I am ready to pull the plug! am I ready ?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
1moreyr
Posts: 25
Joined: Sun Jan 12, 2020 7:10 pm

I am ready to pull the plug! am I ready ?

Post by 1moreyr » Sun Jun 28, 2020 8:03 am

i just posted a career change and got good feedback.
viewtopic.php?f=2&t=318748&p=5338668#p5338668

i am planning to work one more year for a different firm and maybe turn it into part time gig (link above). Below are my current assets and needs. The other post is gravy. I would like to look at this as if i am retiring today with nothing else.

if the other job doesn't go as planned, i will be in retirement! As a 29 year employee of the same megacorp, it's a little scary, I could use your thoughts. Management has changed,I have had it and staying at megacorp isn't an option for me (my choice)

57 years old, DW is 60. We have no debt, 2 cars (subaru and toyota) both have 60K miles each, no plans of changing them for 4-5 years. House is paid for and worth about $450K, Renovations are new. i could coast for 5 years or more if i chose to do nothing, but probably won't

DW is in healthcare. job is in demand and flexible for the amount of time to work. I am counting her as retired with me and using the salary as buffer but she will probably work part time for a while. I estimate that is worth $20k-$40K per year

we are living easily on a take home of $62K/year. Retiree medical ( $13K/year) will make this 75K net or estimated annual gross of $92K per year. (assumed 22% tax. I live in a no income tax state)
I range my needs from $92k- $118K gross. I added a before tax $10K/year for trips/ house repairs/misc unplanned needs.This is probably really conservative.

Income and Assests

Pension/ deferred compensation ; $75,000 gross for the next 5 years after retirement.
2025 and beyond $72,000 - Pension $26800 My SS $ 25800/ year , Spouse SS -$20,000/year (we may delay this as i will be only 62, spouse will be 65)

Total Assets $ 2.2M Total investments represent a 55%/45% allocation . 70% is in Vanguard stocks/bonds
his 401K $1.2M
her 401K $253K

His Roth $52K
her IRA $330K ( most roll over funds from old 401Ks)
Taxable inv $240k
cash $125K (most in Ally CD ladder at 1.75%, 30K in money mkt)

I also have a hobby that is collection of artifacts that are worth $82K. I plan to sell at least $50K of it over the next 5 years as needed. It is pretty easy to dispose of and not in the $2.2M above.

the value of the deferred comp ($240K) is not in the $2.2M in assets. i didn't count it to make it a clean look but did use it in firecalc below.

firecalc give me 100% success for 40 years with a low of $1.8M and an average of $8m using an income of $118K
$1.7m low and average of $9M if I use 45 years.

Rich, broke or Dead calculator yields similar results. Assets lasting much longer than any expected life time with little to no chance of broke (unless i really stress the numbers, then 1-2% chance at 95-100)

What do you think? I'm talking to my boss this week about retiring in the next 60 days....
I am looking to the boglehead braintrust and to those that have made the leap...Please give me confidence or give me pause....
Last edited by 1moreyr on Sun Jun 28, 2020 8:40 am, edited 2 times in total.

thewizzer
Posts: 313
Joined: Sun Aug 19, 2012 10:11 pm

Re: I am ready to pull the plug! am I ready ?

Post by thewizzer » Sun Jun 28, 2020 8:11 am

I seriously read until I got to 2.2m in assets. Then I just skipped to the bottom.

You’re in great shape. Enjoy retirement.

Silk McCue
Posts: 4711
Joined: Thu Feb 25, 2016 7:11 pm

Re: I am ready to pull the plug! am I ready ?

Post by Silk McCue » Sun Jun 28, 2020 8:42 am

We are 59/61 and my wife joins me in retirement at the end of the year. Pension and retirement savings are substantially less than yours. We currently plan to take SS at ages 68/70. We are able to support the standard of living you anticipate with what we have.

You are go for launch.

Cheers

bampf
Posts: 524
Joined: Thu Aug 04, 2016 6:19 pm

Re: I am ready to pull the plug! am I ready ?

Post by bampf » Sun Jun 28, 2020 9:13 am

Yep. Done. Do what you want.

