Still Scared of FIRE in CA!

[ERPRECY]

Am a new member. Have not stopped reading past posts. Quite impressed with the knowledge of members so looking for validation and advice.
I'm almost 58 years old, took early retirement 2 years ago, DH is same age still working, planning to retire at 60 1/2. Two children, both out of college and both with full time jobs. Combined Assets: House and 2 rentals - equity of $600K. 401K - $425K, IRA - $750K. Cash - $100K. Need $80K after tax for retirement income. My current pension and lifetime annuity is $60K before tax.
Here's our plan. In 2 years, sell our house and one rental - est. cash for both after tax: $300K. Use to fund gap till Social Security. Move to rental in HI and make that principal residence, sell after 2-3 years. Move back to mainland at that time - buy or rent? Not yet decided. Get S.S. at 62 - $40K for both. Doable? Any suggested allocation? By the way, strong INTJ. Have a good weekend, everyone!

 

[timo2]

I was following you until you left Hawaii: If you can afford Hawaii, why would you move back?

 

[Midpack]

Welcome to the forum. Have you entered your info in FIRECalc: A different kind of retirement calculator? I didn't see anything in your OP that it can't model. It might be easier to start there and after you look at those results, then ask questions from there.

And as for suggested allocation, most people here would probably recommend a stock allocation from 20-70% with the balance in fixed income. Where in that broad range would depend on your risk tolerance and the FIRECALC results.

 

[fishnfool]

It sounds like you want to live in your Hawaii rental long enough to capture the tax advantages to sell it as principal residents and avoid first 500k for married couple on capital gains. Or why else would you live in paradise and move back?

 

[Papa bear]

I believe they changed that tax rule on rentals and then making it your primary. It used to be that you could have a rental, then live in it and make it your primary residence and then get the tax break. However, now you take the number of years as a primary divided by total years owned. That's the only percentage you can use to offset capital gains.

 

[ERPRECY]

Plan to move back to Mainland from HI is to be closer to the kids. That could still change. Another plan is to just travel to Asia and South America frugally for 5 years after Hawaii.

I will look into FIRECalc.

I will look up taxation on sale of rental properties.

Thanks for all the tips.

 

[ERPRECY]

Excellent FIRECalc results. 2 years out of 5 years occupancy on rental property confirmed. Happy!

 

[travelover]

Excellent FIRECalc results. 2 years out of 5 years occupancy on rental property confirmed. Happy!

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