If you've been reading here for awhile you may remember the post I did back in September 20115 about our big Retirement Meeting.
Since Hubs is leaving work on June 30th(7.5 weeks and counting!)I wanted to see/update what funds we will have to support us at that date into our "Golden Years".
Let me also preface this accounting by saying we have a paid for house and two paid for cars so none of this money needs to be spent on either in retirement(at least not for cars for awhile).
* Pension account--Approx. $443,240 will be in that account on June 30th. We ares buying an annuity with this money which will give us an income of $41,004 per year. If Hubs dies I get 75% of that amount, or $30,756 per year. Once we've passed the 10.8 year mark we'll be paid on the company's dime as that is how long that pile of money would have lasted if we had just drawn down on it at a rate of $41,004 per year(ok, maybe a little longer due to interest accumulating).
* Retirement Savings--$500,000. We will drawn down monthly on this until we hit full Social Security. At that point we will stop and still have $385,000 in this account. Due to it still growing while drawing out of the account we'll still have 77% of what we started with in there at the retirement date when we stop drawing from that fund in 2024.
* Cash & Regular Savings--All together this comes to $368,000 now so will be a tad more by June 30th but a chunk will be used to pay College Boy's tuition next semester so we'll have about $360K.
* HSA account--When Hubs leaves June 30th there will be $12,923.83 in that account.
* RMSA account--This is the retiree medical savings account with which we can pay for retiree health insurance until we hit Medicare age. It will have approx. $99,000 in it.
* Personal Day Payout-Hubs will have personal days he can cash out when he leaves. At his pay rate that means another $4,500 in cash.
* Stock-Hubs has a moderate amount of company stock he earned when his firm went public in 2001. He will cash it out which means about $9,000 more in our accounts.
* Add in to this mix that we still have a home and property in Louisiana we will be selling sometime this year(I hope). We hope to clear a few dollars after that sale but at this point we don't know how much this sale will add to our coffers.
So the plan is that we'll have annuity income starting in July of $41K yr. and will tap some of our 401K$ until Hubs hits full SS age.
Between the annuity and 401K withdrawals or SS we'll have $70K yr. to live on pre-tax.
In addition to those income streams we will still have over $350K of regular savings + $385K left in retirement savings).
Once I hit full SS age the annuity/SS mix increases to $82,836 yr.(+ what's still in the nest egg accounts).
Last year we spent just under $46K total of our take-home income to "live". That's paying for everything except-term life insurance payments, healthcare insurance payments and long term care insurance payments which all came out of the paycheck before we got it.
After figuring that last year we paid $8K OOP for healthcare co-pays + a $3K high deductible OOP before benefits kicked in, $11K of that $46K was medical spending. 8-( We actually spent $35K for living expenses in 2016(outside of medical things).
Once retired the life insurance payments go away(unless we elect to keep life insurance on Hubs....doesn't make much sense though as it was kept on him as he was the breadwinner, but once he retires we aren't "protecting" potential income).
The health insurance payments/premiums once retired will come out of the RMSA account and it should just about cover that expense until we hit 65.(If it doesn't, and who can know right now with the ACA upheaval, we can always take some of our non-retirement account funds or some retirement account funds to cover the extra...plus we have the HSA with almost $13K in it as of June 30th.)
The only one of these three medical expenses we need to cover in retirement out of our two income streams is the long term care premiums. Currently long term care premiums come to just under $1800 a year so this expense can be absorbed into our $70K year annuity/retirement account draw down income easily. We know full well that long term care premiums will rise as we age though so we'll be sure to be cognizant of that expense rising over the years and make adjustments in how our financial resources are divided up so we can still cover this expense.
So add $1800 to the $46K we spent to live in 2016 and we are around $48K in yearly expenses that need to come out of our potential $70K retirement income starting July 1st.
Once we take out withholding/taxes on that $70K yearly income we will actually have $60K+/- a year net income to live off of. Of course for 2017 this won't apply as we will have Hubs working income for half the year and living off of asset income the other half so our "income" and tax bracket will be much higher. The first 6 months of retirement will be different financially from the rest of the years ahead when we are retired.
Once we get into 2018, if we keep our spending at where it is now, pre-retirement, we will have a nice cushion each year for any unforeseen expenses leftover from our income stream. This doesn't count the Personal and Non-retirement Savings/Cash pot, the potential Stock Sale revenue, the cash out of Personal Days when Hubs leaves and the proceeds from the sale of the house in Louisiana which will mean additional infusions of cash into the non-retirement kitty.
I really don't see us reducing our living expenses short term due to College Boy still being on the "family payroll" for another year and Daughter living at home until she finishes her degree. While Daughter's expense on us is not large(we feed her and she doesn't kick in for rent or utilities while in school)her being here still costs us a bit in higher electric and food bills. She pays her own car insurance, car gas and maintenance, cell phone bill, dog expenses, clothing expenses, etc. and any extras she wants, she pays for(liquor, vape, nights out).
Come to think of it, outside of college expenses we really don't spend money on College Boy either.....maybe some clothes now and then but that's it.
Ok, this has become very long and tedious and I'll bring it to an end.
If you see anything I have missed do let me know but overall, I think we are going into retirement in a strong financial shape. 8-)
*Sluggy pats herself on the back.....