Looking for Thoughts

[bobie]

I just turned 40, single dad, have a 18 year old on her third year at collage (she's planning on 18 more months), and I'm $14,000 in "dept" (new van).

I have been maxing out my IRA for the last 15 years. I do not know how much is in the account.
$545,000 in 2040 mutual funds.
$855,000 in 2050 mutual funds.
$975,000 in 2060 mutual funds.
$798,000 in 2070 mutual funds.
I keep around $35,000 in easy to get to cash.

I work part time at a hospital and can retire from them in 11 months and looks like I would get $1,200 a month for life. I have not been able to see what I would get I if worked longer, but I'm on the list to sit down with the retirement person at work, but will not be able to sit down with him till COVID lightens up a bit.
I stream video games on line and sell merchandise. Yes I pay medicare tax on my "pay".

I'm a double amputee so good health insurance is would be nice and I use a wheelchair 100% of the time.
My house is was custom built for me and is setup for wheelchairs.

I no longer like going to work at the hospital 2 days a week and would easily be able to cover health insurance if I added 1 more 4 hour streaming day a week to my life.

I'm just looking for some thoughts as I have never looked into retirement.

 

[njhowie]

I just turned 29, single dad, have a 18 year old on her third year at collage (she's planning on 18 more months), and I'm $14,000 in "dept" (new van).

I have been maxing out my IRA for the last 15 years. I do not know how much is in the account.

How old are you

 

[Aerides]

Welcome, I'll assume the age is a typo?

You have over 3M in investments, and a paid off home, a small pension, and a small streaming revenue income (for now at least).

Aside from everything else mentioned, you'd be good to go, but probably want to get a better understanding on your investments and budget and healthcare options.

 

[pb4uski]

Losing virginity at age 11... I'm impressed. How old was the Mom?

Maxing out IRA since age 14... very impressive!

I'll assume that 29 should have been 59 since the 2 is just below the 5 on a 10-key numeric keyboard.

But even at 59 still impressive savings!

How much is your annual spending? Have you checked out health insurance in your zip code? healthsherpa.com is a place to start.

 

[bobie]

Sorry I just turned 40

 

[pb4uski]

Hope that you don't mind that we had a little good-natured fun with your typo. Welcome to the forum.

 

[MBAustin]

Welcome Bobie. If you haven't found them already, we have a helpful list of things to think about as you contemplate leaving the workforce:

Some Important Questions to Answer

A lot depends on your expected spending, so tracking that carefully if you aren't already would be a good step.

 

[Golden sunsets]

So the IRA account that you don't know the balance of is in addition to all of the fund balances that you list?

 

[bobie]

The fun is all good. I had just woken up and know better that posting that early in my day.



I will start tracking all my spending better.


I have no idea what I have in my IRA. I do know I write a check for it twice a year for what every my tax man tells me to write it for. They do send me a pack every year and I open it up and file it.

I never singed into the account on the internet like I do for my Vanguard and Fidelity.

 

[HI Bill]

I have been maxing out my IRA for the last 15 years. I do not know how much is in the account.
$545,000 in 2040 mutual funds.
$855,000 in 2050 mutual funds.
$975,000 in 2060 mutual funds.
$798,000 in 2070 mutual funds.

I'm confused by this. Are these four separate target date mutual funds? The concept of a target date retirement fund is to hold only one, with a date that most closely matches your retirement year. If you plan to retire in 2020, you should hold the 2020 target date fund. These funds automatically set asset allocation based on the time between the present day and the target date, which is presumed to be your retirement date.

If so, their value, excluding cash and the IRA total more than $3.1M. If you only really need $1,200/mo, then pay off your van, and FIRE, as $3.1M should afford you a withdrawal rate of at least 3% for your age ($90K+ per year). But at your age, I'm a lot confused on your income and budget.

 

[bobie]

I was in a bad accident when younger. I was told to put the settlement money into 2040 and 2050 mutual funds, build or find a house that would fit my needs till I die, and a few other things.

My plan is to live life to it's fullest every day and to do what makes me happy. I have never truly thought about retirement till this week at work. Back in 2002 I did not think i would or want to live till the end of the week. After I got my fake feet on the ground I thought I would live paycheck to paycheck for the rest of my life.


