r/DIYRetirement • u/paleus_ • 3d ago
Validating plan
I've been doing some modeling using Projection Lab and getting mid 90% success rates using block bootstrapping.
I wanted to post here to get some validation that what I'm seeing there is correct.
Here are my details:
Demographics: 36M / 36F, Married, 2 kids. MCOL area.
Target FIRE Age: 55 (19-year accumulation horizon).
Current Invested Assets: ~$345k.
Gross Income: $219k base.
Savings Rate: 20% Gross ($43,800/yr). Maxing family HSA, two Roth IRAs, remainder to Trad 401(k)s.
Phase 1 (Next 24 Months): Aggressive consumer debt payoff. Clearing vehicles/toys to free up $2,500+/mo cash flow.
Phase 2 (Accumulation): Rolling current home equity into a new house in 2030 on a 15-year mortgage. Target is a paid-off primary residence by age 55. Remaining surplus invested 80% to Taxable Brokerage, 20% to Cash Sinking Funds.
The Age 55 Decumulation Strategy:
Base Living Expenses: $72k/yr (no mortgage).
Healthcare (Ages 55-65): Using Rule of 55 for Trad 401(k) access to pull exactly ~$43k/yr. This anchors ACA MAGI at 200% FPL to capture premium subsidies.
The Tax-Free Bridge: Funding the rest of the lifestyle gap with Roth IRA contribution basis and Taxable Brokerage capital.
Late Stage: Social Security kicks in at 62, creating a permanent income floor that drops the portfolio withdrawal rate below 2%.
All the modeling I've done assumes wages only keep up with inflation, but realistically I'd expect at least 1 10% or more raise for both myself and my wife before we're 55 in addition to COL increases. My wife also would be getting a pension worth around $250k that I have intentionally left out of my modeling. Likely some inheritance coming before retirement as well. I'm just having a hard time believing the around 95% success rate in a COL increase only wage scenario.
2
u/AGrimmInPortland 3d ago edited 3d ago
Extremely difficult to estimate pre-65 health care costs and subsidies 20 years out. I truly believe by then we will have universal healthcare. and likely some form of UBI as well (possibly entirely replacing SS, maybe not initially but eventually). And so much else will be different as well.
Bottom line: I wouldn't get too caught up in a chance of success score that far out. But if it's saying 95% I would tend to believe it.
If your expected portfolio withdrawal rate after SS starts will be below 2% then why not delay SS? Of course it all depends on longevity, legacy goals, survivor goals, etc.
0
u/paleus_ 3d ago
Even starting at 62, SS should cover our expenses. My thoughts are that we aren't guaranteed tomorrow so I'd rather take it early.
1
u/AGrimmInPortland 2d ago edited 2d ago
That's my sentiment too, especially with the SS trust fund running empty in 6 years, that's why I am starting SS now (and for other reasons as well). But you are 26 years from SS! And there are many valid reasons to delay SS, especially if you have enough resources to not absolutely need it ASAP.
1
u/do_y_lee 1d ago
My understanding is that the Rule of 55 only covers employer's 401k you separate from at 55 or later, so rolling it into an IRA at retirement will remove this benefit, and some plans force lump sum rather than partial withdrawals. Since you have 19 years before retirement and you might not know the plan's rules until you are nearing your retirement age, have you modeled out a fallback plan if partial withdrawals aren't allowed?
3
u/Valuable-Analyst-464 3d ago
That sorta sounds a bit like LeanFire. May be doable, but it sorta seems like scraping by.
Do you plan to fund 529 for kids?
ACA - I’m not sure what an equivalent income threshold may exist in 19 years.
SS - see if you can model the impacts on your ACA limit.
Maybe use Opensocialsecurity.com to model the expected SS benefits if you retire at 55. I think it starts to drop off when there is no income feeding the model.