Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
New retiree story and recommendation for a good brokerage/bank
Old 10-28-2009, 04:40 PM   #1
gone traveling
 
Join Date: Oct 2009
Posts: 125
New retiree story and recommendation for a good brokerage/bank

Hello all. To start, let me give my life story and status. I am a freelance software developer (used to be a rocket scientist for a NASA contractor) who used to be able to command rates of $60/hr, but now seem to be hitting a wall. I believe that with outsourcing of high skill jobs to cheap places like India, that the whole cost structure of my current standard of living is gone, and I need to live on less. Since I would rather have more free time than a few extra bucks from working a stupid job at Wal-Mart, and I have enough in my retirement accounts to live fairly decently in a low cost area like Eastern Europe, I will just go into retirement, with the possibility of taking the occasional decent paying gig whenever I can get it (but living on a level that does not assume that I could continue to get such gigs.)

Anyway, I currently have a small Roth IRA and a substantial (~ $170K) 401K with my old full time employer. I have a small pension ($350/mo) coming to me when I hit 65, and if I wait until 70 to get Social Security, I will be getting about $1300/mo (even if I don't have any more FICA earnings.) I plan on keeping my income low enough to qualify for much reduced premiums under the new health care plan (in my state of Louisiana, where I plan to have a very small, cheap nominal legal home, I can get free care from the state hospital system if my income is below 200% of poverty.) I am currently a childless bachelor aged 44, and the only wife I plausibly see myself getting would be Easter European (and residing there for the most part.) I find such Eastern European women much more desirable than women in Louisiana. Oh and BTW, I am currently still displaced from my home that was flooded during Hurricane Katrina (I got 9-1/2' of water.)

I currently have about $120K in unsecured debt, and will be purchasing a small, cheap home to take advantage of the homestead exemption in bankruptcy, and then just going Chapter 7. After filing, I will start accessing my retirement accounts (or whenever it would be safe to access my retirement accounts without them being subject to the bankruptcy estate) to live on. I hope to quickly find decent employment so that I can coast a while before accessing the retirement funds, but if that would not be possible (and certainly, for the last 18 months, I have unsuccessfully been trying hard to find such work, which is the main reason I am going into Chapter 7), I will bleed off survival cash to live on.

I understand that I can withdraw retirement funds with a 10% penalty at any time, or if I withdraw the funds in equal amounts every year, I can avoid the 10% penalty, in which case I would have one opportunity to stop the withdrawls and not pay a back penalty, but I would not be able to withdraw anything again until reaching age 59-1/2. So basically, if I start to substantially withdraw funds, I have to make sure that I am withdrawing at a constant rate. As I cannot predict my ability to earn an income, nor know my expenses (e.g., if I were to start a family, obviously I would have more expenses, etc.) the calculation of the amount to withdraw must be carefully determined. Of course, if I live in Eastern Europe, even with a family, my expenses would be low, so I could always bank on being able to live there until I would be age 59-1/2. My parents have a fairly decent estate, and as I would be inheriting 1/2 of that, eventually that can be banked on, but it might be a *long* time waiting for that, and they end up having to spend down quite a bit of that.

Anyway, that's my story. I guess the main thing I need to do now is to find a good brokerage that will allow me a lot of investment opportunities, and also be a good bank for me to manage the withdrawals from my retirement accounts. I plan on doing a direct rollover from the 401K to a qualified IRA, but since I want to withdraw funds before age 59-1/2, I'm thinking that I would need to transfer it into a regular IRA.

As for the investment, I believe that the best way to go is to invest in a mutual fund that invests in good value stocks that can eke out a decent return during rough economic times. I think that the go-go times of financials and high margin entertainment and specialty retail are over. The only sectors I see doing well are computer technology (to some extent, and with the caveat of high P/E) and alternative energy and other green tech. I think that Peak Oil and Peak Everything Else is going to be the defining economic condition of the 21st Century, and any sector that is not aligned with that philosophy is going to be an eventual loser. Ironically, I also want to be in sectors that will be able to leverage the low cost labor arbitrage (ironically because it is that very arbitrage that has crammed me down.) I am thinking about going 20% in alternative energy and the rest in a fund that invests like Berkshire Hathaway (obviously, I would need much more liquidity than actually investing in Berkshire Hathaway, as I would only be able to redeem $5K at a time.)

So that's it. I'd appreciate any comments that could help me.
__________________

__________________
swampwiz is offline   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 10-28-2009, 05:34 PM   #2
Full time employment: Posting here.
 
Join Date: Dec 2006
Posts: 886
What Eastern European country are you considering? Do you have family there or another way to get citizenship or a long term residence visa?

It can be a pain if you don't have good connections.
__________________

__________________

Trek is offline   Reply With Quote
Old 10-28-2009, 06:21 PM   #3
gone traveling
 
Join Date: Oct 2009
Posts: 125
Quote:
Originally Posted by Trek View Post
What Eastern European country are you considering? Do you have family there or another way to get citizenship or a long term residence visa?

