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HI! I am 56 AZ ready to retire need advise
Old 09-26-2011, 05:16 PM   #1
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HI! I am 56 AZ ready to retire need advise

Hi! I am going to retire in 2012 and close my small business. I have done well but lost money in the stock market recently. Reviewing many of the threads there appears to be an above average IQ crowd with good advise. I came to this site looking for answers from the FIRED web site.

Worked all my life saving for retirement and now I am here but do not know what to do now that I am near retirement. I don't believe in working any longer than necessary, a
My house if paid for and I have no debt.
1.) I have $2,500,000.00 and feel that $3,000,000 would be better but I do not want to work any longer.
2.) I am 56 with a wife (not working) a dog, but no children.
3.) My question is do you feel that I have saved enough to last into my 90's I understand that SS is just icing on the cake, but want enough not to have to take SS in to consideration to much.

4.) Been trying to decide the best way invest to achieve a stable retirement with ETF's MFunds, or just to buy dividend stocks. Looking for a retirement amount around $70,000.00. I know that in some parts of the country this may be high, but in other low.
5.) Expenses presently are about $70,000.00 including taxes.

Any advise from seasoned investors and retired.

Thank in advance for any advice.......
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Old 09-28-2011, 08:07 PM   #2
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if i had 2.5m & no debt i would be done right now.
you should be fine.
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Old 09-28-2011, 08:46 PM   #3
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Dogman-

Congrats, you're there!

You should get a lot of good advice here, not only on how much you need (and how to tell) but, also how to set up the income side to ensure you remain financially independent. Lots of folks here that can give you the benefit of their personal experience.

Here's a short summary:

1. A safe withdrawal rate (SWR) is 4%. So, you need 25 x income or, 25 x $70k = $1.75M.
2. Some may say a SWR is 3% or, 33 x 70k = $2.31M. This is, in my view, the conservative view. Either way, you're there.
3. You should set a budget (divided into essential and discretionary expenses) to confirm your $70k is right. (note-if you're already living on $70k/yr, then it's likely a good estimate.)
4. Evaluate the asset allocation you need to ensure you have high confidence (certainty if you're very conservative) that you're income will last 40 years. Another way to think of this is how to ensure an income stream of $70k/yr. So, an "asset" to consider is an annuity to provide some of your income. One of my favorite websites to help answer some of these questions is: Www.bobsfinancialwebsite.com

Welcome to the forum.
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Old 09-28-2011, 10:40 PM   #4
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Hold enough cash for at least 2 or 3 years or expenses before retiring. Spend it down first. That can help preserve your portfolio if the market keeps going down. It has little impact on your lifetime returns if spent early on, regardless of your asset allocation.

You're in good shape.
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Old 09-29-2011, 08:10 AM   #5
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The 4% rule is for 30 years of inflation indexed withdrawals. About 3.5% is more appropriate for 40 years - the OP asked "would it last into our 90's".

Still $2.5 mill ought to provide 40 years of $87,5 withdrawals - and SS will be gravy on top of that.

I agree OP is good to go, as long as his budget numbers are accurate.

OP does not say if his money is tax deferred or taxable. If all one or the other, he could just buy a Vanguard Target Retirement fund and spend all his time relaxing. If split between taxable and TD, I would recommend the Vanguard "Three Fund Portfolio" with bonds in TD. See link:

http://www.bogleheads.org/wiki/Three...Vanguard_funds
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Old 09-29-2011, 11:39 AM   #6
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Thanks for all the helpful advice and comments. As I have made big mistakes in the investments in the past. I would like any comments on, is the market too high presently to put money into dividend stocks like MO, PM, T, V,KFT, etc. or do many people still purchase short or long term Mun Bonds or corporate bonds. I really don't want to watch the stock market daily. Unfortunately I have been burned by buy and hold and brokers.

Any advise for income streams 1.3 in tax deferred and 1.3 in taxable accounts. If its still around SS looks better that I though after reading the different forums, my wife and I should be at around $3,800 per month at 66.

