Nervous

thx guys! appreciate the support. some good feedback though. just needed a sounding board that candidly is consistent with where i was going anyway...need to work a couple more years...just to make sure. as far as jayc...do i really need to send you a w2?? anyway whatever. thx for the feedback.
 
Goblue1972 said:
I'm 40. I have 2 houses worth 2.5 to 3 million. Plus 2 condos worth over a million. And a couple of fractionals 400 ish. I have 9 million in securities...3 million in laddered munis and the rest in diversified equities. I have a pension at 62 of a lump sum of a couple of million. 2 young kids. I estimate retirement expenses of 240 ish. I have no debt. My questions are can I retire? If so what kind of portfolio would you suggest? If I do retire I cant be wrong...I want to avoid having to go back to work at target when I'm 68! So I would need a pretty conservative portfolio. Thoughts?
Click to expand...

I'm a little confused about spending. You said in this post that you wanted to spend 240K now you're at 500K, can you explain.
 
$500K would be the necessary pre tax amount to generate $240K approx in after tax income in today dollars. make sense?
 
Taxes aren't going down. This has to be a long term model...top rates will go back to near 40 plus state and city you r there at 50 ish rates going fwd. In fact in NYC they r already over 50. I think Illinois is at 7 ish?? Plus the city of Chicago. Not sure exactly but I think 50 ish is a good and realistic estimate.
 
Goblue1972 said:
Taxes aren't going down. This has to be a long term model...top rates will go back to near 40 plus state and city you r there at 50 ish rates going fwd. In fact in NYC they r already over 50. I think Illinois is at 7 ish?? Plus the city of Chicago. Not sure exactly but I think 50 ish is a good and realistic estimate.
Click to expand...

Illinois is going to 5% for the next 4 years, then drop to 3.75% after (that's the theory anyway). Chicago has no income tax on wages.
 
I believe Cook County sales tax is about 10.25% for what it's worth. Might of changed since I moved away.
 
I'm sorry...let me explain. My view is that tax rates are going up in the mid to long term. I think ultimately Chicago will look more like NYC. 40 percent federal ultimately plus 7 or so for state and 4 percent for city. Which is where I think NYC is at today. And Chicago right now is in worse fiscal shape today than NYC. Just my opinion of where taxes are going and thus is how I'm modeling my retirement after tax cash flows. Make sense?
 
I was always surprised at how low it was... 3.75%. I relocated from IL to MN and paying 7.85% state income taxes. 5% would be nice.

Dimsumkid said:
Illinois is going to 5% for the next 4 years, then drop to 3.75% after (that's the theory anyway). Chicago has no income tax on wages.
Click to expand...
 
Good grief. Waaaaay too much RE. Sell most of that while you can, and before property taxes start to go way up to pay for out-of-control local government expenses. Way too much carrying costs in personal, non-rental RE IMO, with property tax, utilities, repairs/maintenance, etc. You have about 4 million in assets COSTING you over 2% a year.

Your tax rate in retirement will likely be way lower than you are estimating IMO. Structure your income where most of it comes from LTCGs and you will see dramatically lower tax rates. Even if LTCG rates go up to 25% you will only need 320K to generate your 240K needed income, and if you sell most of your RE and diversify the proceeds into a productive, efficient portfolio worth about 15 million, then you will be at a 2.1% SWR, which should sustain you for 50 years.

What the heck do you do for a living to have amassed such an impressive net worth, if I may ask? Very impressive!
 
I mentioned before...once retired I will sell current house and move back to city place so that should reduce my re exposure by 1.7 million. And I love all of my other re and am willing to work another 2 years to make sure I can afford to love it. As far as what I do...I worked on wall street for 8 years doing investment banking...providing mergers and acquisitions advice and have spent the last 9 years running strategy and m and a for a somewhat well known industrial company.
 
Aiming_4_55 said:
I was always surprised at how low it was... 3.75%. I relocated from IL to MN and paying 7.85% state income taxes. 5% would be nice.
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It seems to me that Illinois needs a complete revamp of its tax code. That state is in a world of hurt, and even a 5% (flat) tax rate is extremely unrealistic, given the hole that's been self-dug for the past couple of decades.
 
Aiming_4_55 said:
I believe Cook County sales tax is about 10.25% for what it's worth. Might of changed since I moved away.
Click to expand...

You must be referring to the sales tax in downtown Chicago, not just Cook County. Cook County adds only 1.25% to this total. But the current rate appears to be 9.75% after they got rid of the past Crook County President Todd Stroger and rolled back .5% of his last increase. He added relatives and cousins as the only "qualified" people in the country to do the jobs he hired them for at salaries 2x-3x what they used to make, more if you count the prison pay some of them used to get!
 
Yup, my experience was mainly downtown Chicago.

