Calculating X expenses w/3.15M

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Zetorman
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Calculating X expenses w/3.15M

Post by Zetorman »

Ok... We have 3.15M(600k net taxable, 900k Roth, and 1650k Pretax). Our target spend is 120k gross even though we only spend 50k net right now, My SS@70 will be approx 46k/yr and DW will be 15k/yr @62. How do you guys calculate the "X expenses number with the different tax treatment of funds? My age is 54, DW 52 and our planning takes me to 92 and her to 95.
Last edited by Zetorman on Sat Jul 31, 2021 5:06 am, edited 2 times in total.
MattB
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Re: Dumb question x expenses

Post by MattB »

Not a dumb question. I have no idea how this is calculated. I'm looking forward to an answer.
Topic Author
Zetorman
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Re: Dumb question x expenses

Post by Zetorman »

I have been "grossing up" both the taxable and Roth using a 16% effective rate ie 600k+900k=1500k/0.84=1785k and then adding that to the pretax. That number =3435k/120k=28.6x without SS. If I add SS per our plan parameters then I come up with 3435k+1463k=4898k total plan value or 40.8x. Is this a valid way to calculate X expenses?
kd2008
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Re: Calculating X expenses w/3.15M

Post by kd2008 »

Zetorman wrote: Sat Jul 31, 2021 12:10 am Ok... We have 3.15M(600k net taxable, 900k Roth, and 1650k Pretax). Our target spend is 120k gross even though we only spend 50k net right now, My SS@70 will be approx 46k/yr and DW will be 15k/yr @62. How do you guys calculate the "X expenses number with the different tax treatment of funds? My age is 54, DW 52 and our planning takes me to 92 and her to 95.
All calculated with your age
Amount of assets needed
ages 54 thru 64, needed 120kx10 =1200k (no SS)
ages 64 through 70, needed 105kx6 =630k (DW's SS)
beyond age 70, needed 59/0.03 = 1970k (Both on SS & 3% withdrawal rate for expenses not covered by SS)

Assets needed 1200k+630k+1970k = 3800k

Be sure to include taxes and healthcare as expenses in your 120k estimate.

So technically you need 31.67x in assets for expenses of 120k/yr

You are at 26.25x now.

Realistically, going from 50k to 120k in expenses at an older age ... :? no comment
Topic Author
Zetorman
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Re: Calculating X expenses w/3.15M

Post by Zetorman »

Thank you! As stated, we currently spend approx 50k net with very little travel and employer insurance. My true target gross budget is really 105k so the 120k adds a small buffer. Again, thank you!
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Re: Calculating X expenses w/3.15M

Post by RyeBourbon »

One quick way to look at it is (all in 2021 dollars, returns are real, inflation adjusted):

Y years from retirement to DW age 62. If Retirement is "now", that's 10 years. You need 10 x 120k = 1200k
6 years from your age 64 to 70. You need 6 x 105k = 630k

1830k to get you age 70 and you have 1500k in taxable/Roth which with moderate real growth of 2.5% or 3% should cover that.

In 16 years, the 1650k with the same 2.5% real growth becomes $2450k, which is 41X your projected 59K expense after SS.

It's not that hard to set up a spreadsheet with a row for each year's withdrawals that lets you play with the spending levels and return assumptions.

NOTE: Make sure that those SS numbers have early retirement built into them. If you both have 35 years of contributions, the impact of early retirement is somewhat mitigated, but you need to do the due diligence to understand what that impact is and plug the more accurate numbers in.

2ND NOTE: Make sure that your expense budget is accurate. Do you have children? College expenses on the horizon? Healthcare expenses accounted for?
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Re: Calculating X expenses w/3.15M

Post by jebmke »

When I was doing this calc, I used as-reported (pre-tax) portfolio value and expense estimate included my best estimate of income taxes.
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Watty
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Re: Calculating X expenses w/3.15M

Post by Watty »

Zetorman wrote: Sat Jul 31, 2021 12:10 am How do you guys calculate the "X expenses number with the different tax treatment of funds?
I include my expected taxes as an expense. This means that if you plan on spending $120K on things other than taxed you would need to do your retirement planning as if you needed something like $150K(?) in income before taxes.
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Zetorman
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Re: Calculating X expenses w/3.15M

Post by Zetorman »

I've been taking our current expenses (kids college funds are separate is will even cover weddings) of 50k net, adding 20k for health ins and approx 18k for all other items (cars, house repair, etc), then dividing 88k by 0.84 (16% effective) to equal 105k. I guess I was just looking for an easy way to add my accounts together to compare apples to apples from an income tax standpoint. If I could equate the Roth and taxable dollars with pretax dollars it would be easier to calculate X expenses in gross dollars. ie. 900k in Roth is worth more than 900k in pretax. The question is how much more and probably is too complicated to calculate given all of the variables and unknowns.