User avatar
Watty
Posts: 19749
Joined: Wed Oct 10, 2007 3:55 pm

Re: I am ready to pull the plug! am I ready ?

Post by Watty » Sun Jun 28, 2020 9:16 am

thewizzer wrote:
Sun Jun 28, 2020 8:11 am
I seriously read until I got to 2.2m in assets. Then I just skipped to the bottom.

You’re in great shape. Enjoy retirement.
+1

With deferred comp plan, collectibles you will be selling, and home equity your net worth is nearing 3 million. And you have a pension and Social Security. :oops:

See this website for a suggested claiming strategy for your Social Security

https://opensocialsecurity.com/

1moreyr wrote:
Sun Jun 28, 2020 8:03 am
firecalc give me 100% success for 40 years with.....using an income of $118K
One thing to remember about Firecalc and other planners like that is that "failure" does not mean that you keep spending mindlessly until you are broke and homeless, failure just means that you might need to do something like cut your spending by 10% years from now if your portfolio drops more than expected.

One thing I did when I was deciding to retire was that I used Firecalc and I kept increasing my spending to see how that decreased my successes rate. I even plotted that on a graph so see if there was a sharp drop-off at some point. That was a crude sensitively analysis that made me feel a lot better about going on and retiring. Anyway you can run Firecalc again setting the spending of $120k, $130K, and so on to see how high your spending could be and still have an 80% or 90% success rate. Also plot the results on a graph. You will likely get some ridiculously high number. I would not actually spend at that level but that might make you feel more comfortable about your retirement finances.

Dottie57
Posts: 8670
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: I am ready to pull the plug! am I ready ?

Post by Dottie57 » Sun Jun 28, 2020 9:19 am

thewizzer wrote:
Sun Jun 28, 2020 8:11 am
I seriously read until I got to 2.2m in assets. Then I just skipped to the bottom.

You’re in great shape. Enjoy retirement.
Me too!

Topic Author
1moreyr
Posts: 25
Joined: Sun Jan 12, 2020 7:10 pm

Re: I am ready to pull the plug! am I ready ?

Post by 1moreyr » Sun Jun 28, 2020 11:04 am

Watty wrote:
Sun Jun 28, 2020 9:16 am

One thing to remember about Firecalc and other planners like that is that "failure" does not mean that you keep spending mindlessly until you are broke and homeless, failure just means that you might need to do something like cut your spending by 10% years from now if your portfolio drops more than expected.

One thing I did when I was deciding to retire was that I used Firecalc and I kept increasing my spending to see how that decreased my successes rate. I even plotted that on a graph so see if there was a sharp drop-off at some point. That was a crude sensitively analysis that made me feel a lot better about going on and retiring. Anyway you can run Firecalc again setting the spending of $120k, $130K, and so on to see how high your spending could be and still have an 80% or 90% success rate. Also plot the results on a graph. You will likely get some ridiculously high number. I would not actually spend at that level but that might make you feel more comfortable about your retirement finances.
yes, thank you, i completely agree with you. , I played that game before with 95% being my success target. i got to 140K i think
my actual compensation is significantly higher than my needs (I am putting 60% of salary into deferred comp this year as a test to see if i could live on the remainder. The last 6 months have been easy but it's coronavirus and spending is down).
i guess it's hard to know what a good success rate is on firecalc because you are always able to make choices (except health issues of course)

i think it's having a large W2 in comparison to my needs is what throws me off but i just don't spend much of it. We banked our raises for years and continued to live on what we lived on. so when i look at the W2, i have trouble with the reality.

not bragging, just saying why i am having trouble. Thank you for your insight.

User avatar
HomerJ
Posts: 14773
Joined: Fri Jun 06, 2008 12:50 pm

Re: I am ready to pull the plug! am I ready ?

Post by HomerJ » Sun Jun 28, 2020 11:15 am

thewizzer wrote:
Sun Jun 28, 2020 8:11 am
I seriously read until I got to 2.2m in assets. Then I just skipped to the bottom.

You’re in great shape. Enjoy retirement.
I stopped once I got to the pension and SS covering nearly all expenses...

How is this a question?