Sign me up for a ghost job... I'm not lazy, sign me up for 2. :D

Dimsumkid said:
You must be referring to the sales tax in downtown Chicago, not just Cook County. Cook County adds only 1.25% to this total. But the current rate appears to be 9.75% after they got rid of the past Crook County President Todd Stroger and rolled back .5% of his last increase. He added relatives and cousins as the only "qualified" people in the country to do the jobs he hired them for at salaries 2x-3x what they used to make, more if you count the prison pay some of them used to get!
Click to expand...
 
steelyman said:
It seems to me that Illinois needs a complete revamp of its tax code. That state is in a world of hurt, and even a 5% (flat) tax rate is extremely unrealistic, given the hole that's been self-dug for the past couple of decades.
Click to expand...

From what I read about this, we could make it at 5% (our current rate is 3%) and back down to 3.75% later if our governor would make some serious efforts to pay down debt and cut back spending. Problem is his new budget made little effort to pay down current debt and included a lot of new spending. This is the same guy who got elected on the promise of balancing the budget and being fiscally responsible.
 
Back to income taxes...once off salary most of your income would come from dividends and cap gains, right? That would be 15% federal, subject to change, and until you start getting that pension.
 
Definitely recommend you get some professional help---with a portfolio the size you have you should be able to get a very low percentage price to balance and plan so that indeed you can get most of your money away from the tax collector by doing dividends and capital gains and growing in tax deferred accounts.
 
Goblue1972 said:
I mentioned before...once retired I will sell current house and move back to city place so that should reduce my re exposure by 1.7 million. And I love all of my other re and am willing to work another 2 years to make sure I can afford to love it. As far as what I do...I worked on wall street for 8 years doing investment banking...providing mergers and acquisitions advice and have spent the last 9 years running strategy and m and a for a somewhat well known industrial company.
Click to expand...


OK, so that gives you a 13.7MM portfolio (9MM stocks, 3MM munis, 1.7MM RE sales proceeds), and if your tax rate averages, let's say, 30% with most of the tax coming from lower LTCG rates (plus your state income tax rate). So you need about 342K/13.7MM, or about a 2.5% SWR rate, which still looks doable to me. Although, I would resturcture that portfolio some so it is not so top heavy with stocks but with more cash reserves. Maybe 10 years of cash reserves so you can make it through "bad times" in the market?

Plus, with your skills, I bet you could do some consulting on the side PT (setting your own hours so it does not seem like a real job), which would lower the SWR and make the projection even more viable.

Dude, you're set! What do you want to do when you quit? Chase mamma around the house all day?
 
I have $6million in stocks and 3 million in laddered munis (not $9 milllion plus the $3million sorry if i confused you on how i wrote that)...if i work another couple of years...i should have another $1.5 to $2.5 depending on how things go. so in 2 years i will have 8 ish in stock and 3 ish in bonds plus the $1.7 ish in RE proceeds from house sale. good advice on getting some professional help...so far ive been doing my own selections.

as far as what i will do...will definitely spend more time with my kids as my current job isn't that difficult...but the travel is absolutely killer. anyway - ill probably end up working with some buddies at a small m and a boutique a couple of days a week...and otherwise be a house husband. maybe my wife will decide to re-start her career (she was a TV newslady). who knows really what i will end up doing..just not doing this and this city!
 
Goblue1972 said:
I have $6million in stocks and 3 million in laddered munis (not $9 milllion plus the $3million sorry if i confused you on how i wrote that)...if i work another couple of years...i should have another $1.5 to $2.5 depending on how things go. so in 2 years i will have 8 ish in stock and 3 ish in bonds plus the $1.7 ish in RE proceeds from house sale. good advice on getting some professional help...so far ive been doing my own selections.

as far as what i will do...will definitely spend more time with my kids as my current job isn't that difficult...but the travel is absolutely killer. anyway - ill probably end up working with some buddies at a small m and a boutique a couple of days a week...and otherwise be a house husband. maybe my wife will decide to re-start her career (she was a TV newslady). who knows really what i will end up doing..just not doing this and this city!
Click to expand...

Oh, OK. Sorry about that confusion. That still puts you around a 3% SWR. For a super long term ER I would personally want to be around a 2-2.5% SWR. However, if your wife wants to go back to work as a news lady I bet she could kick in some percentage of her salary for the budget to get you back in the 2% range.

IMO you still probably have enough to pull it off, and with your skills you could always go back to work if you had to at some point. I would give it a try while you are still young..............
 
Thx. I think I will work 1 year and 10 months more and then call it a day. Just to make sure I have enough. Thx everyone for their feedback. I feel like I'm very close!!!
 
Goblue1972 said:
I'm 40. I have 2 houses worth 2.5 to 3 million. Plus 2 condos worth over a million. And a couple of fractionals 400 ish. I have 9 million in securities...3 million in laddered munis and the rest in diversified equities. I have a pension at 62 of a lump sum of a couple of million. 2 young kids. I estimate retirement expenses of 240 ish. I have no debt. My questions are can I retire? If so what kind of portfolio would you suggest? If I do retire I cant be wrong...I want to avoid having to go back to work at target when I'm 68! So I would need a pretty conservative portfolio. Thoughts?
Click to expand...
Goblue1972...A.K.A Charlie Sheen? :dance:
 
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