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Old 08-22-2013, 03:48 PM   #1
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Hi - Hopeful FIRE in < 5years

Hi - Stats me 52, DH 55. We have invested in our respective 401k's as follows: DH with his employer for 30 years and contributed 6% to get the co match and over time contributions to 401k are now at 15% + co. Match. He will also get a pension. I have only had a 401k the last 19 years and am curr @ 16% + co match.
We paid off our house a couple of months ago and want to start putting this money into non tax-deferred accounts. Love reading all the advice here. This blog along with others is what led me to Vanguard. I plan on rolloing over an IRA to Vanguard to reduce fee costs.
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Old 08-22-2013, 04:56 PM   #2
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Uhoh! You seem to be making the same mistake we made. We concentrated on tax deferral during our working years and put too much into IRAs and 401s and 403s. At retirement we found ourselves with plenty in the deferred plans and not much in taxable accounts. We are in great shape except that the tax man has to eventually be paid. We would have done better overall to have put more into taxable accounts so that we would have had more flexibility early in retirement.
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Old 08-22-2013, 08:36 PM   #3
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I would think you would want to continue contributing to all possible tax deferred accounts before you start taxable accounts. This is if you think your marginal rate is higher now than it will be in retirement. Since DH is 55 will be able to use his 401k in early retirement without penalty.
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Old 08-23-2013, 02:26 PM   #4
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Thank you for the comments. Here are more specifics:
Between both of us we have $1.45 mil in our 401k's/IRA. Cash $35k. DH wil have $33k @ year in pension @ retirement in 2018. Equity in house $225k. Yes - we will have ability to access DH 401k in 2018 as he will be 60.

Goal is to put the $2 k a month in a non-tax deffered account. Not sure what yet. Have an appt with Vanguard and will discuss when I rollover the IRA. Also, getting good ideas here!
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Old 08-24-2013, 09:01 AM   #5
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If you only have $35K outside of a tax deferred account, then it would probably be a good idea to build up your taxable accounts at this point. However, you will have to balance this against giving up any company match in your 401K. Your Vanguard advisor may be able to help with this.

Since you are not planning on retiring until at least one of you is 60, you will not have to pay penalties to withdraw early on your 401K. However, if you have a need for cash between now and then, you may have some risk of not having enough cash to cover emergencies.

You did not share your asset allocation, but I would discuss this with Vanguard and come up with an overall plan to allocate your investments between stocks and fixed income, and then determine which investments are best held inside the tax deferred accounts vs taxable accounts. In general bonds are best held in tax deferred so that you don't have to immediately pay taxes on the dividends.
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Old 08-24-2013, 12:05 PM   #6
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Whatnot, as long a you make minimally sensible decisions (and obviously you're way past this stage!), you are in excellent shape... Congratulations on getting there!
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Old 10-22-2015, 10:07 AM   #7
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2 year update! Wow time sure has passed. Still on track to retire 4/1/2018. Update: DH 401k: $1.250, Me 403b $415k, IRA $239k, total of $1.904 tax deferred. 70/30 allocation. DH Roth, $6,500. HSA $3,056. Cash $64,000, CD 25,000 (3 yr 1.74%). DH 401k is at Fidelity, Roth is @ Vanguard. I also moved by IRA to Vanguard. Total just over $2 million. 5% in after tax. Goal is to increase this over the next 2 years. No debt. Big expenses last 2 years included, 2 weddings for kids, new roof & kitchen remodel. We plan on selling house when we retire and move. Equity $230k. So the next 2 1/2 years will max our 401k $24 k each, and after tax savings $40 k a year. DH pension will be $40k a year and health ins. 70% subsidized vs 80% now. Firecalc & Fidelity both show we are good to go. It will be difficult to adjust from our current salaries and saving to withdrawals. But DH has been at his job for 34 years and is ready to go. And so am I!
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Old 10-22-2015, 12:04 PM   #8
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Thanks for the update, whatnot. Glad to hear things are going well. Have you tried running the numbers to pull the plug a bit earlier? How are you doing with expense tracking to see where you might have some opportunities to reduce without really changing your quality of life? Many of us are finding that we aren't spending as much as we thought we would before we took the plunge. Good luck with everything and keep in touch!
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Old 10-22-2015, 12:59 PM   #9
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Yes I know I have a lot of work to do on the expense side.
But since I have joined this site, I have moved my IRA to Vanguard, I opened an IRA for my DH and then converted to a ROTH. Learned about and had DH start a HSA via work. Also, cleaned up our investments within our respective retirement accounts. DH had over 10 and I really had not paid attention to our AA. So I consolidated the # of investments and have us both at 70/30.
Now my focus is to increase savings (after reach our 401k's max). I have just started using Quicken to track expense. We still want to enjoy life and have always spent pretty freely, but we need to buckle down. I want to start reducing our spending to our anticipated retirement income.
I do love this board and have learned a lot!
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Old 12-01-2017, 09:05 AM   #10
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Hi all. Another 2 year update. Still on tract to retire 4/15/18. DH 60 & me 57

Total tax deferred:$2.5 mil, Moved from 70/30 to 60/40 (includes $27 in Roth 401k)
Roth & HSA $45k, Cash/CD's $228k. Total $2,780 million.
Pension approx $45k a year.

Thank you markets and to this forum! We have tried to put as much as possible in Roth/HSA and increase our cash position. But still have enjoyed traveling etc. Looking forward to next year.
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Old 12-01-2017, 10:52 AM   #11
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Congrats! I wish I was as close to the finish line. Enjoy.
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Old 12-01-2017, 04:28 PM   #12
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Quote:
Originally Posted by whatnot View Post
Hi all. Another 2 year update. Still on tract to retire 4/15/18. DH 60 & me 57

Total tax deferred:$2.5 mil, Moved from 70/30 to 60/40 (includes $27 in Roth 401k)
Roth & HSA $45k, Cash/CD's $228k. Total $2,780 million.
Pension approx $45k a year.

Thank you markets and to this forum! We have tried to put as much as possible in Roth/HSA and increase our cash position. But still have enjoyed traveling etc. Looking forward to next year.
Looks really good - especially with the pension and subsidized HC.

I only skimmed so may have missed it, but what are your annual expenses?
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Old 12-01-2017, 08:34 PM   #13
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Budget is $130k. But that is with a lot of discretionary. We will also have SS, DH will take at 62 and I am thinking 67 to start mine.
I have run numerous calculators, spreadsheets etc and they say we are good to go.
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Old 12-02-2017, 02:15 PM   #14
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Congrats! ��. Enjoy!
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