Can we afford to retire now?

[Anonymous]

I would not be comfortable in your situation. I am on the low end of DCUM wealth/income scale, and I don't have plans for a lavish retirement.... but my number for retiring at 55 is at least 5 million plus a fully paid off mortgage. (That isn't going to happen for me.... but I dare to dream.)

[Anonymous]

Anonymous wrote:I would not be comfortable in your situation. I am on the low end of DCUM wealth/income scale, and I don't have plans for a lavish retirement.... but my number for retiring at 55 is at least 5 million plus a fully paid off mortgage. (That isn't going to happen for me.... but I dare to dream.)

Are you married?

I'm just wondering if that $5 million is household assets of two people or just for you? And you either don't have a spouse or they have their own pot of $.

I'm 55 with $4 million of my own, but then my spouse also has their own pot of money ($4 million), so I'm thinking it is doable.

It better be! I've already annouced my retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would not be comfortable in your situation. I am on the low end of DCUM wealth/income scale, and I don't have plans for a lavish retirement.... but my number for retiring at 55 is at least 5 million plus a fully paid off mortgage. (That isn't going to happen for me.... but I dare to dream.)

Are you married?

I'm just wondering if that $5 million is household assets of two people or just for you? And you either don't have a spouse or they have their own pot of $.

I'm 55 with $4 million of my own, but then my spouse also has their own pot of money ($4 million), so I'm thinking it is doable.

It better be! I've already annouced my retirement.

Obviously with $8M it's "doable", but it does depend upon your yearly expenses. We need to know your mortgage/insurance/proptax/maintenance, car expenses, food, travel, HEALTHCARE, and everything else to say with 100% certainty. Because if you want to spend $500K/year, it's probably not as doable

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would not be comfortable in your situation. I am on the low end of DCUM wealth/income scale, and I don't have plans for a lavish retirement.... but my number for retiring at 55 is at least 5 million plus a fully paid off mortgage. (That isn't going to happen for me.... but I dare to dream.)

Are you married?

I'm just wondering if that $5 million is household assets of two people or just for you? And you either don't have a spouse or they have their own pot of $.

I'm 55 with $4 million of my own, but then my spouse also has their own pot of money ($4 million), so I'm thinking it is doable.

It better be! I've already annouced my retirement.

Obviously with $8M it's "doable", but it does depend upon your yearly expenses. We need to know your mortgage/insurance/proptax/maintenance, car expenses, food, travel, HEALTHCARE, and everything else to say with 100% certainty. Because if you want to spend $500K/year, it's probably not as doable

I guess at this point I just want clarification that when people say that they have a particular number that they are shooting for for retirement, is that a household wealth number (both spouses) or just you as an individual, not including the assets and debts of your spouse?

But yes, lots of details beyond that-- for example we are still paying a mortgage but it's only $2k per month, and I'll carry federal employee health insurance into retirement, which is still an expense, but less than what it costs through ACA.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would not be comfortable in your situation. I am on the low end of DCUM wealth/income scale, and I don't have plans for a lavish retirement.... but my number for retiring at 55 is at least 5 million plus a fully paid off mortgage. (That isn't going to happen for me.... but I dare to dream.)

Are you married?

I'm just wondering if that $5 million is household assets of two people or just for you? And you either don't have a spouse or they have their own pot of $.

I'm 55 with $4 million of my own, but then my spouse also has their own pot of money ($4 million), so I'm thinking it is doable.

It better be! I've already annouced my retirement.

Obviously with $8M it's "doable", but it does depend upon your yearly expenses. We need to know your mortgage/insurance/proptax/maintenance, car expenses, food, travel, HEALTHCARE, and everything else to say with 100% certainty. Because if you want to spend $500K/year, it's probably not as doable

I guess at this point I just want clarification that when people say that they have a particular number that they are shooting for for retirement, is that a household wealth number (both spouses) or just you as an individual, not including the assets and debts of your spouse?

