bwtroutster
Confused about dryer sheets
Hello All,
This is my first post. First off, I wanted to thank everyone for providing the great resources on this site. I have been reading for about the last 3 years and I am still amazed at the vast amount of knowledge that is provided “first hand” by persons’ living the dream.
I started saving 6% of my salary 38 years ago when I first started working in the Petrochemical Industry. That, plus the company match has turned into $768K today. My goal was always to retire at 55 (now we’re both 56). My wife and I have been seriously preparing for retirement over the past 2-3 years. This started by buying acreage out in the county (where taxes are lower). We sold our 2800 sq. ft. home, which was paid for and downsized to 1900 sq. ft.. We now have a septic system and our own well. After living there a year and a half we have tracked our budget religiously and found we can live quite comfortably on $2800/month excluding taxes and insurance. We had also held this spending level 2 years prior to moving. I had slowly started removing take-home income by payroll deduction until we got down to the $2800 level. When dropping lower, I found us dipping into savings some months.
We have also updated one of our vehicles as a new “tow vehicle” for our new travel trailer. We have been RV’ing for about the last 10 years. I am still running a 2006 Tacoma with 139,000 miles that I hope to replace at some point as a second vehicle.
In 2010 our company was purchased by a larger European company to form a mega-corp. At the time, I was working as a manager of an IT development group dedicated to a single manufacturing site. I have since been moved to downtown Houston, where the drive consists of staring at bumpers for 2 hours a day. Along with the newly adopted environment/culture, it has been a challenge to come to work. I have spent the last 4 years working to replace everything my previous team had created with the “company standard”. Not so rewarding and not very satisfying.
I have used RIP, Firecalc, TRP, I-ORP and every other planner I could find to run the numbers. Although I feel we are ready, I am still having trouble convincing myself I am ready to “pull-the-trigger”. We met with a Fidelity account rep last week to review the RIP numbers verify I had everything setup correctly and discuss how we would roll-over the 401K to an IRA. I guess I still want some additional eyes to tell me I am not jumping the gun “too early”. We also spent several years working with an Ameritrade financial planner who hoped to get my pension as a lump and my 401k but I am convinced I can do this on my own.
My main concern is Lump or Pension. I am leaning towards the pension (today). There are 3 separate plans. This is being caused by my moving within the company to different “legal” companies responsible for paying the benefits. They are funded at 85%, 89% and 92% and held in a trust managed by Bank of New York Mellon. I understand that the PBGC will ensure up to $1,579.50 for the first 2 plans (based on my age the year the plans terminated when the company was purchased). The pensions, when added together come to $3599 a month and would be made up from 3 separate plans ($1692, $1621 and $285). I can’t beat this rate on the open market. . Knowing this is a pretty secure amount as base pay, I am leaning to take the pension to supplement smaller withdraws from my 401k which is now at $768. I also plan to have about $80K saved as emergency money by then. Lump would be $709K.
I will also be able to purchase the company medical I currently have at $800/month. This is the full rate of our group policy. Previous retires suggested I plan on it increasing every year. I verified with Fidelity that this is included in RIP
I also have a one-time shot at accessing my 401K funds as they roll over using the “Rule of 55” with our 401K plan. This allows me to take amounts from the 401K roll-over paying 20% withholding but no penalty. Knowing the market is way up today and what I feel approaching “over valued”, I hope to take $120K to bridge us the 3 years (57-59 ½ ). This would also allow us to establish a CD bridge to get past a down market if by 59 ½ the market has tanked.
I know this is a very long post but one more question. When I roll over to Fidelity, I had hoped to keep some of the Fidelity Retirement 2020 Plan I have ($200K). I also wanted to purchase index funds from Vanguard with the balance. According to Fidelity, I could do this for $49 per fund. I like the management tools in Fidelity. Should I just direct IRA to 2 companies, Fidelity and Vanguard?
Questions:
Lump or Pension?
How much to withdraw and establish market bridge?
How should I buy Vanguard, separate or through Fidelity?
RIP & Firecalc say I am ready if I die at 92 and the wife at 94. Am I truly ready?
