What is your financial retirement plan

The Coffee Shop
1

The post this week about withdrawing social security had me thinking a bit. My wife and I are entering our 40’s and still in the accumulation phase, but also starting to look and ask questions about our retirement so that we are set up well when we do.

There is a lot of discussion of social security will be around, how much, etc. The point of this post is not about what, but what your retirement financial plan is in addition or outside of social security.

I do not have a FA right now, but am learning later in life as I near retirement it could be more beneficial, to help navigate withdrawals, tax efficiency, as well as leave me estate in good standing for my wife and son to inherit while leaving some money into the community as well.

My plan right now is to “retire” near 60 with the goal to work a “fun” job on my terms. It could be part-time, it could be low wage, ideally it’s a hobby or something I love so much I am basically being paid while living “retired” That said

I have 3 financial accounts
Brokerage
Simple IRA
Roth (Moving to backdoor this year)

Goal for me is to use my brokerage as I “soft” retire, then pull our of my Simple IRA then Roth after they continue to accumulate and grow at the high end years of earnings. Not sure how social security fits into this or when, but currently we are not using it as a source of income during retirement in our calculations.

We also have a house with 10 years left on our mortgage at 2.1%. Either we will move in the next 3-5 years or build a new house. We do not plan to sell our current house, but rather turn it into a rental. So come near our retirement we will have that house still or when we do sell aim to pay off the mortgage on our second house with the income in the sale.

Our retirement we would love to travel the country for 1-2 years in an RV and do lots of camping. Other than that, travel with our son and do 1-2 big vacations/year, maybe 1 international every couple of years. We plan to be very physically active and just enjoy the fruits of our labor.

Would be curious to what everyone else’s plans are and/or how you are building to it.

2

I have a house currently worth just under 7 digits and owe less that 15% of that on it.
I have my Navy retirement.
I have a slew of investments that are doing OK.
I have my SS if that doesn’t collapse in the next 10 year. I have maxed my SS tax every year for the last 20 years.
I have a vested retirement from my current employer.
I’m now by myself. I’m not worried. I will most likely die before I get close to exhausting the funds

3

Plan is to retire at 62 and live off my pension. Primary house will be paid off, vacation home already is, vehicles are (but will be replaced every-so often), kids should be off the payroll (very close now), and then use the 401k I’ve will have been maximizing contributions into for 40 years for - I have no idea.

4

I just retired from my career at 54. I have a lifetime pension that currently sits at like $57K per year. Even though I’m only 54 I will get about 56% of my SS estimate at 62. I think that equates to $1,300/month or so. At 62 that supplement stops because I’d be eligible for actual SS. I don’t plan on taking SS until 67 when it reaches 100% benefit.

I have my TSP (the federal government’s version of a 401K) and my wife has her 401K. Combined they’re worth ~$2.5M. We have ~$800K equity in our house and we have a few other investments worth <$200K.

My plan is to start converting TSP/401K money to Roth once we are both retired as our tax bracket will be lower.

I plan to get some sort of part time, remote contracting gig to waste some time and make a couple of bucks. Will probably do that until my wife retires. My guess is she calls it a day at the end of 2028. When she coincidentally turns 59.5.

5

65.5 and still working (at least for another year probably). Only bought my house in 2013, but it’s tripled in value, though I don’t know where I want to live when I retire. In the meantime, I like my house and will stay, so house payments continue.

SS + 401(k) + Roth IRA + small brokerage account my dad left me

The FA, the Fidelity guy and FireCalc all say I could retire now.

6

Unlike GMAN, I am still an employed Fed. Despite only being 55 I have 35 years of service and plan to retire in late 2026/early 2027 when I am 57. Unlike GMAN I am not in law enforcement or other jobs that allows for unreduced retirement prior to my minimum retirement age (for me that it 56 years and 10 months). By that time I will have a pension that will bring in around 35% of my salary (rather, average of the 3 highest years), and should I pass before my wife she will get almost 20% of my salary. I will also get the supplement GMAN gets until age 62, which given how many years I have been a fed will amount to 95% of my expected age 62 SS benefit.

We are single income and debt free. Was able to amass over $2M in TSP, Roth, HSA, and taxable with 2 years of contributions remaining. Last month I moved investments around in my TSP so that I have enough $ to go from age 57 to 70 using just stable G Fund (US treasuries) money. Have about 10% of our portfolio in money markets, and the rest in equities just riding things out. Would say total equity exposure is ~65%, which would traditionally be very conservative for me (did 100% for most of my career).

