Running away to the circus

[Paracelsus]

Hello! I'm turning 55 next week and am planning on retiring at the end of this year. I'm single, no kids, and no debt. I've done a good job saving and have been planning on an early retirement since my 20's. I've got resources - my work will give me a pension (decreased because of early retirement, but $28K per year). I've got a 401K accessible to me after 55 with $1-1.1M in it (about half pre-tax, half after tax contributions). I've got 10 years of stock options still coming ($10-30K lump sum value per year), lots of stock outside of retirement ($1M) that generates about $20K dividends per year, and cash of $120K (in case of emergency or market issues with stock). I've got $0.5M in IRAs (just a little in a Roth) available after age 59.5, and hopefully SS will still be in existence at 67 with $30K promised per year. My NEEDS get covered by the pension (utilities and regular life stuff like groceries), but will need to figure out health insurance coverage for next year and am seeing significant rate hikes for 2017 - that extra money will come out of my other resources (work provides a bit of funding, but its limited).

Trying to figure out how to smartly withdraw from my resources (retirement and savings/stock) to have a comfortable life outside of my needs, but I don't live extravagantly. Any resources available on smart spending/withdrawing in retirement considering a tax standpoint?

As my title indicates, I am passionate about circus arts and have been playing in the circus as a aerial performer for the past ten years or so - always as a student at a beginner to intermediate level (flying trapeze, static trapeze, silks, lyra, Spanish web, etc.). Cirque du Soleil will NOT be recruiting me . I will be getting a part-time position at the circus helping with the administrative side next year - more for simple fun than need for funding. Other plans are volunteering at animal shelters, and enjoying life at home gardening and playing with my dog and having the time to go to community markets/fairs, etc. Maybe one or two trips per year to see parts of the globe I haven't gone to before.

Health wise I'm good, but dealing with some arthritis issues and loss of vision issues (glaucoma - slowed down surgically as much as possible) - work stress right now is horribly bad, counting down days to get out of that. Looking to retire early to literally be able to see before that becomes limiting and enjoy my physical skills while I still can. I can teach ground based conditioning classes as a trainer also.

I think I'm fine with the resources and goals I have, but can use some help figuring out how to tap the resources - I've been in accumulation drive mode most of my life rather than a spending mode. Glad this forum exists!

 

[Ready]

Welcome to the forum! What a fascinating first post. You sound like you will fit right in here! Congratulations on doing so well to get to this point. I'm sure you will find lots of great advice here on your withdrawal questions. Please let us know how the circus adventures go post ER!

 

[Bestwifeever]

How much fun is this, a part-time job with the circus! If your pension covers your needs, your investments should throw off enough to cover the rest. Other people here will give you great advice, but welcome!

 

[Katiek]

Welcome and congrats on setting yourself up so well to pursue your interests. We often talk about the importance of not just retiring from something but retiring to something. You definitely have that covered.

 

[MBAustin]

Welcome, Paracelsus! If you haven't seen them yet, there are two excellent resources here that might be useful as you prepare for your retirement date:

http://www.early-retirement.org/forums/f47/some-important-questions-to-answer-before-asking-can-i-retire-69999.html

and

Early Retirement FAQs - Early Retirement & Financial Independence Community

Regarding your withdrawal strategy, there are lots of threads here on the subject. Here's a relatively recent one:

http://www.early-retirement.org/forums/f28/need-easy-to-understand-explanation-of-withdrawal-strategies-70102.html

and you can find more by searching the forums. Also, this Bogleheads page has a lot of helpful info:

https://www.bogleheads.org/wiki/Withdrawal_methods

You mention having "lots of stock outside retirement". If this is all from your current employer (or otherwise not diversified), IMHO you should make it a high priority to diversify this. Most folks here would recommend low-cost mutual funds or ETFs. The important matters are to determine the asset allocation you are comfortable with for your full portfolio, and then ensure you are adequately diversified within each of the asset classes.

Good luck with your planning and enjoy the countdown to ER!

 

[travelover]

.......... I've got a 401K accessible to me after 55 with $1-1.1M in it (about half pre-tax, half after tax contributions). ...........

You should be able to roll over the 401(k) and end up with the after-tax portion into a Roth IRA.

https://www.irs.gov/retirement-plans/rollovers-of-after-tax-contributions-in-retirement-plans

 

[harley]

A circus performer should be a nice addition. Welcome to the zoo!

 

[Moemg]

Welcome , The Sarasota area is full of circus performers and they used to have a clown college here so a lot of people runaway to the circus.My late husband loved anything circus so we met quite a few performers including Gunther Goebel Williams .

 

[Paracelsus]

Thanks for the welcome to the forum! 57 work days to go....

