Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Approaching a Milestone.....
Old 04-07-2010, 10:23 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,864
Approaching a Milestone.....

I did not want to hijack the "How far are you from your all-time high?" thread, but I did mention that I was getting close to the $1M mark for investment assets (retirement and non-retirement), an amount I was close to in 2008 before I retired.

Back then, I was at about $975k when I cashed out my company stock worth about $300k. I paid most of the state taxes that December and most of the federal taxes last April, maximizing my ability to deduct state taxes while meeting minimum estimated tax amounts. That, along with the falling stock market, dropped me down to under $800k for a little while in 2009. But the stock and bond markets have rebounded nicely so I am not only at an all-time high but am very, very close to the $1M mark ($997k). I am counting my small checking account balance (assuming all my checks have cleared) but am not including the $2k balance of an outstanding (and unsecured) loan to a close friend.

Remaining bills this month will set me back a little bit but continued growth in my portfolio along with a quarterly dividend in one stock fund will keep me moving toward the $1M mark, so I could easily hit it any day now.

My 47th birthday is in a few weeks so that would be a great b-day present!

Life is good.....
__________________

__________________
scrabbler1 is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-07-2010, 10:47 AM   #2
Recycles dryer sheets
 
Join Date: Jan 2010
Posts: 174
Good to hear - Enjoy
__________________

__________________
jwkde is offline   Reply With Quote
Old 04-07-2010, 01:23 PM   #3
Full time employment: Posting here.
kaudrey's Avatar
 
Join Date: Feb 2006
Location: Alexandria, Va
Posts: 943
Congrats! I'll have to look to see your "backstory", as I will likely hit $1M around 45 or so (in 4 years), but that won't be enough for me to retire on!
__________________
Two roads diverged in a wood, and I - I took the one less travelled by...
kaudrey is offline   Reply With Quote
Old 04-07-2010, 01:40 PM   #4
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,038
Congratulations Scrabbler!
__________________
FIREd is online now   Reply With Quote
Old 04-07-2010, 07:56 PM   #5
Thinks s/he gets paid by the post
simple girl's Avatar
 
Join Date: Sep 2006
Posts: 2,505
Congrats! Very exciting, hope to be there someday, too. Hopefully sooner than we think, LOL!
__________________
simple girl
less stuff, more time

(49, married; DH 53. I am fully retired as of 2015 (well ok, I still work part-time but only because I love the job and have complete freedom to call off if I want to travel with hubby for work), DH hopes to fully retire 2018 when he turns 55 to access 401K penalty-free...although he may decide to do part-time consulting)
simple girl is offline   Reply With Quote
Old 04-07-2010, 07:59 PM   #6
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,093
Congratulations Scrabbler - well done
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 04-07-2010, 08:44 PM   #7
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 629
That's awesome scrabbler1.

Portfolio growth can really be amazing once it gets large enough for the investment return to outpace contributions. I am getting closer to that point and it is very exciting.

I am 33. I put around $24k a year in and my portfolio is around $175k now. Theoretically I could get close to a $17.5k per year investment return as I am usually around 80/20 stocks/bonds.
__________________
ESRwannabe is offline   Reply With Quote
Old 04-08-2010, 09:29 AM   #8
Recycles dryer sheets
Milkman's Avatar
 
Join Date: Apr 2007
Location: Longmont, CO
Posts: 66
I understand the feeling. In October 2007 I was within $75,000 of making that goal before the bottom fell out. By March of 2009 I was under $600,000. A year ago in March, I never thought that it would come back so fast. During the last 2 1/2 years I never stopped putting everything I could afford into my investments. Now I am less than $20,000 away. I know that 7 figures is just a number, but it still gives you something to get excited about. Somehow in the back of my mind, I am waiting for the shoe to drop.
__________________
Milkman is offline   Reply With Quote
Old 04-08-2010, 09:41 PM   #9
Recycles dryer sheets
 
Join Date: Jan 2006
Posts: 70
Congratulations! I'm sure being childfree had a significant positive impact in your net worth.
__________________
:)
Leonardo is offline   Reply With Quote
Old 04-08-2010, 09:43 PM   #10
Recycles dryer sheets
lightspeed's Avatar
 
Join Date: May 2007
Posts: 135
Congratulations, and great work. It is a great feeling hitting the $1m milestone. What's even better is that your 2nd million will come much faster!
__________________
lightspeed is offline   Reply With Quote
Old 04-08-2010, 10:30 PM   #11
gone traveling
 
Join Date: May 2008
Posts: 3,864
Congrats!

...on a related note, we experienced a new personal financial milestone this year, too- paid over 100K in income taxes...
__________________
Westernskies is offline   Reply With Quote
Old 04-08-2010, 11:10 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,864
Thank you, everyone, for your kind words.

@ESRwannabe - When my portfolio was about $175k, I was 33 years old, too. This was in the mid-1990s when the stock market was booming. I was working full-time and was increasing the stock portion of my overall holdings. Between that and my company's ESOP taking off, I was averaging about $50k increase per year in those great years.

