Yet Another Can We Retire Thread

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quietseas
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Yet Another Can We Retire Thread

Post by quietseas » Mon Oct 07, 2019 9:28 pm

Spouse 1:
53, potentially eligible for FERS Voluntary Early Retirement (VERA) (32 years), $55K/year pension w/ partial COLA plus FERS Supplement while it lasts & eventually SS.
Would not want to consult or work as a contractor in same industry.

Spouse 2:
68, retired, military pension $60K/year w/ COLA (not taxed) and 55% survivor benefit, SS $27K/yr

Health insurance:
Yes FEHB and Tricare [Medicare for #2]

Expenses:
$120K/yr for 2, $100K for 1, could go lower

Assets:
$1M home paid off
$2M investments, retirement accounts [not expected to need to withdraw except for cars or home maintenance]

Any reason not to jump on the VERA if offered? Main issue is Spouse 1 living another 40 years during which time a lot can change.

Matt3
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Re: Yet Another Can We Retire Thread

Post by Matt3 » Mon Oct 07, 2019 9:37 pm

If you are confident in your yearly expenses number, then I don't see why not.. Looks like you have $142k income vs $120k expenses with a $2M dollar cushion. Yes a lot can happen in 40 years, but based on these numbers your $2m should do nothing but grow. Seems like an easy decision to me.

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Cheez-It Guy
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Re: Yet Another Can We Retire Thread

Post by Cheez-It Guy » Mon Oct 07, 2019 9:38 pm

Or either one of you might die tomorrow. I'd be gone.

Small Savanna
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Re: Yet Another Can We Retire Thread

Post by Small Savanna » Mon Oct 07, 2019 9:39 pm

From a strictly financial perspective, this looks easy. Pensions plus social security will either fully cover or almost fully cover your living expenses. With FEHB, no worries about health care costs. $2M investments will generate $60 to 80K per year indefinitely, which should pay for some nice vacations or any other "fun" expenses over and above normal expenses.
Last edited by Small Savanna on Mon Oct 07, 2019 9:41 pm, edited 1 time in total.

student
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Re: Yet Another Can We Retire Thread

Post by student » Mon Oct 07, 2019 9:40 pm

I agree with others that everything looks good.

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Watty
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Re: Yet Another Can We Retire Thread

Post by Watty » Mon Oct 07, 2019 10:21 pm

quietseas wrote:
Mon Oct 07, 2019 9:28 pm
Main issue is Spouse 1 living another 40 years during which time a lot can change.
I tried to come up with a "worst case scenario" and for Spouse 1 and could not think of anything bad enough to cause much of a problem. Even if they somehow they were a bit short of the $100K that you were targeting I could not come up with anything real dire.
quietseas wrote:
Mon Oct 07, 2019 9:28 pm
$120K/yr for 2, $100K for 1, could go lower
It would be good to look at your spending needs at different ages, even in a high cost of living area you may be overestimating your expenses since you have a paid off house.

I have seen relatives get into their mid 70s and naturally slow down even though they were in relatively good health. At that point they spent a lot less because they did not want to do much travel and they were more interested in downsizing and simplifying instead of buying more stuff. Since they lived in a paid off house there were often months when they did not even spend their entire Social Security check.

If only one of you is alive when assisted living is needed then your expenses might actually go down if you needed to move into assisted living.

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abuss368
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Re: Yet Another Can We Retire Thread

Post by abuss368 » Mon Oct 07, 2019 10:25 pm

Sounds like you have a good starting plan with income higher than expenses. Any way to decrease expenses?
John C. Bogle: "Simplicity is the master key to financial success."

Topic Author
quietseas
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Re: Yet Another Can We Retire Thread

Post by quietseas » Mon Oct 07, 2019 10:41 pm

Thanks All, appreciate the fresh set of eyes.

[/quote]
Watty wrote:
Mon Oct 07, 2019 10:21 pm
quietseas wrote:
Mon Oct 07, 2019 9:28 pm
$120K/yr for 2, $100K for 1, could go lower
It would be good to look at your spending needs at different ages, even in a high cost of living area you may be overestimating your expenses since you have a paid off house.

I have seen relatives get into their mid 70s and naturally slow down even though they were in relatively good health. At that point they spent a lot less because they did not want to do much travel and they were more interested in downsizing and simplifying instead of buying more stuff. Since they lived in a paid off house there were often months when they did not even spend their entire Social Security check.
$120K is 100% of current income less the obvious expenses that go away (investments, FICA, Medicare tax, lower federal and state taxes). Property tax, HOA, and insurance on the house is $16K/yr which could be reduced if we wanted to move to a MCOL area.

[/quote]
Watty wrote:
Mon Oct 07, 2019 10:21 pm
If only one of you is alive when assisted living is needed then your expenses might actually go down if you needed to move into assisted living.
Well, yeah hadn't thought about it that way but might be true.

Topic Author
quietseas
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Re: Yet Another Can We Retire Thread

Post by quietseas » Mon Oct 07, 2019 10:49 pm

abuss368 wrote:
Mon Oct 07, 2019 10:25 pm
Sounds like you have a good starting plan with income higher than expenses. Any way to decrease expenses?
We could move to a MCOL area if we wanted to. Property tax, insurance, and HOA on $1M house are about $16K/yr. Don't think we'd enjoy weather in some LCOL areas but some MCOL urban areas could work.

ExitStageLeft
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Re: Yet Another Can We Retire Thread

Post by ExitStageLeft » Tue Oct 08, 2019 3:37 pm

The gravy on top will be SS for spouse 1.

I would take the VERA today. You've got lots of backstops, but our time is limited.

nix4me
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Re: Yet Another Can We Retire Thread

Post by nix4me » Tue Oct 08, 2019 3:45 pm

I’d call and quit right now and be retired tomorrow morning.

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Wiggums
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Re: Yet Another Can We Retire Thread

Post by Wiggums » Tue Oct 08, 2019 3:59 pm

You’re in good shape. Enjoy your retirement.

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