Hello All:
Getting ready to FIRE at 59 (after a few OMYs) and wanted to get your thoughts on the best withdrawal strategy.
Expenses are about $80K a year and I have $2.8M in investments broken down as follows:
$1.5M taxable
$750K my 401K
$350K DW and my IRAs
$200K cash
Will wait until 70 to take $65K in social security income (me and DW combined)
Both taxable and 401K/IRA investments are about 60/40 equity/bond funds. I'd rather not touch my principal, so my idea is simply to use the dividends and capital gains from both my $1.5M taxable and $750K IRA account to cover my $80K expenses. If I only use the income from my taxable account, it will generate around $60-65K depending on the year.
I heard a lot of folks on this site recommend waiting to until 70 to start drawing from a 401K for tax reasons, but I don't see a big difference between using it now or then, esp. since I'll have SS income at 70.
So the question is, should I only touch the taxable income until 70, which means I will have to sell some of the principal each year, or start taking the income from the 401K as soon as I'm eligible?
Getting ready to FIRE at 59 (after a few OMYs) and wanted to get your thoughts on the best withdrawal strategy.
Expenses are about $80K a year and I have $2.8M in investments broken down as follows:
$1.5M taxable
$750K my 401K
$350K DW and my IRAs
$200K cash
Will wait until 70 to take $65K in social security income (me and DW combined)
Both taxable and 401K/IRA investments are about 60/40 equity/bond funds. I'd rather not touch my principal, so my idea is simply to use the dividends and capital gains from both my $1.5M taxable and $750K IRA account to cover my $80K expenses. If I only use the income from my taxable account, it will generate around $60-65K depending on the year.
I heard a lot of folks on this site recommend waiting to until 70 to start drawing from a 401K for tax reasons, but I don't see a big difference between using it now or then, esp. since I'll have SS income at 70.
So the question is, should I only touch the taxable income until 70, which means I will have to sell some of the principal each year, or start taking the income from the 401K as soon as I'm eligible?