This is my first post. First off, I wanted to thank everyone for providing the great resources on this site. I have been reading for about the last 3 years and I am still amazed at the vast amount of knowledge that is provided “first hand” by persons’ living the dream.
I started saving 6% of my salary 38 years ago when I first started working in the Petrochemical Industry. That, plus the company match has turned into $768K today. My goal was always to retire at 55 (now we’re both 56). My wife and I have been seriously preparing for retirement over the past 2-3 years. This started by buying acreage out in the county (where taxes are lower). We sold our 2800 sq. ft. home, which was paid for and downsized to 1900 sq. ft.. We now have a septic system and our own well. After living there a year and a half we have tracked our budget religiously and found we can live quite comfortably on $2800/month excluding taxes and insurance. We had also held this spending level 2 years prior to moving. I had slowly started removing take-home income by payroll deduction until we got down to the $2800 level. When dropping lower, I found us dipping into savings some months.
We have also updated one of our vehicles as a new “tow vehicle” for our new travel trailer. We have been RV’ing for about the last 10 years. I am still running a 2006 Tacoma with 139,000 miles that I hope to replace at some point as a second vehicle.
In 2010 our company was purchased by a larger European company to form a mega-corp. At the time, I was working as a manager of an IT development group dedicated to a single manufacturing site. I have since been moved to downtown Houston, where the drive consists of staring at bumpers for 2 hours a day. Along with the newly adopted environment/culture, it has been a challenge to come to work. I have spent the last 4 years working to replace everything my previous team had created with the “company standard”. Not so rewarding and not very satisfying.
I have used RIP, Firecalc, TRP, I-ORP and every other planner I could find to run the numbers. Although I feel we are ready, I am still having trouble convincing myself I am ready to “pull-the-trigger”. We met with a Fidelity account rep last week to review the RIP numbers verify I had everything setup correctly and discuss how we would roll-over the 401K to an IRA. I guess I still want some additional eyes to tell me I am not jumping the gun “too early”. We also spent several years working with an Ameritrade financial planner who hoped to get my pension as a lump and my 401k but I am convinced I can do this on my own.
My main concern is Lump or Pension. I am leaning towards the pension (today). There are 3 separate plans. This is being caused by my moving within the company to different “legal” companies responsible for paying the benefits. They are funded at 85%, 89% and 92% and held in a trust managed by Bank of New York Mellon. I understand that the PBGC will ensure up to $1,579.50 for the first 2 plans (based on my age the year the plans terminated when the company was purchased). The pensions, when added together come to $3599 a month and would be made up from 3 separate plans ($1692, $1621 and $285). I can’t beat this rate on the open market. . Knowing this is a pretty secure amount as base pay, I am leaning to take the pension to supplement smaller withdraws from my 401k which is now at $768. I also plan to have about $80K saved as emergency money by then. Lump would be $709K.
I will also be able to purchase the company medical I currently have at $800/month. This is the full rate of our group policy. Previous retires suggested I plan on it increasing every year. I verified with Fidelity that this is included in RIP
I also have a one-time shot at accessing my 401K funds as they roll over using the “Rule of 55” with our 401K plan. This allows me to take amounts from the 401K roll-over paying 20% withholding but no penalty. Knowing the market is way up today and what I feel approaching “over valued”, I hope to take $120K to bridge us the 3 years (57-59 ½ ). This would also allow us to establish a CD bridge to get past a down market if by 59 ½ the market has tanked.
I know this is a very long post but one more question. When I roll over to Fidelity, I had hoped to keep some of the Fidelity Retirement 2020 Plan I have ($200K). I also wanted to purchase index funds from Vanguard with the balance. According to Fidelity, I could do this for $49 per fund. I like the management tools in Fidelity. Should I just direct IRA to 2 companies, Fidelity and Vanguard?
Questions:
Lump or Pension?
How much to withdraw and establish market bridge?
How should I buy Vanguard, separate or through Fidelity?
RIP & Firecalc say I am ready if I die at 92 and the wife at 94. Am I truly ready?
Last edited by a moderator:
. And we wonder why large number of lottery winners who took lump sum end up in bankruptcy.
