also need to budget for things like when you need a replacement car or when you have a big expenses like needing a new roof.
Topic Author
CherylHall
Posts: 62
Joined: Fri Jul 06, 2012 8:33 pm

Re: One more ready to retire thread - requesting input on big picture plan

Post by CherylHall »

thank you for your reply! :
Watty wrote: Sun Oct 10, 2021 10:08 am Do your expenses include your mortgage and healthcare?
Yes!
CherylHall wrote: Sun Oct 10, 2021 9:33 am If you business is paying for healthcare now you may need to also do something like budget or an Affordable Care Act policy until you start Medicare. Once you are on Medicare then you may need to also budget to pay for a Medigap supplement.
If I retired the business will be able to pay for 3 more years. I can convert my current plan anytime to personal and it will be a bit more but not awful.
CherylHall wrote: Sun Oct 10, 2021 9:33 am You also need to budget for things like when you need a replacement car or when you have a big expenses like needing a new roof.
Car is paid off (2K miles and its a Honda) and yes you are right on the roof - just had the house painted and a ton of maintenance items completed. I keep up w house maintenance a lot of this was proactive.
Topic Author
CherylHall
Posts: 62
Joined: Fri Jul 06, 2012 8:33 pm

Re: One more ready to retire thread - requesting input on big picture plan

Post by CherylHall »

Watty wrote: Sun Oct 10, 2021 10:08 am
CherylHall wrote: Sun Oct 10, 2021 9:33 am Expenses: 4.5K a month
If so they they will go down when your mortgage is paid off. I would really look at quickly paying off the mortgage, having a paid off house sure made my retirement numbers work a lot better.
Yes -
I was thinking the same thing - thanks
BernardShakey
Posts: 436
Joined: Tue Jun 25, 2019 10:52 pm
Location: CA

Re: One more ready to retire thread - requesting input on big picture plan

Post by BernardShakey »

CherylHall wrote: Sun Oct 10, 2021 9:33 am Hi all, would like your thoughts on my (near) retirement timing and big picture plan. Thanks to this forum for so much education!

I would like to retire when I am covered financially – and that may be now/very soon. That has always been the plan and I have just been keeping on keeping on reluctant to pull the trigger. I have my own business – I am currently contracting for one client that is keeping me very busy but the situation with them has changed and I would like to move on as soon as the current contract is completed at the end of this calendar year.

I can do two things a) retire or b) new clients/scale back. New clients would not be difficult to land in my field. Ideally I would like to retire as I have a lot of personal interests that I would like more time to pursue.

Emergency funds: 50K (will be 80K at end of 2021)
Debt: No debt except 125K left on the mortgage @3.1% House value 400K.
Tax Filing Status: Single – no dependents
LCOL area – no plans on moving
Age: 60
Size of portfolio - $1.8M IRA in Vanguard & Fidelity
SS: approx. 40K a year at age 70
Expenses: 4.5K a month
Health care: Excellent health. Covered with a good plan via my business at approx.- 6K a year
Asset allocation: 60-35-5(cash) Have a tiering plan in place for withdrawals. If I retire soon I will do some Roth conversions – still TBD. Unlikely to have any major expenses in the next few years.
Seems like you could retire now. Expenses are about $60k a year, best I can tell (54k + 6k healthcare). If that does not include taxes, call it $70k per year in expenses. With $1.8M, a 4% withdrawal rate would provide $72k annually. But this would drop in 10 years when SS kicks in. Congrats!
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Watty
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Re: One more ready to retire thread - requesting input on big picture plan

Post by Watty »

CherylHall wrote: Sun Oct 10, 2021 10:29 am
Watty wrote: Sun Oct 10, 2021 10:08 am
CherylHall wrote: Sun Oct 10, 2021 9:33 am Expenses: 4.5K a month
If so they they will go down when your mortgage is paid off. I would really look at quickly paying off the mortgage, having a paid off house sure made my retirement numbers work a lot better.
Yes -
I was thinking the same thing - thanks
I would guess that your expenses would be around $4K a month once the house is paid off.

Your situation looks good to me. :beer
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JoeRetire
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Re: One more ready to retire thread - requesting input on big picture plan

Post by JoeRetire »

CherylHall wrote: Sun Oct 10, 2021 9:33 am Hi all, would like your thoughts on my (near) retirement timing and big picture plan.

Ideally I would like to retire as I have a lot of personal interests that I would like more time to pursue.

Tax Filing Status: Single – no dependents
Age: 60
Size of portfolio - $1.8M IRA in Vanguard & Fidelity
SS: approx. 40K a year at age 70
Expenses: 4.5K a month
You could retire today if you wish.
Just remember: it's not a lie if you believe it.
HomeStretch
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Joined: Thu Dec 27, 2018 3:06 pm

Re: One more ready to retire thread - requesting input on big picture plan

Post by HomeStretch »

I agree with other posters that your numbers support retiring now. Congratulations!

If you have any extra cash, I agree with the suggestion to pay off the 3.1% mortgage.

If you have never had a Roth IRA and are considering future Roth conversions, consider opening a Roth IRA and making a small contribution/conversion in 2021 to start the 5-year clock on an initial Roth IRA.
zie
Posts: 293
Joined: Sun Mar 22, 2020 4:35 pm

Re: One more ready to retire thread - requesting input on big picture plan

Post by zie »

CherylHall wrote: Sun Oct 10, 2021 9:33 am Ideally I would like to retire as I have a lot of personal interests that I would like more time to pursue.
This is the only potential problem with your plan, having enough time to do all of those personal interests! If you under-size your personal fun TODO list, you may find retirement a problem. So unless you feel confident you are good with things to do(besides napping), then you might want to keep 1 or 2 part time clients to slow-retire, so you can adjust easier. It's totally not needed financially, but emotionally, it might be needed.

Either way, have fun in your retirement!
Topic Author
CherylHall
Posts: 62
Joined: Fri Jul 06, 2012 8:33 pm

Re: One more ready to retire thread - requesting input on big picture plan

Post by CherylHall »

HomeStretch wrote: Sun Oct 10, 2021 7:44 pm
If you have never had a Roth IRA and are considering future Roth conversions, consider opening a Roth IRA and making a small contribution/conversion in 2021 to start the 5-year clock on an initial Roth IRA.
AHH! very good point! I opened a Roth yesterday. thank you!
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