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Old 04-30-2010, 08:25 PM   #21
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I guess I'm hoping it will be in addition to the AR pension. After some thought,... I suppose I could retire with anything between $3500- $4000 per month.

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Old 04-30-2010, 08:45 PM   #22
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Originally Posted by rdjrn View Post
More info. Army Reserve retirement shoud be around $800 per month (before taxes). Wife is 12 years my junior and will continue to work for about another 10 years. And I totallly forgot to mention that I draw a tax free VA pension of $1300 per month for a service related disability.
I'd still like to draw between $3500 - $4000 a month after taxes from my investments alone.

Now whatcha think?
I think you are pulling our chain.

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Old 04-30-2010, 09:09 PM   #23
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Originally Posted by W2R View Post
You are not a dirtbag to think of it.

As one who has already inherited to one who may, I would urge you to NEVER depend on an inheritance in your ER plans, until the money actually has been distributed to you and is in your bank account. Seriously you never know what might happen. End of life expenses and other unexpected expenses can be monstrous, and if you aren't counting on it then you aren't going to be disappointed.
Agreed. I have a rough idea of what I *think* I'd have coming in my inheritance from my mom, but (a) it's her money to spend as she sees fit (though she's very unlikely to do it as she's a very simple/frugal/LBYM type) and (b) I hope to not see it for a long, long time if it comes. She carries LTCI as well (which already paid for itself helped in my dad's final few months fighting cancer) so medical/LTC costs aren't too likely to break her (but still remotely possible). Still, I'm not assuming anything and the expected inheritance isn't even in my long term financial plan.

She is, on the other hand, starting to gift her kids with money she feels very confident she'll never need from time to time, preferring to see her kids put it to good use in their lives while she's still around to feel good about it. She says that's what Dad would have wanted. Dad's philosophy was to save as much of his SS check as he could because he felt he was getting a good deal from it while his kids would be screwed by it, and he considered saving it for the inheritance as giving his kids a better deal from SS.
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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Old 05-01-2010, 07:27 AM   #24
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Originally Posted by wolf View Post
This is before taxes. Rule of thumb is 4% withdrawal rate.
The 4% SWR rule of thumb is based on a 30 year retirement window, so it might pose more longevity risk than a 56-57 year old might be comfortable with.
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 05-01-2010, 08:30 AM   #25
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Don't know if this will help you but....I'm 55 with $1,025,00 in investable assets and with the ability to sock another $80,000 away each year for the next 4 years at which time I plan to officially retire. Hoping the investable asset bucket will be between 1.3 to 1.5 million but there are no crystal balls. If the market does nothing, investable assets will be closer to 1.3m, if it does well it will be closer to 1.5m, if it goes know the drill here. In 4 years my home will be paid for. Income will come from board fees of $18,000/year and K1 income from family business which historically runs anywhere from $50,000/yr to $100,000 + a year as well as whatever interest I'm able to get off some CD's (currently running about $30,000 a year).....all of this is before tax. My plan is to live off whatever income is generated from the Board fees, K1 income from famly business, CD interest and any SS I may be entitled to....while allowing my stock market investments to continue to grow( with any luck!). Once my house is paid for ...I need $3,600 a month which is my bare bones budget...meaning being able to pay the bills and and owning a home requires. I have to pay for my health care.

Personally I am more comfortable with 1.5M to 2 M in investable assets ...which is why...even though I might be able to draw down my investable assets...I'm going to try not on what actually comes in as income....until my assets get closer to the 2m mark.

The other thing I have done...unlike some advice from the brokers and financial planners I currently have 13-15 years of 50K income NET of taxes socked away in Certificates of that if the market gyrates...I know I have a 13 - 15 year safety net. These last 2 bubbles did me in and ...I need to sleep at night.

I think you are well on your way....and have a comfortable nest egg that will afford you to "change gears" should you need to. But like others here...taxes...are a consideration. Generating $48,000 on a 1M nest egg sounds easy ...on the surface...until taxes are factored in. Save all you can beween now and the moment you retire. It will never be easier to do so.
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Old 05-01-2010, 08:52 AM   #26
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On other thing to think about. While your pension and 401K is $950,000....that is not net of tax. I have only about 20% to 25% of my assets in "deferred tax" IRA's....which means 80% of my investments tecnically are net of tax (Ive already paid tax on it - although I have to pay tax on any future cap gains, interest and dividends) which also means more net dollars to me should I use those dollars.
Now...this was not necessarily by design....but as I was talking to a planner years ago....I said..."please explain to me why it makes sense....for me plan on taxes being less in my retirement years - they could also be higher"! While I understand...all the nuances of ....socking away more before tax make more dollars...even if I am making the federal government more money....something about it....when I thought about it...didn't make a lot of sense to terms of knowing what I would have for retirment. ( i.e., one can't control the federal government.)
So my after tax investable asset bucket say of ...$1,025, someone elses 401K before tax bucket of ....what....$1,350,000 or so.

I also did not have the ability to set aside anymore in deferred accounts...unless I wanted an annuity...which after investigating them thoroughly I decided I didnt. In other words...why was I going to put "after tax" money....that I have already paid tax on....into a deferred vehicle like an annuity that when I started withdrawls...I'd have to pay tax again A small little detail (big!)...most people selling annuitie don't explain to you. If the annuities work as they should....we will be dead before we start invading the "basis" and only the basis is tax free. They distribute the growth out first. !!! The other cute little marketing that if someone bought the protected death benefit.....if the stock market goes down and your withdrawls bring "distributed bucket" down zero (which does happen)...then that protected death benefit you have paid for goes away.
Anyone looking at annuities needs to have the person selling you what happens when you start taking withdrawals against different scenarios of market decline. It is eye opening. Will you still get what they promised on a yearly basis. Yes..but they are paying you back with your own money.
Just my opinion...after intense investigation...
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Old 05-01-2010, 04:39 PM   #27
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A VAT tax will take care of those of you who do not have tax deferred accounts. And those of you who do also. You get to pay twice.

In theory, theory and practice are the same. In practice, they are not.
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