Dan and Karen, coming to you from Abu Dhabi

[urright4me]

Hello, new to the forum, but not new to investment planning. In a nutshell, we are ready to spring free from my career of 25 years as a geologist. We love to travel, hike and bike long distances, view the stars, and camp at beautiful vistas. I would like to quit my job at 50, in trade for five years of my life, I give up the potential for a lump sum and continued company sponsored medical insurance. I have saved $600k in after tax cash investments, and woule like to begin substantially equal payments out of my $800k IRA (as my only income until 59-1/2). In so doing, I can realize a 15% tax rate for these 9-1/2 years. Then starting SS at 62, and my pension at 60 (both reduced for early withdrawl) brings in $88.3k/yr at a 25% tax rate. Investing after tax surplus, keeps up with waiting for larger $/yr from SS & pension subject to higher taxes. We would like a simple life in Bulgaria and Italy before coming home in 5-10 years. I like the idea of a high deductible medical insurance policy, where we self insure for the small items but have catastrophic insurance for the big ticket items. I have plenty of Soc Security points, but wonder if they would be penalized by not working for 12 years before collecting them. We plan to invest all surplus funds in tax free bonds, etc. Is pulling IRA funds out early to get a 15% tax rate the best thing to do, or should we leave that money invested and pull it out later in a higher tax bracket? Thanks for your thoughts and experience.

 

[REWahoo]

I have plenty of Soc Security points, but wonder if they would be penalized by not working for 12 years before collecting them.

Yes, you would be penalized, but not very much - certainly not enough to make it a significant factor in your early retirement decision. You might want to use the search button to find one or more of the several threads on the forum discussing this very subject.

 

[aida2003]

We would like a simple life in Bulgaria and Italy before coming home in 5-10 years.

I'm curious why you've chosen these two particular countries. As long as you don't live close to the cities in those countries, you might live simply there but OTOH you might feel deprived of action, cultural stuff (concert, museum, theater, etc.) and what about access to a good doctor if needed?
Would you buy a house or lease for a decade? How easy is it to buy RE there? Way too many questions, but since you're already an expat you're familiar with them, I suppose.
The grass might seem greener on the other side of a fence, but it's not always true, IMO.