@Milkman - I hope you can reach the $1M mark soon. I, too, got a little worried not only because my investments had dropped in value but the "big" bond fund's monthly dividends had taken a tumble. Everything has increased and returned to what I hope is "normal," especially the monthly dividends.

@Leonardo - My being childfree is the biggest reason for my financial success and being able to retire in 2008 at age 45.

@Lightspeed - I have not been adding much to my portfolio from the outside because I stopped working (i.e. retired) in 2008. All my IRA's increase is from the growth in the stocks and bonds in it, not any new contributions. My non-retirement funds have increased mostly from growth but some from excess dividends reinvested (from muni bonds to the "big" bond fund and to stock mutual funds). Therefore, getting from $1M to $2M is not likely to happen as long as I remain retired.
__________________
scrabbler1 is online now   Reply With Quote
Old 04-09-2010, 12:17 AM   #13
Recycles dryer sheets
knucklehead 61's Avatar
 
Join Date: Nov 2008
Posts: 136
congrats scrabbler!
i envy you & am trying to bail out at 45 as well, but it looks like a may have to push it back a couple years. can i ask how do you support your self with 1m total? is all that in taxable accounts? i have 1.1m in my portfolio, but only 300 to 325k of it is outside of ira & 401k accounts that i cant get to until 59.5 years old. so i am wondering how to support myself between 45 & 59.5?
__________________
knucklehead 61 is offline   Reply With Quote
Old 04-09-2010, 04:57 AM   #14
Recycles dryer sheets
 
Join Date: Oct 2009
Posts: 58
Congrats Scrabbler, I am 44 and just passed the 1M mark 1 month ago, currently 1.02M. I have to say that I know it is just a number but...its a large number. I moved to 100% cash and my target is 1.75M with 72K per year annual contributions. I hope to be there in 2017. Congrats. I ran the numbers and figured that with my savings rate, why take the risk?
__________________
floatingdoc is offline   Reply With Quote
Old 04-09-2010, 07:44 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,864
Quote:
Originally Posted by knucklehead 61 View Post
congrats scrabbler!
i envy you & am trying to bail out at 45 as well, but it looks like a may have to push it back a couple years. can i ask how do you support your self with 1m total? is all that in taxable accounts? i have 1.1m in my portfolio, but only 300 to 325k of it is outside of ira & 401k accounts that i cant get to until 59.5 years old. so i am wondering how to support myself between 45 & 59.5?
I had the same problem you had in the years leading up to my retirement in 2008. My retirement investments (RI) were growing more quickly than my non-retirement ones (NRI). In 2004 the value of my RI exceeded the value of my NRI. By 2008, my RI became 60% of the total. In 2007, I stopped contributing to my 401(k), mainly because I had become ineligible for any company match due to working only 12 hours a week. In the years before that, I should have kept my 401(k) contributions down to the level at which I would be able to take advantage of the company match but no more. Not doing that boosted my 401(k) a little but kept my NRI down a little, too.

But I had an ace in the hole to boost my NRI to get me through the age 45-59.5 years. I knew when I left my company I would have a one-time chance to liquidate all or part of my RI. My company's ESOP gave me a chance to sell my company stock holdings at a lower tax rate (LTCG) when I left it while I rolled my 401(k) portion into an IRA.

I did not want to take a beating on taxes and penalties by liquidating my 401(k), the same kind of beating you would face if you did that now or in the near future. I ended up paying about 25% of the ESOP in taxes (state and federal) and penalties, far less than the 35%-40% I would pay if I liquidated the 401(k). If you have any company stock in your 401(k), you may be able to cash it out at the LTCG rate by using NUA (Net Unrealized Appreciation), paying the 10% early withdrawal penalty on only the original cost (par value).

Another thing I was able to do when I left my company and cashed out my ESOP was to withdraw without penalty the after-tax contributions I had made to my 401(k) back in the 1990s. The earnings from these after-tax contributions I rolled into the IRA. This was my only chance to totally separate this blob of money from the rest of the 401(k) prior to turning 59.5.

The income from that big bond fund came from about $300k I invested in it initially (it pays almost 7%). I get about $2k a month from it, enough to cover my expenses with some room to spare. I was able to keep most of the rest of my ~$300k in NRI intact. Perhaps you can liquidate at most half of your RI and combine that with your NRI to cover your expenses (don't know how much they are)?

Speaking of expenses, I needed to be debt-free to keep them low. I also needed to find an affordable individual HI policy which could fit into my budget.
__________________
scrabbler1 is online now   Reply With Quote
Old 04-09-2010, 03:58 PM   #16
Recycles dryer sheets
 
Join Date: Sep 2009
Posts: 353
Congratulations scrabbler! Nice round milestone!

