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Is my plan too simplistic?
Old 08-17-2004, 05:23 PM   #1
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Is my plan too simplistic?

: I am 49, married, have 2 in-college sons and have no debts save for PLUS loans for my sons (24K). My current net worth is 1.3 M and I would like to retire in 5 years. I am the only employee of my S-Corp business. My wife is a public school employee. I have estimated our annual retirement costs of 40K.

I have laddered CDs of 280K for the first seven years of retirement. These are also used for our emergency fund.

We have 400K in IRAs (trad, Roth, and SIMPLE) that I plan to gradually convert to All-Roth and invest in Vanguard Target Retirement 2015.

We have another 100K in IRAs that I plan to gradually convert to All-Roths and invest in Vanguard Target Retirement 2025, with plans to invest at least 400K eventually here also.

Other funds will eventually be placed in a Target 2035 fund. Etc, etc.

I am keeping my income low so I can top off my tax bracket with annual traditional to Roth IRA conversions. This also helps us our sons receive college scholarship monies.

Our retirement income stream will also be supplemented (a little) by my wife's state retirement income, as well as her 3 tax-deferred annuities. Oh, yeah, and possibly SS payments.

Is this plan just way too simple?

Reg2




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Re: Is my plan too simplistic?
Old 08-17-2004, 05:46 PM   #2
 
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Re: Is my plan too simplistic?

I always enjoy reading stuff like this, especially
when the poster is wondering if they can retire, and when. I realize that I am quite unique, but I retired with
virtually nothing but motivation and creativity. I will never have a million dollar net worth. I will never have a
half million dollar net worth, so please excuse me if I
am amused when someone says, "We have a net worth
of 1 million, no debt, no kids at home, a paid off house
worth $250,000 and we both get a COLAed pension
at 55. Can we retire?" What a hoot!

John Galt
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Re: Is my plan too simplistic?
Old 08-17-2004, 06:09 PM   #3
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Re: Is my plan too simplistic?

John,
You make an excellent point....once again.

Basically, half the state of California could retire (our way) based on their recent home values. So what's stopping them? FEAR

Not to mention losing friends, keeping up with the showoffskis, etc.

Billy
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Re: Is my plan too simplistic?
Old 08-17-2004, 06:10 PM   #4
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Re: Is my plan too simplistic?

Reg2,

Don't be discouraged by John's message. *It was just a response from what the site has come to know as the Galternate Universe. *
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Re: Is my plan too simplistic?
Old 08-17-2004, 06:47 PM   #5
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Re: Is my plan too simplistic?

Nope

Simple is good. Sounds to me (reading between the lines) - you want the kids to make it thru college ok before you pull the plug.

Before Target there was Lifestrategy - Vanguard's early try at a life cycle type fund.

Vanguard Lifestrategy cons and mod is 75% of our ER. 10% Vanguard REIT and 15% hobby stocks.

We retired (no kids) with 300-350k in financial assets in 1993. Long story but the stuff you need is here - start perusing this forum.

The mental aspects are just as real as the financial. I got lucky - they canned/layed off my butt at 49 while I was busy planning to retire at 63.
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Re: Is my plan too simplistic?
Old 08-17-2004, 07:13 PM   #6
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Re: Is my plan too simplistic?

I think John Galt's point is right on. Certainly not a discouragement. The question is, Reg, why are you STILL working? Your approach does sound very reasonable though.
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Re: Is my plan too simplistic?
Old 08-17-2004, 08:43 PM   #7
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Re: Is my plan too simplistic?

Hi Region2,

Simple is good. I love the 2025 fund .... have 1/3 of
my stash in it.

Cheers,

Charlie
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Re: Is my plan too simplistic?
Old 08-18-2004, 09:21 AM   #8
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Re: Is my plan too simplistic?

Simple is better...(best?).

Many folks have 20-30 different funds and think that they are well diversified because of this. *They eventually will come to their senses and realize that more funds is not necessarially a better position to be in and gravitate to a more simple approach.

You have a pretty good plan, especially the VG TR 2035, why mess it up?
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