1924F4mandolin
Dryer sheet wannabe
I have posted some of this info a week or so ago….I was looking at the Boglehead site and thought their worksheet might make it clearer what I am hoping to find out, so I cannibalized it and cut quite a bit out. Here is the situation I am in……a LOT of if’s, and likely just plain unrealistic thinking involved. I am a 51 years old working for the Dept. of Defense schools in England. Coming up on two years ago I married (for the first time) a local UK lady. I just figured I would work another 7-8 years and retire here in England instead of the U.S. About 6 months ago it hit me that we just might possibly be able to retire by the summer of 2010-2011 if we head back to the Spokane area (where there is more sun). Last summer we bought a house for $205,000 (all paid for) outside of Spokane that we plan to rent out for a year or two (nobody in it yet) before we quit here and head back. When we got married in Feb 07 we bought a house here in the UK that we are living in….we thought we would be living in it at least 7-8 years anyway so what the heck. Problem there….house purchased for 277,000 Pounds, we put about 30,000 Pounds of fixes into the house after moving in and of course things have since gone down a bit…..not just with the housing market (not down that much here….prices stayed higher where we live than most places)…but with the dollar/pound. Bought the house at about $1.92 and it is currently bobbing all over the place at around $1.50. My wife also has 70,000 Pounds in a saving account. Side note: our mortgage/utilities here are paid by the Govt…..so my salary goes into my pocket. Staying on a year or two more makes financial sense…..but our working for schools has gotten to us and we are ready for something else. Basically, retirement is GOING to happen soon.....just a matter of making it as nice as possible.
Now….the problem…..If possible, my wife and I are going to call it quits the summer of 2010 (2011 at the latest) as long as they offer me VERA. If 2010, I figure I would pull in over the years this money….
*$1000+ a month from the immediate pension (after tax). But not adjusted for inflation until I turned 62.
*Almost $1000 a month at 56 until 62 from Social Security supplement.
*Any interest for money in accounts
*Take Social Security at 62 or put it off a year or two if we can. As of last Spring they were quoting me at about $1370 a month at 62 if I kept working. My wife takes her 50% spousal when she turns 62.
*We have the Govt health insurance that I currently have carried over into retirement. I am paying $104 a month for just myself at this time. I will add her to this next year so it will bump it up.
**Bottom line- the house that we would be living in would be paid for. Expenses are minimal. We are spending just over $1000 most months right now for utilities, insurance, food, gas etc and am allowing for staying under an average of $36,000 a year to start retirement. I figure after fixing the house (my wife wants a GOOD kitchen) we should have at least $450,000 in accounts(TSP, savings etc) (depending on what happens to the house in the UK) doing whatever they are doing. The numbers indicate to me that as long as we stay well under the $36,000 we shouldn’t have a problem (unless a big health problem crops up). We would just live at the $2000 a month level most of the time. We both don’t mind taking some part time jobs those first couple of years just so I can buy a few toys and to keep from digging into that $450+K.
I guess what I am asking……can you folks poke a ton of holes in this plan……is there something that I can’t see? 2011 is the better choice, but you never know for sure if they are going to offer VERA…..and both my wife and I are desperate to do what we really like………sitting around, gardening, exercising (me only), gin+tonic drinking and admiring the view of the river (her only…after all, she is British…actually Yorkshire…there is a difference). Orrrrr, do I need a FAdvisor to smack me upside the head with a big “get real” stick?
Emergency funds = 3-6 months of expenses (indicate if you have this, but it should probably not be part of your asset allocation) Kind of, but I am including this in the below totals.
Debt: None, don’t really count the house here in the UK since I am not making the payments.
Tax Filing Status: Married filing Jointly
Tax Rate: 25% Federal 0% State State of Residence Washington
Age: 51 last July
Desired Asset allocation: From 60/40 to 70/30….possibly something like Vanquard total stocks.
Intl allocation: 10-20% of stocks
If you want to give us the subcategory breakdowns within each asset class, go ahead. (Most people probably will not want to do this.) For example: x% Large Caps x% Mid Caps X% Small Caps X% REIT X% International stocks X% Sector X% Bonds X% Cash Some people may also want to tell us the % of growth investments and % of value investments they want. Overall….a good 6% if possible.