Quote:
Originally Posted by Westernskies View Post
...on a related note, we experienced a new personal financial milestone this year, too- paid over 100K in income taxes...
Hmmm, Westernskies, I think I envy you more than scrabbler!
__________________
smjsl is offline   Reply With Quote
Old 04-09-2010, 05:32 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,864
Wow, Westernskies, I thought I paid a lot in income taxes in 2008 when I paid about $74k, mostly as a result of selling my company stock. I thought I was going to have to pay a greater tax penalty (about $28k more) for doing that until I learned otherwise.

And with the big increase in the stock market and S&P 500 this week, I figured out that I am now only about $435 away from the $1M mark. It is likely that I will go over $1M and under $1M a lot in the next few weeks as I pay some big bills in the next few weeks. Makes for pleasant but bumpy ride LOL!
__________________
scrabbler1 is online now   Reply With Quote
Old 04-12-2010, 05:17 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,864
With today's small gains in the stock market and S&P500, I am now over the $1M mark ($1.0008M) in total investments - my taxable accounts, my IRA, and my small checking account!

I do not know if I will stay over the $1M mark for the rest of the month, as I have two large bills (total=$2k) due in the next few weeks before I receive my next monthly dividends. I'd say the odds are pretty good I can stay above $1M.
__________________
scrabbler1 is online now   Reply With Quote
Old 04-12-2010, 05:49 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,905
Quote:
Originally Posted by Westernskies View Post
Congrats!

...on a related note, we experienced a new personal financial milestone this year, too- paid over 100K in income taxes...
.

Congratulations! I guess? On a personal note, this is the first year that we paid zero in Federal and State taxes. I can only hope the second one of the usual duo remains equally distant.
__________________
ejman is offline   Reply With Quote
Old 04-12-2010, 07:59 PM   #20
Recycles dryer sheets
knucklehead 61's Avatar
 
Join Date: Nov 2008
Posts: 136
i don't own stock in the co i work for (but likely will inherit at least half of it unless i bail out soon). my spread sheet shows expenses of $80k after taxes to survive the way i want to. (lets just say that that will be a substantial pay cut from what i earn today ) i think i have income streams set up to bring in about 75% of that amount now, but want a solid safety factor in place before i pull the plug.


Quote:
Originally Posted by scrabbler1 View Post
I had the same problem you had in the years leading up to my retirement in 2008. My retirement investments (RI) were growing more quickly than my non-retirement ones (NRI). In 2004 the value of my RI exceeded the value of my NRI. By 2008, my RI became 60% of the total. In 2007, I stopped contributing to my 401(k), mainly because I had become ineligible for any company match due to working only 12 hours a week. In the years before that, I should have kept my 401(k) contributions down to the level at which I would be able to take advantage of the company match but no more. Not doing that boosted my 401(k) a little but kept my NRI down a little, too.

But I had an ace in the hole to boost my NRI to get me through the age 45-59.5 years. I knew when I left my company I would have a one-time chance to liquidate all or part of my RI. My company's ESOP gave me a chance to sell my company stock holdings at a lower tax rate (LTCG) when I left it while I rolled my 401(k) portion into an IRA.

I did not want to take a beating on taxes and penalties by liquidating my 401(k), the same kind of beating you would face if you did that now or in the near future. I ended up paying about 25% of the ESOP in taxes (state and federal) and penalties, far less than the 35%-40% I would pay if I liquidated the 401(k). If you have any company stock in your 401(k), you may be able to cash it out at the LTCG rate by using NUA (Net Unrealized Appreciation), paying the 10% early withdrawal penalty on only the original cost (par value).

Another thing I was able to do when I left my company and cashed out my ESOP was to withdraw without penalty the after-tax contributions I had made to my 401(k) back in the 1990s. The earnings from these after-tax contributions I rolled into the IRA. This was my only chance to totally separate this blob of money from the rest of the 401(k) prior to turning 59.5.

The income from that big bond fund came from about $300k I invested in it initially (it pays almost 7%). I get about $2k a month from it, enough to cover my expenses with some room to spare. I was able to keep most of the rest of my ~$300k in NRI intact. Perhaps you can liquidate at most half of your RI and combine that with your NRI to cover your expenses (don't know how much they are)?

Speaking of expenses, I needed to be debt-free to keep them low. I also needed to find an affordable individual HI policy which could fit into my budget.
__________________

__________________
knucklehead 61 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Bond fund bubble approaching? sailfish FIRE and Money 24 04-01-2010 02:17 PM
Are we approaching the threshold of a bull? Radiophilejapan FIRE and Money 63 07-08-2009 12:24 PM
Asset Allocation - Rebalancing when approaching ER or Retired chinaco FIRE and Money 28 10-30-2008 10:45 PM
FIRE date fast approaching Lakedog Hi, I am... 11 05-30-2007 05:51 PM
D- (Decision) day is approaching REDreaming FIRE and Money 6 01-09-2007 08:58 PM

 

 
All times are GMT -6. The time now is 12:27 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.