Koolau, Newbie checking in from the land of Nords

[Koolau]

Hi to all.

Long time lurker, here. Not sure I qualify as an early retiree, judging from some of the pros who post so often. I finally pulled the trigger almost 3 yr ago at the tender age of 58. Worked in F500 Co. for 36 years and saved from day 1. I've been a good saver, but only fair to dismal investor. generally, too conservative!

When I first visited Hawaii in 1975, I fell in love with its lush beauty, its people, its incredible mountains and endless beaches. From that time, I not only worked toward FIRE but more so toward eventually relocating to Hi. Late last year, DW and I finally wrapped up our mid-western affairs and moved here in two (each) 49.9lb suitcases. (Remember when the second bag was free?)

Probably the best investment we ever made was the purchase of a condo in windward Oahu in the early '80s. It's now paid for and that has allowed us to claim a small piece of paradise.

In the future, I'll share more of my FIRE story as appropriate. For now, the brief version is as as follows:

Have decent (if not great) pension (non-COLA adjusted except at the whim of the Corp.) Better, I have decent medical ins. with relatively low monthly cost and 20% co-pay for most needs. Also various his-and-hers IRAs (Trad and Roth) as well as a 401k. Finally, I have cash proceeds from sale of old mainland house. The 401k is the largest portion of invested funds and is mostly in stable value fund (yeah, I know!). His and her SS available in less than 12 mo.

Current "issues" include: Making the money last as long as we do. Becoming more aggressive in my investments (about time, huh?) When to take SS. Tax planning. Filling the remainder of my life with meaningful pursuits, experiences and relationships.

I've long enjoyed your posts and have learned much. I'd like to think I'm at least to the consciously incompetent stage of investing, moving toward the consciously competent.

I look forward to learning much more and I hope to contribute to the forum.

Much aloha,

Koolau

[honobob]

Aloha Koolau, from Honobob!

My good friend there is on Kaneohe Bay and painted the Koolau mountains along his wall by his pool. I first visited in 1976 and moved there one year later. The economy drove me to CA in the eighties.

Just got back from three weeks in Honolulu and was on your side a couple of times to my special restaurant place. Hope to be there full time in January.

Welcome to the forum. Good to hear another Hawaii Real Estate Believer!!

[laurence]

Considering the performance of the market for the last ten years, you can't beat yourself up so bad for your investment choice. I'm guessing you chose the route you did due to risk aversion and fear of the unknown, nothing wrong with that, you invested well in real estate and saved and now live in paradise! I might suggest a move with your asset allocation to 25% equities, maybe Vanguard total market. That will greatly increase portfolio survivability. What is your total portfolio NW, and how much money do you need per year?

[Koolau]

Aloha laurencewill,

I've calculated my yearly cash needs (beyond my pension but before SS) at about 3% of NW or less. That is not a firm figure as I've not yet experienced even a year in Hawaii. So far, it has been less expensive than I had thought and I would gladly lower that 3% in order to stay put. I do see potential for significant increases in cash burn due to energy and air travel as well as the overall increase in the cost of living. Local estimates of C-O-L increases exceed the average increase on the mainland, so that 3% figure could go up.

My typical portfolio results have not fallen below 5%/year since I started tracking 12 years ago. More typically; 6 to 7%. (Sort of good news - bad news.)

You are correct that I'm risk averse and it has both saved me from significant losses, but cost me huge potential gains.

Thanks for the advice on moving toward at least 25% stock. Currently, I'm at roughly 20% but that's a bit misleading since about half the stock is Company stock in 401k and old exercised stock options. Back when I was unconsciously incompetent, my company stock got as high as 50% NW!!! That bit of stupidity on my part is the reason I could retire to Hawaii before 65. The stock went vertical in late '80s/early '90s. My other motto (besides Murphy) - better lucky than good.

In fact I do plan to increase stock % as I roll over IRAs. I have accounts at Vanguard and that is where I plan to put most of my non-401k assets. To be honest, inertia has been my biggest enemy in this "plan". In concept, nothing is as easy as rolling over an IRA. In practice... I could tell you stories!