Because our pre-tax TSP is rather high, I will be converting to Roth aggressively, especially since the Trump-era tax cuts will likely be extended. No financial need to take SS until 70, and taking early would affect my ability to convert to Roth in the desired bracket and also increase IRMAA risk. Pension and SS at 70 more than covers our typical annual spend rate, even accounting for likely 20-25% drop in future SS. As of today we have at least 4 times more than needed for the bridge years from age 57 to 70.

My “take home” pay in retirement will be quite higher than my working years due to our high savings rate. Even if SS went “poof” we’d be fine. We have several cats, but they are the only ones who will be eating cat food.

Will likely stay in Houston for retirement as we really enjoy the arts and food scene as well as convenient access to flights around the world. Family is in DFW area, so we can always drive to see them.

Financially I could retire now, but don’t want the 5% reduction per year in pension before my MRA and also want to maintain those federal employee health benefits. At this point, with a minimum of 14.5 months to go and a job where I do some incredibly interesting stuff, I can hang in there.

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7

I’m 40. If things go as planned I should have a few million in real estate, but no pension aside from CPP (Canada’s meager cousin to social security), and a modest investment portfolio. Wife will have a very healthy pension. I may unload the real estate at some point before retirement as regulations are really changing here and not in favour of property owners.

8

If I were you I would NOT pay down that mortgage even if you have the cash. You can buy AA muni bonds (so tax free) at almost 5% now for 10 years, that’s printing money.

One of my big financial regrets was closing a 900k mortgage I had at 3% when I had the cash. 2% spread is almost 20k per year, tax free. I’m a dumbass.

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9

You should move to the US.

10

plan was always to live hard die young
and have a good lookin corpse every time

but I didn’t get that done

House is paid off, two new hybrid cars we paid cash for so no debts.
Hope is to be done with IT work the end of this year, will delay SS payments until 70 in order to maximise payments for my wife. The women in her family tend to live to be old, I don’t expect to get a lot older myself. 70 is the goal :wink:

My wife will keep working for a few years. I’ll take over trip planning and we’ll try for a couple trips in that time, S. Africa next year, Chile 2027.
2026 summer I have a solo canoeing/fishing/backpacking loop planned through WY, ID, MT and OR.

We do have a financial advisor on the advice of my wife, who has had several family experiences with the money manager in the family getting old and incompetent. Our FA has just hired a nice smart young woman with several business degrees from good schools, so that is good for continuity. They do pretty much what I would do anyway in investment terms, but now there’s a third party young and clever watching over things.

No pensions, immigrated here age 30 with exchange controls in the old country, so started with $1500 and a suitcase. Between us we have a fair 401k, another lump in annuities for guaranteed income. Hopefully that will get us there.
Our FA is keen to convert a lot of the 401k into Roth, which I do regret not doing earlier.

I also regret not taking a government job with a pension… everyone I know who was able to retire at a reasonable age, was either military or government, with a pension. No-one except a few finance or IT guys manages ordinary retirement on a 401k…

wrinkle is, younger son has health issues and may not be able to work. Planning for that is taking a deal of effort thought and worry.

11

Yeah, we just pay what we owe monthly, no way in hell are we paying that down early. If we do move, that is being rented out and paid off.

I hope we hold this long-term, even if we move out of state. Ideally we move out in the next few years and have our renters pay down the mortgage.

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12

The benefits of living in Canada are certainly slipping away.

13

Yes, but have you looked what’s going on here?!

14

After Covid I started to look at things from the bottom up, IE what is the minimum I need to have shelter, food, 2 cel phones and one car?

-property taxes 3800$
-insurance 4000$ (about)
-city utilities bills (water sewer garbage) 1200$
-car insurance 1000$
-gas/maintenance 2400$
-electricity/gas 3600$
-two cell phones 2400$
-food (grocery only) 5200$

22600$ cad…of course this is very basic, and some numbers are off, but we could pay everything on 30k$ per year.

From there we are looking at “wants”

Well we plan on a vacation/travel budget of at least 30k$

Sports equipment of around 5k$ (shoes, occasional new bike etc)

Sports memberships of 3k$ (gym, possible ski pass, pool etc)

Eating out 2600$

Christmas 2k$

Extended health (physio, dentist, meds etc.) 5k$

Clothes? 1k$

So mostly off the top of my head but around 80$k inputs required, but our goal is 100k. (Can$)

We’re 52ish and like BCtri my wife works public sector and will have a great pension, around 2k/month rental, I’ll have at least 2k/month in rrsp (401k) so when she goes at 55 and me maybe 2 years later the we…should be Ok.

