We’re hoping to retire early (and fish
) and would like some advice on how to best use our assets until we are eligible for our retirement accounts. Here is our current situation:
--I'm 55, DW is 52.
--2 Kids in college.
--No loans or debt. We pay off everything monthly
Combined 401ks and individual IRA - $1.2M (all pre-tax)
Combined Roth IRAs - $165K
Brokerage Account - $510k (all individual stocks)
Mutual Funds - $129K
Cash - $120K
College fund – $85k which should cover all remaining college costs
FHA (Future Health Account) – $30k (must be used for health insurance)
We also have annuity payments coming due in 2 years of 15k, in 3 years of 60k, in 6 years of 18k and in 7 years of 18k.
Anticipated expenses are at about $85k a year (taken from a 2 year running average) and include health insurance for the whole family.
- We’d like to live off of cash, stock sales (Brokerage account) and
annuity income until we are eligible for our 401k. We plan on managing our
income so we pay 0% on the long term capital gains. I figure this to be
about $95K a year and with the standard deductions, kid deductions, and
minor 1099 income, we fall below the $78750 income limit for 0% capital
gains taxes….but still cover all our expenses. I know you can’t time the
market but if/when the market corrects, I think this plan is very risky with
the possibility of losing a lot of equity in the stocks. Should we sell some
stock now to have more cash on hand to get us thru the first 5 years?
- If the above makes sense, I think our income would be low enough (using
just cash and long term capital gains) to qualify for affordable health care
for a family of 4. In my above expenses, I include health care through my
current employer which would be significantly more expensive than ACA.
Does long term capital gains count towards income for ACA? Is this a good
I would appreciate any feedback or comments…thanks, TightLines