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Just retired, hope I've got my ducks in order
Old 05-17-2013, 06:38 AM   #1
Confused about dryer sheets
 
Join Date: Feb 2012
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Just retired, hope I've got my ducks in order

Just seeking some additional validation on my stats:

Me and spouse both 60 living off investments and drawdown. Will supplement with SS staring @64.

Investments (managed by top asset mngmt team)
$480k in AAA rated bonds (savings, already taxed) 10 yr ladder
$300k variable annuity (mutual funds) IRA
$421k IRA mutual funds
$89k money market/savings/checking

Assets (no debt)
Home $249k
RV $50k
Autos $15k (2006, 2009)

Yrly budget
$65k

Healthcare

$10k deduct major medical
Both of us in good health

SS plan

@64. $38,960/yr
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Old 05-17-2013, 06:42 AM   #2
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Run your number through this calculator to see what it tells you: FIRECalc: A different kind of retirement calculator
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Old 05-17-2013, 06:50 AM   #3
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Quote:
Originally Posted by REWahoo View Post
Run your number through this calculator to see what it tells you: FIRECalc: A different kind of retirement calculator
+1
Or Fidelity Investments Retirement Income Planner.

I think you will get the confirmation you are looking for from these programs.
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Old 05-17-2013, 07:36 AM   #4
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I'd say that people usually run calculators BEFORE jumping the ship, but you decided to do when already in the water. OTOH, your retirement savings are great.
Does your $65k budget include Fed and State taxes? Does it also account for health/dental insurance premiums? If so, starting at age of 64, your savings need to cover only $26k/yr. Sounds great to me.

PS. What does "top asset mngmt team" mean? LOL; charging top fees in the industry or minimum fees like DFA hopefully that leave more dough for you.
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Old 05-17-2013, 09:28 AM   #5
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PS. What does "top asset mngmt team" mean? LOL; charging top fees in the industry or minimum fees like DFA hopefully that leave more dough for you.
This above quote and the variable annuity asset made me wonder. The bottom line of everything below is make sure you really understand the fees that you are paying to your advisers.

*WARNING* the following may only apply to my very negative experience. Your mileage may vary. Past performance is no guarantee of future results. Removing this sticker voids your warranty. *END DISCLAIMER*

The biggest financial mistake I ever made was allowing a CFP to put what eventually became 7% of my assets into a variable universal life insurance policy. I surrendered the policy and fired him about 10 years ago. I owned the policy for 12 years. Not sure this is the same thing you have, it just reminded me of it. The problem in my case was the outrageous hidden fees. It was very hard to determine these from the statements we were given:
  • special fund asset class with higher fees
  • overpriced term life insurance policy
  • direct fee to the CFP's firm every month as we added money

I could have bought the exact same funds cheaper myself, or could have bought a much cheaper S&P 500 fund which out performed these funds in both a very good and a very bad market. Fund family name was Mainstay.

I could have bought the exact same term life policy from the same company, NY Life, for less. Or I could have shopped a little and gotten and even better deal.

After 12 years this account was ~$100 underwater. I was able to surrender with no negative tax consequence. I was very embarrassed that I had allowed this situation to continue unrecognized as long as I had.

I managed the rest of my net worth myself, up to that point. Today it's all me. Every other thing I did out performed this variable universal life insurance policy. Most dramatically so. Even the change invested in my couch cushions did better than this.

I had just reached the point were the amount of money was starting to out pace the fees and was starting to earn back a decade of loss. Loss due to fees exceeding earnings. Your invested amount is high enough that you would be past that inflection point. At least when applied to what my situation was. But it's still a large boat anchor to be dragging along as you sail forward.

If I had invested that money in my Vanguard S&P 500 fund each month and directly purchased the term life policy from NY Life, I would have been ~$100,000 wealthier in 2002.
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Old 05-17-2013, 09:39 AM   #6
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If you were to withdraw 4% per year of your investments, that would be $51,600. Once SS begins you should have more then enough, but for the next four years you may have to withdraw more than 4% unless you can reduce your budget. If you could make a small amount of income doing something part time for the next four years I think that would give you a bit more cushion. See what Firecalc tells you to confirm.
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Old 05-17-2013, 09:46 AM   #7
Confused about dryer sheets
 
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I did run lots of calcs. Just like to hear from others swimming in the waters of retirement.

Budget has $$ for insurance, taxes. Keeping in mind, will be drawing on bond $$$ which has already been taxed and growth is fed tax exempt for most part and capital is taxed savings. Hope to move IRA amounts into bonds over time with minimal tax after exemptions/deductions.

Also have a little extra set aside early on for health care deductible ($10k) and emergency's.

Thanks for input! Re asst mgrs, yes there are fees, but they come with sound advice and performance that is equitable.
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Old 05-17-2013, 02:40 PM   #8
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Originally Posted by rosspam View Post

Thanks for input! Re asst mgrs, yes there are fees, but they come with sound advice and performance that is equitable.
Were they the ones who advised you to put $300k in variable annuities? Did they sell those variable annuities to you?

What are you paying for these asset managers and what kind of drag is that on your portfolio? Do they charge you a percentage each year or are you paying an hourly fee only?

What kind of fees are you paying on your mutual funds in your IRA? Where are you buying them from and how do the fees compare to, say, Vanguard index funds?

I'm not saying you need to answer these questions in this thread. You have good assets. But the way they are invested doesn't give me much confidence in asset managers. I suspect that you are enriching them far more than they are enriching you.
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Old 05-17-2013, 03:03 PM   #9
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+1 to what has already been posted. Do you have an idea of how much money they are making for the likely little bit of work they do and seemingly bad advice they are giving you? We can be a tough crowd. BTW, you have done VERY well and welcome to the forum.
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Old 05-19-2013, 04:42 AM   #10
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I would not make the jump to ER if these calculators indicate a success rate < 100%. However, I am very conservative.
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Originally Posted by rosspam View Post
I did run lots of calcs. Just like to hear from others swimming in the waters of retirement.
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Old 05-19-2013, 10:18 AM   #11
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I would do it, but I did it with less @ 42. What do I know?

I think if you can live on 3% DD on savings, no problem. That's what we are doing.

SS is icing on the cake for us (if we get it).
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