But yes, lots of details beyond that-- for example we are still paying a mortgage but it's only $2k per month, and I'll carry federal employee health insurance into retirement, which is still an expense, but less than what it costs through ACA.

yes, if you have access to federal (or any company health insurance) thru retirement or age 65, even if retired, your medical costs will be much lower. We will pay $3-3.5K more per month than our current health insurance when we have to use the ACA (and then the deductible will be $7/14K rather than $1.5/$3K) , even on cobra it will still be $1.5K/month cheaper (and the similarly lower deductible) than the ACA. We can afford it, but I suspect many do not realize they might be spending $40K+ on healthcare until they turn 65 (we spend about $5-7K per year now including copays/everytihgn until we max out) So if you are spending an extra $35K+ for 10+ years that's something to consider.

[Anonymous]

Anonymous wrote:No. You have $4m in investible assets, which means you could draw down $160k per year, and you'd have to pay taxes, tuition, and your mortgage out of the $160k annual spend. If I were you, I'd work for at least two more years to cover the $90k per year in private school expenses and see where they land for college, and then reassess.

+1 We will have about $3.8 mil when we retire next year (I'm 56; spouse is 62), two kids in college by then with 529 funded to what they need.

ACA insurance is ridiculously expensive, even with the subsidies but even more so without, and who knows what the Rs will do about the subsidies.

PITI is $2300. Monthly expenses all in without having to budget is about $10K, with travel about $12K.

No way would I retire at 50 with only $3mil and two kids, and paying for private school at $90K/yr. Insane.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No. You have $4m in investible assets, which means you could draw down $160k per year, and you'd have to pay taxes, tuition, and your mortgage out of the $160k annual spend. If I were you, I'd work for at least two more years to cover the $90k per year in private school expenses and see where they land for college, and then reassess.

+1 We will have about $3.8 mil when we retire next year (I'm 56; spouse is 62), two kids in college by then with 529 funded to what they need.

ACA insurance is ridiculously expensive, even with the subsidies but even more so without, and who knows what the Rs will do about the subsidies.

PITI is $2300. Monthly expenses all in without having to budget is about $10K, with travel about $12K.

No way would I retire at 50 with only $3mil and two kids, and paying for private school at $90K/yr. Insane.

OP has 4 million, not 3.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How much is your mortgage?

We are aiming for $250k/year after paying off mortgage and kids’ college costs.

Mortgage and property tax is $4000 a month


Our HHI is $650 k. I forgot to mention that too.

Looks like we need to keep working! Ugh

Who is the highest earner?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would not be comfortable in your situation. I am on the low end of DCUM wealth/income scale, and I don't have plans for a lavish retirement.... but my number for retiring at 55 is at least 5 million plus a fully paid off mortgage. (That isn't going to happen for me.... but I dare to dream.)

Are you married?

I'm just wondering if that $5 million is household assets of two people or just for you? And you either don't have a spouse or they have their own pot of $.

I'm 55 with $4 million of my own, but then my spouse also has their own pot of money ($4 million), so I'm thinking it is doable.

It better be! I've already annouced my retirement.

Obviously with $8M it's "doable", but it does depend upon your yearly expenses. We need to know your mortgage/insurance/proptax/maintenance, car expenses, food, travel, HEALTHCARE, and everything else to say with 100% certainty. Because if you want to spend $500K/year, it's probably not as doable

I guess at this point I just want clarification that when people say that they have a particular number that they are shooting for for retirement, is that a household wealth number (both spouses) or just you as an individual, not including the assets and debts of your spouse?

