ejw93
Recycles dryer sheets
Hi All -
Allow myself to introduce...myself.
Former Navy Submarine officer, current Federal Employee, approaching age 41 with DW and 2 boys (born 1999 and 2008). Some parts of my Federal career are rewarding, but I'm rapidly tiring of the commute and beaurocracy. I will soon be retired from the Navy Reserve ("Gray Area" Retired, with pension/health benefits commencing at age 60).
Current Retirement Savings and expenses-
-----
IRA/401k/TSP - $154K ($31K is in DW IRA)
Roth - $190K (Basis is $26K, 1st contribution 1998)
Taxable Accounts - $193K
FERS Annuity participant, start date (SCD) is 1997.
Marginal Tax Bracket is 25% Fed/~10% State (CA).
Portfolio mix is split 5 ways between SP500, REIT, Overseas, Bond, Energy/other. Tax-deferred accts are more tilted towards income-generating funds, Taxable acct tilted more in favor of stocks/CG assets.
Currently saving about $14k/yr in TSP (includes match), 0-10K/yr in Roth (depending on eligibility).
Only debt is $300k 30-yr fixed mortgage, recently refi'd to 3.875%. Plan to pay-as-scheduled. Our expenses all-in run ~$75k/yr.
Retirement Plan is in 3 phases:
-------
Ultimate Plan- Phase I: Age 50-55. Early Retire at age 49 or 50 and live off of Taxable accounts and Roth BASIS for 5 years to age 55 (Brokerage plus Roth BASIS should be >$500k). DW may or may not work Part-Time to keep busy/supplement our income. Draw Brokerage acct and Roth BASIS down to zero or near zero in 5 years.
Ultimate Plan- Phase II: 401k withdrawals from age 55-60 (401k/IRA/TSP balance should accumulate to ~$650k). At age 54, DW and I will take a seasonal (Christmas) full-time employment gig and roll our TSP/401k/Traditional IRA balances in to a new employer's 401k. In January of the next calendar year (in tax code parlance, 'the calendar
year of attaining your 55th birthday'), we quit our new jobs and are eligible for penalty-free 401k withdrawals. Draw 401k accts down to zero or near zero in 5 years.
Ultimate Plan- Phase III: Age 60+, Live off $40K FERS Pension w/COLA, $40K Navy Pension w/COLA and HC Benefits,
plus Roth Earnings balance (~$1.2M) at SWR.
Thoughts/Input requested:
-------
1) Federal Employees will soon be eligible for 'Roth' TSP. I'm considering sliding Brokerage (taxable) $$ in to this, which will (legally) shield some of my ER funds from FAFSA college cost calculations. Upside is that growth in the Roth is tax-deferred and I avoid the roughly 6% per college year FAFSA Parental Asset 'Tax'. Downside is that in Phase I, I will have to live of of just the Roth BASIS/Contributions and not the earnings/capital gains I could have left alone in the brokerage acct.
2) At age 54, Will have to find an employer who has a 401k that allows 401k withdrawls at age 55. Not sure how to sniff this out in advance- Do most Fortune 500 companies provide this? We DON'T want to get our entire 401k balance returned to us in 1 lump sum!
3) Waiting until after 2012 election to see what happens with CG rates... this will push me one way or the other on moving Brokerage $$ to Roth accts.
4) Will be eligible for Severance/RIF/VERA (FERS pension plus FEHB health benefits) if it is offered at age 50, but I'm certainly not counting on it. Providing my family with Health Care on an individual HDHP/HSA policy from
age 50-60 scares the crap out of me.
5) I read Bob Clyatt's book a little over a year ago. Another option is to try and convince my employer to reduce my position/hours to Part Time at age 45+ and start a quasi-Phase I a bit early...
Hopefully my plan will defeat Dr. Evil's uneccesarily-slow-but-easily-escapable-death-mechanism. Would love to hear recommendations or encouragement!
Allow myself to introduce...myself.
Former Navy Submarine officer, current Federal Employee, approaching age 41 with DW and 2 boys (born 1999 and 2008). Some parts of my Federal career are rewarding, but I'm rapidly tiring of the commute and beaurocracy. I will soon be retired from the Navy Reserve ("Gray Area" Retired, with pension/health benefits commencing at age 60).
Current Retirement Savings and expenses-
-----
IRA/401k/TSP - $154K ($31K is in DW IRA)
Roth - $190K (Basis is $26K, 1st contribution 1998)
Taxable Accounts - $193K
FERS Annuity participant, start date (SCD) is 1997.
Marginal Tax Bracket is 25% Fed/~10% State (CA).
Portfolio mix is split 5 ways between SP500, REIT, Overseas, Bond, Energy/other. Tax-deferred accts are more tilted towards income-generating funds, Taxable acct tilted more in favor of stocks/CG assets.
Currently saving about $14k/yr in TSP (includes match), 0-10K/yr in Roth (depending on eligibility).
Only debt is $300k 30-yr fixed mortgage, recently refi'd to 3.875%. Plan to pay-as-scheduled. Our expenses all-in run ~$75k/yr.
Retirement Plan is in 3 phases:
-------
Ultimate Plan- Phase I: Age 50-55. Early Retire at age 49 or 50 and live off of Taxable accounts and Roth BASIS for 5 years to age 55 (Brokerage plus Roth BASIS should be >$500k). DW may or may not work Part-Time to keep busy/supplement our income. Draw Brokerage acct and Roth BASIS down to zero or near zero in 5 years.
Ultimate Plan- Phase II: 401k withdrawals from age 55-60 (401k/IRA/TSP balance should accumulate to ~$650k). At age 54, DW and I will take a seasonal (Christmas) full-time employment gig and roll our TSP/401k/Traditional IRA balances in to a new employer's 401k. In January of the next calendar year (in tax code parlance, 'the calendar
year of attaining your 55th birthday'), we quit our new jobs and are eligible for penalty-free 401k withdrawals. Draw 401k accts down to zero or near zero in 5 years.
Ultimate Plan- Phase III: Age 60+, Live off $40K FERS Pension w/COLA, $40K Navy Pension w/COLA and HC Benefits,
plus Roth Earnings balance (~$1.2M) at SWR.
Thoughts/Input requested:
-------
1) Federal Employees will soon be eligible for 'Roth' TSP. I'm considering sliding Brokerage (taxable) $$ in to this, which will (legally) shield some of my ER funds from FAFSA college cost calculations. Upside is that growth in the Roth is tax-deferred and I avoid the roughly 6% per college year FAFSA Parental Asset 'Tax'. Downside is that in Phase I, I will have to live of of just the Roth BASIS/Contributions and not the earnings/capital gains I could have left alone in the brokerage acct.
2) At age 54, Will have to find an employer who has a 401k that allows 401k withdrawls at age 55. Not sure how to sniff this out in advance- Do most Fortune 500 companies provide this? We DON'T want to get our entire 401k balance returned to us in 1 lump sum!
3) Waiting until after 2012 election to see what happens with CG rates... this will push me one way or the other on moving Brokerage $$ to Roth accts.
4) Will be eligible for Severance/RIF/VERA (FERS pension plus FEHB health benefits) if it is offered at age 50, but I'm certainly not counting on it. Providing my family with Health Care on an individual HDHP/HSA policy from
age 50-60 scares the crap out of me.
5) I read Bob Clyatt's book a little over a year ago. Another option is to try and convince my employer to reduce my position/hours to Part Time at age 45+ and start a quasi-Phase I a bit early...
Hopefully my plan will defeat Dr. Evil's uneccesarily-slow-but-easily-escapable-death-mechanism. Would love to hear recommendations or encouragement!