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[quote=Anonymous][quote=Anonymous][quote=Anonymous]We’re in our early sixties and have been retired for nearly a decade.  When we retired our net worth was about 4.0 million.  Now it’s $7.5 million thanks to the market, real estate appreciation and our spending habits.

After all this time we finally sat down with a financial advisor.  She ran the numbers and told us we have a 99+ chance of a successful retirement into our 90s with a shit ton of money left over.  Also advised that we take social now rather than wait and that we don’t look into long term care insurance because we don’t need it.

It was a very reassuring meeting even if it did confirm everything that I already knew/thought.  [/quote]

Thanks for sharing. Reassuring indeed. We have about the same, one retired (59) and the other will work for a few more years. We still have two kids in college so want to make sure that's completed.

Do you mind sharing your expenditure profile? How much do you spend every year? travel? Number of homes? Mortgage? etc. Thanks![/quote]

Sure (with minor name changes to protect the innocent ha ha).

We spend about $250 to $280 k a year, but it’s a little complicated because it includes  about $50k of expenses relating to two rental properties that we own.  We bring in about $70k a year on the properties.  We track our expenses pretty closely with an app; last year our negative cash flow was $180k and the year before it was $220k (thanks to a one time tax hit on something I’m not gonna get into).  The bottom line is that those are the amounts that we actually ended up taking out of our accounts.

We own three homes - our primary residence where we have about 60 to 70 percent equity and a very low interest rate mortgage that we’re not paying off, a second home with no mortgage, and a third that’s a rental property with another very low interest loan and about 50 percent equity.  Combined our mortgage payments are $4200 for principal and interest, the majority being principal so we don’t really consider all of this money to be an “expense” - yes it’s a cash flow issue but we’re mostly paying ourselves.

We plan on selling the rental property within the next year or so and investing the proceeds (probably around $400k) in our brokerage account.  We don’t like being landlords and are only doing it to help a close relative temporarily.

We spend about $40k a year on travel, and this is the amount (adjusted upwards for inflation each year) that we told the advisor we wanted to continue spending well into our 70s.

We have about $25k a year in medical expenses including premiums.  Premiums will drop
considerably once Medicare kicks in.

Our kids are long out of college and all of that was paid for long ago.

Basically the advisor calculated that, based on our current spending, we need about $220k a year.  With the rental property sold and the money added to our brokerage account, we’ll have somewhere in the neighborhood of $5.5 to $5.7 million in accounts to draw down from.  (Our remaining net worth is in the primary residence and second home, which we won’t be selling so we won’t be drawing down from either of them).

Taking social security early would bring us in about $47k a year combined.  We’ll still be collecting about $30k a year in rents on the rental property we won’t be selling (our English basement).   Taking $77k from $220 leaves us with a shortfall of $143k a year, which we’d have to make up for by drawing on our accounts.  That’s about 2.5 percent of their current value, well below the so called 4 percent rule.  That’s how she came up with 99 percent plus, and in fact she advises that we can actually spend considerably more than we do if we want to.  She is comfortable with a probability of success of 85 to 90 percent, and so are we.

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