I am obviously overcomplicating this so back to the drawing board! Again, thank you to all!
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Re: Calculating X expenses w/3.15M

Post by bradpevans »

Zetorman wrote: Sat Jul 31, 2021 9:56 am I've been taking our current expenses (kids college funds are separate is will even cover weddings) of 50k net, adding 20k for health ins and approx 18k for all other items (cars, house repair, etc), then dividing 88k by 0.84 (16% effective) to equal 105k. I guess I was just looking for an easy way to add my accounts together to compare apples to apples from an income tax standpoint. If I could equate the Roth and taxable dollars with pretax dollars it would be easier to calculate X expenses in gross dollars. ie. 900k in Roth is worth more than 900k in pretax. The question is how much more and probably is too complicated to calculate given all of the variables and unknowns.

I am obviously overcomplicating this ....back to the drawing board!
Also consider Your bases in the 600,000 taxable. Your basis is 300,000 then, for instance, you could take out nearly 200,000 in one year and pay very little tax at least at the federal level because you have 100,000 gain and 100,000 return of basis

Early years you may wish to pull more from deffered (avoid high RMD + 2 SS = higher brackets) but also Roth and taxable; the goal is “tax bracket smoothing” over the years...
bradpevans
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Re: Calculating X expenses w/3.15M

Post by bradpevans »

Zetorman wrote: Sat Jul 31, 2021 9:56 am I've been taking our current expenses (kids college funds are separate is will even cover weddings) of 50k net, adding 20k for health ins and approx 18k for all other items (cars, house repair, etc), then dividing 88k by 0.84 (16% effective) to equal 105k. I guess I was just looking for an easy way to add my accounts together to compare apples to apples from an income tax standpoint. If I could equate the Roth and taxable dollars with pretax dollars it would be easier to calculate X expenses in gross dollars. ie. 900k in Roth is worth more than 900k in pretax. The question is how much more and probably is too complicated to calculate given all of the variables and unknowns.

I am obviously overcomplicating this ....back to the drawing board!
Also consider Your bases in the 600,000 taxable. Your basis is 300,000 then, for instance, you could take out nearly 200,000 in one year and pay very little tax at least at the federal level because you have 100,000 gain and 100,000 return of basis

Early years you may wish to pull more from deffered (avoid high RMD + 2 SS = higher brackets) but also Roth and taxable; the goal is “tax bracket smoothing” over the years...
Topic Author
Zetorman
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Re: Calculating X expenses w/3.15M

Post by Zetorman »

The 600k taxable has a 590k basis. I guess this entire exercise is to determine if I really have enough to call it quits 12/31/22. Between now and then we will add 120-150k plus market gain/loss on a 50/50 AA. I strongly believe we will spend less than 105k gross (88k net), but 40 years is a long long time to guess at expenses. 120k is an upper-end estimate to buffer unknowns. My desire to know X expenses is yet another measure of where we are in this journey. We are flexible, but we are tired especially with Covid and healthcare careers. The collective wisdom of BH, Fidelity retirement planner, and early-retirement.org are what I am using to plot our current location and distance to the goal.

In conclusion, would the average BH consider retiring 12/31/22 with our ages and numbers? We will use the ACA for healthcare and are debt-free with a paid-for 300k home in a LCOL state.
Marseille07
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Re: Calculating X expenses w/3.15M

Post by Marseille07 »

So the question isn't so much about whether you have enough (you do), but whether your taxable lasts till 59 1/2? I haven't done it myself and I don't plan to, but have you considered the Roth Conversion Ladder or the 72(t) business? https://www.madfientist.com/how-to-acce ... nds-early/
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Re: Calculating X expenses w/3.15M

Post by RyeBourbon »

Zetorman wrote: Sat Jul 31, 2021 10:45 am The 600k taxable has a 590k basis. I guess this entire exercise is to determine if I really have enough to call it quits 12/31/22. Between now and then we will add 120-150k plus market gain/loss on a 50/50 AA. I strongly believe we will spend less than 105k gross (88k net), but 40 years is a long long time to guess at expenses. 120k is an upper-end estimate to buffer unknowns. My desire to know X expenses is yet another measure of where we are in this journey. We are flexible, but we are tired especially with Covid and healthcare careers. The collective wisdom of BH, Fidelity retirement planner, and early-retirement.org are what I am using to plot our current location and distance to the goal.

