ReadySetGo
Dryer sheet aficionado
- Joined
- Nov 20, 2017
- Messages
- 39
This forum is great, and after lurking for awhile, I'd like to get involved in the discussions to learn and contribute. My husband and I turn 53 at the end of the year and hope to retire in 4 1/2 years at 57. Here is our rundown:
401Ks----------------$1,350,000, with about 27% in Roth
IRAs------------------$469,500
Deferred Comp------$150,000
HSA------------------$31,600
Brokerage Acct------$285,000 non-retirement brokerage account, with small amount in crowdsourced RE investments (Lending Club and Realty Shares)
We will continue to max out 401Ks, including catch up. With company matches, annual joint contribution is around $55,000
We will contribute between $100-$120K to deferred comp each year, and are trying to determine best payout schedule moving forward (upon termination, I will receive 50K in lump sum, 30K over 7 years, and 80K over five years).
We will continue to max out HSA contributions each year; this year will be $6900
We have three kids, one graduating college a semester early next month, a freshman at an out-of-state university, and a junior in high school. Our 529s and scholarships cover about 70% of costs.
We own two houses, with about $350K in equity and $386K in mortgage remaining. We are trying to sell the secondary home, but will rent it out seasonally in the coming year, with an expected income of $8,000. We consider leveraging our houses as swaps for future travel or moving to the second house while renting the first, which would more than cover both monthly mortgage payments.
At this point, we consider waiting to collect social security until we are 70, and the SS.gov calculator says we will collect over $80K/yr. combined. I believe this will decrease, as we won't work until we are 70, but I'm not sure by how much.
We have been tracking our expenses for almost 20 years, and know exactly what we spend. Our biggest expenses are food, education, taxes, mortgages, and a shared lease on a horse (will go away when the youngest goes to college in August of 2019).
We are estimating annual expenses of $150K in retirement.
I have run firecalc, but have a hard time figuring out how to add the deferred comp over time. We use mint and personal capital and have an extensive spreadsheet with previous budgets and future estimates. All are on the positive side for retirement in 2 years or beyond.
Here are some of the things I am thinking through:
1) I was originally going to collect the new deferred comp (4.5 years-about $440K in addition to existing) over ten years, to minimize amount needed from 401Ks in early retirement. Now I'm wondering if I should set payout to five years, as expected amount will be over $100K annually for five years, which may be just about all we need between 57-62, and would allow the 401Ks to earn more by sitting longer. We are likely to do some kind of part-time work in early retirement. Ideal would be some kind of seasonal work at a national park, so not a big income generator. And who knows what we will decide.
2) I'm wondering what we can do now to minimize taxes when we are required to collect RMDs and factor in social security, as the income at age 70 could be well over $100K, and much more than we will need at that age.
3) We have not been in the camp to pay down the mortgage, as our money earns more by being invested, and our interest rate is low. Would it make sense, though, to put more money over the next five years towards eliminating the mortgage, while adding less to the deferred comp?
4) I don't yet understand the MAGI/ACA/tax connection, but will investigate resources and welcome advice. I believe our income in retirement will still be relatively high, so am interested in the best strategies to reduce our outflow.
We appreciate any advice. If we can build confidence in the plan, we can better tackle the "retire to what" concept. Thanks!
401Ks----------------$1,350,000, with about 27% in Roth
IRAs------------------$469,500
Deferred Comp------$150,000
HSA------------------$31,600
Brokerage Acct------$285,000 non-retirement brokerage account, with small amount in crowdsourced RE investments (Lending Club and Realty Shares)
We will continue to max out 401Ks, including catch up. With company matches, annual joint contribution is around $55,000
We will contribute between $100-$120K to deferred comp each year, and are trying to determine best payout schedule moving forward (upon termination, I will receive 50K in lump sum, 30K over 7 years, and 80K over five years).
We will continue to max out HSA contributions each year; this year will be $6900
We have three kids, one graduating college a semester early next month, a freshman at an out-of-state university, and a junior in high school. Our 529s and scholarships cover about 70% of costs.
We own two houses, with about $350K in equity and $386K in mortgage remaining. We are trying to sell the secondary home, but will rent it out seasonally in the coming year, with an expected income of $8,000. We consider leveraging our houses as swaps for future travel or moving to the second house while renting the first, which would more than cover both monthly mortgage payments.
At this point, we consider waiting to collect social security until we are 70, and the SS.gov calculator says we will collect over $80K/yr. combined. I believe this will decrease, as we won't work until we are 70, but I'm not sure by how much.
We have been tracking our expenses for almost 20 years, and know exactly what we spend. Our biggest expenses are food, education, taxes, mortgages, and a shared lease on a horse (will go away when the youngest goes to college in August of 2019).
We are estimating annual expenses of $150K in retirement.
I have run firecalc, but have a hard time figuring out how to add the deferred comp over time. We use mint and personal capital and have an extensive spreadsheet with previous budgets and future estimates. All are on the positive side for retirement in 2 years or beyond.
Here are some of the things I am thinking through:
1) I was originally going to collect the new deferred comp (4.5 years-about $440K in addition to existing) over ten years, to minimize amount needed from 401Ks in early retirement. Now I'm wondering if I should set payout to five years, as expected amount will be over $100K annually for five years, which may be just about all we need between 57-62, and would allow the 401Ks to earn more by sitting longer. We are likely to do some kind of part-time work in early retirement. Ideal would be some kind of seasonal work at a national park, so not a big income generator. And who knows what we will decide.
2) I'm wondering what we can do now to minimize taxes when we are required to collect RMDs and factor in social security, as the income at age 70 could be well over $100K, and much more than we will need at that age.
3) We have not been in the camp to pay down the mortgage, as our money earns more by being invested, and our interest rate is low. Would it make sense, though, to put more money over the next five years towards eliminating the mortgage, while adding less to the deferred comp?
4) I don't yet understand the MAGI/ACA/tax connection, but will investigate resources and welcome advice. I believe our income in retirement will still be relatively high, so am interested in the best strategies to reduce our outflow.
We appreciate any advice. If we can build confidence in the plan, we can better tackle the "retire to what" concept. Thanks!