I found this forum about a year ago and it has been a great learning experience for me. My wife and I just finished paying for our three children's college education and now I want to make sure we are on track to retire in 7 to 10 years. I greatly appreciate any feedback!
Retirement timing goals:
His- Current age of 55 and would like to retire at age 62 and delay SS until age 65 if finances allow.
Her- Current age of 54 and would like to retire at age 65 and delay SS until age 70. My wife was able to work part time when our children were young and she currently plans to work until 65 which is a great advantage for health insurance and delayed SS.
Emergency Fund: $135,000 (approx. 1 years expenses). 1/2 in HYSA and 1/2 in mutual funds with Schwab
Debt: Home mortgage of $224,000 at 2.75% and will be paid off by 2035. Home value of $800,000.
Monthly mortgage is currently $3,300 of which $1,000/month is escrow
Tax filing status: Married filing joint. Federal tax rate= 24%. KS state tax rate= 6%.
Income: Total $290,000/year
His- $140,000
Hers- $150,000
Expenses: $135,000/year. Includes mortgage, daily living items, travel, purchases, etc. This does not include health insurance or taxes since we are currently working.
Investment assets: Total= $1.9 million
His- IRAs=$952,000
Roth IRAs= 84,000
Her-IRAs=856,000
Roth IRAs= 17,000
Company stock= $20,000
Retirement contributions: Total $42,500/year
His- $14,000/year. I recently got out of corporate American to reduce my stress and took a job with a private group with no retirement plan. I will add this amount on my own to my IRA. This also included a big pay cut but it will be worth it.
Her- $28,500/year. Includes company match of 4%
Savings contributions: $40,000/year
Social Security:
His/Her age
62/65=$5,370/month
62/67=$5,811/month
62/70=$6,606/month
65/65=$5,948/month
65/67=$6,389/month
65/70=$7,183/month
Health:
Overall we are both healthy, exercise regularly and eat well but I have a strong family history of heart disease and she has a few issues that require management.
My retirement plan thought process and questions:
1. At my current age and with 1.9 million in IRAs I would like to put more in liquid savings not tax deferred accounts. This would allow a bridging to delayed SS for both of us.
2. If I take my current liquid amount of $135,000 and add an additional $40,000/year at 6% return for 7 years I can have approx. $500,00 to make that bridge minus what is needed as an emergency fund.
3. The $500,000 liquid bridge amount would also allow time for back door Roth conversions after we stop working and have low income tax rate.
4. Taking SS at 62/70 seams like the sweat spot but wife's take-home income between 62 and 65 would cover our monthly expenses.
5. Using rule of 72, rough math, and not counting yearly contributions my 1.9 million could be 4 million in 10 years then take a 4% withdraw rate which would give us an income approx. $160,000 before taxes or $120,000 after taxes then reduce expenses by mortgage (2,000/month) then I am in the ballpark for retirement? Add in SS then we are golden?
I find the timing of when to do what a little overwhelming but have a few years to figure it out with daily reading of Bogleheads.
Retirement timing goals:
His- Current age of 55 and would like to retire at age 62 and delay SS until age 65 if finances allow.
Her- Current age of 54 and would like to retire at age 65 and delay SS until age 70. My wife was able to work part time when our children were young and she currently plans to work until 65 which is a great advantage for health insurance and delayed SS.
Emergency Fund: $135,000 (approx. 1 years expenses). 1/2 in HYSA and 1/2 in mutual funds with Schwab
Debt: Home mortgage of $224,000 at 2.75% and will be paid off by 2035. Home value of $800,000.
Monthly mortgage is currently $3,300 of which $1,000/month is escrow
Tax filing status: Married filing joint. Federal tax rate= 24%. KS state tax rate= 6%.
Income: Total $290,000/year
His- $140,000
Hers- $150,000
Expenses: $135,000/year. Includes mortgage, daily living items, travel, purchases, etc. This does not include health insurance or taxes since we are currently working.
Investment assets: Total= $1.9 million
His- IRAs=$952,000
Roth IRAs= 84,000
Her-IRAs=856,000
Roth IRAs= 17,000
Company stock= $20,000
Retirement contributions: Total $42,500/year
His- $14,000/year. I recently got out of corporate American to reduce my stress and took a job with a private group with no retirement plan. I will add this amount on my own to my IRA. This also included a big pay cut but it will be worth it.
Her- $28,500/year. Includes company match of 4%
Savings contributions: $40,000/year
Social Security:
His/Her age
62/65=$5,370/month
62/67=$5,811/month
62/70=$6,606/month
65/65=$5,948/month
65/67=$6,389/month
65/70=$7,183/month
Health:
Overall we are both healthy, exercise regularly and eat well but I have a strong family history of heart disease and she has a few issues that require management.
My retirement plan thought process and questions:
1. At my current age and with 1.9 million in IRAs I would like to put more in liquid savings not tax deferred accounts. This would allow a bridging to delayed SS for both of us.
2. If I take my current liquid amount of $135,000 and add an additional $40,000/year at 6% return for 7 years I can have approx. $500,00 to make that bridge minus what is needed as an emergency fund.
3. The $500,000 liquid bridge amount would also allow time for back door Roth conversions after we stop working and have low income tax rate.
4. Taking SS at 62/70 seams like the sweat spot but wife's take-home income between 62 and 65 would cover our monthly expenses.
5. Using rule of 72, rough math, and not counting yearly contributions my 1.9 million could be 4 million in 10 years then take a 4% withdraw rate which would give us an income approx. $160,000 before taxes or $120,000 after taxes then reduce expenses by mortgage (2,000/month) then I am in the ballpark for retirement? Add in SS then we are golden?
I find the timing of when to do what a little overwhelming but have a few years to figure it out with daily reading of Bogleheads.
Statistics: Posted by Rameaton — Sun Jun 30, 2024 2:11 pm