I work in passenger rail (electrician) and have the luxury of writing my own hours during the summer months once I end full time employment, it’s a job I still really enjoy so, it might generate 20-50k per year from 57-62ish?

2c
Maurice

15

One million more arms every month.

16

Well, i am retiring fully in 8 months at full retirement age. From now to then, i will be reducing my hours to about 16. I am i healthcare and have been x 42 years.
I am not financially prepared at the level you guys are, by no means. I am the single breadwinner with a disabled husband and i am the only one that had a 401 which was wiped out in 2008. Because of that, i changed the risk level to zero.I will get a very modest pension(it was disabled in 2008) and it will pay for healthcare only.
I could work longer but i have made the decision to be more available to my husband and for myself. He is a double amputee and now on home dialysis. It is time consuming and his appointments are many.

The stress in healthcare is severe and i am so tired of being bitch when i get home with a commute of over 75 minutes.
So not much traveling for us. I hope to find out who the hell i am after healthcare and maybe find another passion. Our house is paid for and our IRAS will disappear in our mid 80’s. We will sell the house and get a senior living apartment. The odds of him making it to his 80’s is not good.

We have no human children. But also no one to help us either. So i have to stay fit and healthy for the road ahead.

We make tough decisions and this has been tough. Healthcare is a young persons game with computer skills and speed needed. I have neither.

Hubby is already on SS but the lowest amount due to a scattered work history but will get a bit of a raise when i go on SS due to spousal benefits.

We will be frugal, but hopefully ok. Not at the Slowtwitch level but at the lower middle class level.
I have been a member here for over 15 years i think. I used to race half and full iron distances. I cant even remember what that was like anymore as the last 10 years (+) has been work and hubbys health issues.

I thought we would be at a different place at this age. I thought we would be MUCH more stable and be able to travel etc. Funny how God laughs when you make plans!

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17

We are in our 70’s. Retired. Our plan is to enjoy spending lots of time with our family, hike, run, boat, fish, travel (Australia this year), volunteer and do what we want without stress.

We have not had debt in 25 years which is key to making life signifcantly less stressful … especially retirement.

We have a large home on a picturesque lake and a wonderful life. 2MM+ equity in our home. 2MM+ in investments. We want for nothing and do what we want. We do not actually spend all of our combined social security each month. I know, that sounds strange but we have very few fixed obligations (insurance, internet, phone service, subscriptions, etc.). We eat out frequently, buy expensive food we wouldn’t have when we were young, travel, etc. Still, it is hard to spend all the money.

We generate significant cash flow (dividends, interest) in our portfolio but we reinvest it. RMDs will start in a couple of years and we will likely just reinvest it into our after tax account.

Those of you still in your accumulating phase, I will share our key components:

  • Set your standard of living below your income (after tax and savings, Roth or 401k).
  • Invest in dividend paying companies you are familiar with and automatically reinvest the dividends back into the same company.
  • Pay cash for your cars, boats, toys, etc.
  • Pay off your mortgage as early as possible. Money tends to stack up when you have no debt.
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18

Related question for folks here…

When you look at your life-in-retirement plans, do you factor in leaving stuff for your kids (for those that have kids)? How so?

On one end, there’s the thought that this is my and my spouse’s time - the kids will figure out theirs on their own. And the other end is we want to leave them with as much as possible, just in case. And then there’s somewhere in between.

Wife and I have thought about retirement years. We differ on the kid considerations.

19

I am hoping to leave stuff.

My parents don’t appear to or have any plans to leave much. Various factors. Which is completely fine, and I do not expect. I prefer them to have all that they need.

I have over the years met and respected people who really wanted to ensure their grandchildren had support. Mostly for education.

I hope to be able to retire the way I envision, and also start and contribute to 529’s as grandkids arrive on the scene. And then maybe someday have a property that is an investment, short term rental that will then get passed along for kids to use/rent/sell how they see fit. I also work part-time as a Federal employee. This is in part retirement planning. Hoping the health insurance coverage and small pension is a supplement to preserve any retirement account to give to them.

20

Yes - the 2 houses (although 1 will be sold and a condo in warmer weather will be purchased), I’m guessing the bulk of my 401k as well as a few life insurance policies.