Stumbling into ER...

[qt333]

Hello to everyone,

I accepted a buyout/er/layoff in 2011 at age 55, thinking my small pension, unemployment benefits, savings and maybe some misc income would let me take a 2-3 year break from work.

Five years later, I'm 60 and really, really like not working. A combination of lowering living expenses and creative income supplementation means I've been able to keep a pretty stable 3-4 years of living expenses in liquid savings without touching my 401k/IRA accounts.

In my mind, I didn't really need to have a plan because "next year, I'll go back to work for a couple of years.. and then I'll make a plan for my REAL retirement" but a decent-sized inheritance I wasn't really expecting has me facing the reality that I've probably retired.

The calculators (Firecalc, Fidelity, Vanguard) all seem to indicate I'm ok - but I've always been quite independent and never had any help investing or planning or even doing my taxes and I'm not so sure.

I'm confused about how to put together a plan for withdrawing money from retirement accounts to live on, when to draw social security, figuring out how what to do with the inheritance, etc. and want to get some help and advice with all of this but I also have some pretty deep-seated trust issues that make it tough for me to accept the help I need.

I've started by looking for a CPA and then thought I'd make appointments with both Fidelity and Vanguard (who hold my 401K & IRA accounts) as I'm pretty sure they offer some "free" consulting.

I really appreciate all the information offered here.

 

[Free To Canoe]

Welcome to the forum! I believe that you have come to the right place.
You can manage your assets yourself but you will have to do some learning. There is a suggested reading list available.


Don't be overwhelmed by all of the questions. Take them one at a time. Most of the questions have been asked before. Some have been discussed ad nauseam. Feel free to ask them here.


By the way, congratulations on "retirement".

 

[travelover]

Welcome . You can do it. The dirty little secret is that it is not really all that hard to do it yourself.

 

[VFK57]

Welcome to the Forum. As long as you spend no more than what your income is going to be + inflation counting on X years of living (nobody can figure it out for sure) you are OK. Nobody lives forever so enjoy what is left.

 

[Sycamore]

First congratulations on the first few years of your retirement, sounds like you've set the stage for future success.

If you're interested in learning some of the basics around building your own retirement portfolio I suggest some books by the following authors:

William Bernstein (The Investor's Manifesto and The Four Pillars of Investing)
Richard Ferri (All About Asset Allocation)
Larry Swedroe (The Only guide To A Winning Investment Strategy You'll Ever Need)

If the value of your account at Vanguard meets a certain threshold you qualify for a free plan and follow-up phone meeting with one of their Certified Financial Planners. They'll provide a detailed plan with some broad asset allocation recommendations.

An emerging trend in the financial planning industry is Robo Advisors. Check out companies like Betterment, Personal Capital, WealthFront, and even Schwab. These firms are changing the industry, and will grow in their impact on fees and service.

I agree with travelover, you can do this yourself if you invest the time to learn the basics.

+1 on the CPA in light of your inheritance.

 

[Major Tom]

If you have the time and inclination, spend lots of time reading the posts on this forum. A lot of people seem to like the Bogleheads forum too. I've hardly spent any time over there, so don't really know. This place seems friendlier but maybe I'm biased. Do lots of reading, both online and off. Ask questions too if you want. I tend to read a great deal, and find that every question I have has been asked by someone else, but if you like to ask questions, break a leg. There are helpful folk here who will do their best to answer them for you.

Don't rush it. You have lots of time. After all - you don't have a job

Welcome!

PS - like you, I really, really like not working

 

[38Chevy454]

Welcome to the forum, sounds like you are in good shape to continue retirement. Agree with the rest, you can educate yourself by just reading on here, asking questions, and talking with some professionals (hopefully free!). Then decide on your risk tolerance, and with a good idea of expenses, figure out a plan to get the money. One thing to consider, you have fixed and discretionary spending. The fixed portion is fairly easy to predict and tend to be pretty constant; the discretionary part is harder, but you can also make adjustments as required so the total of fixed plus discretionary will meet your income amount.

 

[qt333]

Thanks to everyone for the welcome, tips and encouragement.

Still waiting to hear back from the two CPAs recommended by friends. Any thoughts on choosing one? Things I should be sure to ask about?

An emerging trend in the financial planning industry is Robo Advisors. Check out companies like Betterment, Personal Capital, WealthFront, and even Schwab. These firms are changing the industry, and will grow in their impact on fees and service.

Interesting - I think 401k sent something out about this within the last 6 months or so.

Don't rush it. You have lots of time. After all - you don't have a job

Seriously, I have to remind myself about this all the time.

 

[Sycamore]

qt333,

When I made the comment about Robo Advisors I mentioned because of your comment about developing trust. Robo Advisors might be a good choice for you, but I would not rule out a good fee only Certified Financial Planner.

If you're not inclined, or not interested, in learning about asset alloction and general financial planning they a CFP might be a good option. You're comfortable working with a CPA (which I agree with), why not consider a CFP?

I am not a CFP, but I think they bring value to people. The key is finding the right one for you. Many now work on an hourly basis (in response to competition from Robo Advisors and Do-It-Yourselfers).

A good CFP will charge you a percentage of Assets Under Management (AUM). If you find one that charges 1% then hopefully they bring more than portfolio recommendations (perhaps some investment tax planning).

Ask your CPA if they can recommend a good CFP.

For me personally I would want one that has >1% AUM fee, a focus on passive investment strategies, and an excellent record with the Certified Financial Planning Board, and FINRA.

 

[pb4uski]

If you're looking for a CPA to help you with retirement planning, look for a CPA with a PFS (Personal financial Specialist) designation... they have taken special study of personal financial planning...most CPAs focus on audit, corporate accounting or taxation and very few are knowledgeable about personal financial planning.

However... I'm a big advocate of DIY... nobody cares about your money more than you... but I have used Vanguard's financial planning service and think they are ok... well worth the cost (free in my case and probably your's too... ask them).

You can also ask questions here and/or search threads on the topics that interest you.

I assume that with your inheritance that you'll have substantial taxable accounts as well as tax-deferred... so you'll want to read about tax efficient placement of assets. See Principles of tax-efficient fund placement - Bogleheads

On withdrawing, many of us have a fairly healthy allocation to cash so withdrawing is simply a matter of a cash transfer and periodic rebalancing. What I have done is my asset allocation is 6% cash... that, along with dividends and capital gain distributions from my taxable account investments are sufficient to cover 3-4 years of living expenses. I have automatic transfer from my online savings account to my local bank checking account monthly.... my retirement "paycheck".. and then pay our monthly bills out of that account.

And you'll find lots of debate about when to file for SS.