It can be a pain if you don't have good connections.
No, I don't any family there, but if I find a nice young woman, I can make a family with her.

I like Ukraine, but Mother Russia is also a possibility (tougher political situation there.)
__________________
swampwiz is offline   Reply With Quote
Old 10-28-2009, 07:19 PM   #4
Thinks s/he gets paid by the post
Coach's Avatar
 
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
Hi swampwiz, and welcome to the forum.

Considering your employment difficulties, Katrina and your planned bankruptcy, you have had your share of bad luck. I hope things turn around.

A good source of information on 72t distributions can be found here. I don't know how cheaply you can live in Eastern Europe. The 72t calculation is based on life expectancy, so the amount you could get out of your IRA will be pretty small at your age.

As for brokerages, I've been pleased with Schwab. They also offer nice affiliated checking and savings accounts. But, there are lots of folks on here who are very happy with their brokerage choices.

Coach
__________________
Coach is offline   Reply With Quote
Old 10-28-2009, 09:13 PM   #5
Full time employment: Posting here.
 
Join Date: Jul 2007
Location: ST LOUIS
Posts: 994
For how much can you live in Eastern Europe?
__________________
rec7 is offline   Reply With Quote
Old 10-28-2009, 09:22 PM   #6
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
With a portfolio of less than $200K, by conventional rules of thumb, you'll be able to safely withdraw about $8K/yr. And most studies show this to be sustainable for only 30 years.

You are making a huge assumption that the cost of living in the eastern European country of your choice will continue to be much, much lower than the US. You're only 44 - you have a long time to live and you will be in trouble if your assumption turns out to be wrong.

On the other hand, if you plan to semi-retire and work for just your low living wages, and let your portfolio grow, you may end up with a nice sum of money by the time you're ready for your pension at 65.

Given your stated penchant for 'working the system', I must point out that I am not a lawyer or a financial advisor, so This is not financial, investment or retirement advice. Please consult a professional advisor.
__________________
walkinwood is online now   Reply With Quote
Old 10-28-2009, 09:36 PM   #7
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
Quote:
I currently have about $120K in unsecured debt, and will be purchasing a small, cheap home to take advantage of the homestead exemption in bankruptcy, and then just going Chapter 7.
Will you be able to get financing for a small cheap home?
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 10-28-2009, 09:55 PM   #8
Recycles dryer sheets
 
Join Date: Sep 2009
Posts: 353
I'd be curious to know how much you think you'll be spending in Europe and based on what? Plus with dollar tanking... how do you account for that?

P.S. Isn't Moscow the most expensive city in the world? (It's probably quite different then rest of eastern europe though.)
__________________
smjsl is offline   Reply With Quote
Old 10-28-2009, 10:01 PM   #9
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Walkinwood makes a good point: there are talks about Ukraine joining the European Union in a few years and this could mean higher living expenses down the road. Also, when retiring abroad, one has to worry about exchange rate issues since your pension, SS and investment income will be paid is USD and your expenses will have to be paid with UAH.
__________________
FIREd is offline   Reply With Quote
Old 10-29-2009, 02:47 AM   #10
gone traveling
 
Join Date: Oct 2009
Posts: 125
Quote:
Originally Posted by Bestwifeever View Post
Will you be able to get financing for a small cheap home?
I use my liquid assets to purchase the home.
__________________
swampwiz is offline   Reply With Quote
Old 10-29-2009, 02:52 AM   #11
gone traveling
 
Join Date: Oct 2009
Posts: 125
Quote:
Originally Posted by smjsl View Post
I'd be curious to know how much you think you'll be spending in Europe and based on what? Plus with dollar tanking... how do you account for that?

P.S. Isn't Moscow the most expensive city in the world? (It's probably quite different then rest of eastern europe though.)
The cost of living in the provincial cities is much lower than Moscow. I could probably get a decent apartment for $200/mo, and even eating out for every dinner, I don't need to spend more than $300/mo for everything that would go down my gut.

As for the dollar tanking, the Ukrainian Hrivna used to be 1 USD = 5 UAH, but now it's 1 USD = 9 UAH. Besides, all prices are generally tied to the USD (they are known as "y.e.", pronounced ooh-yeh), so if I invest in the EAFE index, I would actually be coming out ahead.
__________________
swampwiz is offline   Reply With Quote
Old 10-29-2009, 02:55 AM   #12
gone traveling
 
