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Old 02-18-2011, 08:28 PM   #21
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I sure wish I had your problem...........
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Old 02-18-2011, 08:56 PM   #22
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Given your apparent wealth I would suggest that you get some professional assistance, everyone here is just great but it wouldn't hurt to get some structured advice.
Probably the best comment of the lot (including mine). This is way more money than I had accumulated at the age of 40, for sure. Or anyone I know. Makes me wonder. Hmm..
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Old 02-18-2011, 09:25 PM   #23
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One factor about the real estate is that you can have a plan without much buffer. The emergency plan can be to sell some of the real estate, which not only adds to your net worth but reduces your expenses.

But, I don't see $9M supporting $500K, or even $400K for such a long period.
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Old 02-18-2011, 10:12 PM   #24
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Steelyman. I actually just turned 39.
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Old 02-18-2011, 10:18 PM   #25
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Running...I agree with your assessment. I'm likely to work 2 more years and with sale of my existing house and income stream for the next couple of years hopefully have a portfolio that exceeds 13. I think that should do it.. And yes in an emergency I could sell some of the real estate if I had to. Assuming a not crazy inflation scenario...would like to be able to lock in 5 or 6 million in go munis at 4 ish after tax percent and retain most of the rest of the portfolio to pass on. Thx for the advice...
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Old 02-18-2011, 10:59 PM   #26
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Steelyman. I actually just turned 39.
I believe you started the thread by saying you are 40. That's what I based my reply on.

At any rate, good luck with reaching your goals.
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Old 02-19-2011, 02:16 AM   #27
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Steelyman. I actually just turned 39.

Looks a little bogus ish !!!
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Old 02-19-2011, 07:14 AM   #28
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thx guys! appreciate the support. some good feedback though. just needed a sounding board that candidly is consistent with where i was going anyway...need to work a couple more years...just to make sure. as far as jayc...do i really need to send you a w2?? anyway whatever. thx for the feedback.
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Old 02-19-2011, 08:36 AM   #29
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I'm 40. I have 2 houses worth 2.5 to 3 million. Plus 2 condos worth over a million. And a couple of fractionals 400 ish. I have 9 million in securities...3 million in laddered munis and the rest in diversified equities. I have a pension at 62 of a lump sum of a couple of million. 2 young kids. I estimate retirement expenses of 240 ish. I have no debt. My questions are can I retire? If so what kind of portfolio would you suggest? If I do retire I cant be wrong...I want to avoid having to go back to work at target when I'm 68! So I would need a pretty conservative portfolio. Thoughts?
I'm a little confused about spending. You said in this post that you wanted to spend 240K now you're at 500K, can you explain.
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Old 02-19-2011, 08:42 AM   #30
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I think the $260K difference is taxes.
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Old 02-19-2011, 08:42 AM   #31
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$500K would be the necessary pre tax amount to generate $240K approx in after tax income in today dollars. make sense?
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Old 02-19-2011, 09:35 AM   #32
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$500K would be the necessary pre tax amount to generate $240K approx in after tax income in today dollars. make sense?
(500-240)/500=52% tax rate? Seems pretty high to me. I would have expected maybe 30%?
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Old 02-19-2011, 09:41 AM   #33
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Taxes aren't going down. This has to be a long term model...top rates will go back to near 40 plus state and city you r there at 50 ish rates going fwd. In fact in NYC they r already over 50. I think Illinois is at 7 ish?? Plus the city of Chicago. Not sure exactly but I think 50 ish is a good and realistic estimate.
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Old 02-19-2011, 09:45 AM   #34
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Taxes aren't going down. This has to be a long term model...top rates will go back to near 40 plus state and city you r there at 50 ish rates going fwd. In fact in NYC they r already over 50. I think Illinois is at 7 ish?? Plus the city of Chicago. Not sure exactly but I think 50 ish is a good and realistic estimate.
Illinois is going to 5% for the next 4 years, then drop to 3.75% after (that's the theory anyway). Chicago has no income tax on wages.
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Old 02-19-2011, 09:52 AM   #35
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I believe Cook County sales tax is about 10.25% for what it's worth. Might of changed since I moved away.
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Old 02-19-2011, 09:58 AM   #36
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I'm sorry...let me explain. My view is that tax rates are going up in the mid to long term. I think ultimately Chicago will look more like NYC. 40 percent federal ultimately plus 7 or so for state and 4 percent for city. Which is where I think NYC is at today. And Chicago right now is in worse fiscal shape today than NYC. Just my opinion of where taxes are going and thus is how I'm modeling my retirement after tax cash flows. Make sense?
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Old 02-19-2011, 09:59 AM   #37
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I was always surprised at how low it was... 3.75%. I relocated from IL to MN and paying 7.85% state income taxes. 5% would be nice.

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Illinois is going to 5% for the next 4 years, then drop to 3.75% after (that's the theory anyway). Chicago has no income tax on wages.
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Old 02-19-2011, 10:17 AM   #38
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Good grief. Waaaaay too much RE. Sell most of that while you can, and before property taxes start to go way up to pay for out-of-control local government expenses. Way too much carrying costs in personal, non-rental RE IMO, with property tax, utilities, repairs/maintenance, etc. You have about 4 million in assets COSTING you over 2% a year.

Your tax rate in retirement will likely be way lower than you are estimating IMO. Structure your income where most of it comes from LTCGs and you will see dramatically lower tax rates. Even if LTCG rates go up to 25% you will only need 320K to generate your 240K needed income, and if you sell most of your RE and diversify the proceeds into a productive, efficient portfolio worth about 15 million, then you will be at a 2.1% SWR, which should sustain you for 50 years.

What the heck do you do for a living to have amassed such an impressive net worth, if I may ask? Very impressive!
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Old 02-19-2011, 10:25 AM   #39
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I mentioned before...once retired I will sell current house and move back to city place so that should reduce my re exposure by 1.7 million. And I love all of my other re and am willing to work another 2 years to make sure I can afford to love it. As far as what I do...I worked on wall street for 8 years doing investment banking...providing mergers and acquisitions advice and have spent the last 9 years running strategy and m and a for a somewhat well known industrial company.
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Old 02-19-2011, 10:43 AM   #40
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I was always surprised at how low it was... 3.75%. I relocated from IL to MN and paying 7.85% state income taxes. 5% would be nice.
It seems to me that Illinois needs a complete revamp of its tax code. That state is in a world of hurt, and even a 5% (flat) tax rate is extremely unrealistic, given the hole that's been self-dug for the past couple of decades.
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