[USER]

I’d love the thoughts of the wise minds here. Me 55, spouse 51. Kids grown and financially independent.

Deferred/401k/rollovers are $660k for me $815k for spouse. Roth $13k. HSAs total $42k. HYSA $200k.

Total investments and cash = $1.75m
No mortgage. Two homes valued at probably $850k combined.

Budget (after tax) = $96k/yr of which $24k is discretionary (travel, dining, etc). That drops to $86k/yr budget next year when car payment of $700 is gone (3.4% rate).

We want to be done with very stressful jobs and enjoy life. We would pick up some occasional income through consulting or similar work – conservatively estimating average $1000/month income.

My questions:
– I think we can be done. Every scenario I run says yes. Am I crazy?

I do factor SS income at age 62 for each of us accounting for $0 income going forward – but I do have 40 earning years so mine is fine at $29k. Spouse’s would be reduced a bit but still $26k.

– Best way to drawdown? I’m currently thinking HYSA first and younger spouse does SEPP until 59 1/2 to give us $40-45k a year.

Then we add in periodic early withdrawals from my deferred plan to make up difference. I’d eat the 10% penalty because we’d stay in lowest tax bracket anyway.

This is factored into scenarios. Is there a better way to do this?

– I HATE the idea of paying someone (CFP or advisor) to validate my numbers but should I?

Finally, for those starting your journey, I went back and looked – 10 years ago we only had $200k invested and a pile of debt.

[Christine]

I understand not wanting to pay to validate strong numbers. However, I would recommend a “gut check”. I used Nectarine this year to help sort out my solo 401k and my portfolio mix.

It was 150 for an hour and I then received a very detailed follow up list.

I will be using the service again and now have my sister using it as well to help direct things that I should not be helping with!

Spend the 150, it could save you thousands!

[Lynette]

Good job. That all sounds great. You have done a great job. Your plan looks good. #1 Pay off your car with part of your HYSA.

Then build it back up. Good luck and have fun!

[Jule]

I am curious, how are you getting to $96k from $1,750,000? The interest at 3.5% (due to younger age) is only around $61k.

If you eat into the principal it won’t last. And this is not even factoring taxes and the 10% penalty.

[Robert]

I don’t care if you hate the fact of paying someone to validate your numbers; it might be very good investment. As far as the rest of your inquiry; even though the two of you have crushed it to have a 1.75 million net worth at your ages; I’m not a fan of either one of you returning before the age of 60; and I will explain why.

if you are a Dude, your life expectancy is 79 years of age with a good chance you will live into your 80s.

If you are a Dudette, your life expectancy is 88 years of age with a very good chance you live into your 90s. And the cost of medical care is only going to go up, and up, and up.

And life expectancy in the United States ever since the 1950s has only gone in One Direction; and that is up as well.

Additionally; taking Social Security age 62…… Given your projected lifespan; is not a good idea at all, unless one of you becomes ill or disabled.

My short answer is that even though your jobs are stressful; I would keep going at least until your early to mid 60s.

The longer you could can put off retirement; that gives your nest eggs, much more time to grow; and simultaneously decreases the number of years you’ll need to draw from them.

And taking Social Security before the age of 70 – unless someone desperately needs to – lowers their ultimate payout; assuming they do not die prematurely.

[Ann]

Check out Boldin. You can use it as a cheaper step before paying for a professional.

I really do recommend easing your work stress.

I didn’t realize how stressed I really was until I was out for over a year.

[Brenda]

If it were me, I would pay off the car first. Next, make sure you are accounting for Medicare costs which take a chunk out of SS.

I think it’s worth taking the risk if you’re that unhappy. I’m there, too, and I’ve decided to give it one more year just to see what happens with this new administration.

There have been a lot of things mentioned that could impact us like changes to SS, Medicare and tax rates.

I’m betting most won’t happen but I feel like I want to at least see where we head before taking the plunge because it would be tough for me to go back to working without a significant drop in pay.

[Author]

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