Excluding our current mortgage payment, which we could payoff now if we wished, we spend around $85K annually. We have kids in the household, so that could drop after they are out on their own.
Healthcare. A few expenses would reduce, but with increased healthcare expenses due to loss of employer contribution, we expect our expenses would go up $10K in early retirement. It is possible that HC would actually be lower with ACA, but we do not want to count on it in case the law changes.
Kids. College funding is accounted for separately. We presently have enough for them to go to state school. If I retired early and my income dropped to minimal levels, financial aid eligibility would probably mean present savings could get them through private college and possibly post-grad. Kids' weddings, vehicles, etc. are not budgeted. The way I look at it, we'll help if we can, but are not altering our own plans for those things.
Care. We have not budgeted for long-term care. I think that is the biggest wild-card as respects planning. We live healthy lifestyles now, but one never knows when a debilitating illness might hit.
No pensions. We have $15k NET annual rental income that we anticipate will keep pace or slightly beat inflation. Our estimate of SS benefits for me and spouse totals $40K/yr, but we assume starting at age 70. This is the currently calculated PIA, but we expect full retirement age will be bumped back a few years by that time.
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ANNUAL A45 FIRE A70 EXPENSES $85 $95 $90 less RENTS -15 -15 -15 less SS 0 0 -40 plus TAXES 5 5 NEEDED 85 40
After mortgage payoff, deducting 15% from pre-tax accounts, and excludng education accounts, we presently have $1.6M in investments. There is enough in Taxable and Roth so that withdrawals from Tradl accounts would not be needed before 60.
Inputting the above figures and our current 70/30 portfolio and not adjusting with age, FIRECalc.com suggests the success rate of 68%. However, we have options of liquidating real estate to generate additional lump sum income if required, though that cuts into ongoing rental income. Ideally, we'd like to leave the real estate to the kids (hopefully with stepped-up basis).
How far away do you think we are from being able to safely retire early based on the above numbers?
What else should we be thinking about?