Retirement Projections that we Do

It is a new year and we have done our Family P & L Actuals from last year. We have also done our 2021 Budget and Goals sheets together. Now is the time to update our Retirement Projection sheets with our Actuals from 2020 to see our new Retirement Projections.

Since last year we decided on the year 2030 for Darlene to retire at. That is the year that I can go on Medicare Insurance so we would just need to buy Health Insurance for Darlene for about 11 years. We are projecting that it will cost us roughly $500 per month or $6,000 per year for her Health Insurance when she retires.

If she decided to work part-time for Insurance, she would have to average over 20 hours per week. Right now, she is feeling like being totally retired at age 54 so that is what we are planning on when doing our projections.

We have done Retirement projections with us starting Social Security at age 67 and others at age 70. We will keep doing both projections up to the date we need to start Social Security to decide which way we are going. Some things that can factor on when we start taking out Social Security is the following;

  • How are Investments do for us for the next 12 years.
  • When the kids move out of our house and we aren’t supporting them in anyway.
  • When Darlene decides to fully Retire or if she decides to work for a while part-time for Insurance.
  • How are Health is.

We wish we had a crystal ball to tell us a perfect time to start Social Security but we don’t. We are going to go with what are projections are showing us when we are closer to the date. Our current projections are showing us currently that we should start at age 67. But I still would love not to ever have to count on Social Security. My goal would be to wait till age 70 to start.

The tough part is most guys in my family on both sides of my parents don’t live past age 80. Only my Grampa actually did that I know of. We are projecting that I live to age 90. I hope to live to see the 100’s in my pipe dream. But I would want my health also and not just be able to lay in a bed when I am old. We try to take care of ourselves now so we can live long lives.

We have three different projections that we use. They are;

  1. An excel spreadsheet we made up many years ago and update it each year once we get actuals from the year before.
  2. We have created another excel spreadsheet model last year and will update it each year we get actuals from the year before.
  3. We use Fidelity.com Retirement Projection Tool and review it yearly also.

All three of them have slightly different numbers from expenses to inflation but all three have about the same projected date for when the money may run out.

In our projections we have the following factors built into our excel projections and some in our Fidelity projection that we have listed below.

  • Inflation we factor in a range from 1.25% to 2% each year. Some people may say that is too low or too high but that is what we feel the average will run.
  • We add in large House expenses and Car expenses that may come up in the future in their own column. For example, we may need a new Water Heater every 5 years, a new HVAC unit every 10 years, the House painted every 5 years, A new Roof on the house every  years, a new Car every 6 years and when we are older a big Medical expense every 5 years.
  • We have our expenses going up of course with inflation each year but we projected lower expenses when Logan moves out, when Seth moves out, when Darlene retires and when I pass away.
  • We have also a column for the Health Insurance cost for Darlene when she retires early.
  • We have columns for our Income Streams from Investments, Jobs to Social Security. We project low returns on our Investments and lower Social Security amounts than what our yearly Social Security Statement shows. We also factor in paying for Social Security Supplemental Insurance when we start Medicare.

Then every thing adds and subtracts from our total Investments and IRA money we have to give us a projected new total amount of money to live off of. This may seem confusing but if you came over to our house, I could show you in person and it may make sense to you better.

As always, I am not giving you any Financial Advice and you should seek advice from your Professional Advisors to see what is best for your situation. See my Disclaimer at MillsWay.com. This is for entertainment only.

You may have another model that you use for your Retirement projections and if they work for you then that is great. That is what matters. But if you are looking to make adjustments to your model then maybe some of the things, we factor in would work for you.

In the past working with people who had Debt problems a lot of them didn’t look past this year. They didn’t think about planning for large upcoming expenses. They just wanted to make it through the current year they were in. A lot where hit with large Medical Expenses in their later years that they didn’t plan on.

As we talked about before we try to factor in a lot of things into our Retirement Projections. I feel it is those large unknown expenses that can really hurt people during their retirement years. Yet we all know that if we own a home that their will be repairs to it every now and then. Also, we know that our cars don’t always last forever. Plus, things go up in cost over the years. If you are our age just look at what Gas cost back in 1980 and what it cost now or a loaf of Bread to a gallon of Milk. Most things go up in cost each year so we need to factor that in.

