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10-12-2014, 12:06 PM
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#21
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by EastWest Gal
If your annual living expenses are $100K and your pension is $60K, you will only need to w/d $40K/yr to start . What you withdraw from taxable accounts isn't income. You ought to be able to spend more on whatever you want (big hint: travel) than you thought. I don 't know if you saw this, but Kiplinger has info on state tax situations for retirees. You live in one of the top 10 tax friendly states for retirees. Congratulations. You look good to go.
Sent from my iPhone using Early Retirement Forum
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Thanks EastWest Gal
I will take a look at Kiplinger
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10-12-2014, 12:10 PM
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#22
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by Cobra9777
Congrats. Looks like you are good to go. You have a big decision coming up on the pension. There are plenty of threads here on lump sum vs annuity. It was an excellent resource when I was making the same decision last year.
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Thank you Cobra9777
Can you tell possibly tell me what you ended up doing and why?
I have read some of the post's and they seem to recommend annuitizing a part of your assests which lower the SWR on remaining assests. If you know of any specific really good posts on this please let me know.
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10-12-2014, 12:12 PM
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#23
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by retire2020
You are in very good position..fire any time. 65K on 2M portfolio…3.2% WR + SS is very much doable.
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THANK yOU retire2020
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10-12-2014, 12:16 PM
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#24
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by stepford
My numbers are similar, but I'm planning to make a go of it with with significantly less pension than the OP and significantly smaller savings than JCRetire77. I'll be at 0.9M taxable, 1.1M deferred with a $33K/yr non-COLA'd pension (includes retiree medical) and I expect to make the jump on or about my 55th birthday next summer.
The one (huge) saving grace in my plan is that DW will continue to work part time and will have a COLA'd state pension 50% larger than my own (plus a few $100K additional savings) when she drops out to join me at 60.
Of course, the other saving grace is that DW and I are both pretty frugal (as ex-grad students are wont to be) and have after tax expenses typically in the $60-70K/yr range...
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Thank you for your information stepford. Enjoy.
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10-12-2014, 12:25 PM
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#25
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by rodi
I plugged in your numbers to firecalc and it gave 100% success. Not sure how you came up with 94.5%.
Did you enter the extra income (SS, Pension) on the appropriate tab? When all that kicks in - you're covering a huge portion of your expenses.
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Thanks rodi
I put 3114K$ (pension lump sum + current investable assets), 50/50 total market, 3% inflation, 125K$ year spend, 35 year retirement, 21.6K$/year my SS at 62, 10,404$/year wife SS at 66, 1% annual fee costs (instead of 0.18% in program). I get 94.5% from Firecalc.
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10-12-2014, 04:16 PM
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#26
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,298
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Quote:
Originally Posted by klbvbb01
Thank you Cobra9777
Can you tell possibly tell me what you ended up doing and why?
I have read some of the post's and they seem to recommend annuitizing a part of your assests which lower the SWR on remaining assests. If you know of any specific really good posts on this please let me know.
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Not Cobra, but here's some thoughts I posted a while ago http://www.early-retirement.org/foru...ary-66781.html. I took a lump sum over a pension three years ago, and I can explain again if you like. But it's a personal decision for each of us, and not strictly dollars and cents.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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10-12-2014, 07:16 PM
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#27
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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Quote:
Originally Posted by klbvbb01
Thank you Cobra9777
Can you tell possibly tell me what you ended up doing and why?
I have read some of the post's and they seem to recommend annuitizing a part of your assests which lower the SWR on remaining assests. If you know of any specific really good posts on this please let me know.
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The thread linked by Midpack is very good. I remember reading through his reference guide several times. Many others as well. Just search and you'll find a wealth of information and viewpoints.
I elected the annuity option for several reasons, but mainly to reduce risk and uncertainty by covering ~50% of our spending with guaranteed income. When SS kicks in, the percentage goes higher, and then drifts lower because the pension is not COLAed. It also had a decent payout at 6.5%, and was 100% funded with a solid company.
On the flip side, if the market performs as well as it has the last 30 years, a 60/40 lump sum portfolio would have beaten the pension annuity and left some money for my heirs (...in most cases). I remember running some FIRECalc models to see how the lump sum would have performed vs the fixed annuity, and the success rates were quite high (70-80%). So you definitely forego some potential upside in exchange for reduced risk and uncertainty. In my judgement, with interest rates sitting near zero, I don't think stocks and bonds will perform as well as the last 30 years. We're just at the tail-end of a 30-year run-up in stocks/bonds after interest rates peaked in the mid 80s.
I paid off my mortgage with part of my taxable portfolio for same basic reason... to reduce reliance on future market performance to meet retirement expenses. I have lower expenses and a smaller portfolio, with less risk and uncertainty. You'll find many here who advocate holding a low-interest-rate mortgage in retirement, on the expectation that the market will outperform the mortgage rate. History is on their side, but again, I'm a little more bearish going forward and thus prefer to eliminate that unknown.
Good luck.
__________________
Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
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10-12-2014, 09:04 PM
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#28
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,211
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Quote:
Originally Posted by klbvbb01
Thanks rodi
I put 3114K$ (pension lump sum + current investable assets), 50/50 total market, 3% inflation, 125K$ year spend, 35 year retirement, 21.6K$/year my SS at 62, 10,404$/year wife SS at 66, 1% annual fee costs (instead of 0.18% in program). I get 94.5% from Firecalc.
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I did not change the expense part.
I also realize I didn't unclick COLA on the pension - and I did pension, rather than lump sum.
That's probably the difference.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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10-12-2014, 10:26 PM
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#29
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Gone but not forgotten
Join Date: Jul 2012
Location: Peru
Posts: 6,335
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You're good to go!
... and if maybe you need a part time chauffeur, gardener or doorman, I 'm available.
Congratulations and welcome to the ranks of the unemployed.
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10-13-2014, 07:51 AM
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#30
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Recycles dryer sheets
Join Date: Oct 2014
Posts: 57
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klbvbb01 - I hope to be in a very similar situation in 10 years. This gives me confidence it will work out.
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10-13-2014, 03:03 PM
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#31
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Moderator
Join Date: Oct 2010
Posts: 10,723
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Quote:
Originally Posted by klbvbb01
- Includes recent quote on retiree medical plan from megacorp
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If your after-tax investments did not throw-off much income, it might be possible for you to qualify for PPACA subsidies. Could you get your income under $62,920? Probably not if you annuitize. Sticking most of the $2M into non-income producing investments might not be worth it, but I figured I'd mention it.
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10-13-2014, 04:31 PM
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#32
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by sengsational
If your after-tax investments did not throw-off much income, it might be possible for you to qualify for PPACA subsidies. Could you get your income under $62,920? Probably not if you annuitize. Sticking most of the $2M into non-income producing investments might not be worth it, but I figured I'd mention it.
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thanks for suggestion sengsational
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10-13-2014, 04:54 PM
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#33
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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Quote:
Originally Posted by imoldernu
You're good to go!
... and if maybe you need a part time chauffeur, gardener or doorman, I 'm available.
Congratulations and welcome to the ranks of the unemployed.
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thanks imoldernu
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10-13-2014, 04:57 PM
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#34
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Dryer sheet wannabe
Join Date: Sep 2014
Location: Lafayette/Louisiana
Posts: 16
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thanks phil70
save/plan hard and you will do great
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