Join Date: Oct 2009
Posts: 125
Quote:
Originally Posted by FIREdreamer View Post
Walkinwood makes a good point: there are talks about Ukraine joining the European Union in a few years and this could mean higher living expenses down the road. Also, when retiring abroad, one has to worry about exchange rate issues since your pension, SS and investment income will be paid is USD and your expenses will have to be paid with UAH.
That will not happen as Mother Russia would not allow it. Ukraine will live on as its namesake "the borderland." And don't forget that it is the recent Eastern European admissions to the European Union that are having the hardest time in the Great Recessions - e.g., Latvia, Estonia.
__________________
swampwiz is offline   Reply With Quote
Old 10-29-2009, 05:01 AM   #13
Thinks s/he gets paid by the post
 
Join Date: Apr 2005
Location: Duesseldorf, Germany
Posts: 1,005
The ladies in Eastern Europe can be quite tough cookies. They have learned what it takes to take care of themselves (and right they are).
I would wonder if they are looking for a foreign partner with the perspective to stay in their own country and remaining at their former standard of living.
Some German guys had to learn that the divorce rate jumps up significantly after the wife has received permanent residency.
__________________
chris2008 is offline   Reply With Quote
Old 10-29-2009, 08:12 AM   #14
Dryer sheet aficionado
Bikerchick's Avatar
 
Join Date: Oct 2009
Location: Northern Virginia
Posts: 41
Quote:
Originally Posted by Coach View Post
Hi swampwiz, and welcome to the forum.
As for brokerages, I've been pleased with Schwab. They also offer nice affiliated checking and savings accounts. But, there are lots of folks on here who are very happy with their brokerage choices.
Coach
Hi swampwiz. Schwab will also help you buy shares that are not on the US exchanges, although the minimum investment is $5K. Not sure this is well known.
__________________
Bikerchick is offline   Reply With Quote
Old 10-29-2009, 08:47 AM   #15
gone traveling
 
Join Date: Oct 2009
Posts: 125
Quote:
Originally Posted by chris2008 View Post
The ladies in Eastern Europe can be quite tough cookies. They have learned what it takes to take care of themselves (and right they are).
I would wonder if they are looking for a foreign partner with the perspective to stay in their own country and remaining at their former standard of living.
Some German guys had to learn that the divorce rate jumps up significantly after the wife has received permanent residency.
Well, my situation would be the opposite - I would be the one looking to get permanent residency over there.
__________________
swampwiz is offline   Reply With Quote
Old 10-29-2009, 01:31 PM   #16
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
Quote:
Originally Posted by swampwiz View Post
I use my liquid assets to purchase the home.
You didn't mention any liquid assets in your intro, that's why I asked, unless you're talking about using your 401(k) to purchase the home (although you talk about rolling that over to an IRA so probably not)?

Good luck to you either way.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 10-29-2009, 02:38 PM   #17
gone traveling
 
Join Date: Oct 2009
Posts: 125
Quote:
Originally Posted by Bestwifeever View Post
You didn't mention any liquid assets in your intro, that's why I asked, unless you're talking about using your 401(k) to purchase the home (although you talk about rolling that over to an IRA so probably not)?

Good luck to you either way.
After I sell my current homesite, I will have about $63K in cash, outside of my retirement accounts. I will take $53K of that and buy the house. Then, after spending the rest on fixing up the house and buying appliances and furniture, etc., I will file Chapter 7.
__________________
swampwiz is offline   Reply With Quote
Old 10-30-2009, 01:49 AM   #18
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,171
Quote:
Originally Posted by swampwiz View Post
After I sell my current homesite, I will have about $63K in cash, outside of my retirement accounts. I will take $53K of that and buy the house. Then, after spending the rest on fixing up the house and buying appliances and furniture, etc., I will file Chapter 7.
This is probably going to get me flamed, but don't you think your creditors should get at least some of that $63K in cash?
__________________
kyounge1956 is offline   Reply With Quote
Old 10-30-2009, 11:08 AM   #19
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,608
I believe that intentionally hiding assets or piling up debt with the intention to file bankruptcy and default are both crimes. What makes you think doing either of these would be a good idea?
__________________
growing_older is offline   Reply With Quote
Old 10-30-2009, 01:42 PM   #20
gone traveling
 
Join Date: Oct 2009
Posts: 125
Quote:
Originally Posted by kyounge1956 View Post
This is probably going to get me flamed, but don't you think your creditors should get at least some of that $63K in cash?
Well, the state gave me, coincidentally, $63K to purchase a home, so you could say that money is contractually obligated for me to purchase the home.

And in any case, if the creditors should get that money, then the laws should have been written which would disallow me buying an exempt asset before bankruptcy. This is analogous to a tax loophole - if such loopholes should not be done, then the law should be written to disallow it.
__________________

__________________
swampwiz 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
There is hope - a good story - Newguy; this is for you dex Other topics 7 03-15-2008 08:02 AM
Good news. Good story. calmloki Other topics 9 12-20-2007 08:15 PM
Good Lotto story nnkrealtor Other topics 9 02-28-2007 12:34 PM
Brokerage from hell Doby Hi, I am... 16 07-30-2006 03:50 PM

 

 
All times are GMT -6. The time now is 11:09 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.