Hello all. To start, let me give my life story and status. I am a freelance software developer (used to be a rocket scientist for a NASA contractor) who used to be able to command rates of $60/hr, but now seem to be hitting a wall. I believe that with outsourcing of high skill jobs to cheap places like India, that the whole cost structure of my current standard of living is gone, and I need to live on less. Since I would rather have more free time than a few extra bucks from working a stupid job at Wal-Mart, and I have enough in my retirement accounts to live fairly decently in a low cost area like Eastern Europe, I will just go into retirement, with the possibility of taking the occasional decent paying gig whenever I can get it (but living on a level that does not assume that I could continue to get such gigs.)
Anyway, I currently have a small Roth IRA and a substantial (~ $170K) 401K with my old full time employer. I have a small pension ($350/mo) coming to me when I hit 65, and if I wait until 70 to get Social Security, I will be getting about $1300/mo (even if I don't have any more FICA earnings.) I plan on keeping my income low enough to qualify for much reduced premiums under the new health care plan (in my state of Louisiana, where I plan to have a very small, cheap nominal legal home, I can get free care from the state hospital system if my income is below 200% of poverty.) I am currently a childless bachelor aged 44, and the only wife I plausibly see myself getting would be Easter European (and residing there for the most part.) I find such Eastern European women much more desirable than women in Louisiana. Oh and BTW, I am currently still displaced from my home that was flooded during Hurricane Katrina (I got 9-1/2' of water.)
I currently have about $120K in unsecured debt, and will be purchasing a small, cheap home to take advantage of the homestead exemption in bankruptcy, and then just going Chapter 7. After filing, I will start accessing my retirement accounts (or whenever it would be safe to access my retirement accounts without them being subject to the bankruptcy estate) to live on. I hope to quickly find decent employment so that I can coast a while before accessing the retirement funds, but if that would not be possible (and certainly, for the last 18 months, I have unsuccessfully been trying hard to find such work, which is the main reason I am going into Chapter 7), I will bleed off survival cash to live on.
I understand that I can withdraw retirement funds with a 10% penalty at any time, or if I withdraw the funds in equal amounts every year, I can avoid the 10% penalty, in which case I would have one opportunity to stop the withdrawls and not pay a back penalty, but I would not be able to withdraw anything again until reaching age 59-1/2. So basically, if I start to substantially withdraw funds, I have to make sure that I am withdrawing at a constant rate. As I cannot predict my ability to earn an income, nor know my expenses (e.g., if I were to start a family, obviously I would have more expenses, etc.) the calculation of the amount to withdraw must be carefully determined. Of course, if I live in Eastern Europe, even with a family, my expenses would be low, so I could always bank on being able to live there until I would be age 59-1/2. My parents have a fairly decent estate, and as I would be inheriting 1/2 of that, eventually that can be banked on, but it might be a *long* time waiting for that, and they end up having to spend down quite a bit of that.
Anyway, that's my story. I guess the main thing I need to do now is to find a good brokerage that will allow me a lot of investment opportunities, and also be a good bank for me to manage the withdrawals from my retirement accounts. I plan on doing a direct rollover from the 401K to a qualified IRA, but since I want to withdraw funds before age 59-1/2, I'm thinking that I would need to transfer it into a regular IRA.
As for the investment, I believe that the best way to go is to invest in a mutual fund that invests in good value stocks that can eke out a decent return during rough economic times. I think that the go-go times of financials and high margin entertainment and specialty retail are over. The only sectors I see doing well are computer technology (to some extent, and with the caveat of high P/E) and alternative energy and other green tech. I think that Peak Oil and Peak Everything Else is going to be the defining economic condition of the 21st Century, and any sector that is not aligned with that philosophy is going to be an eventual loser. Ironically, I also want to be in sectors that will be able to leverage the low cost labor arbitrage (ironically because it is that very arbitrage that has crammed me down.) I am thinking about going 20% in alternative energy and the rest in a fund that invests like Berkshire Hathaway (obviously, I would need much more liquidity than actually investing in Berkshire Hathaway, as I would only be able to redeem $5K at a time.)
So that's it. I'd appreciate any comments that could help me.
Anyway, I currently have a small Roth IRA and a substantial (~ $170K) 401K with my old full time employer. I have a small pension ($350/mo) coming to me when I hit 65, and if I wait until 70 to get Social Security, I will be getting about $1300/mo (even if I don't have any more FICA earnings.) I plan on keeping my income low enough to qualify for much reduced premiums under the new health care plan (in my state of Louisiana, where I plan to have a very small, cheap nominal legal home, I can get free care from the state hospital system if my income is below 200% of poverty.) I am currently a childless bachelor aged 44, and the only wife I plausibly see myself getting would be Easter European (and residing there for the most part.) I find such Eastern European women much more desirable than women in Louisiana. Oh and BTW, I am currently still displaced from my home that was flooded during Hurricane Katrina (I got 9-1/2' of water.)
I currently have about $120K in unsecured debt, and will be purchasing a small, cheap home to take advantage of the homestead exemption in bankruptcy, and then just going Chapter 7. After filing, I will start accessing my retirement accounts (or whenever it would be safe to access my retirement accounts without them being subject to the bankruptcy estate) to live on. I hope to quickly find decent employment so that I can coast a while before accessing the retirement funds, but if that would not be possible (and certainly, for the last 18 months, I have unsuccessfully been trying hard to find such work, which is the main reason I am going into Chapter 7), I will bleed off survival cash to live on.
I understand that I can withdraw retirement funds with a 10% penalty at any time, or if I withdraw the funds in equal amounts every year, I can avoid the 10% penalty, in which case I would have one opportunity to stop the withdrawls and not pay a back penalty, but I would not be able to withdraw anything again until reaching age 59-1/2. So basically, if I start to substantially withdraw funds, I have to make sure that I am withdrawing at a constant rate. As I cannot predict my ability to earn an income, nor know my expenses (e.g., if I were to start a family, obviously I would have more expenses, etc.) the calculation of the amount to withdraw must be carefully determined. Of course, if I live in Eastern Europe, even with a family, my expenses would be low, so I could always bank on being able to live there until I would be age 59-1/2. My parents have a fairly decent estate, and as I would be inheriting 1/2 of that, eventually that can be banked on, but it might be a *long* time waiting for that, and they end up having to spend down quite a bit of that.
Anyway, that's my story. I guess the main thing I need to do now is to find a good brokerage that will allow me a lot of investment opportunities, and also be a good bank for me to manage the withdrawals from my retirement accounts. I plan on doing a direct rollover from the 401K to a qualified IRA, but since I want to withdraw funds before age 59-1/2, I'm thinking that I would need to transfer it into a regular IRA.
As for the investment, I believe that the best way to go is to invest in a mutual fund that invests in good value stocks that can eke out a decent return during rough economic times. I think that the go-go times of financials and high margin entertainment and specialty retail are over. The only sectors I see doing well are computer technology (to some extent, and with the caveat of high P/E) and alternative energy and other green tech. I think that Peak Oil and Peak Everything Else is going to be the defining economic condition of the 21st Century, and any sector that is not aligned with that philosophy is going to be an eventual loser. Ironically, I also want to be in sectors that will be able to leverage the low cost labor arbitrage (ironically because it is that very arbitrage that has crammed me down.) I am thinking about going 20% in alternative energy and the rest in a fund that invests like Berkshire Hathaway (obviously, I would need much more liquidity than actually investing in Berkshire Hathaway, as I would only be able to redeem $5K at a time.)
So that's it. I'd appreciate any comments that could help me.