At the time the 2060 had not gone public that I know of. I moved money into the account the year I found it about it. Mid 2014 is when one of the bigger companies opened their 2060 fund. I'm not 100% sure why I was told to move the money, but trusted to much at the time.
I moved money into the 2070 fund the month it opened. I plan on my daughter inheriting this account (I know there are better investments for something like this). The rest of my estate get split 5 ways as it's currently set up. I do not have life insurance.

I bring in anywhere from $3,000 to $24,000 a month from streaming videos. I make $1,500 to $8,000 a month profit on merchandise, the more work I put into it the more I make, but takes a lot of time to deal with packing and shipping.

I was looking at my bills and this was for the last 12 months. My power and water are high due to having an indoor lap pool. I'm currently insuring 3 cars.
Power $1,753
Water / sewer / storm $635
Fiber internet $4,126
Cell $524
LPG $835
Property taxes $3,176
House / car insurance $4,651
Collage $29,000 should have 18 months left

 

[HI Bill]

I'd suggest considering looking at the expense ratios of your target date funds and consider exchanging those shares for a mix of something like VTI, BND and VEA (total US market, total bond market and international). Funds that are anticipated to be gifted in 2070 should be at least 80-90% in equities, IMHO, as we're talking 50+ years. Looks like you're doing great, especially with the streaming and merchandise stuff! With your assets and income, I'd consider moving everything to VG, and possible hiring a FA to assist you with lowering fund expenses, potentially raising the earnings, and managing everything! Cheers!

 

[Aerides]

I bring in anywhere from $3,000 to $24,000 a month from streaming videos. I make $1,500 to $8,000 a month profit on merchandise, the more work I put into it the more I make, but takes a lot of time to deal with packing and shipping.

That's impressive, especially given your age. What games do you stream?

 

[Animorph]

Wow, I'm jealous of that game streaming! I think that's the first substantial social media income I've heard of here. I'm just a casual RPG gamer.

I assume the fund balances you gave are in a taxable account(s) and therefore available to you before age 59.5.

If your expenses are really that low and you don't need to leave a big estate I don't think you need to worry too much about retiring. Especially with the option of continuing the streaming. I assume the merchandising boosts the streaming income to some degree, but if it seems more like work I'd drop that.

You should be able to go onto healthcare.gov or your state's ACA marketplace and gauge the cost of health insurance. Unless you have access to some other insurance source, that's what you're going to get. Keep in mind that the high deductible (Bronze) plans are often highly competitive with the more expensive (Gold or Silver) plans when considering initial cost and potential maximum out of pocket cost. Or you may qualify for a subsidy.

If your IRA is large, you might consider Roth conversions eventually. Although the sooner the better.

Your portfolio seems OK, but the collection of differently dated funds is a little strange. The main difference will be that later dated funds will hold more equities and less bonds. If they are all from the same fund company that may be literally the only difference. Not a bad choice, but the effect is that they perform pretty much the same as the dollar-weighted average date. So one middle-date retirement fund would be very similar to that collection. Getting the latest available fund ensures lots of stocks and fewer bonds, if that's what you want.

Welcome, and good luck!

 

[pb4uski]

So as I understand it you have $~$3.1 million in taxable accounts, plus an unknown amount in IRAs, plus $35k in cash and $14k in debt.

Are you eligible for social security retirement benefits when you are 62?

Your expenses are not particularly high in relation to your resources. The $3.1 million alone at a reasonable 3.5% withdrawal rate would support $109k a year of spending and from what you posted it looks like your actual spending is much less than that.

So you probably have enough to retire anytime that you to and you certainly don't have to worry about money.

Silly question though... why the debt for the van when you could have easily just paid cash from the $35k in cash or by liquidating $14k from the $3.1 million?

 

[bobie]

I do not have a target date. The other day at work people were talking about paychecks so I looked at mine and it was for $27.84. After we all made jokes about it and we started joking about retirement. I opened the retirement thing and saw I could retire soon at 100% and I just keep thinking about it.

I have about 50% of my stuff in VG and about 25% in FA. I do plan on moving the rest over the next few months.

Right now I do 3 blocks of Minecraft and Oxygen not Included a week. I do 2 to 5 blocks a week of viewers choice from a poll on my website. I'm working on setting up a 15+ series of something that will be 60 to 90 minutes a week with someone else, but still working out the details.
I like 2.5 hour blocks, but each block takes right at 3 hours once you look at the setup and all. If the donations are rolling in I don't stop until I have to.

