Thank you BH nation for your ongoing engagement and wisdom. I am preparing to retire from GoliathCorp in about 22 months, and would like you to pressure-test what I think is a pretty strong retirement plan.
I am 59.5, DW is 54, both in good health. My salary is mid-six figures, and she works part time and would continue to do so for 3-4 years after I retire. Our spending is about $240,000 (pre-tax), our surviving parents are well positioned to pay for LTC if needed, and our kids are either on their own or in college with most costs aside from food and gas already funded in 529s.
The Plan: I would retire between age 61 and 62, but only claim my pension at 62 to avoid the reduction for claiming before that age. That pension would pay $230,000/year (pre-tax), does not have a COLA, and has a 50% survivor benefit for DW. My deferred compensation account will pay out $75,000/year for the ten years after I retire (roughly ages 62-72), and immediately if I die. It is conservatively invested. All in, we would have “mailbox money” of about $305,000/year. I would claim SS at 70, which would pay about $54,000/year.
Our house is worth $2.5-3M, and we owe $350k at 2.875%. We plan to downsize in about 5 years, so our current mortgage payment of $4750 and the associated utilities would drop substantially then. We also own a rental property with about a $165k mortgage at 4%, with monthly revenue of $2300 and expenses of $1800. It is easy to maintain. We have no other debt.
We have taxable brokerage accounts, a 401(k), vested restricted stock, stock options (some that don’t expire for 8 years), DW’s IRA - total about $3M. Because we don’t expect to need that money, we would invest all the investable assets in an S&P500 index fund and let it ride. I would not invest in an international fund, because most of the S&P 500 have substantial international operations.
I know the risks that my soon to be former company experiences financial difficulties and cannot fund the pension and DC as they have in the past, and am comfortable with that. I am also comfortable that we will be able to afford health care insurance until we enroll in Medicare. I think.
Our FA (paid hourly) said that based on their simulations, we have better than a 99% chance of our retirement plan working. Do you see any gaps or opportunities? Our hope is that our biggest problems will be managing conversions and RMDs among accounts we don’t otherwise need to monitor, and deciding how to bless people and organizations that are important to us. Sage advice on that last part is also very welcome.
Thank you for your insights! It is rewarding to see two lifetimes of good financial decisions yield good results when it matters, as you all know.
I am 59.5, DW is 54, both in good health. My salary is mid-six figures, and she works part time and would continue to do so for 3-4 years after I retire. Our spending is about $240,000 (pre-tax), our surviving parents are well positioned to pay for LTC if needed, and our kids are either on their own or in college with most costs aside from food and gas already funded in 529s.
The Plan: I would retire between age 61 and 62, but only claim my pension at 62 to avoid the reduction for claiming before that age. That pension would pay $230,000/year (pre-tax), does not have a COLA, and has a 50% survivor benefit for DW. My deferred compensation account will pay out $75,000/year for the ten years after I retire (roughly ages 62-72), and immediately if I die. It is conservatively invested. All in, we would have “mailbox money” of about $305,000/year. I would claim SS at 70, which would pay about $54,000/year.
Our house is worth $2.5-3M, and we owe $350k at 2.875%. We plan to downsize in about 5 years, so our current mortgage payment of $4750 and the associated utilities would drop substantially then. We also own a rental property with about a $165k mortgage at 4%, with monthly revenue of $2300 and expenses of $1800. It is easy to maintain. We have no other debt.
We have taxable brokerage accounts, a 401(k), vested restricted stock, stock options (some that don’t expire for 8 years), DW’s IRA - total about $3M. Because we don’t expect to need that money, we would invest all the investable assets in an S&P500 index fund and let it ride. I would not invest in an international fund, because most of the S&P 500 have substantial international operations.
I know the risks that my soon to be former company experiences financial difficulties and cannot fund the pension and DC as they have in the past, and am comfortable with that. I am also comfortable that we will be able to afford health care insurance until we enroll in Medicare. I think.
Our FA (paid hourly) said that based on their simulations, we have better than a 99% chance of our retirement plan working. Do you see any gaps or opportunities? Our hope is that our biggest problems will be managing conversions and RMDs among accounts we don’t otherwise need to monitor, and deciding how to bless people and organizations that are important to us. Sage advice on that last part is also very welcome.
Thank you for your insights! It is rewarding to see two lifetimes of good financial decisions yield good results when it matters, as you all know.
Statistics: Posted by Gopherever — Sat Aug 24, 2024 6:45 pm — Replies 0 — Views 50