Retirement plan review

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Topic Author
Garfieldthecat
Posts: 48
Joined: Mon Dec 24, 2018 10:48 am

Retirement plan review

Post by Garfieldthecat » Sun Feb 10, 2019 2:53 pm

Wife and I are about 20 years from retirement, and wanted to see if we are missing anything for planning purposes. This is obviously a rough draft, and can change, since who knows what will happen over the next 20 years.

My wife is 5 years older then me, we both work with income of $225,000/yr, split almost equally between us. Both of us should have SS benefits of about $34,000/yr at 67, or $42,000 at 70 (current dollars). No debt, house paid off already. Current retirement savings are about $900,000 , and adding about $72,000/year.

Right now, the current plan is to retire at 65 (wife first when I am 60, then I retire at 65 when she is 70). Waiting until 70 to take SS for both of us. We can probably live off my salary for those 5 years, or with minimal saving withdrawals. I'm trying to be safe, so just in case, I ran firecalc with the above numbers, except I only put in $30,000/yr in SS benefits at 70, just in case SS benefits change. With a withdrawal amount of $180,000/yr ,I get a 100% success rate (yes, I know past performance doesn't predict the future, so this isn't 100% guaranteed). Depending on what SWR is used, I'll need between $3-4 million saved (in current dollars).

I put in $180,000/yr as a conservative (as in way high number), since that is what we live on (pre-tax, after automatic 403b/saving withdrawals). I've also looked at expenses only, and even a generous spending plan would only be about $75,000 (not including healthcare). So I have a fair amount of wiggle room for future healthcare expenses, healthcare insurance, and increased vacations. This also gives us plenty of room to cut if the stock market doesn't do well for a while. This is the biggest unknown for me, with so much uncertainty about healthcare costs, as well how much we should truly be spending in retirement.

How does this look? Like a said, it's a rough plan that we can adjust as we go forward, if we end up saving more, we can move up retirement a year or two; likewise if the stock market is horrible we can delay a year or two. And/or adjust our true expense amount as we get closer to actual retirement.

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David Jay
Posts: 7150
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Retirement plan review

Post by David Jay » Sun Feb 10, 2019 9:15 pm

It looks good.

Based on where you are today, you may be able to put aside enough to consider early retirement. For the last couple of years, the Boglehead median retirement age is 58 (from Retirement Roll Call 2018, 2019). You may find that you want to retire together...
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

Topic Author
Garfieldthecat
Posts: 48
Joined: Mon Dec 24, 2018 10:48 am

Re: Retirement plan review

Post by Garfieldthecat » Mon Feb 11, 2019 2:18 pm

Well, I al ot can happen, so I'll just keep our options open. :happy

The biggest thing I worry about is missing something in my planning. As someone said, there are "known unknowns" and "unknown unknowns".

Known unknowns would be healthcare costs, our health, job status over the next 20 years, etc..

Unknown unknowns are what I am afraid of missing and not planning for.

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