Hello, I'm a newbie to the ER site and forums, and FIRECalc. I've been
lurking so far, and I'm impressed by the level of knowledge and the friendly
helpful attitude, so here goes ...
I am "provisionally" retired at 53yo, and I'd like to become "early" retired.
I'd like to aim for an income of $50K/yr. This is pre-tax; I don't think taxes
will hurt me TOO badly, since half of my portfolio is taxable accounts, and
those will be about half basis and half LT cap-gain - make sense ? I believe
a 37yr payout is reasonable - I doubt I'll live past 90yo - that's WELL past
my expectancy, and my people are NOT long-lived.
I have nest egg of about $1M, roughly half tax-advantaged & half taxable.
If I'm running the SS calculators properly, I'll start getting about $21K/yr
when I'm 66. I believe that is today's dollars. Yes, I'm allowing for the
fact I won't earn anything between now and age 66, but I maxed it
out for quite a while there.
I really like the "sleep at night" factor of immediate annuities and I plan to
invest 25%/$250K (certainly no more) into one. The Vanguard/AIG quote is
about $11K/yr with 3% inflation. (A simple spreadsheet computes that this
represents about 6% on this investment, if I live 'til 90; if I die sooner, I frankly
don't care that I didn't get such a great return !) I plan to use IRA money,
since the SPIA payout will be taxed as ordinary income, while so much of the
taxable money is cap-gains. I figure with the SPIA and SS, I have a guaranteed
minimal income that will promote sound sleep, while allowing me to invest
the remaining $750K more agressively.
So I tell FIRECalc that I need $39K/year (with CPI inflation and 37yr payout.
This is 5.2% WR on the $750K (that's left in my nest egg after I buy the
SPIA), but of course it includes the forecast SS, and it says I'm 100% safe,
invested at 60% S&P500, 20% small-cap value, and 20% T-Bills (0.4% ER).
Sounds good to me (except I'd like some foreign stock); I like to keep it simple !
So that's my basic plan. Right now I'm only about 50% in equities, so I plan
to move to the 60%+20% over the next few months.
I'd appreciate your comments !
Thanks, John
lurking so far, and I'm impressed by the level of knowledge and the friendly
helpful attitude, so here goes ...
I am "provisionally" retired at 53yo, and I'd like to become "early" retired.
I'd like to aim for an income of $50K/yr. This is pre-tax; I don't think taxes
will hurt me TOO badly, since half of my portfolio is taxable accounts, and
those will be about half basis and half LT cap-gain - make sense ? I believe
a 37yr payout is reasonable - I doubt I'll live past 90yo - that's WELL past
my expectancy, and my people are NOT long-lived.
I have nest egg of about $1M, roughly half tax-advantaged & half taxable.
If I'm running the SS calculators properly, I'll start getting about $21K/yr
when I'm 66. I believe that is today's dollars. Yes, I'm allowing for the
fact I won't earn anything between now and age 66, but I maxed it
out for quite a while there.
I really like the "sleep at night" factor of immediate annuities and I plan to
invest 25%/$250K (certainly no more) into one. The Vanguard/AIG quote is
about $11K/yr with 3% inflation. (A simple spreadsheet computes that this
represents about 6% on this investment, if I live 'til 90; if I die sooner, I frankly
don't care that I didn't get such a great return !) I plan to use IRA money,
since the SPIA payout will be taxed as ordinary income, while so much of the
taxable money is cap-gains. I figure with the SPIA and SS, I have a guaranteed
minimal income that will promote sound sleep, while allowing me to invest
the remaining $750K more agressively.
So I tell FIRECalc that I need $39K/year (with CPI inflation and 37yr payout.
This is 5.2% WR on the $750K (that's left in my nest egg after I buy the
SPIA), but of course it includes the forecast SS, and it says I'm 100% safe,
invested at 60% S&P500, 20% small-cap value, and 20% T-Bills (0.4% ER).
Sounds good to me (except I'd like some foreign stock); I like to keep it simple !
So that's my basic plan. Right now I'm only about 50% in equities, so I plan
to move to the 60%+20% over the next few months.
I'd appreciate your comments !
Thanks, John