Aloha Honobob,

Thanks for the kind welcome. Sorry to hear you had to move to Ca when your heart is still here. Glad you will soon get to return!

So what is fav restaurant on windward side? All the "fine dining" seems to be in Honolulu, but I've never been much into that scene. The Shore Bird, Bubba Gump's or Cheeseburger in Paradise are about as "fine" as I get! So far, I like the neighborhood restaurants like Kim Chee or Ken Wah in Kaneohe. Haven't tried Haleiva Joe's on Haiku, but have gone to the one on the north shore and was more than satisfied with lunch menu. I hear Crouching Lion is reopening under new mgmt.

Much Aloha to all

Koolau

[CitricAcid]

Welcome to the board, and I would like to agree with laurencewill's assessment. As you are already in retirement, I would not suggest pumping up your equities/stock exposure too too much, but enough to have a decent hedge against inflation (especially since pension is not-COLA). Also, I am not so sure how risk-averse you are considering you have so much money in one company 8) . With a pension and able to live off of 3% NW, seems like you will be fine...

[RonBoyd]

Quote:

Originally Posted by Koolau So what is fav restaurant on windward side? All the "fine dining" seems to be in Honolulu, but I've never been much into that scene. The Shore Bird, Bubba Gump's or Cheeseburger in Paradise are about as "fine" as I get! So far, I like the neighborhood restaurants like Kim Chee or Ken Wah in Kaneohe. Haven't tried Haleiva Joe's on Haiku, but have gone to the one on the north shore and was more than satisfied with lunch menu. I hear Crouching Lion is reopening under new mgmt.

I agree about "Cheeseburger in Paradise" -- the last time we were in Hawaii (last November), we ate lunch at the one on Kalakaua Avenue in Honolulu three times... so it must have been good.

We have eaten lunch at the "Breakers Restaurant" in Haleiwa the last two times we visited the Rainbow State. Excellent both times. (Busy place though)

[honobob]

Quote:

Originally Posted by Koolau Aloha Honobob, Thanks for the kind welcome. Sorry to hear you had to move to Ca when your heart is still here. Glad you will soon get to return! So what is fav restaurant on windward side? All the "fine dining" seems to be in Honolulu, but I've never been much into that scene. The Shore Bird, Bubba Gump's or Cheeseburger in Paradise are about as "fine" as I get! So far, I like the neighborhood restaurants like Kim Chee or Ken Wah in Kaneohe. Haven't tried Haleiva Joe's on Haiku, but have gone to the one on the north shore and was more than satisfied with lunch menu. I hear Crouching Lion is reopening under new mgmt. Much Aloha to all Koolau

Koolau
Tried to PM you but you're not set up to receive PM's. Don't know if that is by choice or accident. I wanted to send you the restaurant name and am trying to keep the riff raff out (me excluded). Looks like you're on your way to finding it anyway!

[Nords]

Welcome to the board, Ko'olau. We probably have enough locals to start our own E-R.org chapter now!

You're going to have to grab your user name over at HawaiiThreads.com, too...

Perhaps it's better to be more concerned about the company stock than about your overall stock percentage. The bigger factor might be the volatility and "sleep-at-night" factor than actual (or potential) portfolio losses. If you're thinking about raising your stock %, though, this sure is a cheaper time to do it than last year.

I share your "fine dining" criteria. I guess Harry's in your area is long gone. Have you tried Haleiwa Café, Kua A'ina (the funky one in Haleiwa), The Shack (Mililani), or Thai Kitchen (Waipahu)?

But more importantly, what board do you use and where do you surf?

[Koolau]

Nords,

Sorry for the delay in replying. As you know, retirement is a busy time! heh, heh. Also, to be quite honest, I only just got back online after an almost 3 year hiatus. I haven't redeveloped the habit to check e-mail or the board (retirement - not surf!) Since retiring, I've only occasionally checked the board from various library computer rooms.

RE: Company stock: Over the years I have shed "vast" amounts of the stuff - especially when it was flying high. Now it's so beaten down it's paying a great % dividend - and I've convinced myself it has to go back up. Hope springs eternal. You're so right that stock is way cheaper now than in recent past. That's one reason I'm trying to convert some "fixed" trad. IRA's to stock Roths.