Congrats OP
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

User avatar
Raymond
Posts: 1573
Joined: Mon Apr 16, 2012 6:04 am

Re: I am ready to pull the plug! am I ready ?

Post by Raymond » Sun Jun 28, 2020 11:22 am

Have that talk with your boss tomorrow :happy
Congratulations! :sharebeer
"Ritter, Tod und Teufel"

User avatar
Watty
Posts: 19749
Joined: Wed Oct 10, 2007 3:55 pm

Re: I am ready to pull the plug! am I ready ?

Post by Watty » Sun Jun 28, 2020 11:28 am

1moreyr wrote:
Sun Jun 28, 2020 11:04 am
i guess it's hard to know what a good success rate is on firecalc because you are always able to make choices (except health issues of course
Things like Firecalc are good for doing a reality check to make sure you are not doing something that is completely unreasonable but their calculations really don't work well in the real world. The problem is that you expenses will be lumpy, unpredictable, and which be different at different stages of life.

novemberrain
Posts: 319
Joined: Wed May 09, 2018 12:26 pm

Re: I am ready to pull the plug! am I ready ?

Post by novemberrain » Sun Jun 28, 2020 12:14 pm

Unless one of you have health issues, I would work few more years in your situation.

random_walker_77
Posts: 985
Joined: Tue May 21, 2013 8:49 pm

Re: I am ready to pull the plug! am I ready ?

Post by random_walker_77 » Sun Jun 28, 2020 12:17 pm

You're in good shape, especially since your spending is 75K w/ access to a retirement medical plan (lucky you!). Your investments will throw off 40K/yr in dividends, and you have a healthy income stream for the next 5 years. Your tax rate is going to be a lot less than 22% -- you might want to play around w/ taxcaster (or if you do your own taxes, mock up something w/ your copy of <tax software>)

Note that, if your income is all qualified dividends and long term capital gains (LTCG), a married couple can make over 100K and pay no income taxes, between the ~25K standard deduction and the 78K 0% tax bracket for LTCG.

Do you have the option to defer that pension income? If so, your tax rate might be 0% for the next few years if you both stopped working. You'd still need to run the scenarios to see if that's optimal, or if you're better off taking this now, so that your tax rate doesn't shoot up in 15 years between all of your income streams and/or required distributions from tax-deferred accounts.

marcopolo
Posts: 3069
Joined: Sat Dec 03, 2016 10:22 am

Re: I am ready to pull the plug! am I ready ?

Post by marcopolo » Sun Jun 28, 2020 12:29 pm

novemberrain wrote:
Sun Jun 28, 2020 12:14 pm
Unless one of you have health issues, I would work few more years in your situation.
There is always one in every bunch.

Care explain why you think that is necessary?
Once in a while you get shown the light, in the strangest of places if you look at it right.

Topic Author
1moreyr
Posts: 25
Joined: Sun Jan 12, 2020 7:10 pm

Re: I am ready to pull the plug! am I ready ?

Post by 1moreyr » Sun Jun 28, 2020 12:39 pm

novemberrain wrote:
Sun Jun 28, 2020 12:14 pm
Unless one of you have health issues, I would work few more years in your situation.
yes, please do!! i am curious what you see as a concern as that is why i posted. do you think there isn't enough money or i am too young?

thewizzer
Posts: 313
Joined: Sun Aug 19, 2012 10:11 pm

Re: I am ready to pull the plug! am I ready ?

Post by thewizzer » Sun Jun 28, 2020 12:41 pm

marcopolo wrote:
Sun Jun 28, 2020 12:29 pm
novemberrain wrote:
Sun Jun 28, 2020 12:14 pm
Unless one of you have health issues, I would work few more years in your situation.
There is always one in every bunch.

Care explain why you think that is necessary?
Because a lot of Bogleheads are so risk averse, anything less than 10 mil is ‘cutting it close.’ :)

I also love the constant advice to work until 70 to maximize SS.

novemberrain
Posts: 319
Joined: Wed May 09, 2018 12:26 pm

Re: I am ready to pull the plug! am I ready ?

