@bonesly
I am not so confident about being in a solid position, but I appreciate hearing that.So let's just look at a worst-case outcome to quantify that "solid position" comment that was made by @Ace300. Your current asset level is $9,994K with an AA almost entirely in stocks (96.3%, with the other 3.7% in BND and a CA municipal). Your wife seems to be the big earner ($500K-$1,000K income per year) and she's planning to retire in 2-3 years, with joint contributions to retirement between $150K-$350K/yr. This is the range of balance growth that could reasonably be expected if she retires in 2 years and only puts in $150K.
Yes, I am aware that the expenses are, by far, the biggest and hardest problem.
End-BalPercentile
$7,868.0K 5th
$10,513.5K 25th
$12,426.8K 50th
$14,502.6K 75th
$17,835.1K 95th
If you have a bad couple of years in the stock market, that 5th percentile outcome supports a 4% draw for 30 years (until you're 89) of $296.7K in today's dollars. Pensions and SocSec will add to that, but I think it's quite unlikely that they will bring that back to your current spending level of $650K/yr, so unless the real estate income is around $350K/yr it looks like you need to cut expenses or you'll have a problem. Even at a more favorable percentile like 10th or 20th, you need about $16,250K to maintain a $650K/yr spend rate (and that spend includes paying the taxes due) and that's above 50th percentile, so not a viable plan (again unless the RE income is around $300-350K/yr).
You might also plan to continue working until 70 and you didn't say how much of the $150-$350K/yr is your contribution (I'm assuming the majority is her input). At any rate, this analysis may be worth sharing with your partner as a reality check, if you don't have a financial advisor that should already be alerting you to this spending concern in retirement.
The numbers above are from my Accumulation Monte Carlo, with image & links below along with other models that should show a similar concern.
Data and Models I use for Monte Carlo:
NYU Data Set 1928-2017 with Model Fits
Accumulation Monte Carlo <- image above
Withdrawal Monte Carlo
You'll need a MS Excel license; download to your local machine and enable macros (required for the 1,000 random trials and results aggregation).
I'm using my own model as I like to know what's under the hood, but there are other models I like that have public facing website interfaces:
Portfolio Visualizer's Monte Carlo (also their Financial Goals model),
FiCalc (probably easiest to use),
TPAW (probably most comprehensive),
[ur=https://engaging-data.com/will-money-la ... 1&show5x=1]Engaging Data: Rich, Broke, or Dead[/url], (also fairly easy to use), and
FireCalc (lots more inputs to tailor to your situation).
I apologize for the delay in responding!
Please know I am very grateful for your help, and in awe of the comprehensively of your understanding.
Unfortunately for me, I read this post and basically said to myself 'OMG! I have no idea how to go about understanding these topics and concepts' Then I ran away like a scared child (;-)
When the fear subsides, I will attempt to understand.
Statistics: Posted by josephny — Tue Nov 19, 2024 5:44 am