I am a numbers person and want to put percentages in our favor. I don’t want to run out of money in our Retirement years. I also want Darlene to be fine after I go to Heaven someday.

Some people like to just use a percentage of their investments to plan on how much money they can spend each year in retirement. Some people use 3% and some people use up to 7%. Each person has different views and situations. For me I would love if we could use a 3% withdraw rate at retirement. We teach our boys to shoot for 3% or 4% for their Financial Freedom Retirement Goals projections.

We printed off studies from different people to show our boys the chance of their money lasting at different withdraw rates. Of course, it depends if they have the money invested in Stocks, Bonds or sitting in cash. Plus, what mixture they have from 100 Stocks or 50% Stocks and 50% Bonds, etc.

My perfect world would be to never do a withdraw from our Retirement funds and just live off our Dividend Stocks and other forms of Passive income. But not everyone has multiple forms of Passive Income.

We teach the boys to live debt free and especially at Retirement time. We want them to work with a Financial Planner if they don’t feel they have the education to take care of their Retirement Funds. We have also showed them several Free Retirement Resources and Tools that they can use. We really hope they will consistently keep educating themselves on Personal Finances and Investing.

In most of the studies I have read showed that at 3% withdraw rate and money invested in something other than cash lasted people. At 4% studies have shown some 98% to 100% for at least 30 years. At 5% withdraw rate 96% to 100% if in a Mixture with Stocks for at least 30 years. But if 100% in Bonds at a 5% withdraw rate showed 64% on one study for 30 years.

Who knows how long we will live after we retire? Some positive people will say they are going to live to see age 110. Past Financial Planners we worked with wanted our money to last till age 94. I don’t think anyone except my Grampa ever made it to see age 80. So, who knows how long we will live?

Darlene and myself want to semi-retire at an early age. I am retired at an early age so I can write books and help people with my Podcast, Blog, Website and Books. Darlene will need to work at least 20 hours a week until both boys are out of the house for Health Insurance. We are shooting for her to retire at age 54.

Social Security our current plan is not to start drawing it until age 67 or age 70 depending on our situation at the time. We have no idea what Social Security may look like at our retirement age. Some people think it won’t be around. We think it will be around but maybe at 50 to 75%. Who knows? We want to plan our retirement without counting on Social Security payments and then if we do get it, we can spoil our grandkids even more. LOL

What withdraw percentage are you currently at if you are retired? If not retired yet what rate do you plan on doing? We want to give our boys the best chance to have their money last them thru their retirement years.

We hope everyone hits their Financial Freedom Goals from our family – The Mills Family.

Here are some positive quotes I like;

“Get your Money to Work for You… As hard as You Work for it.” By Napoleon Hill

“1. Make Money. 2. Use the Money to Make More Money. 3. Repeat the Process.” By Warren Buffett

“There is no way to happiness; happiness is the Path.” By Buddha

“Change Your Thoughts – Change Your Life” by Wayne W. Dyer

Let me know your thoughts about this blog and let me know of others you would like me to do in the future. I feel we can all learn from each other. That is why I am in the helping people retire early, enjoy life more and be more successful. Also, please see my Disclaimer page.

Don’t give up on your dreams; don’t let others talk you out of your dreams. Make your dreams happen. Make it happen today.

Visit my Podcast at www.Live4.Club on Anchor.fm, Spotify, Pocket Casts, Breaker Audio, Google Podcasts, Radio Public, I-tunes, Apple Podcast and more. If you would like to be a guest on my Podcast drop me an email at bruce@millsway.com or Text me at 480-389-6224

Support me at Anchor.fm/Live4, Patreon.com/Millsway or Paypal.me/Millsway

Thanks, and Have a great night.  Please Support or Follow me at https://www.patreon.com/millsway  for access to all my blogs.

Click here for some Side Income and Part-time Business Ideas

Millsway.com and Live4.Club

Personal Capital – Manage your money now. Smart way to track and manage your financial life. Award-winning financial tools and more.

#financial freedom #financial independence #FIRE #Hustle #Live4 #podcast #millsway

Leave a Reply

Your email address will not be published. Required fields are marked *