Its time to jump off this merry-go-round!

[msmith8441]

Newby here- circumstances beyond any our control has made me realize its just time to go thru the door to my next phase. 64 now- 65 in Jan & starting SS/Medicare.

Divorced about 10 mo ago (surprise!) so now - after forking over half of my buckets- I'm working on my Plan B approach to the next few years... I left the crazies in CO for a new life/lifestyle in TX earlier this year. House on some land all paid for so I don't have a mortgage or electric bill (installed solar)

I am interested to hear how others are structuring their sequence of taking retirement funds to avoid / minimize taxes/stretch their $$ & not get screwed (again) with more taxes on SS distributions.

I have funds in cash, IRAs & Roth IRAs, Fixed index annuities (both in qualified & Roth money), & Income annuities, and a bunch of alternative investments safe from Wall Street craziness- fine art shares, fine wine shares, a dozen casks (55 gal barrels) of 2020 Irish whiskey (the year of the 'Vid... when all distillers around the world stopped their liquor-making and turned to producing hand sanitizer, it seemed like a fun idea to capture a little bit of a reduced commodity...we'll see in 2028 or so), hardwood trees growing in Costa Rica, and several other angel investments (start ups / pre-IPO in a variety of industries/fields/products- 3 have IPO'd - all pretty good, but no black swans yet... still hoping!), and a little gold & silver in there for good measure.

Its the sequence of taking $$ out to meet my budgeted needs (savings + SS = budgeted expenses) without incurring excessive taxes- the annuities especially are confusing since I have both IRA & ROTH money in those vehicles. I am planning on using cash for the first little while to let those annuities continue growing, but maybe not?- that's where I need more education: I don't want to be forced into RMDs in 7-8 years...or lose $$ by doing sequence wrong and overpaying taxes.

At any rate- as I zero in on 'starting' my retirement on Jan 1st 24, I still have some planning to do, aside from putting it all on RED...

 

[westpac]

Sell your speculative investments and invest in VTSAX, and maybe BND.

 

[2017ish]

Why are you starting social security at 65? Have you run scenarios at Open Social Security https://opensocialsecurity.com/?

Like Westpac, I would not want the complexity of what you've set up--especially in 15-20 years....

I focus not on minimizing taxes, but on maximizing our safe, post-tax spending--which means we have been "voluntarily" paying a lot of taxes from 2017 to the present so as to facilitate Roth Conversions before DW hits IRMAA territory.

Welcome to the forum, BTW!

 

[Exchme]

Welcome to the forum!

Sorry to hear about the divorce, that will knock you for a loop.

I don't understand the investments you've listed. Many of those are going to be illiquid when you want to sell, most sound like they have high fees associated with them.

Indexed annuities are uniformly trash foisted on you by unscrupulous salesmen. Income annuities aren't terrible, but prior to about age 80, should generally only be bought by people that don't think they have enough money to live on and are risky because they aren't inflation adjusted. Buying annuities when you are not maximizing Social Security, which is the very best annuity because it is inflation adjusted, just does not make financial sense.

I think you've made your financial life really complicated. As you age, you will increasingly find that having to manage complicated things means making mistakes. Personally I would make it a goal to simplify and get out of complicated things.

As for Wall St craziness, below are inflation adjusted returns for the last hundred years or so for stocks, bonds and cash. Nearly 100,000% real returns in stocks isn't too shabby. Yes you have to put up with the craziness of the market to get it, but you will find that your alt investments are far more volatile and may not return anywhere near as much.

Unless the alt investments are a trivial part of your portfolio, I would work to get out of them, take my lumps, and invest in stocks and bonds. Those traditional investments are far more liquid, easier to plan around and have low fees to hold. Plus there are academic studies, history, software and experience of others available to help.

 

[Texas Proud]

I am not a fan of your alternate investments but hey, they might pay big time...


The BIG problem is there is no one answer to your question... everybody has different needs and different accounts and sources of income..


I have been for years reducing my income to get more support for my ACA insurance policy... the return had been huge for me... so I have forgone any of the ROTH conversions...


My first source of money was from taxable accounts with cash and securities that did not have big gains... when I ran out of those I started to cash in the ROTHs... I am now on medicare and might sell for cap gains or do some conversions, just have not put pen to paper to see what it will cost me...

 

[Sunset]

I would cut off my left foot before I put ROTH money into annuities.

OP - you have been sold many weird exotic "investments" and I hope you actually get your cash out of them when you can. Thank goodness you didn't buy a bridge in Brooklyn as well.

Maybe you are a multi-multi millionaire and just have so much investments that the exotic ones represent 5% of your total stash , and even if you lost 1/2 your stash you would still be extremely rich. In which case, realize you will pay taxes.

Have you seen your trees in Costa Rica ?

 

[mystang52]

OP: I never give specific financial advice here, and besides I'm a conservative investor so those "exotic" investments are alien to me. I'll echo a couple of others here, though, and just say in retirement having a more simplified portfolio makes sense. Regardless of how you invest, trimming down the investment types would probably make for a calmer retirement.

 

[marko]

Yikes.

There's "investments" and then there's income producing investments. The group here tends to be more focused on the latter and into more traditional investment vehicles. As Sunset said, if these exotics are a small percentage of your portfolio then, ok.

But you might take want to take inventory of your income needs going forward and reassess how you're going to address them. As others have noted, a more simplified portfolio might help going forward. You're shifting gears and it might be time to lighten the load.

There's tons of information here and good people to help.

 

[DrRoy]

What % do you have in the alternatives? It will be interesting to see how they do.

 

[MarieIG]

Welcome to the forum.

I would start with calculating expenses - and see how much you need to live. As far as RMD, to lessen those, you might want to consider some Roth conversions. Also, carefully consider when to take your SS security in light of the built in COLA aspect.

 

[HI Bill]

Welcome to the group! To assess the risk of your investments, can you provide your AA (asset allocation), with a % assigned to each asset class? With your recent divorce, will you have enough $ to live on if you follow the 4% rule?