No, I haven't tried those restaurants, but thanks for the tips. As a corn-fed midwesterner, I have been surprised that I like so many new things. I had never tried kim chee (the food) until a few months ago. Wow! What a great appetizer. Poke? Had to swallow hard before trying. Great! Cooked rice? Never liked the stuff until I learned how to "mix" it with other flavors. I've put on weight since moving, just from the wonderful cooking smells coming from neighbors' kitchens, I think.

I hate to admit it, but I've never tried surfing. I do live vicariously by reading others descriptions of the sport (er, passion). And I do love to watch.

One tax question for fellow state residents: Do you understand the tax treatment of 401k distributions which INCLUDE company match contributions? I know that money contributed by employees is state taxed, but I think its different for any money contributed by the company, e.g., company stock match. If so, it could get complicated separating out which is which (and which used to be which as my plan allowed converting company stock to other plan funds - which I did.)

Any thoughts on the subject or a point in the right direction would be helpful. I must say, the pension and SS tax treatment in HI is a major benefit!!!

Thanks again Nords. You've been one of my RE heroes for many years and I've always enjoyed reading your posts. I've learned much about HI and ER.

Koolau

[RonBoyd]

Quote:

Originally Posted by Koolau Poke? Had to swallow hard before trying. Great

Poke for those who have never heard of it is the most fantastic food item ever devised. And the best is found at the Tamura Supermarket in Waianae -- well worth the drive out there just for the Poke. But don't try it around dinnertime: you can't get within a couple blocks of the parking lot and if you do, you will cruise the lot for a good half hour before a parking space opens up.

Quote:

Originally Posted by Koolau One tax question for fellow state residents: Do you understand the tax treatment of 401k distributions which INCLUDE company match contributions? I know that money contributed by employees is state taxed, but I think its different for any money contributed by the company, e.g., company stock match. If so, it could get complicated separating out which is which (and which used to be which as my plan allowed converting company stock to other plan funds - which I did.) Any thoughts on the subject or a point in the right direction would be helpful. I must say, the pension and SS tax treatment in HI is a major benefit!!!

I seem to remember something about a different tax treatment for company stock withdrawn from a 401k at the time of separation. I also vaguely remember it needs to be done within a short time after you leave the company. This may be what you are referring to.

[Nords]

Quote:

Originally Posted by Koolau I hate to admit it, but I've never tried surfing. I do live vicariously by reading others descriptions of the sport (er, passion). And I do love to watch.

If you can swim, you can learn to surf. Kinda quiet up there on your side right now (although the kitesurfing is probably busy at Kailua Beach) but south shore swells will be going up to Thanksgiving.

Quote:

Originally Posted by Koolau One tax question for fellow state residents: Do you understand the tax treatment of 401k distributions which INCLUDE company match contributions? I know that money contributed by employees is state taxed, but I think its different for any money contributed by the company, e.g., company stock match. If so, it could get complicated separating out which is which (and which used to be which as my plan allowed converting company stock to other plan funds - which I did.) Any thoughts on the subject or a point in the right direction would be helpful. I must say, the pension and SS tax treatment in HI is a major benefit!!!

I don't understand the tax treatment of the company match-- doesn't apply to our situation.

However here's a link to a 1998 change to the tax code, which could have been changed since then. It might give you a starting point to wade through the current version of the tax code:
01/22/98 ANNOUNCEMENT 98-02

[clifp]

Aloha Koolau

Another Hawaii transplant here. The rules could have changed since I checked back in 99/2000. But my understanding is contribution by employers to a 401K are not taxed (i.e. treated as pension) when withdrawn. I never looked at the rule regarding company stock as part of retirement, but I think might be treated the same.

What I did do when I retired was to create to two roll over IRAs. One roll over IRA contained my contributions and earnings. The other one contain my former companies contributions. I will only owe federal taxes on withdrawal from the second IRA no state tax.

Of course I won't be paying state income for the forseeable future but that it is another story and if you want to find more, feel free to ask (FYI, Nords I used the 2nd IRA to fund HEAVEN investment )