Post by novemberrain » Sun Jun 28, 2020 6:45 pm

1moreyr wrote:
Sun Jun 28, 2020 12:39 pm
novemberrain wrote:
Sun Jun 28, 2020 12:14 pm
Unless one of you have health issues, I would work few more years in your situation.
yes, please do!! i am curious what you see as a concern as that is why i posted. do you think there isn't enough money or i am too young?
You are only 57. And I you are hoping to live till 90+, that is a lot of years.

Is your pension from a government entity? If not, pensions may not be safe.

The reason I said that I personally might work for a few more years if I were in your situation is
1. I myself will be bored if I have to spend 30+ years not working. It is just my personality. I'd rather work and take good vacations; than be on retirement full time.
2. Financial uncertainties.

That was just my personal preference. Yours might be different.

Financially, for your spending levels, you are indeed in a safe place to retire though. Let me also add that.

marcopolo
Posts: 3069
Joined: Sat Dec 03, 2016 10:22 am

Re: I am ready to pull the plug! am I ready ?

Post by marcopolo » Sun Jun 28, 2020 7:22 pm

novemberrain wrote:
Sun Jun 28, 2020 6:45 pm
1moreyr wrote:
Sun Jun 28, 2020 12:39 pm
novemberrain wrote:
Sun Jun 28, 2020 12:14 pm
Unless one of you have health issues, I would work few more years in your situation.
yes, please do!! i am curious what you see as a concern as that is why i posted. do you think there isn't enough money or i am too young?
You are only 57. And I you are hoping to live till 90+, that is a lot of years.

Is your pension from a government entity? If not, pensions may not be safe.

The reason I said that I personally might work for a few more years if I were in your situation is
1. I myself will be bored if I have to spend 30+ years not working. It is just my personality. I'd rather work and take good vacations; than be on retirement full time.
2. Financial uncertainties.

That was just my personal preference. Yours might be different.

Financially, for your spending levels, you are indeed in a safe place to retire though. Let me also add that.
If you concern is being bored in a 30+ year retirement, it is not clear to me how working a few more years is going to help. Somehow you would find interesting things to do for 25 years, but 30 would cause endless boredom?

Seems that time might be better spent exploring some possible interests that one would find engaging for the next phase of life. If that is working at your current job that is fine, but why dismiss a whole world of other possible pursuits?
Once in a while you get shown the light, in the strangest of places if you look at it right.

Topic Author
1moreyr
Posts: 25
Joined: Sun Jan 12, 2020 7:10 pm

Re: I am ready to pull the plug! am I ready ?

Post by 1moreyr » Mon Jun 29, 2020 4:50 am

novemberrain wrote:
Sun Jun 28, 2020 6:45 pm
1moreyr wrote:
Sun Jun 28, 2020 12:39 pm
novemberrain wrote:
Sun Jun 28, 2020 12:14 pm
Unless one of you have health issues, I would work few more years in your situation.
yes, please do!! i am curious what you see as a concern as that is why i posted. do you think there isn't enough money or i am too young?
You are only 57. And I you are hoping to live till 90+, that is a lot of years.

Is your pension from a government entity? If not, pensions may not be safe.

The reason I said that I personally might work for a few more years if I were in your situation is
1. I myself will be bored if I have to spend 30+ years not working. It is just my personality. I'd rather work and take good vacations; than be on retirement full time.
2. Financial uncertainties.

That was just my personal preference. Yours might be different.

Financially, for your spending levels, you are indeed in a safe place to retire though. Let me also add that.
Thank you for your thoughts. I understand . "what will you do? will you be bored? " That is a risk but I like to ride motorcycles cross country, hike the mountains and a lot of other things i can do at 57, i don't see me doing at 87. My dad is 78 and still rides a trike but can't go far. I want to ride with him more while he still can which, seems to be running out of time. I have travelled the world, lived in Europe , worked across Asia. There are many things across the USA I still haven't seen. In the world of vacations, i won't feel deprived with a week on the outerbanks or a 60 day cross country trip next summer. I budgeted 10k/ year for regular vacations or surprises. My two week trip last year cost just under $5K so that trip will go a little more.