But yes, lots of details beyond that-- for example we are still paying a mortgage but it's only $2k per month, and I'll carry federal employee health insurance into retirement, which is still an expense, but less than what it costs through ACA.

yes, if you have access to federal (or any company health insurance) thru retirement or age 65, even if retired, your medical costs will be much lower. We will pay $3-3.5K more per month than our current health insurance when we have to use the ACA (and then the deductible will be $7/14K rather than $1.5/$3K) , even on cobra it will still be $1.5K/month cheaper (and the similarly lower deductible) than the ACA. We can afford it, but I suspect many do not realize they might be spending $40K+ on healthcare until they turn 65 (we spend about $5-7K per year now including copays/everytihgn until we max out) So if you are spending an extra $35K+ for 10+ years that's something to consider.

Isn't it nice how healthcare indentures people to work full time? Even if they can make do with part time jobs or even retire if they don't mind living modestly. It's especially designed to f people 50+.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much is your mortgage?

We are aiming for $250k/year after paying off mortgage and kids’ college costs.

Mortgage and property tax is $4000 a month


Our HHI is $650 k. I forgot to mention that too.

Looks like we need to keep working! Ugh

Yes, because for a couple with a HHI of $650K, you don't have "much saved". A lot has likely been going to private schools. That was a choice, so now you need to finish that and spend 3-5 years saving aggressively.

You need to plan for healthcare for until age 65---that could be $40K+ easily for just 2 of you (when you include the premiums and actually what your copays/deducibles are---even if you don't see a doctor much now, once you hit 50 even if very healthy that starts to change)

Well, we didn’t have such a high income until fairly recently so that’s why we don’t have ‘much saved.’

How many times will you post the same story? I’ve read this at least three times on this board…

[Anonymous]

Anonymous wrote:I think you need to wait until after college. Hopefully your kids will launch well, get off your health plan. Then the cost would be more manageable. I don’t think you need to keep saving, so if you’re still earmarking a ton to retirement accounts I think you can start enjoying your money now, just let your assets grow. But yeah, personally I would wait until college is paid and done.

You can't really "enjoy" anything if you hate your jobs and have to work full time. Full time job doesn't give people a lot of time off for travel unless you fancy flying international to hop from town to town during the max 10 business day your employer would allow you to take (before raising hell) and then coming to work exhausted. And living for that Friday every week when you get to enjoy your 2 days off and hope there aren't many domestic chores or kids weekend activities sucking you dry until Monday when you rinse and repeat.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much is your mortgage?

We are aiming for $250k/year after paying off mortgage and kids’ college costs.

Mortgage and property tax is $4000 a month


Our HHI is $650 k. I forgot to mention that too.

Looks like we need to keep working! Ugh

Yes, because for a couple with a HHI of $650K, you don't have "much saved". A lot has likely been going to private schools. That was a choice, so now you need to finish that and spend 3-5 years saving aggressively.

You need to plan for healthcare for until age 65---that could be $40K+ easily for just 2 of you (when you include the premiums and actually what your copays/deducibles are---even if you don't see a doctor much now, once you hit 50 even if very healthy that starts to change)

Well, we didn’t have such a high income until fairly recently so that’s why we don’t have ‘much saved.’

How many times will you post the same story? I’ve read this at least three times on this board…

I’ve never posted about my finances before. However, I’m sure a lot of people on dcum are in a similar situation as me!

[Anonymous]

Do you want to retire? You have a good household income and personally I’d keep working for 5 more years. If you get laid off, you’re okay, might as well save more or hold off on withdrawing.

[Anonymous]

If you only recently started making $650k then live like you earn 300k and aggressively pay off your house. Your current retirement savings are enough to provide 160k-180k/yr. I’d consider your $1M to be your college fund. In 5 yrs you’ll be in much better shape for retirement.

[Anonymous]

Yes, you can retire. The question is, can you enjoy living at the level your current amount of savings will allow?

We retired at 61/65 with a paid off 1.2m home, 3 kids through college, 3m in the bank, and a small pension. We are fine. We visit the kids a couple times per year, and take several shorter trips together, one long trip just the 2 of us, and at least one family trip with all of us. We have yet to touch the principal of the 3m, which has grown since retirement.