In conclusion, would the average BH consider retiring 12/31/22 with our ages and numbers? We will use the ACA for healthcare and are debt-free with a paid-for 300k home in a LCOL state.
You can't go on X times expenses to tell if your plan will work. You really need to plan out the spending for each year with conservative assumptions for returns, particularly looking out for sequence of returns risk.

But, yes I think you will be in good shape 18 months from now.
Retired June 2023. AA = 55/35/10
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Wiggums
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Re: Calculating X expenses w/3.15M

Post by Wiggums »

Watty wrote: Sat Jul 31, 2021 9:47 am
Zetorman wrote: Sat Jul 31, 2021 12:10 am How do you guys calculate the "X expenses number with the different tax treatment of funds?
I include my expected taxes as an expense. This means that if you plan on spending $120K on things other than taxed you would need to do your retirement planning as if you needed something like $150K(?) in income before taxes.
We included our expected taxes as an expense as well. When estimating taxes, we just copy the current turbotax file and then modify the copy.

We spend about the same each year which made our planning easier. Then we thought about any big ticket items (new roof, HVAC, new car) that do not occur every year and Roth conversions.
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Topic Author
Zetorman
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Re: Calculating X expenses w/3.15M

Post by Zetorman »

I have everything on a spreadsheet including specific funds for specific goals. All of the calculators that I use seem to agree that we are in the range to consider a full exit from work 12/31/22. However, I will never get a job with my current pay/schedule once I call it quits and discussing these sorts of things/numbers with friends/co-workers yields blank stares.

Once again, thanks to all of those who read/replied.
KlangFool
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Re: Calculating X expenses w/3.15M

Post by KlangFool »

Zetorman wrote: Sat Jul 31, 2021 12:10 am
Ok... We have 3.15M(600k net taxable, 900k Roth, and 1650k Pretax).
Zetorman,

1) How much CASH do you plan to accumulate before you retire? if this CASH saves you 10K to 30K of taxes, why won't you do it?

2) 600K -> 590K cost basis

3) 900K Roth -> How much of that is Roth contribution that you can withdraw before 59 1/2 years old?

4) 1650K -> Pre-tax -> How much taxes do you want to pay?

In my mind, I separate the withdrawal from the actual expense spent. And, I can do that because I have 3 years of expense in CASH. I can spend without generate taxable income.

So, you would retire before you qualify for Medicare. Do you need ACA insurance? Do you need to qualify for ACA insurance subsidy?

In summary, in my system, my annual expense need and actual Roth conversion/taxes pay are separate. I can do that because I have enough money to spend while paying zero or minimal taxes. Aka, CASH, Roth contribution, 0% long term capital gain, standard deduction.

You may want to think about this.

KlangFool
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Normchad
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Re: Calculating X expenses w/3.15M

Post by Normchad »

Zetorman wrote: Sat Jul 31, 2021 7:23 pm I have everything on a spreadsheet including specific funds for specific goals. All of the calculators that I use seem to agree that we are in the range to consider a full exit from work 12/31/22. However, I will never get a job with my current pay/schedule once I call it quits and discussing these sorts of things/numbers with friends/co-workers yields blank stares.

Once again, thanks to all of those who read/replied.
We are in the exact same position. All my friends aren’t even thinking about retiring, even though they are mid 50s or older, and make good money.

The reaction is somewhat unsettling. It makes me question if I’m going nuts…..

And like you, I know once I quit I won’t find another job that pays so well. So I need to be really sure……
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Re: Calculating X expenses w/3.15M

Post by Jack FFR1846 »

If you're 54 now and planning for SS at 70, the year 2035 arrives before you reach 70 and payments drop to 80% of what they are now, funded by what's coming in. So take that into account in any calculations.

https://www.cnbc.com/2021/07/06/many-fe ... appen.html
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Topic Author
Zetorman
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Re: Calculating X expenses w/3.15M

Post by Zetorman »

KlangFool wrote: Sat Jul 31, 2021 7:44 pm
Zetorman wrote: Sat Jul 31, 2021 12:10 am
Ok... We have 3.15M(600k net taxable, 900k Roth, and 1650k Pretax).
Zetorman,

1) How much CASH do you plan to accumulate before you retire? if this CASH saves you 10K to 30K of taxes, why won't you do it?