I agree if i worked a little longer, i could save a little more and have more buffer but risks of missing the opportunity with my parents or taking the dream rides are also concerning. I am healthy today but not being physically capable to enjoy what i want to do, while i can do it is always uncertainty as well.

I also wonder if I got bored could I be ok giving up a 6 figure salary to do part time work at motorcycle parts department or something that is in an area where i have an interest.

snowox
Posts: 337
Joined: Wed Nov 08, 2017 9:17 am

Re: I am ready to pull the plug! am I ready ?

Post by snowox » Mon Jun 29, 2020 6:38 am

Say Bye and Enjoy!

LuckyGuy
Posts: 14
Joined: Fri May 15, 2020 6:41 am
Location: Kentucky

Re: I am ready to pull the plug! am I ready ?

Post by LuckyGuy » Mon Jun 29, 2020 6:39 am

Have a great retirement! Go take a nice ride.

flyingaway
Posts: 2729
Joined: Fri Jan 17, 2014 10:19 am

Re: I am ready to pull the plug! am I ready ?

Post by flyingaway » Mon Jun 29, 2020 8:26 am

1moreyr wrote:
Sun Jun 28, 2020 8:03 am

Pension/ deferred compensation ; $75,000 gross for the next 5 years after retirement.
2025 and beyond $72,000 - Pension $26800 My SS $ 25800/ year , Spouse SS -$20,000/year (we may delay this as i will be only 62, spouse will be 65)
Will you receive $75,000 per year for the next 5 years and $72,000 per year after that? If yes, why hesitate? I might retire today.

huskerfan1414
Posts: 133
Joined: Wed Mar 11, 2020 7:51 pm

Re: I am ready to pull the plug! am I ready ?

Post by huskerfan1414 » Mon Jun 29, 2020 9:59 am

I suggest getting out of the job and into a boat somewhere. Congrats on retirement! :beer
The more I learn, the dumber I feel.

User avatar
HomerJ
Posts: 14773
Joined: Fri Jun 06, 2008 12:50 pm

Re: I am ready to pull the plug! am I ready ?

Post by HomerJ » Mon Jun 29, 2020 12:53 pm

novemberrain wrote:
Sun Jun 28, 2020 6:45 pm
1moreyr wrote:
Sun Jun 28, 2020 12:39 pm
novemberrain wrote:
Sun Jun 28, 2020 12:14 pm
Unless one of you have health issues, I would work few more years in your situation.
yes, please do!! i am curious what you see as a concern as that is why i posted. do you think there isn't enough money or i am too young?
You are only 57. And I you are hoping to live till 90+, that is a lot of years.

Is your pension from a government entity? If not, pensions may not be safe.

The reason I said that I personally might work for a few more years if I were in your situation is
1. I myself will be bored if I have to spend 30+ years not working. It is just my personality. I'd rather work and take good vacations; than be on retirement full time.
2. Financial uncertainties.

That was just my personal preference. Yours might be different.

Financially, for your spending levels, you are indeed in a safe place to retire though. Let me also add that.
That was the question. We all have to be careful when answering these threads to use the information given.

We shouldn't worry if the OP will be bored or not, and we shouldn't think "Oh, I'd want to spend more every year than that".

Just answer the question with the information given.

Thanks for coming back and clarifying though novemberrain.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

aristotelian
Posts: 7625
Joined: Wed Jan 11, 2017 8:05 pm

Re: I am ready to pull the plug! am I ready ?

Post by aristotelian » Mon Jun 29, 2020 1:13 pm

thewizzer wrote:
Sun Jun 28, 2020 8:11 am
I seriously read until I got to 2.2m in assets. Then I just skipped to the bottom.

You’re in great shape. Enjoy retirement.
I stopped reading at the pension which covers their spending even before you get to the 2.2M. Yeah, they are set. They were probably set 5-10 years ago.

Topic Author
1moreyr
Posts: 25
Joined: Sun Jan 12, 2020 7:10 pm

Re: I am ready to pull the plug! am I ready ?