Before fees, taxes, and junk I got $256 and got some in other currencies in donation from sitting at my desk from 7:15 to 10:02 tonight. I tried to push merchandise five times and I know I got at least 20 orders, but I will not look at them till Monday as I have to go work a real job for 2 days. I was pushing orders as my daughter should pack them over the weekend before she folds and bags the new shirts I got in.

 

[bobie]

It looks like 67 for 100% of social security. 62 would be 70%.

The car loan is 0.99%. I have this fetish about having a 700+ credit score and every 4 years I buy a new car to get a loan and try to keep my credit score high. I think it's a type of mental illness, but I don't think they have a name for it yet.

 

[pb4uski]

Got it. Hopefully the $35k of cash is in an online savings account earning 1%.... so you come out ahead by 0.01%.

 

[pacergal]

Looks like you are doing well, financially.
Your daughter is only 18 and has almost completed 3 years of college? Congratulations!
One thing I would recommend is to go online and figure out how much you do have in your IRA and what it is invested in.
If you are sure of your budget, you look ready to retire. Enjoy!

 

[Sunset]

It looks like 67 for 100% of social security. 62 would be 70%.

The car loan is 0.99%. I have this fetish about having a 700+ credit score and every 4 years I buy a new car to get a loan and try to keep my credit score high. I think it's a type of mental illness, but I don't think they have a name for it yet.

The idea that a person needs to be constantly in debt or have a loan to have a high credit score is false, FAKE.

I have zero debt, and haven't had any for the last 16 years, and my credit score is high at 800. I keep my car for 10-12 years.

My DW has had no debt for well over 20 years and her score is higher than mine by about 20 points. DW keeps her car for 20 years.

We pay cash for our cars, brand new.

 

[aja8888]

No loans here and no debt except monthly CC and that's paid off immediately. Credit score is 830.

 

[GLM]

On keeping score

True, we have paid cash for our cars for about 25 years, pay off our credit cards every month. We gave not had a mortgage since 2004. Our scores hover around 820.

Besides paying our bills on time, one thing that helps is utilizing very little of our available credit. (Normally about 3%) Additionally keeping old credit cards going helps your history.

We did co-sign the kids first cars. That was done about a decade ago. It did not do much to bump the score higher.

 

[Walt34]

The idea that a person needs to be constantly in debt or have a loan to have a high credit score is false, FAKE.

I have zero debt, and haven't had any for the last 16 years, and my credit score is high at 800. I keep my car for 10-12 years.

Same here. We haven't had a mortgage for decades and pay cash for vehicles (on those rare occasions when we buy one). We do use credit cards a lot but pay them off in full every month. Our credit scores vary of course with the phase of the moon and stars or whatever metric it is that the credit companies use but usually run a bit over 800.

Technically of course we're constantly "in debt" as there almost always is some outstanding credit card debt that has a balance that isn't due yet. For example at the moment I'm wearing a pair of sneakers from Amazon that I haven't paid for because the bill hasn't arrived. When it comes I'll pay it. But the money is in the bank right now to pay for the shoes and is earmarked for that, so in my world of "mental accounting" we're not actually in debt.

YMMV

 

[EastWest Gal]

My son would be jealous!

I'm quite sure you have more than enough, especially with the income from streaming. Though it's work, it feels less like work than the hospital job.

I can't figure out why you do not know what is in your IRA? You should really check into that. It sounds odd that "your tax man" tells you how much to write for your IRA. If you are maxing it out, it is easy to figure that out on your own. Do you not track how it is invested? You could move your IRA to Vanguard so you can track how much is in it. How is it being managed?

My credit score has been north of 800 ever since I started checking. Our house and cars are long paid off, and we will pay cash for the next car I'm sure. I have two credit cards, using only one and paying it off each month. Carrying debt will lower your credit score, not raise it, I think.

I think you should quit the hospital job. Why risk getting COVID going to the hospital? Much of your income is from streaming anyway. Doing the streaming, you won't be technically retired, but it sounds awesome.

 

[pb4uski]

You all made me look... 817... but not sure it is worth anyting in that I have no plans to borrow.