rws1773
Confused about dryer sheets
- Joined
- Dec 17, 2013
- Messages
- 5
Hello everyone! Well, I’m usually a lurker on Internet forums – content to read others thoughts and draw my own conclusions while I learn. I’m going to change things up though and just dive right in. I found this site while researching early retirement and there seems to be a wealth of knowledge and experience here. It also seems like the kind of place to find the answers to questions I have from people who have “been there, done that”.
I will be retiring from the Navy at the end of next year with 20 years of service. I’m going through the normal mix of emotions – everything from excitement to anxiety – not sure how to tell the difference! I could use some advice/reassurance in regards to the financial side of the house and making the transition. When I retire next year, I never want to be in a position to have to work full time at a job again. If circumstances require adjustments then my first option would be to cut expenses where possible. If cutting back wasn’t enough or circumstances such as a severe stock market crash necessitated earning some extra cash, I’d rather it be either part time or freelance with no long-term commitment.
With that said, I’d like to share some of my specifics and follow with some of my concerns with the hope that I’m on the right track and can benefit from others insights and ideas. Thanks to everyone in advance!
Retirement date: 31 Dec 2014
Terminal Leave date: 1 Sep 2014
Age: 42 (current)
Income/Assets:
Pension: ~$2050 gross/month, anticipate ~$1850 net/month
TSP: ~$125,000
ROTH IRA: ~$75,000
Taxable Brokerage: ~$50,000
Total: ~$250,000
Current amounts are approximately $35k less than those posted. I will be able to easily save another $25k during the next 9 months and the remaining $10k is assumed appreciation of my nest egg during the next year.
I have no debt and plan to retire to Tucson, AZ. I am an experienced investor and with the exception of TSP all my investments are in individual stocks. I am a fairly conservative investor, preferring steady dividend payers/growers, but will occasionally leverage some options to generate cash from the premiums for selling covered calls or leveraging by purchasing calls if I feel a security is very under valued.
Therein lies the problem. I have spent my career steadily investing but honestly have no firm idea on how I am going to draw it down.
Specific concerns are:
- I plan to purchase a house when I retire. I am divorced so I only have myself to worry about. Consequently, I want a small 900-1200 sf house in the $70k-$110k range. My concern is how to finance it – i.e. how much to put down, 30 yr/15 yr/5-1 ARM, pay off early or keep to term since rates are low?
- Considering the bulk of my nest egg is in tax sheltered accounts, what is the best way to draw it down without triggering the 10% early withdrawal penalty? I’d like to supplement my pension with ~$1,000/month from my nest egg. I realize this is a bit more than the recommended SWR of 4% but I am ok with that. My ROTH and taxable portfolio are currently yielding 3.9%. Depending on what I ultimately do with my TSP account, I think I can pull that amount out without selling equity (i.e. live off the dividends). Or I could do a 72(t) but I’m not convinced that is the most prudent way of getting the cash out. Specifically, I am concerned about being locked into a withdrawal rate until I’m 59 ½ without having the flexibility to either increase or decrease the withdrawals. I am open to ALL suggestions including annuitizing, converting TSP to Roth, 72(t) SEPP withdrawals, and staggered withdrawals from taxable, then Roth, then TSP. My goal is to maximize my withdrawal amounts while ensuring I don’t outlive my nest egg and minimize my tax liability.
Sorry for the long introduction! Any help or advice from the community will be greatly appreciated!
I will be retiring from the Navy at the end of next year with 20 years of service. I’m going through the normal mix of emotions – everything from excitement to anxiety – not sure how to tell the difference! I could use some advice/reassurance in regards to the financial side of the house and making the transition. When I retire next year, I never want to be in a position to have to work full time at a job again. If circumstances require adjustments then my first option would be to cut expenses where possible. If cutting back wasn’t enough or circumstances such as a severe stock market crash necessitated earning some extra cash, I’d rather it be either part time or freelance with no long-term commitment.
With that said, I’d like to share some of my specifics and follow with some of my concerns with the hope that I’m on the right track and can benefit from others insights and ideas. Thanks to everyone in advance!
Retirement date: 31 Dec 2014
Terminal Leave date: 1 Sep 2014
Age: 42 (current)
Income/Assets:
Pension: ~$2050 gross/month, anticipate ~$1850 net/month
TSP: ~$125,000
ROTH IRA: ~$75,000
Taxable Brokerage: ~$50,000
Total: ~$250,000
Current amounts are approximately $35k less than those posted. I will be able to easily save another $25k during the next 9 months and the remaining $10k is assumed appreciation of my nest egg during the next year.
I have no debt and plan to retire to Tucson, AZ. I am an experienced investor and with the exception of TSP all my investments are in individual stocks. I am a fairly conservative investor, preferring steady dividend payers/growers, but will occasionally leverage some options to generate cash from the premiums for selling covered calls or leveraging by purchasing calls if I feel a security is very under valued.
Therein lies the problem. I have spent my career steadily investing but honestly have no firm idea on how I am going to draw it down.
Specific concerns are:
- I plan to purchase a house when I retire. I am divorced so I only have myself to worry about. Consequently, I want a small 900-1200 sf house in the $70k-$110k range. My concern is how to finance it – i.e. how much to put down, 30 yr/15 yr/5-1 ARM, pay off early or keep to term since rates are low?
- Considering the bulk of my nest egg is in tax sheltered accounts, what is the best way to draw it down without triggering the 10% early withdrawal penalty? I’d like to supplement my pension with ~$1,000/month from my nest egg. I realize this is a bit more than the recommended SWR of 4% but I am ok with that. My ROTH and taxable portfolio are currently yielding 3.9%. Depending on what I ultimately do with my TSP account, I think I can pull that amount out without selling equity (i.e. live off the dividends). Or I could do a 72(t) but I’m not convinced that is the most prudent way of getting the cash out. Specifically, I am concerned about being locked into a withdrawal rate until I’m 59 ½ without having the flexibility to either increase or decrease the withdrawals. I am open to ALL suggestions including annuitizing, converting TSP to Roth, 72(t) SEPP withdrawals, and staggered withdrawals from taxable, then Roth, then TSP. My goal is to maximize my withdrawal amounts while ensuring I don’t outlive my nest egg and minimize my tax liability.
Sorry for the long introduction! Any help or advice from the community will be greatly appreciated!