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Need advice to invest $659,000
Old 06-14-2020, 04:51 AM   #1
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Need advice to invest $659,000

Simply put, I have $659,000 to invest. Wife and I live on 30k a year and want to be able to earn a fair return and possibly withdraw slowly to maintain our 30k lifestyle.
Simple math tells me that $659k would give us around 26,360 for 25 yrs. we are 52 & 51 yrs. our SS would amount to around $2500 a month but won’t take that till at least 62. We have the ability to earn enough to make 30k but would rather work less “lol” because we retired early.

Thoughts??
Thank you
Rich
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Old 06-14-2020, 06:32 AM   #2
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Quote:
Originally Posted by rworell View Post
Simply put, I have $659,000 to invest. Wife and I live on 30k a year and want to be able to earn a fair return and possibly withdraw slowly to maintain our 30k lifestyle.
Simple math tells me that $659k would give us around 26,360 for 25 yrs. we are 52 & 51 yrs. our SS would amount to around $2500 a month but won’t take that till at least 62. We have the ability to earn enough to make 30k but would rather work less “lol” because we retired early.

Thoughts??
Thank you
Rich
Is the $2,500/more of SS at 62 or at 67? Assuming 67, if you retire no with no further work, you're 15 years from SS... at $2,500/month that is $450k that should be put in a side fund ( perhaps a CD ladder) to fund from ER to SS.

The remaining $209k would support another$6-8k of inflation adjusted withdrawals, so it seems that you could spend as much as $36-38k a year.

If you expenses are $30k that does leave a lot of room for bad things to happen (new roof, new HVAC, car, etc).

Have you run you situation through FIRECalc?
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Old 06-14-2020, 06:43 AM   #3
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- Which simple math gives you 4.0% on your initial money and which requires a higher return as you draw your investments down to maintain same yield?
- I'm quite sure you won't take SS till at least 62. Hopefully you won't qualify for disability before then.
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Old 06-14-2020, 06:55 AM   #4
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Originally Posted by pb4uski View Post
Is the $2,500/more of SS at 62 or at 67? Assuming 67, if you retire no with no further work, you're 15 years from SS... at $2,500/month that is $450k that should be put in a side fund ( perhaps a CD ladder) to fund from ER to SS.

The remaining $209k would support another$6-8k of inflation adjusted withdrawals, so it seems that you could spend as much as $36-38k a year.

If you expenses are $30k that does leave a lot of room for bad things to happen (new roof, new HVAC, car, etc).

Have you run you situation through FIRECalc?
We have “0” debt. Live and own my RV which we live in. We also have a cash reserve of $70k for Emergencies
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Old 06-14-2020, 07:04 AM   #5
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We have “0” debt. Live and own my RV which we live in. We also have a cash reserve of $70k for Emergencies

Yes but the RV needs to be maintained just as a house would.
Also at some point you may even have to replace the entire RV. They don't last forever.
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Old 06-14-2020, 07:04 AM   #6
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What will you do about housing once the RV life is no longer suitable?
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Old 06-14-2020, 07:52 AM   #7
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Yes but the RV needs to be maintained just as a house would.
Also at some point you may even have to replace the entire RV. They don't last forever.
True, I’m an Licensed RV technician too and a mechanic of 30 yrs. I feel I’ve got that covered.
Plus maintenance is budgeted in our 30k living expenses.
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Old 06-14-2020, 07:54 AM   #8
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What will you do about housing once the RV life is no longer suitable?
Probably rent back home but after RVing we will be house caretakers till the next thing. Beautiful thing about being debt free and retired we are not tied down to anything
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Old 06-14-2020, 08:09 AM   #9
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We have “0” debt. Live and own my RV which we live in. We also have a cash reserve of $70k for Emergencies
Good added info & resources.
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Old 06-14-2020, 12:57 PM   #10
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Originally Posted by pb4uski View Post
Is the $2,500/more of SS at 62 or at 67? Assuming 67, if you retire no with no further work, you're 15 years from SS... at $2,500/month that is $450k that should be put in a side fund ( perhaps a CD ladder) to fund from ER to SS.

The remaining $209k would support another$6-8k of inflation adjusted withdrawals, so it seems that you could spend as much as $36-38k a year.

If you expenses are $30k that does leave a lot of room for bad things to happen (new roof, new HVAC, car, etc).

Have you run you situation through FIRECalc?
+1. Personally, I think this is one of the best ways for your situation.
The $450k should cover all your need with no drama until SS kicks in.
You can even be aggressive with the remaining $209k in terms of invesment if you have the stomach for the up and down of the market (VTI etc.), or you can buy a low cost Vanguard retirement fund with 30/70 or 40/60 stock/bond and hold it until SS kicks in. The $209k could become some larger amount when SS kicks in for you (or goes lower, that is the risk you can take).
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Old 06-14-2020, 06:20 PM   #11
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is health insurance taken care of?
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Old 06-14-2020, 08:01 PM   #12
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Originally Posted by rworell View Post
Simply put, I have $659,000 to invest. Wife and I live on 30k a year and want to be able to earn a fair return and possibly withdraw slowly to maintain our 30k lifestyle.
Simple math tells me that $659k would give us around 26,360 for 25 yrs. we are 52 & 51 yrs. our SS would amount to around $2500 a month but won’t take that till at least 62. We have the ability to earn enough to make 30k but would rather work less “lol” because we retired early.

Thoughts??
Thank you
Rich
Hi Rich, at 51 and 52 years old you are both still quite young. I would not want my retirement funds that exposed to likely cost of living increases so I would need to invest it somewhere I could get a decent return.

A few years ago I would have suggested a SP500 index fund but my thinking on this has slowly been evolving with the times and I no longer think that's the best option. The tech boom that arguably started in the 1990's is changing the way the world does business, the way food is produced and harvested, the way we receive healthcare and the way things are manufactured. The change has only just begun and whether you or I like these changes is inconsequential, they will continue to develop whether we as individuals embrace them or not. I would suggest you harness these powerful trends that will define our future and profit from them to secure yourself from devasting inflation. It's bad enough to be old, you don't want to be broke and old.

One of my favorite ways to do this is via funds that are heavy in the technology that will define the way business, manufacturing, travel and farming is conducted in the future. One company that runs multiple tech funds that stands out to me is ARK Invest. They do not have financial ties to the companies they research and invest in. Their funds are diversified in many different companies but each fund is focussed on specific technologies. They have funds focussed on things from genomics (medicine enabled by recent breakthroughs in genetics) to robotics (automated manufacturing).

It's worth checking out and considering for a portion of your investable assets. One thing you don't want to do is just sit on that money at a very low rate of return. It WILL run out unless you die well before the actuarial tables suggest, trust me on that!
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Old 06-14-2020, 08:16 PM   #13
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Will this be in a retirement account or taxable? It has not been previously invested? Do you have any other investments or is this completely new to you?
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Old 06-15-2020, 05:13 AM   #14
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Will this be in a retirement account or taxable? It has not been previously invested? Do you have any other investments or is this completely new to you?
Completely new. Just want to make the best safe decisions. We don’t want or need much. Just want it to last.
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