[USER]

Please critique my current plan……..My wife and I are both 45. Paid off home in a somewhat HCOL area.

We carry no debt on anything so we just have regular unavoidable expenses.

The house equity is currently irrelevant because I don’t know if we’ll stay here or move to a lower cost of living area.

Between our 401k’s, IRA’s, and brokerage fund we have roughly 1mil total. We max both 401k’s, and both IRA’s for a total of 5k/mo on average.

The majority of all our investments are in our 401k accounts in S&P 500 funds. I’d like to retire at 55 using the rule of 55.

We shouldn’t have high expenses in retirement as long as our health stays good, and all kids will be moved out at that time.

Does it seem like we would be on track to pull the trigger at 55?

My wife carries our Healthcare insurance and could keep working part time to keep it but I’d like us both to be able to retire at the same time.

My biggest worry is Healthcare when we aren’t working.

Are we on track most likely or does it seem like wishful thinking we could retire in 10yrs on our current path?

I’m estimating we’d be just fine with 60-70k per year income. Maybe less.

But I don’t know what Healthcare costs will be at that point with or without my wife being able to provide that through her employers plan.

[Matthew]

If you do 4% then you would need 1.5 mil for 60k a year so you would need to grow it by 50%. For 70k a year, it would need to go up to 1.75 mil so 75%.

That is certainly doable in 10 years even if it just coasted with no further contributions.

You can just get health insurance for a few years outside of work.

If you move to a lower cost of living area, 60-70k a year should be enough to live modestly.

That’s before adding in government benefits like Social Security and Medicare when you qualify for them.

Overall, more money would help but you’re in a good spot.

[Tweetie]

Have you attempted to write the numbers out on paper?
Inflate your current expenses by like 4% annually to see what amount they might be in 10 years.

Go onto marketplace dot gov website and input some different incomes in it to see what health insurance would cost if you got it from there.

Here’s an example I used: if my income was 50k (this would cover my expenses and health insurance from marketplace)

then the insurance amount I would pay would be like $300/month (using 2024 figures from the website), then I inflated the $300 by 4% for ‘whatever timeframe’ and got an estimate for like $500 for insurance premium.

I know that things change and there may not even be marketplace insurance, but got to use what u have.

I was able to keep using the income of 50k/year, because my current actual expenses are lower.

Hopefully I didn’t confuse you

[Debbi]

The 4% rule would give you 40k/mil per year for 30 years of retirement.

I would keep working until your nest egg is big enough to sustain itself with a conservative withdrawal rate so you can have a long retirement and some money to help with end of life care expenses.

So, it depends on how much your portfolio grows in 10 years and what your retirement expenses will be.

I would consider looking at places with a lower cost of living so your money will go further.

At 55, I would hire a fiduciary to do a plan and calculate how long your retirement funds should last given your assets and expenses before officially retiring.

[Christopher]

Your scenario sounds just like mine. 46, dual income and a couple years away from empty nesting), debt free, working towards 55 retirement.

You’re on track for 70k spendings from 55 other than your logical healthcare question.

I also am trying to study healthcare options.

Probably in 10 years our options will change… for better or worse I don’t know.

[Terri]

I would consider cost of living expenses and inflation. As a cancer survivor, healthcare costs will be detrimental to making your retirement funds last.

Healthcare expenses result of outliving money at retirement.

I would definitely include healthcare in your planning.

Congratulations on the nest egg you’ve built so far!

[Author]

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