Post by 1moreyr » Tue Jun 30, 2020 5:30 am

HomerJ wrote:
Mon Jun 29, 2020 12:53 pm
novemberrain wrote:
Sun Jun 28, 2020 6:45 pm
1moreyr wrote:
Sun Jun 28, 2020 12:39 pm
novemberrain wrote:
Sun Jun 28, 2020 12:14 pm
Unless one of you have health issues, I would work few more years in your situation.
yes, please do!! i am curious what you see as a concern as that is why i posted. do you think there isn't enough money or i am too young?
You are only 57. And I you are hoping to live till 90+, that is a lot of years.

Is your pension from a government entity? If not, pensions may not be safe.

The reason I said that I personally might work for a few more years if I were in your situation is
1. I myself will be bored if I have to spend 30+ years not working. It is just my personality. I'd rather work and take good vacations; than be on retirement full time.
2. Financial uncertainties.

That was just my personal preference. Yours might be different.

Financially, for your spending levels, you are indeed in a safe place to retire though. Let me also add that.
That was the question. We all have to be careful when answering these threads to use the information given.

We shouldn't worry if the OP will be bored or not, and we shouldn't think "Oh, I'd want to spend more every year than that".

Just answer the question with the information given.

Thanks for coming back and clarifying though novemberrain.
Thank you for challenging me and making me think.. that is why i came here.
i have a 75K number but I do all planning on the 118-120K number and i think it still works. If i get really bored, there will be money for more travel or classes at the community college. The motorcycle is a 2019 with a 5 year extended warranty so that's covered as well :happy

Heck firecalc (which isn't the bible) gives me 95% at 140K or so. My "goal" is to die with at least a millon to 2.2M that i started with. It's really not a goal but I use it as a measure to ensure the plan has some room for unplanned (good and bad) spending.

Am I scared financially? heck yes,, Am I scared of FOMO for how i use the rest of my quality time on this planet? yes more so !
Last edited by 1moreyr on Tue Jun 30, 2020 5:45 am, edited 1 time in total.

Topic Author
1moreyr
Posts: 25
Joined: Sun Jan 12, 2020 7:10 pm

Re: I am ready to pull the plug! am I ready ?

Post by 1moreyr » Tue Jun 30, 2020 5:41 am

flyingaway wrote:
Mon Jun 29, 2020 8:26 am
1moreyr wrote:
Sun Jun 28, 2020 8:03 am

Pension/ deferred compensation ; $75,000 gross for the next 5 years after retirement.
2025 and beyond $72,000 - Pension $26800 My SS $ 25800/ year , Spouse SS -$20,000/year (we may delay this as i will be only 62, spouse will be 65)
Will you receive $75,000 per year for the next 5 years and $72,000 per year after that? If yes, why hesitate? I might retire today.
yes, that is correct. Pension is 26.8K/year annual deferred comp payment annually for 5 years of ~48k. First annual payment 6 months after retirement.
deferred comp is in a fund that is $155k vanguard money market (or something like that) and $85K Vanguard target 2020. I know that is stupid conservative for the next 5 years but if everything else drops, i still get this money. I might move some of the cash to the 2020 target fund but if you have won the game, why play and i will sleep at night. i continue to play 55/45 with the 2.2M remainder

it's $240K out of $2.4M (that's the 2.2M plus the 240K)

Wanderingwheelz
Posts: 359
Joined: Mon Mar 04, 2019 9:52 am

Re: I am ready to pull the plug! am I ready ?

Post by Wanderingwheelz » Tue Jun 30, 2020 8:07 am

These are my favorite posts on Bogleheads because these folks who are way over prepared for retirement are just like me. Lol

I’m 49 and will always feel like I’m two days from going broke.

Topic Author
1moreyr
Posts: 25
Joined: Sun Jan 12, 2020 7:10 pm

Re: I am ready to pull the plug! am I ready ?

Post by 1moreyr » Tue Jun 30, 2020 12:31 pm

Wanderingwheelz wrote:
Tue Jun 30, 2020 8:07 am
These are my favorite posts on Bogleheads because these folks who are way over prepared for retirement are just like me. Lol

I’m 49 and will always feel like I’m two days from going broke.
and I am still afraid to leave ! LOL :oops:

Post Reply