2) 600K -> 590K cost basis

3) 900K Roth -> How much of that is Roth contribution that you can withdraw before 59 1/2 years old?

4) 1650K -> Pre-tax -> How much taxes do you want to pay?

In my mind, I separate the withdrawal from the actual expense spent. And, I can do that because I have 3 years of expense in CASH. I can spend without generate taxable income.

So, you would retire before you qualify for Medicare. Do you need ACA insurance? Do you need to qualify for ACA insurance subsidy?

In summary, in my system, my annual expense need and actual Roth conversion/taxes pay are separate. I can do that because I have enough money to spend while paying zero or minimal taxes. Aka, CASH, Roth contribution, 0% long term capital gain, standard deduction.

You may want to think about this.

KlangFool
Yes, we will use the ACA. Our taxable is 300k CASH/300k VWIAX adding 4-5k/mo CASH until 12/31/22 when I will be 56. These dollars will hopefully let us stay in the ACA subsidy range until at least when I am 65. I technically look at the portfolio as 300k CASH and 2.85M retirement account staring at 59.5yo. The "retirement" fund currently has 300k VWIAX taxable, 1.65M pretax, and 900k Roth invested 60/40 and won't be touched for 5 yrs. Add in the CASH and the whole thing is currently approx 55/35/10. Target net spend =88k x35yr for "retirement funds."

I guess I am looking at this in buckets. Bucket 1 gets me to roughly 60 and is CASH and bucket 2 + SS carries us to the end.
I need to do more work in details regarding conversions to reduce overall taxes.
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Zetorman
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Re: Calculating X expenses w/3.15M

Post by Zetorman »

Jack FFR1846 wrote: Sat Jul 31, 2021 9:25 pm If you're 54 now and planning for SS at 70, the year 2035 arrives before you reach 70 and payments drop to 80% of what they are now, funded by what's coming in. So take that into account in any calculations.

https://www.cnbc.com/2021/07/06/many-fe ... appen.html
Thank you. This has been considered in the plan.
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Re: Calculating X expenses w/3.15M

Post by averagedude »

In a similar situation, but i would rather quit very soon with a very low probability of returning back to work than working several years longer to guarantee that I will never have to work again. If I have to go back to work for a couple of years due to the sequence of return gods, it will not be the end of the world. It beats working a guaranteed several years longer, especially considering that I may not even live 5 more years. Life can be short.
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Re: Calculating X expenses w/3.15M

Post by KlangFool »

Zetorman wrote: Sat Jul 31, 2021 9:31 pm
300k VWIAX adding 4-5k/mo CASH until 12/31/22
Zetorman,

Which is a BIG PROBLEM for you if you try to get the ACA subsidy. How much taxable income do VWIAX generate per year?

You need to get rid of the VWIAX before you retire.

<<I need to do more work in details regarding conversions to reduce overall taxes.>>

You should start by understanding the ACA subsidy calculation.

KlangFool
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Topic Author
Zetorman
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Re: Calculating X expenses w/3.15M

Post by Zetorman »

My understanding is this: We need to stay between the 138% (24k ish) and 400%(69k ish) poverty level for two people. My plan is to use cash after 12/31/22 to live on and do Roth conversions to "create" enough income to stay off Medicaid. VWIAX kicks off income and cap gains, but probably not enough to get us to 24k. My thinking is that by December of each year I will be able to estimate the current yrs income/cap gains then do a Roth conversion IF we are short. If we are over, then there is a big range between 24k and 68k. Granted, we will end up paying more in premiums and deductibles as we move up through the "donut" after the year 2022 if the income cap returns. I have considered selling VWIAX and going 40/60 stock bond etfs to make these numbers more predictable. Anyway, once I hit 59.5 then things change a bit as I will start to burn some pretax at lower brackets. At this point, I will use pretax up to ACA limits and taxable to supplement, keeping everything under 400% fpl. If some big emergency arises, I will also have access to my nearly 300k Roth IRA which will not count as income for ACA purposes. This "game" will be played until we are both on medicare. Does this make sense and sound reasonable?
mbt863
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Re: Calculating X expenses w/3.15M

