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Hi 2 old,

Thanks for the response. I's all useful information for the planning process.

The fact that you opened by saying that you're approximately 7 years from retirement, and you ended with extending your retirement date, tells me that you really don't know when you're going to retire, because you haven't yet made the decisions that need to be made in order to get a real handle on what your expenses will be.

Actually, I do know when I'm retiring. That was just an example of what it would take to come up with enough to live at the high end of the expense range, something I don't think is doable as stated. I'm not planning on having expenses in the upper half of the range, since it greatly exceeds our current expenses DW probably would like it, but that's why I'm planning now to show her what's possible.

Until you make the decision about whether or not you're going to buy this house, there's no way you can estimate expenses. Expecting an average return rate of 15% is, for all practical purposes, not doable.

I agree wholeheartedly. It’s just an example to show DW what it could take to upsize a house if we move at retirement. My real plan is to purchase a comparable or lower cost house than our current if we should move. If it means we get to upsize, good. If we have to downsize too much, then maybe we should look for lower cost communities. In any case, the cost of maintaining the house will also play a major factor in any purchase decision.

IMHO, this is not a good way to approach it. To simply say that we'll 'plan on living within our means' just doesn't work, and neither does 'assuming' you can pay off the mortgages.

I agree, but to clarify, I meant cutting back on discretionary expenses. For example, instead of three trips each year, we may need to plan on only two or we cut back on eating out, anything where you have the discretion to cut back. While paying off the mortgages is part of the plan, circumstances closer to retirement will dictate if we go forward on it. The likely scenario is to pay off the second at retirement and the first several years later.

Whenever I want to wake myself up to reality, I just add the cost of a nice new car in year 1 of retirement (in my case ~$45,000). A $45K withdrawal in year 1, coupled with the additional taxes that would be due on the same, makes quite a dent in the portfolio 30 years from now. :-(

This is something I need to do. One hope is the portfolio grows larger than what’s needed so any excess can go for the car (i.e., the $45K doesn’t hurt so much because you had $50K extra to cover it). Another way is that I know I over-estimated some expenses. For example, I was conservative with taxes and taxed 100% of income, I expense the full amount for medical co-pays and deductibles each year and have a misc expense budgeted. In theory, I should save the unspent portions into a one-time expense fund. After 5-7 years, there should be enough in the account to get a new car (not the $45K one you’re looking at).

In any case, thanks for your input. It shows I’m on the right track, because I’m doing some things similar to you. I see I still need to do more tweaking though.

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