Current portfolio (please provide a hint as to the size of the total portfolio like 4 figures, 5 figures, 7 figures, etc.). What might be appropriate for a very large portfolio might not be appropriate for a new investor. Taxable xx% cash (for investing – do not include emergency funds) Between my checking account at 0% ($12,000) and wife’s Pound accounts (approx $105,000 getting about 4.5%) $117,000 that could be put somewhere now. …well, at least my $12,000xx% fund name (ticker symbol) (expense ratio) $6000 in Janus Global Tech….way way way down since I bought in 2000
xx% stock company name (ticker symbol)
His Roth at Vanguard xx% fund name (ticker symbol) (expense ratio) I have approx $8,000 in a Janus Olympus fund….down over 50%xx% fund name (ticker symbol) (expense ratio) Wife has approx $15,000 in ISA (same as ROTH in the U.S.) getting about 4.5%
His 401k xx% fund name (ticker symbol) (expense ratio) TSP account is $200,000. Currently 40% in C fund (S+P oriented) and 60% in G fund (about 4.3% at the moment I think). I got 100% into the G fund a year ago when things looked strange and the DOW was almost 14,000…..moved 30% over when DOW hit 12,000…thought I did a good thing…..then another 10% more when the DOW hit 11,000…..hindsight……..buggers!!!
Company Match? 5%
New annual Contributions $x his 401k (including matching contributions) $20,500 this last year. Matching from Govt I believe comes to about $2400 a year.$x her 403b (including matching contributions $x taxable Questions: 1.
With such a short time-line to retirement……where is the best place to stick my $12,000 before the end of the year? I could pay off a little more of the mortgage here in the UK which is at 4.5%...and probably another $10-15,000 by Spring. 2. We could get back approx $120,000 on the house in the UK if we sold now……fairly big loss and I think we would be able to wait a few years (around 2013 or so) for this to make a comeback….but still…..what is the Pound/Dollar going to do?If things stayed like they are right now…..figure about $150,000 or more by 2013.
Key Points*We are likely going to have to hang on to the house here in the UK for a couple of years after we retire until the prices come back a little bit and just rent it out and let the mortgage come down a little more. Also just plain praying for the Pound to make a little bit of a comeback on the Dollar and possibly sell the house Spring of 2010. *If VERA is offered and I take it next summer (2010) I would be 53. Approx pension from govt is $16500 a year immediately. With what I am assuming would be 15% tax bracket, take home after spouse benefits would be a little over $1000 a month. *I would be eligible for the social security supplement at 56. When I crunched those numbers I came to almost $1000 a month from age 56-62.
*Take SS either at 62 or put it off for a year or two. My wife is supposedly eligible for the 50% SS of my total by that time. Which is another reason to retire in the US.
*What the heck is the Pound going to do in the next year or two
??
Now….the problem…..If possible, my wife and I are going to call it quits the summer of 2010 (2011 at the latest) as long as they offer me VERA. If 2010, I figure I would pull in over the years this money….
*$1000+ a month from the immediate pension (after tax). But not adjusted for inflation until I turned 62.
*Almost $1000 a month at 56 until 62 from Social Security supplement.
*Any interest for money in accounts
*Take Social Security at 62 or put it off a year or two if we can. As of last Spring they were quoting me at about $1370 a month at 62 if I kept working. My wife takes her 50% spousal when she turns 62.
*We have the Govt health insurance that I currently have carried over into retirement. I am paying $104 a month for just myself at this time. I will add her to this next year so it will bump it up.
**Bottom line- the house that we would be living in would be paid for. Expenses are minimal. We are spending just over $1000 most months right now for utilities, insurance, food, gas etc and am allowing for staying under an average of $36,000 a year to start retirement. I figure after fixing the house (my wife wants a GOOD kitchen) we should have at least $450,000 in accounts(TSP, savings etc) (depending on what happens to the house in the UK) doing whatever they are doing. The numbers indicate to me that as long as we stay well under the $36,000 we shouldn’t have a problem (unless a big health problem crops up). We would just live at the $2000 a month level most of the time. We both don’t mind taking some part time jobs those first couple of years just so I can buy a few toys and to keep from digging into that $450+K.