Post by mbt863 »

kd2008 wrote: Sat Jul 31, 2021 9:05 am
Zetorman wrote: Sat Jul 31, 2021 12:10 am Ok... We have 3.15M(600k net taxable, 900k Roth, and 1650k Pretax). Our target spend is 120k gross even though we only spend 50k net right now, My SS@70 will be approx 46k/yr and DW will be 15k/yr @62. How do you guys calculate the "X expenses number with the different tax treatment of funds? My age is 54, DW 52 and our planning takes me to 92 and her to 95.
All calculated with your age
Amount of assets needed
ages 54 thru 64, needed 120kx10 =1200k (no SS)
ages 64 through 70, needed 105kx6 =630k (DW's SS)
beyond age 70, needed 59/0.03 = 1970k (Both on SS & 3% withdrawal rate for expenses not covered by SS)

Assets needed 1200k+630k+1970k = 3800k

Be sure to include taxes and healthcare as expenses in your 120k estimate.

So technically you need 31.67x in assets for expenses of 120k/yr

You are at 26.25x now.

Realistically, going from 50k to 120k in expenses at an older age ... :? no comment
Interesting thread--but not getting the 3% withdrawal rate after 70...I know there is plenty of dispute on SWR but 3% at 70 seems really, really conservative but I guess it could handle variables (such as LTC or other unknowns--significant reductions in SS benefits).
KlangFool
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Re: Calculating X expenses w/3.15M

Post by KlangFool »

Zetorman wrote: Sat Jul 31, 2021 11:08 pm My understanding is this: We need to stay between the 138% (24k ish) and 400%(69k ish) poverty level for two people. My plan is to use cash after 12/31/22 to live on and do Roth conversions to "create" enough income to stay off Medicaid. VWIAX kicks off income and cap gains, but probably not enough to get us to 24k. My thinking is that by December of each year I will be able to estimate the current yrs income/cap gains then do a Roth conversion IF we are short. If we are over, then there is a big range between 24k and 68k. Granted, we will end up paying more in premiums and deductibles as we move up through the "donut" after the year 2022 if the income cap returns. I have considered selling VWIAX and going 40/60 stock bond etfs to make these numbers more predictable. Anyway, once I hit 59.5 then things change a bit as I will start to burn some pretax at lower brackets. At this point, I will use pretax up to ACA limits and taxable to supplement, keeping everything under 400% fpl. If some big emergency arises, I will also have access to my nearly 300k Roth IRA which will not count as income for ACA purposes. This "game" will be played until we are both on medicare. Does this make sense and sound reasonable?
Zetorman,

You are thinking this wrong and it is going to cost you a lot of taxes.

A) You are wasting your standard deduction space on VWIAX. You could use those spaces for Roth conversion before 59 1/2 years old.

B) You do not need VWIAX. You have Roth contribution in your Roth IRA that you could use before 59 1/2 years old.

What if you have the following instead?

A) 300K CASH and 300K VTSAX (Total Stock Market Index )in the taxable account

B) Add extra bond into your tax-deferred account

You achieve the following

1) VTSAX generate 90+% qualified dividend = 0% long term capital gan tax

2) You can Roth convert 24K at 0%

3) You can capital gain harvest another 40K at 0%

4) You pay 0% taxes

5) By adding bond into your tax-deferred account, you reduce the growth of your tax-deferred account.

6) By Roth converting 24K per year, you reduce the size of your tax-deferred account.

7) You pay fewer taxes now and in the future.

An even better idea, Roth convert up to 44K aka 10% tax bracket.

In summary, if you go down your current path, you would pay more taxes in the future. All this because of VWIAX? It is unnecessary and very costly.

KlangFool
Last edited by KlangFool on Sun Aug 01, 2021 8:33 am, edited 1 time in total.
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Zetorman
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Re: Calculating X expenses w/3.15M

Post by Zetorman »

All great ideas! We will already be forced to convert TIRA to Roth in order to "create" income to avoid Medicaid. However, I see your point on VWIAX. My thinking was that I need at least 24k/yr income to meet the 138% poverty level. We are getting <10k/yr int and cap gain, therefore we would have to convert at least 15k/yr just to get over the 138% line. After that, we could continue to convert all the way up to 68k, if desired, before potentially going over the ACA cliff should it return. A few minor adjustments will help save even more from the taxman.
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Re: Calculating X expenses w/3.15M

Post by babystep »

kd2008 wrote: Sat Jul 31, 2021 9:05 am
Zetorman wrote: Sat Jul 31, 2021 12:10 am Ok... We have 3.15M(600k net taxable, 900k Roth, and 1650k Pretax). Our target spend is 120k gross even though we only spend 50k net right now, My SS@70 will be approx 46k/yr and DW will be 15k/yr @62. How do you guys calculate the "X expenses number with the different tax treatment of funds? My age is 54, DW 52 and our planning takes me to 92 and her to 95.
All calculated with your age
Amount of assets needed
ages 54 thru 64, needed 120kx10 =1200k (no SS)
ages 64 through 70, needed 105kx6 =630k (DW's SS)
beyond age 70, needed 59/0.03 = 1970k (Both on SS & 3% withdrawal rate for expenses not covered by SS)

Assets needed 1200k+630k+1970k = 3800k

Be sure to include taxes and healthcare as expenses in your 120k estimate.

