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retirement options -the time has come. final plans
Old 04-12-2015, 05:42 AM   #1
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retirement options -the time has come. final plans

well we are in the home stretch now and retiring in july,

40 years in the making and i can't believe it is here.

i have been running the numbers over and over trying to find the most efficient way of handling withdrawals both in current taxes and in taxes when rmd's kick in.

so here are the final stats :

marilyn is 64 and i am 62.

she is collecting now 868 a month . i will file in january and get 24k and she will be boosted to 12k a year.


so we have 36k in ss and a 20k pension to start with .

that gives us 56k. we are planning around an income of 130-140k as a max but have actual expenses in the 110k range we also live in queens nyc,

we have about 2.8 million split just about evenly between ira's and taxable account and another 300k after tax money due us tied up in 2 remaining co-op apartments over looking central park with rent stabilized tenants.

they are not accepting buy out offers on their lease and rents are near break even so we are keeping that out of the equation.

we are 45/45/10 equities bonds cash.

so here is the questions i am running into.

we both are finishing up working by july and since i am working part time now i doubled up on my 401k and between that and medical i will have about 8-10k in taxable income this year left over.


marilyn will have just about all her taxable income offset by her ira deduction.


so we are starting off with about 20k in pension ,36k in ss and the rest withdrawals from the cash .

that seems to be the most efficient means of doing it year 1 .

i also set up the 50k we get from the taxable accounts in dividends and distributions to start to go in to our money market for the following years money. we have enough cash to finish until that point.

the big question i can't figure out is are we better off leaving the cash sit , spending down the ira money at a higher tax rate now and having less rmd's later.

i can't get the fidelity rip calculator to do anything but pull the taxable account first.

anyone have software than can run the two scenarios ?


do we hit the cash first , let some of the distributions take advantage of the zero capital gains bracket or do we shed as much ira money early on as we can.

this stuff is making my hair hurt.
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Old 04-12-2015, 06:23 AM   #2
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Have you given i-orp a try first?
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Old 04-12-2015, 06:29 AM   #3
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i-orp ? never heard of it. thanks i will check it out.

wow just did , just maybe that will do it, i have to play .
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Old 04-12-2015, 06:39 AM   #4
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i-orp ? never heard of it. thanks i will check it out.

wow just did , just maybe that will do it, i have to play .
Yeah, give it a play. It sounds like i-orp can help with some of the decisions. It is pretty comprehensive and aims to optimize all the variables, especially with regard to IRAs. You may find it also suggests some other things such as traditional to roth rollovers.

And since you both don't *have* to take SS, it may have suggestions for that too. Sounds like you were just going to take SS now for both. Hold on there, you may want to wait.

Good luck and happy planning!
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retirement options -the time has come. final plans
Old 04-12-2015, 06:50 AM   #5
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retirement options -the time has come. final plans

You realize you could easily live 25 years or more? I am 2 years behind you and my split 16% fixed income and 84% dividend funds (DVY, IDV etc.,) and dividend equities (O, VZ etc.). My yield is easily 4% and that will easily cover all expenses. Those old rules about your age in fixed income in my opinion are dangerously conservative. Take a look at dividend funds payout during the last crash...hurt true but not so much... In my opinion inflation is the real enemy. I keep enough in fixed income to get me through any downturn... But the dividends keep on coming.

Just some food for thought

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Old 04-12-2015, 07:17 AM   #6
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45-50% equities works just fine . in fact prior to rmd's our withdrawal rate to cover actual expenses and taxes which is about 115k is just 2.30%. 50/50 is our comfort range.

we figured about 130-140k in case we want to do a bunch of trips .

4% has tested fine well in to the 90% range .
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Old 04-12-2015, 07:24 AM   #7
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Originally Posted by JoeWras View Post
Yeah, give it a play. It sounds like i-orp can help with some of the decisions. It is pretty comprehensive and aims to optimize all the variables, especially with regard to IRAs. You may find it also suggests some other things such as traditional to roth rollovers.

And since you both don't *have* to take SS, it may have suggestions for that too. Sounds like you were just going to take SS now for both. Hold on there, you may want to wait.

Good luck and happy planning!
the projections i ran for waiting made it really not worth it.

by the time you figure in the lost checks and lost gains on the money you are spending downthere was such little difference even if she made it to 95 and me 92.

if one of us died the loss of one check could wipe away any advantage.

the huge ss checks also when coupled with rmd's were a boat load of taxes more


this chart does not factor in lost gains on what you spend down waiting . how much would be given up the last 5 years in gains spending down investments vs ss ?

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Old 04-12-2015, 07:33 AM   #8
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No advice on the spending mix. I struggle with it myself. But congrats on reaching the end of work.
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Old 04-12-2015, 07:37 AM   #9
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thanks , it has been a lifetime of effort.
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Old 04-12-2015, 01:36 PM   #10
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Enjoy your retirement. I'm starting week 11 of early retirement and am quite content.


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Old 04-12-2015, 01:59 PM   #11
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Congrats mathjak107. I've been reading your posts a long time during almost all of which I've been FIRE'd and you've been working, so I'm glad to see you throwing the switch! It's time!


Look at our "join dates." I just passed 10 years, you'll be there shortly.


I'll keep my comments on your financial plans general........ No matter how you plan for things to go, there is good reason to believe they'll wind up going very differently. (I FIRE'd into the Great Recession for example) So, stay flexible. Know and accept that your financial results may be wildly better or worse than your projections. "Average" results are actually somewhat unlikely.


Value time. Its progression, unlike finances, is easily predictable. Spend it wisely and enjoy your well earned time away from pulling the plow.
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Old 04-12-2015, 02:52 PM   #12
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Congrats on the upcoming retirements. Now if you would say good bye to NY, and move to a lower cost more tax friendly location, that nest egg would be even more attractive.
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Old 04-12-2015, 06:21 PM   #13
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thanks to all.

yep if we moved down south we could live like kings . but living here in ny has us active in the daily lives of our kids and grand kids and somethings you can't put a price tag on.
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Old 04-12-2015, 06:21 PM   #14
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Congrats mathjak107. I've been reading your posts a long time during almost all of which I've been FIRE'd and you've been working, so I'm glad to see you throwing the switch! It's time!


Look at our "join dates." I just passed 10 years, you'll be there shortly.


I'll keep my comments on your financial plans general........ No matter how you plan for things to go, there is good reason to believe they'll wind up going very differently. (I FIRE'd into the Great Recession for example) So, stay flexible. Know and accept that your financial results may be wildly better or worse than your projections. "Average" results are actually somewhat unlikely.


Value time. Its progression, unlike finances, is easily predictable. Spend it wisely and enjoy your well earned time away from pulling the plow.

as they say man plans and god laughs.
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