I did meet with my financial advisor last week and he's advising me to roll over my 401K as soon as I retire in January into an IRA (pre-tax contributions), Roth IRA (after-tax contributions) and to merge all my company stock funds into one account (currently in 4 - one of these accounts is in my 401K so I'd be taxed for that withdrawal). I'm in a bit of panic in that I would not have access to that IRA money till 59.5, so 4.5 years of relying on company stock dividends and stock options in addition to my pension. If something goes bad with the company (unlikely, but who knows - it's an excellent large company that's been through everything in the last ~120 years well), it would hurt me. I don't see much disadvantage to doing this conversion when I turn 59.5 - that way I'd still have the security of the amount available in case of a disaster these next 4.5 years, but get an integration of all my retirement money (all IRAs with the 401K money) and better coordination between those funds at that time when they pay out for my support.

 

[Sunset]

Thanks for the welcome to the forum! 57 work days to go....

I did meet with my financial advisor last week and he's advising me to roll over my 401K as soon as I retire in January into an IRA (pre-tax contributions), Roth IRA (after-tax contributions) and to merge all my company stock funds into one account (currently in 4 - one of these accounts is in my 401K so I'd be taxed for that withdrawal). I'm in a bit of panic in that I would not have access to that IRA money till 59.5, so 4.5 years of relying on company stock dividends and stock options in addition to my pension. If something goes bad with the company (unlikely, but who knows - it's an excellent large company that's been through everything in the last ~120 years well), it would hurt me. I don't see much disadvantage to doing this conversion when I turn 59.5 - that way I'd still have the security of the amount available in case of a disaster these next 4.5 years, but get an integration of all my retirement money (all IRAs with the 401K money) and better coordination between those funds at that time when they pay out for my support.

401K's have immunity from lawsuit, and with large companies the expense can often be very low for the funds. So I'd not be so quick to take that part of the advice about rolling it into an IRA.
Who would manage the IRA (I'm guessing your FA, for a fee ?).

Also, why trigger a tax event to simply move the company stock from one account to another, seems like an expensive thing, when instead if you need money just sell that and take it out, and eventually these "orphan" stocks disappear.

I always think of the Enron employees who had everything tied to the company, if I was in this position within my IRA and 401K's I would be sure no more than 5% - 10% in company since your Pension comes from them too.

 

[Paracelsus]

My plans are still on - retiring in about 18 hours of work! I've gotten private health insurance for the next year as I don't qualify for any ACA cost reductions and want my benefits known for the next year. I did find a good plan that covers my doctors. Also have the pension and other benefit programs established. Still planning on running away to the circus and being part time staff there in January. So looking forward to this next phase of my life!

 

[travelover]

My plans are still on - retiring in about 18 hours of work!..........

Congratulations!

 

[street]

Congratulations on retiring! Wow it is a big deal and it sounds like you had a plan from a young man. That is what they say you need to do is set a goal and have a plan.

Do you have a job lined up or are you going to be looking for a circus job? I also had a plan and a part time job to help me work through the process of retirement. I am a person that can't sit still to long so I know I needed a little something to do. I also did somethings to challenge myself that you could say were over my head. Lol

Good luck in the transition you can stay busy with things that don't cost money.

 

[Katiek]

Congratulations and thanks for checking in and updating us!

 

[ugeauxgirl]

If you leave your 401K at your company you can withdraw the funds without penalty if you separate from service after age 55. If you roll them into an IRA and then make withdrawals you will have to pay a 10% penalty for withdrawals before 59.5- or else do a 72T, which is complicated and risky if you mess it up- I would leave enough in your 401K to cover your spending needs till 59.5 unless you KNOW you will not need those funds till then

 

[Paracelsus]

Thanks, I'm certainly keeping in mind the 55 vs 59.5 age limits to these funds. I'm thinking of keeping things as they are just to have my 401k funds available if needed (I may do fine with pension, dividends and stock options for the next 5 years), but these days who knows when something major might come up in case of an illness or accident or I decide to do some major life changes.

 

[ArkTinkerer]

I just saw your posts. I love seeing the cirque performances. Never done Cirque du Soleil but smaller ones (Cirque Mechanica came thru recently). I would love to do a road trip and hit a bunch of these. Do you know of any website or other resource that shows who is touring and the performance dates/times?

 

[kimcdougc]

Congrats on your retirement! Hope all your dreams come true. Good Luck!

 

[Paracelsus]

So far, my dreams are coming true. I'm loving my retirement (don't roll your eyes just because I'm only three months into this ). I'm working at the circus two days a week being an administrator. I'm volunteering at a wildlife rehab center (no pressure to adopt pets ) as a generalist one morning and as a specialist (using my veterinary skills) another morning. The other three days a week are now shaping up to be gardening and bicycling days and every day is a lovely day with the dog at the local dog park.

I've had some rough times losing my mother in February, but soooooo glad I had the free time in retirement to be able to spend the last few days of her life with her.

 

[MBAustin]

Thanks for the update, Paracelsus. Sorry about the loss of your mother but glad that you had that extra time with her. Nice how your circus work and volunteering have come together so well!