So technically you need 31.67x in assets for expenses of 120k/yr

You are at 26.25x now.

Realistically, going from 50k to 120k in expenses at an older age ... :? no comment
OP is asking about how to include taxes because different accounts have different tax treatments.

But I really like the way expenses are calculated above with the ages.

3.8M is only needed if OP is to retire now. If OP continues to work which seems to be the case then they would be FI in next few years.
kd2008
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Re: Calculating X expenses w/3.15M

Post by kd2008 »

mbt863 wrote: Sun Aug 01, 2021 6:09 am
kd2008 wrote: Sat Jul 31, 2021 9:05 am
Zetorman wrote: Sat Jul 31, 2021 12:10 am Ok... We have 3.15M(600k net taxable, 900k Roth, and 1650k Pretax). Our target spend is 120k gross even though we only spend 50k net right now, My SS@70 will be approx 46k/yr and DW will be 15k/yr @62. How do you guys calculate the "X expenses number with the different tax treatment of funds? My age is 54, DW 52 and our planning takes me to 92 and her to 95.
All calculated with your age
Amount of assets needed
ages 54 thru 64, needed 120kx10 =1200k (no SS)
ages 64 through 70, needed 105kx6 =630k (DW's SS)
beyond age 70, needed 59/0.03 = 1970k (Both on SS & 3% withdrawal rate for expenses not covered by SS)

Assets needed 1200k+630k+1970k = 3800k

Be sure to include taxes and healthcare as expenses in your 120k estimate.

So technically you need 31.67x in assets for expenses of 120k/yr

You are at 26.25x now.

Realistically, going from 50k to 120k in expenses at an older age ... :? no comment
Interesting thread--but not getting the 3% withdrawal rate after 70...I know there is plenty of dispute on SWR but 3% at 70 seems really, really conservative but I guess it could handle variables (such as LTC or other unknowns--significant reductions in SS benefits).
Yes, I agree with you. That was my thinking too, about LTC and other unknowns.
kd2008
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Re: Calculating X expenses w/3.15M

Post by kd2008 »

babystep wrote: Sun Aug 01, 2021 8:58 am
kd2008 wrote: Sat Jul 31, 2021 9:05 am
Zetorman wrote: Sat Jul 31, 2021 12:10 am Ok... We have 3.15M(600k net taxable, 900k Roth, and 1650k Pretax). Our target spend is 120k gross even though we only spend 50k net right now, My SS@70 will be approx 46k/yr and DW will be 15k/yr @62. How do you guys calculate the "X expenses number with the different tax treatment of funds? My age is 54, DW 52 and our planning takes me to 92 and her to 95.
All calculated with your age
Amount of assets needed
ages 54 thru 64, needed 120kx10 =1200k (no SS)
ages 64 through 70, needed 105kx6 =630k (DW's SS)
beyond age 70, needed 59/0.03 = 1970k (Both on SS & 3% withdrawal rate for expenses not covered by SS)

Assets needed 1200k+630k+1970k = 3800k

Be sure to include taxes and healthcare as expenses in your 120k estimate.

So technically you need 31.67x in assets for expenses of 120k/yr

You are at 26.25x now.

Realistically, going from 50k to 120k in expenses at an older age ... :? no comment
OP is asking about how to include taxes because different accounts have different tax treatments.

But I really like the way expenses are calculated above with the ages.

3.8M is only needed if OP is to retire now. If OP continues to work which seems to be the case then they would be FI in next few years.
Thank you. You are correct.
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Monster99
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Re: Calculating X expenses w/3.15M

Post by Monster99 »

You should try to eliminate the VWIAX fund in taxable - I inherited ~50k Dodge and Cox stock fund in 1995 from my father and just let it sit.... now it throws off LTCG, div's and has a low basis that complicate Roth conversions in the 12% tax bracket. 😖😖
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