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Old 01-26-2020, 02:05 PM   #21
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Not sure about fixation on 22% but you can likely support (3-0.8)*4% = 88k + wife’s salary per year spending (pre tax?)

Not quite sure what that means, but as I said above, we are paying expenses on wife salary alone and not touching any of the portfolio for monthly expenses





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Have you looked at what your tax rate will be in retirement? Surely some of that 2.2mill will be in taxable investment accounts you could pull at 15%?

I think that all accounts are taxed as income. Our fed rate in years past, after deductions and all was usually in the 15-17% range. Our expectation is that after DW retires, we will for the near term not change our lifestyle and expect expenses to stay the same (adj for inflation however).
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Old 01-26-2020, 02:11 PM   #22
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Why can't you sell one of the three properties now and put all your cash shortage problem to rest? Getting a heloc to make the payment just shifts one loan to another. Your are paying more in interest payment. Why would someone do that?

As I stated already, we of course can sell one of the properties, but we are not sure if we want them to play a role for us after DW retires. Hanging on to them for now to keep options open.


If you needed a chunk of cash for say 2-3 years would you better to take it out of a HELOC and pay 3-4% interest (and then you have new payment/expense) or take it out of your IRA and pay 22% on it? That is where I am struggling a bit.


Would it be a bad idea to take it from Roth's tax free now and lose the growth that we would otherwise get if we left it alone until late in retirement?

The land BTW is worth 8-10X what I paid for it 25 years ago, so I have no regrets about "tying up" money.
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Old 01-26-2020, 05:37 PM   #23
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How hard would it be to squeeze a couple of additional years out of the cars? It's not hard to get 200,000+ miles out of cars these days. The extra time will let you decide on what to do with your properties.
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Old 01-26-2020, 06:25 PM   #24
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If you needed a chunk of cash for say 2-3 years would you better to take it out of a HELOC and pay 3-4% interest (and then you have new payment/expense) or take it out of your IRA and pay 22% on it? That is where I am struggling a bit.

You are going to have to pay that tax sooner or later. You have already received the benefit of deferment. Just bite the bullet and do it now. From my view I do not see any sense in adding new debt with your assets.



This is a reason why I build up my project cash needs for 5 years... so that I am not forced to take money from my tax deferred accounts when I need the cash.
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Old 01-26-2020, 07:18 PM   #25
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I know this is really un-american: But why not just buy one very good used car and keep both other cars. Will pay almost the same insurance. Would save A LOT of money.
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Old 01-26-2020, 07:36 PM   #26
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Good thoughts regarding the cars. I have a full shop at the house and do most all of my car maintenance. But I am in a "phase" now driving a $1300 '02 Taurus Wagon. DWs car is a 2012 VW CC with almost 140K miles on it. I just did a 4 hour intake manifold replacement on it. And my '08 truck has at least 3-4 things wrong with it. So fact is I am just tired of working on cars (except for my antique ones) and dealing with broken stuff. DW wants an Audi which I think are overpriced (but very nice cars) but she has talked about it forever, she still works, so we will find a way to make it happen if she really wants it. I'm still not sure what I would buy either, keep my truck (which I plow our driveway with in the winters), etc. etc. But as I said originally, I am trying to plan for replacing 2 of the cars 2 years from now, not now, and just find a way to pay cash for them when the time comes.
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Old 01-26-2020, 08:18 PM   #27
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If your wife still works, I don't think you should deny her the Audi. Just get a car loan.
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Old 01-26-2020, 08:42 PM   #28
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If your wife still works, I don't think you should deny her the Audi. Just get a car loan.

Oh yeah, that's a given.
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Old 01-26-2020, 09:11 PM   #29
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if you're living off the wife's earnings, are you really FIRE'd ?
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Old 01-26-2020, 09:50 PM   #30
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if you're living off the wife's earnings, are you really FIRE'd ?

