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He is retiring in 18 months, will be needing $30,000 per year to add to lifetime pension of 1900.00 monthly which pays our mortgage...Today! we have 580,000. in the MDP, we will we together be getting $2700.00 monthly in SSI in 18 months. Currently we live on $90,000. Will be eligible for COBRA until Medicare but I take many meds per day. Is this portfolio right for us?

The generally accepted safe withdrawl rate, at least by most on the TMF boards, is 4% per year from a portfolio that is approximately 75% in the S&P500 and 25% in fixed income, if you need it to last 30 years. I don't know what the MDP is, but if you are confident that it will outperform the S&P500, then you can take more than 4%, but I'd think hard about the risk.

As to the rest of what you've said, let's take a 4% withdrawl of $580k as a starting point. That's $23,200 per year, short of the $30k you say you need. Add in your SSI and that's another $32,400 per year, for a total of $55,600. That's way short of your current spending of $90k.

When you say you live on $90k, does that include the Medicare and SS taxes your husband pays on his earnings? Those expenses will go away when he retires. So will any other work-related expenses and so will any more additions to your savings. If you subtract all that out, how much does it reduce your needs?

Will your company pay for Cobra or will it come out of your pocket? If it's going to be on you, that's a significant added expense. How long until your house is paid off? If you downsize to a smaller house that's fully paid for, that will free up your mortgage payments for other living expenses and reduce your property taxes, utilities, insurance and maintenance costs. Another option for having a paid-for house is moving somewhere with lower-cost housing (what we did). That might not lower all those other housing-related expenses but will at least get rid of the mortgage. If you don't need that $1900 to pay the mortgage, that's another $22,800 per year to live on, bringing the total as far as I can see to $78,400. With the mortgage paid off, you won't need $90k.

That's the best I can come up with. Anyone else?

--fleg
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