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After all these years, I'm OUT
Old 08-06-2013, 09:06 PM   #1
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After all these years, I'm OUT

Greetings to all who read this forum almost daily, as I have for past several years, dreaming of the day when I could sleep in and do whatever I wanted to do each day. Finally posting today. I want your opinions. I think I'm a-ok, but want the wisdom of this forum, as I respect those who have followed a similar path regarding their personal finances, or who are following the path towards the goal of FI.

At age 54 I have accepted a downsizing offer from the company--its complicated, but lets just say, I'm gone, left with a big smile, as the corporate gig, with the flights & travel, the boring meetings, politics, BS, personnel issues, etc. got the best of me for the past 30+ years. I have been a high earner and top performer in my field, and lucky with some company stock options.

DW is a homemaker, 1 child in last yr of college, 1 in technical school. Live in Tennessee.

We have always lived frugally, way below our means, for many years, as our parents grew up in the depression, and we were raised in frugal homes, those habits stuck, even though I had gross earnings in the mid 6 digits for a several years. We do enjoy treating ourselves to 2-3 vacations per year costing maybe 10k total, we go out to eat x 2 per week,(inexpensively) we enjoy concerts and sporting events, etc. We can easily live on approximately 85k per year including a 10k allowance for healthcare. Mortgage payoff is in a separate account, not yet pulled the payoff trigger, but money is there, ready when I am, which should be soon, as we just downsized.

Investment portfolio is at $3.8M (does not include mortgage payoff account)with 90% in taxable. Majority of it at Vanguard, at approximately 43% stock, 57% in bonds, CD's, cash.
I get nervous when the market drops, but I'm learning to not look at portfolio when market drops...it helps me stay calm, as I worked my rear off my entire life, saved diligently and don't want to mess up at this point.

OK...questions....am I A-OK?
how do I not mess it up? ..just allocate it as I'm comfortable (at less than 50% equities as I feel I won the game and don't want to take any more equity risk than necessary) and not look at except to rebalance annually?

what kind of withdrawal methodology is suggested?

need suggestions re non stock component as I currently have a lot in cash, suggestions on bond allocation?

brand new to the retirement game, like it so far but its only been 2 months, ....any tips on how to have a successful transition?

Thanks to all

I value your thoughts and opinions, glad, no thrilled, to be in the class of 2013.

Time4brake
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Old 08-06-2013, 10:03 PM   #2
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You're golden. 85/3800 = 2.2% WR. Congratulations!

Vanguard's CFP's will do a retirement plan for you for free and will make recommendations on how to invest your stash.

Bonds are a real tough area right now as many feel interest rates will rise in the near term and bonds will get hammered. In response, many of us are staying in shorter term maturities and hope to redeploy at higher rates later. If Mega had a 401k with a stable value fund that offers decent returns it would be good to stay there for now.

For cash, I like online savings accounts currently paying 0.8-1.0%.
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Old 08-07-2013, 04:45 AM   #3
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Time4brake, congratulations. You are more than set financially.
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Old 08-07-2013, 05:11 AM   #4
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Congratulations!
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Old 08-07-2013, 06:09 AM   #5
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You made it with room to spare. Congratulations!
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Old 08-07-2013, 07:31 AM   #6
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Ya you are all done, congrats! Your withdrawal rate is below what a sane AA will pay out. You could design a very simple and conservative portfolio that would kick off income without touching principal of about 2.5% which is about $10k more (before taxes) than the $85k you say you need. You have won the game!
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Old 08-07-2013, 08:23 AM   #7
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Quote:
Originally Posted by Time4brake View Post
OK...questions....am I A-OK?
I'm guessing there are a lot of forum members reading this and asking themselves "if he has to ask, where does that leave me?"

So, to answer your question...um, yes! You are more than OK! Don't do one more day of work unless it's something you absolutely love to do! You've earned it.

Congratulations and welcome to the forum!
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Old 08-07-2013, 12:40 PM   #8
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Now that you've made all that money, don't risk it. Go with Vanguard or Fidelity and don't let them move you in and out of any investment. Go index funds and just enjoy life. If you are new to investing, a good resource would be Lazy Portfolios - Bogleheads. Keep it simple. As previously stated, "you've won!"
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Old 08-07-2013, 01:26 PM   #9
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Time4brake,


I have similar assets and spending. My allocation is closer to 60/40 vs your 47/53, but I think this is just a reflection of risk tolerance. After reading the recent thread about increasing equity allocations with age, I may go even higher on the equity over the next several years.

As far as withdrawal strategies, since my spending is fairly flexible, I chose to go with what I need that year vs percent of remaining portfolio, whichever is lower. Right now I am using 2.5%; in my mid 50's I will go to 3% or 3.5%. This year I am tracking at well under 2% spending, at see no need to spend any more than that.

I too am struggling with the fixed income allocation. I have way too much in cash, sitting and waiting for the correction. My old company just added a GIC to their 401k offerings so I may shift a bit in that direction.
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Old 08-07-2013, 04:04 PM   #10
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Congratulations!

If you have any stock options that you will be forced to exercise upon your departure, that's one way to set up a cash buffer for the first months (or years, depending on the amount) while you work out a withdrawal strategy. And in your taxable accounts, switch over to taking all dividends and cap gains in cash rather than reinvesting. That also reduces the need to rebalance.

Enjoy!
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Old 08-07-2013, 04:15 PM   #11
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less than 50% equities as I feel I won the game and don't want to take any more equity risk than necessary
You're in great shape, but the quoted section set my spidey sense tingling.

As you do some more research and read about what is likely to work and what isn't, you will probably come to the conclusion that this conventional wisdom is not as wise as it once was.
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Old 08-07-2013, 04:36 PM   #12
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Wow. Impressive in both accumulation and lifestyle (keeping it modest). Enjoy it.
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Old 08-07-2013, 05:46 PM   #13
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I agree you are golden. Congratulations.
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Old 08-07-2013, 05:58 PM   #14
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Keep the wife happy, that's the only thing that could mess you up!
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Old 08-07-2013, 07:14 PM   #15
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He'll be home full-time, that should keep her happy.
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Old 08-09-2013, 05:15 AM   #16
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He'll be home full-time, that should keep her happy.
... or not!
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