Too young to work
Dryer sheet aficionado
- Joined
- Jan 8, 2013
- Messages
- 46
As DW and I sock away money for a very early retirement, we wonder if we have already put too much into tax sheltered accounts. At what point do you decide that you need more money in non sheltered accounts? Here is our situation.
Ages 27 and 28.
Expected retirement age 37 and 38.
Yearly expenses 30k (will be higher in retirement because of health insurance)
AA 90% equities (15% international) 10% bonds + pensions. Thinking of doing away with bonds as we have the pensions as stable growth.
Annual retirement contributions...
17.5k Roth 403b
17.5k trad 403b
11000 Roth IRAs (for both)
3.5k for pension
4.2k for pension
Pensions are 2.5% x years worked x final average salary (46k each). Should have 17 years and 10 years for each person.
Emergency fund 47k
Roth 403b 56k
Trad 403b 8k
Roth IRA 90k
Trad IRA 52k
Pension 22k
Taxable investments (stocks) 11k
Everything is in low ER Vanguard Index funds
I would think those accounts could grow a great amount untouched until 59.5 years of age. More important seems to be accessible money in our younger years before we can touch these accounts. We will have over 20 years to cover from taxable accounts.
Lots of questions ahead, lookout!
We can't afford to put any more away than we are now. Should we stop contributing to our 403bs, and start putting it into taxable investing accounts?
The Roth IRAs should continue as we can access the money contributed any how, right?
Taking a pension at a young age incurs early withdraw penalties from the IRS, is that correct? I know the pension will be reduced based upon age, and we will have income taxes on it.
We intend to take the pensions early, just in case they go away or benefits are reduced down the road because of budget cuts. It is better to take it early than not at all. Is that a bad way to think about the pensions? Should we wait until 65 to collect?
I also know about the 72t for taking money early for the 403bs and IRAs, but I would like to push that off as long as possible because it's not flexible. Once you start a 72t, does it have to continue until the account is depleted, or until you reach retirement conditions or the account?
Are there any good books on planning for such an early retirement? We have all the concepts of saving and LBYM, but need help in figuring out how much to put where.
Ages 27 and 28.
Expected retirement age 37 and 38.
Yearly expenses 30k (will be higher in retirement because of health insurance)
AA 90% equities (15% international) 10% bonds + pensions. Thinking of doing away with bonds as we have the pensions as stable growth.
Annual retirement contributions...
17.5k Roth 403b
17.5k trad 403b
11000 Roth IRAs (for both)
3.5k for pension
4.2k for pension
Pensions are 2.5% x years worked x final average salary (46k each). Should have 17 years and 10 years for each person.
Emergency fund 47k
Roth 403b 56k
Trad 403b 8k
Roth IRA 90k
Trad IRA 52k
Pension 22k
Taxable investments (stocks) 11k
Everything is in low ER Vanguard Index funds
I would think those accounts could grow a great amount untouched until 59.5 years of age. More important seems to be accessible money in our younger years before we can touch these accounts. We will have over 20 years to cover from taxable accounts.
Lots of questions ahead, lookout!
We can't afford to put any more away than we are now. Should we stop contributing to our 403bs, and start putting it into taxable investing accounts?
The Roth IRAs should continue as we can access the money contributed any how, right?
Taking a pension at a young age incurs early withdraw penalties from the IRS, is that correct? I know the pension will be reduced based upon age, and we will have income taxes on it.
We intend to take the pensions early, just in case they go away or benefits are reduced down the road because of budget cuts. It is better to take it early than not at all. Is that a bad way to think about the pensions? Should we wait until 65 to collect?
I also know about the 72t for taking money early for the 403bs and IRAs, but I would like to push that off as long as possible because it's not flexible. Once you start a 72t, does it have to continue until the account is depleted, or until you reach retirement conditions or the account?
Are there any good books on planning for such an early retirement? We have all the concepts of saving and LBYM, but need help in figuring out how much to put where.