# Retirement Model — Matt Hoffmann

## Date: 2026-05-04
## Model: v4 (with actual portfolio + household data)

---

## Current State

| Metric | Value |
|--------|-------|
| Age | 35 |
| AGI (2025) | $208,500 |
| Savings rate | 20% gross |
| Annual spend | $132,000 ($11K/month) |
| Total investable assets | $608,914 |
| Home equity | $264,000 |
| Mortgage | $236K @ 3.875%, matures 2047 |
| Spouse (Aundrea) | TSP: $90K, VA health benefits, stable gov job |

### Asset Breakdown
| Account | Value |
|---------|-------|
| Taxable brokerage (Robinhood) | $198,914 |
| 403(b) | $215,000 |
| TSP (Aundrea) | $90,000 |
| CDs / HYSA | $100,000 |
| Crypto | $5,000 |
| **Total investable** | **$608,914** |

### Inheritance Assumption
- Amount: $5,000,000
- Probability within 15 years: 30%
- Expected value: $1,500,000

---

## Target at Retirement (Age 50)

| Item | Value |
|------|-------|
| Final income | $324,836 |
| Target annual spend (inflation-adjusted) | $205,652 |
| Required nest egg (4% rule) | **$5,141,292** |

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## Scenario Analysis

### Without Inheritance

| Return Scenario | Assets at 50 | Gap to Target | Retirement Age |
|-----------------|--------------|---------------|----------------|
| Conservative (6.0%) | $2,659,908 | -$2,481,384 (-48.3%) | 59 |
| **Moderate (7.5%)** | **$3,138,824** | **-$2,002,469 (-38.9%)** | **56** |
| Optimistic (8.5%) | $3,508,444 | -$1,632,849 (-31.8%) | 54 |

### With Inheritance (30% probability)

| Return Scenario | Assets at 50 | Surplus/(Gap) | Retirement Age |
|-----------------|--------------|---------------|----------------|
| Conservative (6.0%) | $7,659,908 | +$2,518,616 | 50 |
| **Moderate (7.5%)** | **$8,138,824** | **+$2,997,531** | **50** |
| Optimistic (8.5%) | $8,508,444 | +$3,367,151 | 48-50 |

### Probability-Weighted (Moderate Returns)

| Outcome | Probability | Assets at 50 | Retirement Age |
|---------|-------------|--------------|----------------|
| No inheritance | 70% | $3,138,824 | 55-57 |
| Inheritance arrives | 30% | $8,138,824 | 50-52 |
| **Expected value** | **100%** | **$4,638,824** | **~53-54** |

---

## Monte Carlo Simulation (10,000 runs)

| Percentile | Assets at 50 | Retirement Feasible? |
|------------|--------------|---------------------|
| 5th | $1,738,193 | No |
| 25th | $2,482,879 | No |
| **Median** | **$3,268,871** | **No** |
| Mean | $4,082,958 | Borderline |
| 75th | $4,862,950 | No |
| 95th | $8,673,115 | Yes |

**Probability of hitting $5.14M target at 50: 23.4%**

---

## Savings Rate Sensitivity (Moderate Returns, No Inheritance)

| Savings Rate | Assets at 50 | Gap to Target | Retirement Age |
|--------------|--------------|---------------|----------------|
| 20% (current) | $3,138,824 | -$2,002,469 | 56 |
| 25% | $3,473,104 | -$1,668,188 | 55 |
| 30% | $3,807,385 | -$1,333,908 | 54 |
| 35% | $4,141,665 | -$999,627 | 53 |

---

## Key Insights

### 1. The Math is Clear
At 20% savings, $208K income, $608K starting, 7.5% returns:
- **Without inheritance: 56 is realistic**
- **With inheritance: 50-52 is realistic**
- **Probability-weighted: ~53-54**

### 2. Inheritance is the Single Biggest Variable
- 30% probability × $5M = $1.5M expected value
- Makes the difference between 56 and 50
- NOT in your control — plan without it, hope for it

### 3. Your Spending is the Anchor
- $132K/year at 35 → $205K/year at 50 (inflation)
- Two kids (5 and 7) = spending likely sticky for 15+ years
- Reducing spend is the fastest path to earlier retirement
- But unrealistic with kids and lifestyle

### 4. Savings Rate Matters, But Not Dramatically
- 20% → 30% savings = +$669K at 50 = 2 years earlier
- Requires $21K/year more saved = $1,750/month
- Doable at $208K income, but meaningful lifestyle tradeoff

### 5. Returns Matter More Than Savings
- 6% → 8.5% returns = +$849K at 50 = 5 years earlier
- But 8.5% real returns = aggressive equity-heavy portfolio
- Your barbell may deliver this, but with higher volatility

### 6. Home Equity is a Wildcard
- $264K equity, mortgage paid off at 66
- If downsized at 50: extract $200K+ = reduces nest egg needed
- If kept: mortgage payments continue until 66
- Recommendation: Model "downsize at 55" scenario

---

## Probability-Weighted Retirement Age Distribution

| Age | Probability | Scenario |
|-----|-------------|----------|
| 50 | 7% | Inheritance + optimistic returns |
| 52 | 15% | Inheritance + moderate returns |
| 55 | 25% | No inheritance + good returns |
| 56 | 20% | No inheritance + moderate returns |
| 57 | 18% | No inheritance + conservative returns |
| 59 | 10% | No inheritance + low returns |
| 60+ | 5% | Adverse scenario |

**Expected retirement age: ~54**

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## Recommendations

### Immediate (Next 12 Months)
1. **Keep 20% savings rate minimum** — don't reduce
2. **Evaluate increasing to 25%** if lifestyle allows ($1,750/month more)
3. **Max out 403(b) + Roth IRA backdoor** — tax-advantaged space is precious
4. **HSA if eligible** — triple tax-advantaged

### Medium-Term (1-5 Years)
5. **Aundrea's TSP maxing** — her stable job + gov benefits = she can work longer, reducing household dependency on your portfolio
6. **Track actual spending** — $11K/month assumption may be high or low
7. **Model "downsize at 55"** — extract home equity to bridge gap

### Long-Term (5-15 Years)
8. **Inheritance scenario planning** — if it arrives, what's the deployment strategy?
9. **College funding** — kids at 5 and 7 = college in 10-13 years. 529 plans?
10. **Healthcare bridge** — Aundrea has VA benefits. You need coverage from 50-65.

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## The Bottom Line

**Without inheritance: Plan for 55-56**
**With inheritance: 50-52 is realistic**
**Probability-weighted expected: ~54**

The gap is $2M at moderate returns. You can close it with:
- Higher savings rate (25-30%)
- Higher returns (8.5%+ real — your barbell might deliver this)
- Lower spending (unlikely)
- Inheritance (30% probability)
- Downsize/home equity extraction (~$200K)

**Plan for 55. Hope for 50. Prepare for 57.**

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*Model: v4 | Assumptions: 3% income growth, 3% spend growth, 4% withdrawal, $5M inheritance @ 30% probability*
*Revisit: Quarterly or upon major income/asset/spend changes*