I guess what I am asking……can you folks poke a ton of holes in this plan……is there something that I can’t see? 2011 is the better choice, but you never know for sure if they are going to offer VERA…..and both my wife and I are desperate to do what we really like………sitting around, gardening, exercising (me only), gin+tonic drinking and admiring the view of the river (her only…after all, she is British…actually Yorkshire…there is a difference). Orrrrr, do I need a FAdvisor to smack me upside the head with a big “get real” stick?
Emergency funds = 3-6 months of expenses (indicate if you have this, but it should probably not be part of your asset allocation) Kind of, but I am including this in the below totals.
Debt: None, don’t really count the house here in the UK since I am not making the payments.
Tax Filing Status: Married filing Jointly
Tax Rate: 25% Federal 0% State State of Residence Washington
Age: 51 last July
Desired Asset allocation: From 60/40 to 70/30….possibly something like Vanquard total stocks.
Intl allocation: 10-20% of stocks
If you want to give us the subcategory breakdowns within each asset class, go ahead. (Most people probably will not want to do this.) For example: x% Large Caps x% Mid Caps X% Small Caps X% REIT X% International stocks X% Sector X% Bonds X% Cash Some people may also want to tell us the % of growth investments and % of value investments they want. Overall….a good 6% if possible.
Current portfolio (please provide a hint as to the size of the total portfolio like 4 figures, 5 figures, 7 figures, etc.). What might be appropriate for a very large portfolio might not be appropriate for a new investor. Taxable xx% cash (for investing – do not include emergency funds) Between my checking account at 0% ($12,000) and wife’s Pound accounts (approx $105,000 getting about 4.5%) $117,000 that could be put somewhere now. …well, at least my $12,000xx% fund name (ticker symbol) (expense ratio) $6000 in Janus Global Tech….way way way down since I bought in 2000
xx% stock company name (ticker symbol)
His Roth at Vanguard xx% fund name (ticker symbol) (expense ratio) I have approx $8,000 in a Janus Olympus fund….down over 50%xx% fund name (ticker symbol) (expense ratio) Wife has approx $15,000 in ISA (same as ROTH in the U.S.) getting about 4.5%
His 401k xx% fund name (ticker symbol) (expense ratio) TSP account is $200,000. Currently 40% in C fund (S+P oriented) and 60% in G fund (about 4.3% at the moment I think). I got 100% into the G fund a year ago when things looked strange and the DOW was almost 14,000…..moved 30% over when DOW hit 12,000…thought I did a good thing…..then another 10% more when the DOW hit 11,000…..hindsight……..buggers!!!
Company Match? 5%
New annual Contributions $x his 401k (including matching contributions) $20,500 this last year. Matching from Govt I believe comes to about $2400 a year.$x her 403b (including matching contributions $x taxable Questions: 1.
With such a short time-line to retirement……where is the best place to stick my $12,000 before the end of the year? I could pay off a little more of the mortgage here in the UK which is at 4.5%...and probably another $10-15,000 by Spring. 2. We could get back approx $120,000 on the house in the UK if we sold now……fairly big loss and I think we would be able to wait a few years (around 2013 or so) for this to make a comeback….but still…..what is the Pound/Dollar going to do?If things stayed like they are right now…..figure about $150,000 or more by 2013.
Key Points*We are likely going to have to hang on to the house here in the UK for a couple of years after we retire until the prices come back a little bit and just rent it out and let the mortgage come down a little more. Also just plain praying for the Pound to make a little bit of a comeback on the Dollar and possibly sell the house Spring of 2010. *If VERA is offered and I take it next summer (2010) I would be 53. Approx pension from govt is $16500 a year immediately. With what I am assuming would be 15% tax bracket, take home after spouse benefits would be a little over $1000 a month. *I would be eligible for the social security supplement at 56. When I crunched those numbers I came to almost $1000 a month from age 56-62.
*Take SS either at 62 or put it off for a year or two. My wife is supposedly eligible for the 50% SS of my total by that time. Which is another reason to retire in the US.
*What the heck is the Pound going to do in the next year or two
??
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