re: Retirement goal and how to get there: looking for advice / opinions

for those that have retired, did you go ahead and get some of the major home expenses out of the way beforehand (new roof comes to mind) ?
I can see needing a new one in a few years and I'd hate to shell out 30-40k and not have an income to replenish that.

We are both at about the same timeline. I am couple of years older but plan to keep working until I am 65.

Let's say you need 7K a month to be comfortable as you retire. 84K a year is likely to be pulling closer to 100K plus or more to account for taxes. Subtract out SS or pension money if you can get to your number with help from these options at the time you retire.

I like the general concept of the bucket system and have been sorting out strategies about creating the bucket that keeps me from needing to sell stocks in a down market. Not sure if I care to have an Intermediate bucket or not. - 3-6 year money not exposed to as high of market risk.

As for cash flow needs the simpiliest way for me to visualize it is approximate the dollars needed to replace our takehome pay as it currently stands.

For myself and my wife the initial years of her retirement while I will still work we need about 150 K to keep her cash flow secured for three year until she draws SS at 67 and that will reduce the bucket size about 75 K

I probably will wait until 70 for Social Security. I think my bucket to insulate for serious downturns will be close to 300 K to replace my take home pay and account for taxes.

One of my main ways to fund this will probably be to direct dividends from investments into secure investments (still working out what I would invest in)

So I will have in the neighboorhood of 400K that I will not have in my typical S&P investments and directing it to lower return but more secure investments like treauries, CD's, HYS etc. when we are both retired.

Whatever numbers work for your situation, the short version is you probably will need to build up some lower return but more certain investments to secure your retirement cashflow and this will likely lower your overall return on investments as you build these funds. I doubt you would want to do that all right before retirement considering that could coincide with a market downturn.

In addition to all that we keep a decent emergency fund to cover expenses like a new roof, HVAC or decent used car if needed.

You might want to consider this as you project your possible returns in the next 6 or so years.

On another note Georgia does treat 62 yo seniors pretty well with property tax exemptions from school taxes which is about 55 percent of my property tax bill. (Some counties maybe not all)

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84K a year is likely to be pulling closer to 100K plus or more to account for taxes.

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You have taxes very high. For example, SS probably won't be taxed at all (this applies to many states). If SS is half of the $100k a year then the tax burden is $50k minus deductions. That all comes out to much less than $16k a year in taxes.

There is medical coverage which when added to the actual tax burden makes your $84k to live on number more realistic in that situation.

It's even better than that in Georgia. SS is not taxed at all and investment income is not taxed unless it exceeds $65k a year (at and after age 65). The only tax burden then becomes federal income taxes,

The standard deductions are also higher than you stated past age 65.

Yes, meaning medicare at 65.

I'm not far from retirement and have done a ton of research on tax implications and where to live to minimize my tax burden.

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It's very conservative. Show your math. The historical return of VOO, for example, is 13.4%. Given that average one could still easily take out 6% and still be growing their money.

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How many retirees are 100% in equities though? 4% bonds are out there for 4,5,10, and 20 years. I’m no where close to retirement but I’d think you’d be nuts to not be closer to 60/40 or less equities/ bonds right now in retirement.

So take your 13% at 40% and bonds at 4% and sure you have a little money to play with but I’d think you are better off assuming that’s a bonus than the norm.

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Medical expenses
Health insurance
Property insurance
Property taxes
Auto maintenance
Toys, like boats
Vacations
Kids,grandkids
Social activity, eating/drinking/concerts

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1. Only for two years Medicaid kicks in
2 . Will be around 144$ in two years when Medicaid
3. Will always increase seems like so prepare
4. Price locks in for senior citizens
5. With no car note should be minimal maintenance
6. Not needed and if so should have prepared much better
7. Should not be a problem to take three vacation a year and not break the bank
8. Kids should handle that
9. This of course will vary

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country club

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Have you told the boys at the country club that you don’t have enough to retire? Time to figure out how to manage your money and reset your expectations baw

You bing up a good point.

The term retirement can be different for people depending on their needs.