Again thanks for your interest and help. Will retire maybe working just a few hours a day at home during first four years of retirement starting mid 2012. Running you own small business is not what it used to be, the military looks pretty good after reading the blogs.

Dogman wishing he were a dog, no worries, but at least I have a stash of bones.
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Old 09-29-2011, 12:49 PM   #7
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I believe "most" of us prefer mutual funds/ETFs over individual stocks. Takes the day-to-day work off your hands. You can find funds that hold good dividend payers. I prefer roughly equal allocations of domestic, international, EM, small/large, value/growth, with real estate and natural resources added. I was OK investing in individual domestic and tech stocks, but when I diversified globally stock selection become too much of a burden. You can't go too wrong selecting the broad index funds or ETF's that give you the market return minus expenses.

I invest for total return rather than income. It allows additional diversification into non-income equities and should result in better portfolio gains and less variability. You just sell as needed to raise cash to meet planned expenses, within your planned limits of course. Probably a little more work than straight income. There are lots of strategies for portfolio withdrawals, so read up and find a plan that makes sense to you.
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Old 09-30-2011, 02:01 PM   #8
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If I may make one clarification, 4% is the safe initial withdrawal rate. You should be able to increase that amount for inflation annually.

Looks like you're in very good shape...hopefully you have things like health care coverage, LTC, and so on.

Good luck!
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Originally Posted by Huston55 View Post
Dogman-

Congrats, you're there!

You should get a lot of good advice here, not only on how much you need (and how to tell) but, also how to set up the income side to ensure you remain financially independent. Lots of folks here that can give you the benefit of their personal experience.

Here's a short summary:

1. A safe withdrawal rate (SWR) is 4%. So, you need 25 x income or, 25 x $70k = $1.75M.
2. Some may say a SWR is 3% or, 33 x 70k = $2.31M. This is, in my view, the conservative view. Either way, you're there.
3. You should set a budget (divided into essential and discretionary expenses) to confirm your $70k is right. (note-if you're already living on $70k/yr, then it's likely a good estimate.)
4. Evaluate the asset allocation you need to ensure you have high confidence (certainty if you're very conservative) that you're income will last 40 years. Another way to think of this is how to ensure an income stream of $70k/yr. So, an "asset" to consider is an annuity to provide some of your income. One of my favorite websites to help answer some of these questions is: Www.bobsfinancialwebsite.com

Welcome to the forum.
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Old 09-30-2011, 02:03 PM   #9
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I believe "most" of us prefer mutual funds/ETFs over individual stocks.
I certainly do. It's fine to use 5% of your money IMO to invest in individual stocks, but it's just too darn hard to keep up with all that's needed to be a good investor this way. I don't have the article handy, but I recall that you'd need about 12-15 individual stocks to be somewhat diversified within the equity category....that's a lot of 10K reports to read each year.
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Old 09-30-2011, 03:17 PM   #10
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Especially since you "don't" want to watch the market daily, I would steer clear of individual stocks as well. I've been there and done that. While I had some nicer winners over the years, it never compensated for the huge losses I took in stocks like WAMU, Citi and Worldcom. Buffet's rule #1 - DON"T LOSE MONEY. I failed that big time with my stock portfolio. Use ETF's or mutual funds.

You also didn't say how and where you plan to manage your portfolio, but did say you had brokers. Go to Fidelity, Vangaurd or Schwab and use them for all of your brokerage services. You will have access to a bunch of planning tools in one place and with 2.5M, you will get some nice perks along the way - not to mention no cost/low cost services.

Good luck and welcome to the ER group - it greeeat!
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Old 09-30-2011, 03:47 PM   #11
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I would dollar cost average into the market with that large a nest egg. Your money will last 35 years with doing nothing and that's not even including SS. I would use a combination of treasuries and put maybe 200K/yr into a vanguard target retirement fund. You've won the game, the only way to screw it up is to keep playing.
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Old 09-30-2011, 08:09 PM   #12
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Hello and welcome. Have you tried to enter your values in this free tool :

Merrill Edge| See Where You Stand

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Any advise from seasoned investors and retired.
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