Various Forms of Retirement Income

ESI, you can retire now. Your prior stated goal was ‘$100K income, with $70K to expend’ (or something like that). You are there.

All your categories are fine, and, as other commenters have noted, comprehensive. My thought on any ‘business’ you may consider buying/starting, is that there is a downside to that. I rarely see it discussed on any PF site, seems like all the PF bloggers and their commenters are in the group of people that only succeed, never fail, and never have to pay off years worth of debt they might accumulate in 18 months or less.:-)

Seriously, working for someone else or consulting has no risk. Once you leave the worklife, as you are contemplating, RISK is the biggest item to consider. Losing $100K now, when you are gainfully employed, will be horrible but you will work another year and cover your expenses, taxes, and replenish that in savings. Quit your worklife, lose $100K in a business venture (no matter how good a manager you may be!:-)) and you have no way to recover that money without returning to the workforce (at a lower job with lower pay, believe it). Surprising the number of wannabe entrepreneurs who defer paying themselves or will continue to operate at a small(ish) loss for years, rather than face the ugly truth that they are depending on an ‘act of God’ to change the economy/marketplace/product demand/other.

This should be hard. Make a matrix with the ‘y’ (vertical) axis columns showing your age, from top on down to 100.. ‘x’ (horizontal) axis will show income sources, i.e. Column A ‘rental income’, column B, Post-Tax dividend, interest, capital gains; Column C, pre-tax sames, Column D, your S.S., Column E your wife’s S.S., etc.

For your Social Security (and wife’s) exact calculation, have your S.S. numbers and mother’s maiden names, input date on this secure site, and plug in the numbers into your Columns D and E at the correct age, i.e. 62 or 67, whatever.

You will be very surprised that you won’t have to dip into your Net Worth. Of course, you will spend more before/after tax money up front, but that will be replaced by your Social Security benefits in later years (which you can count on if you are over age 40). Only the pedants will squirm at not touching the IRAs and 401(k) appreciation, because they don’t understand that money is fungible and $1 is just $1 no matter which pocket it comes out of. Let us know the number, my back-of-the-envelope calculation for you and family is that you will hit about $140K/yr right this minute if you quit your job. Good luck.


Originally posted at

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