That's a good point, but does it really matter? I actually got laid off during a "re-org" ONE MONTH before I was going to retire anyway, and was paid handsomely to leave. DW was let go (same company) in 2018 and I told her "if you want to retire now, we could probably make it work with some lifestyle adjustments" and she said "No" and that she wanted to work for 3+ more years.....
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Old 01-26-2020, 10:00 PM   #31
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if you're living off the wife's earnings, are you really FIRE'd ?


Hmm, I need to know the answer to this also.

I can identify with enjoying the task of keeping the family fleet of older vehicles running and then you hit a point where it’s less satisfying and you can afford other options. I wish DW would agree to a new or 2 yr old low mileage car while she’s still working.
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Old 01-26-2020, 10:20 PM   #32
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if you're living off the wife's earnings, are you really FIRE'd ?


For some reason, this type of comment always makes me wonder if there is some underlying gender bias? Maybe not. But it just seems men are always defaulted to “work longer than their wives” as some type of standard.

It’s just less common to see comments like this when the gender is reversed

Personally I applaud couples who can look at each individually and what they contribute (financially and non financially) and make sensible decisions that both are in agreement with.
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Old 01-26-2020, 11:27 PM   #33
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For some reason, this type of comment always makes me wonder if there is some underlying gender bias? Maybe not. But it just seems men are always defaulted to “work longer than their wives” as some type of standard.

It’s just less common to see comments like this when the gender is reversed

Personally I applaud couples who can look at each individually and what they contribute (financially and non financially) and make sensible decisions that both are in agreement with.
+1
So true.

That's why when my DW said she wanted to retire, I told her no, not yet as I had another year or two to go.
Didn't want her to feel bad about slacking off while I slaved away...
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Old 01-26-2020, 11:32 PM   #34
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..... or take it out of your IRA and pay 22% on it? That is where I am struggling a bit.

.....
Take it out of your IRA, because you are going to pay 22% later anyhow, but is it really 22% on all of what you take out each year ??

However, if you are careful, perhaps you can take out a small amount each year and stay below the 22% level,
You have to check with last year's tax return to see how much head space you have between your income level after deductions and the 22% level.
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Old 01-27-2020, 04:47 AM   #35
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We are pretty long-toothed in the economic cycle and you are leveraged to three properties and have next to no emergency fund.

If I were you (and I'm not), I would sell one of the properties NOW to reduce my leverage and get better positioned just in case things don't go as planed.
Plus 1.
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Old 01-27-2020, 07:55 AM   #36
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Plus 1.
+2. I actually typed the exact comment about paying off at least one property and un-leveraging yourself, but forgot to press Post.

The reason I'm typing a new comment is to caution you against buying an Audi unless you want to spend a LOT of time or money keeping it running. I got to know my Audi guys way too well during my tenure driving my A4. Granted I put a ton of miles on it, but a lot of stuff that shouldn't have broken repeatedly did. Never again. I drive a boring Hyundai Sonata Hybrid now and my maintenance is a tiny fraction of what it was with the Audi.
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Old 01-27-2020, 09:46 AM   #37
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Take it out of your IRA, because you are going to pay 22% later anyhow, but is it really 22% on all of what you take out each year ??

However, if you are careful, perhaps you can take out a small amount each year and stay below the 22% level,
You have to check with last year's tax return to see how much head space you have between your income level after deductions and the 22% level.

DW's salary is already well into the 22% bracket, so anything we take from the IRA would get hit at that rate.
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Old 01-31-2020, 04:49 PM   #38
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There's also tax implications on selling a 2nd home that you may need to consider
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Old 01-31-2020, 05:02 PM   #39
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Have you considered working FT or PT for a year+, seems like you need to ramp up cash reserves, especially with cars needing to be refreshed.
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Old 01-31-2020, 05:14 PM   #40
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Do you have a hobby you love, that could be turned into a side gig? Doesn't really count as w*rk, in my mind.
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