Savings in reverse... is there a calculator to help figure out if we can retire now?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:PP again.. At the highest level, you need 25 times your planned annual expenses saved up to not risk running out of money (the 4% rule).

Don’t forget you will be taxed for the income you take out of 401ks, so you need to factor that in as well.

In this 4% rule do the planned annual expenses include taxes? I assume it would.

All expenses. Imagine you have $5mil. 4% is $200,000. This is the total amount you get per year for ALL cash outflows - Mortgage, Health insurance, Taxes, groceries, college, vacation, etc.

Thanks for the clarification.

[Anonymous]

Anonymous wrote:Op here. I should say that both DH are mid fifties and have been trying to get new jobs with no success for a couple of years. So losing our jobs now could potentially be permanent in terms of the income level we have now. It’s more like a 30 year retirement scenario. If we lost our jobs this year ideally we would live off our non IRAs until at least 58 right? Should I factor in depleting our taxable savings first? We have in 529s about half of a private college expense saved. Other big expense is private high school (4 years tuition). Anyone have idea how much medical, dental,vision insurance is privately per year for family of 5? [/quote

Go to bogleheads.org and ask your question there. Also, give more info - it's anonymous so just share your details so you can get good, thorough answers.

[Anonymous]

Anonymous wrote:Op here. I should say that both DH are mid fifties and have been trying to get new jobs with no success for a couple of years. So losing our jobs now could potentially be permanent in terms of the income level we have now. It’s more like a 30 year retirement scenario. If we lost our jobs this year ideally we would live off our non IRAs until at least 58 right? Should I factor in depleting our taxable savings first? We have in 529s about half of a private college expense saved. Other big expense is private high school (4 years tuition). Anyone have idea how much medical, dental,vision insurance is privately per year for family of 5?

I've been looking into this too. You can start withdrawing from your 401k plan if you retired from your employer/company at 55 years or older. You cannot start withdrawing from your IRAs until 59.5 years old.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op here. I should say that both DH are mid fifties and have been trying to get new jobs with no success for a couple of years. So losing our jobs now could potentially be permanent in terms of the income level we have now. It’s more like a 30 year retirement scenario. If we lost our jobs this year ideally we would live off our non IRAs until at least 58 right? Should I factor in depleting our taxable savings first? We have in 529s about half of a private college expense saved. Other big expense is private high school (4 years tuition). Anyone have idea how much medical, dental,vision insurance is privately per year for family of 5?

I'd say, yes, use taxable savings first. If your 529s cover half of a private college then that probably means they'd cover all of an in-state public. If you are still putting money in them, might be worth switching that savings to non-529s so you can use the money for other expenses without penalty if necessary. And, if iDH or I lost our job and didn't expect to be able to get another, child would be switching from private high school to public immediately.

This.

I would begin setting the children's expectations at half of private or all of public college covered. And start looking at your public High School options now.

Also, run your numbers in firecalc. Google for the URL.

[Anonymous]

Anonymous wrote:Need more info.
Age - You and DH?
Ages - Kids
Expected cost of kids' college over the x years
Expected monthly spend
Plan for medical coverage for you and DH until you get to 65
Plan for medical coverage for kids while they are in college
How much money you have saved in each type of vehicle (Roth, 401K/IRA, other)
Status of house - paid off or monthly mortgage balance for how long?

Also do you have more than one property? And what is equity in your property(ies)?

[Anonymous]

Anonymous wrote:Op here. I should say that both DH are mid fifties and have been trying to get new jobs with no success for a couple of years. So losing our jobs now could potentially be permanent in terms of the income level we have now. It’s more like a 30 year retirement scenario. If we lost our jobs this year ideally we would live off our non IRAs until at least 58 right? Should I factor in depleting our taxable savings first? We have in 529s about half of a private college expense saved. Other big expense is private high school (4 years tuition). Anyone have idea how much medical, dental,vision insurance is privately per year for family of 5?

I would look for jobs that may be a step down but provide health insurance and cover most of your yearly nut. How many more years of private school? That may have to be jettisoned.

Medical, dental, vision are quite expensive for the 57-65 ages. Some of it is dependent on your income level. My SIL and BIL are paying about $30k a year for theirs without any dependents- as one data point- He is 63 and she is 62. If you have any preexisting conditions (and we all seem to at that age), it may get pricier as Congress continues to carve away the ACA.

[Anonymous]

Op here. Thanks for everyone’s recommendations.

I did work a lot of work on this just going year by year how much expense we would expect and then related funds to cover it in a big spreadsheet for 30 years. We are 55/57. It comes out that there is a significant cash flow disparity to manage. I forecast that we deplete our taxable accounts first and then start on our 401k plus social security and a small pension. The forced 401k withdrawals start at 70.5 and then we have surplus every year. We are still going thru anticipated expenses but it looks like we can cover it without having to sell the house or go to 0 savings at 85. For context Our kids are 15,17,18 and we have 4 years of private high school left. We have about 1.5m in taxable and about 2.5m in various 401k funds. Plus house worth 1.3m with 350k mortgage. And college funds that cover about 2/3 of private college today.

[Anonymous]

Anonymous wrote:Op here. Thanks for everyone’s recommendations.

I did work a lot of work on this just going year by year how much expense we would expect and then related funds to cover it in a big spreadsheet for 30 years. We are 55/57. It comes out that there is a significant cash flow disparity to manage. I forecast that we deplete our taxable accounts first and then start on our 401k plus social security and a small pension. The forced 401k withdrawals start at 70.5 and then we have surplus every year. We are still going thru anticipated expenses but it looks like we can cover it without having to sell the house or go to 0 savings at 85. For context Our kids are 15,17,18 and we have 4 years of private high school left. We have about 1.5m in taxable and about 2.5m in various 401k funds. Plus house worth 1.3m with 350k mortgage. And college funds that cover about 2/3 of private college today.

So, let me get this straight..

You have $1.5M taxable
2.5M 401K

Home eq - $1M (can't touch it unless you downsize elsewhere). Maybe you "extract" around 500K from the home.

Big expenses to come
4 years of private High school - $160K
1/3 of pvt. college (@70K/yr for 3 kids) - $280K

Not sure what your annual run rate is but you will have depleted the $1.5M by the time you are 65/67 ($110K per year for expenses (maybe low given your suspected lifestyle) + $440 for private HS and college).
Your $2.5 401K will be about $5M by then.
You can downsize to a smaller house and the equity you get out of it would take you to 70.5 years

I wouldn't do it (esp. the private HS and college) but it should work. I'd at least make sure you do instate public though just to be safe..

[Anonymous]

Op here. Private high school is one year at 40k and 3 years at average of 25k. First kid at college has 15k merit aid per year. We live in DC. Public college is at most 10k benefit if kid wants to go there and can get in.

[Anonymous]

Anonymous wrote:Op here. Private high school is one year at 40k and 3 years at average of 25k. First kid at college has 15k merit aid per year. We live in DC. Public college is at most 10k benefit if kid wants to go there and can get in.

OK. As long as you can take care of medical between now and the last kid getting out of college, you should be fine.

Check out the website firecalc.com. It has a good retirement simulator. check it out and good luck!

[Anonymous]

Just an FYI: If you have any Roth IRAs, you can tap your contributions to them at any time without penalty or tax consequences.