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Old 02-20-2021, 12:49 PM   #301
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Join Date: Feb 2021
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Originally Posted by The Cosmic Avenger View Post
Welcome, Errollyn! It sounds like you have a good grip on where you are and where you want to be, that's a great start!
I suggest posting in the "Hi, I am" forum, too, when you get a chance, to introduce yourself to the rest of the board, not just us hoping to be in the class of 2024!

If you're planning for your retirement funds to last you 40 or more years instead of the typical 20, you should aim for either a 3-3.5% withdrawal rate (WR), or make sure you have a lot of fat in your budget that you can cut if there is a recession/depression. However, if your pension pans out you're probably fine, guaranteed income is a wonderful safety net! But I'd plan as if you won't have it for now, until you know that you do. That way you're fine either way.
Great point about the 4% perhaps being too high to safely fund retirement. It's definitely something I've considered, and a lower rate may be in order.

I didn't want to get too into the weeds for fear of boring you guys, but I do have a pension coming to me regardless of whether I take an early retirement offer (unless our society falls apart, that is). It's just a matter of whether I can start drawing it immediately, or if I have to wait until I'm in my late 50s. I also haven't factored SS into my figures, but presumably that would be an additional income available in my early 60s. Given these two factors, my investments really only have to bridge the gap between age 49 through age 60 by themselves--after that, SS and the pension should kick in. That being said, I try not to consider those as guarantees, and want my personal investments to be enough to fund our retirement just in case they don't materialize for some reason.

I also think my expenses in 2020 might've been higher than what I'd spend in retirement. But again, to play it safe I'm considering it a "normal" year.
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Old 02-20-2021, 01:20 PM   #302
Dryer sheet wannabe
 
Join Date: Feb 2021
Posts: 13
Quote:
Originally Posted by Yoheadden View Post
The DW and I are both currently 50, with no debt, house is paid off, no kids and just under 1.3M in investable assets.
Here are some things that have been going through my mind as I plan our departure from the involuntary working world and Iím curious how some of you are taking these things into consideration.
1. Health Care- it seems that unless u are covered by your previous employer, the ACA, is the way to go. Iím a Vet, so Iím thinking of just using the VA for myself which would save us considerable. We know a couple that retired where the husband was old enough for Medicare, but the younger wife had catastrophe insurance.
2. SS- Right now considering letting both build until we are 70 or taking 1 early and letting the other wait. Either the lower one or the DWs, since she would more than likely outlive me. When checking your SS benefits, make sure you check the one for ER, otherwise it assumes u will work until full retirement age.
3. Roth Conversions- it would be good to start partials now if we do. Have to see how it affects Medicare payments & SS. Plus, consider future tax rates.
4. AA- we are pretty aggressive at 85/15. Probably should lower the stocks a little, but a 40-50 year timeframe worries me. Iíve read in posts here that a 60/40 portfolio is around the sweet spot.
5. WR- 4% is the rule of thumb, but 3% would be better. Really comes down to budget, what you really need to live on, + adding in savings for big picture items like car replacement, roof, windows, etc. itís really easy to make the figures to your favor, but you arenít doing yourself any favors in doing so.
6. Relocating - Hmm, where to go. I know you really should spend considerable time wherever you are thinking of going, but you have to add that into the budget as well.
7. RMDs- Do I need to lower these to save on taxes and if so, whatís the best choice. How do these fit into your future income plan ?
8. Income Plan- up until retirement, your paycheck was the income plan. Now, When, how much and from which sources income will need to come from to cover fixed expenses and discretionary spending. Time to look at the big picture.

Sorry if I rambled a bit. These are some things going through my head and plan to work on. I am curious to hear others thoughts on the above and anything else I probably missed.

Wow, our situations are surprisingly similar. Here are some comments about your points...

1. For health care, I actually used the ACA premium in my 2020 expense records instead of what I'm paying through my workplace plan. That way I had a more realistic idea of what health insurance might cost once I'm retired. The difference was about $500 per month--$780 monthly premium through ACA compared to $280 that I was actually paying. I'm also a veteran, but I haven't looked into coverage through the VA. I did switch to a HDHP last year and started funding an HSA, which I liked enough that we did the same thing for my wife this year. The HSA should provide a little buffer in the future when we have big medical bills.

2. By most accounts, it's best to wait as long as possible before drawing SS. For me, I'll assess this once I'm eligible for those benefits. If I really need the money, I'll start drawing it. If I have a really big cushion and am still in good health, I'll delay. But bottom line is that as long as I don't consider SS in my retirement numbers, it's a decision I'm allowed to make later.

3. I've thought about the Roth conversions too. The first half of my career I was investing in traditional retirement accounts, because that's what was available. But for years now I've been maxing out Roth accounts (IRA and 401k). I kinda like have a mix of the two, though I concede that the Roth conversions are probably a smart move since as a nation we'll have to raise taxes at some point to avoid going bust.

4. I'm all over the place with my asset allocations, but my primary retirement account is in a target date fund...I think 2030 or 2035. I also have a money in various index funds, an annuity that I started contributing to as a teenager (I stopped putting money into it years ago), and some individual stocks.

5. While I'm using the 4% rule in my calculations, I do knock 20% off the value of my assets before I apply the rule. I do that assuming those assets will be taxed at a 20% rate (because as I mentioned above, not all of my assets are in Roth accounts). I'd love to grow my investments so 3% is easily doable--that'll be a consideration when I'm deciding if now is the best time to retire.

6. Go somewhere that makes you happy. That's what I want to do. Even if it doesn't make the most financial sense. I personally would rather live in a high-tax state that's pleasant than a low-tax state that's riddled with trash, crime, etc.

7. No idea...haven't thought about this.

8. Same as #7. These are things I'll probably sit down and discuss with a fee-based financial planner in the year leading up to retirement. I'll pay them a few hundred bucks and let them look at my portfolio to make recommendations.
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Old 04-02-2021, 08:19 AM   #303
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Originally Posted by brokrken View Post
Net Worth Excluding Real Estate and Personal Property
06/20/2017 - $1,205k
10/02/2017 - $1,273k - Nice little quarter, I would say.
1/1/2018 - $1,354k - Still headed in the right direction. Let's see what 2018 has to offer.
4/1/2018 - $1,398k - Smaller increase this quarter as the market hasn't helped. Luckily my contributions more than made up for the lack of market returns.
07/02/2018 - $1,461k - Q2 was similar story to Q1. Moving in the right direction though.
10/01/2018 - $1,537k
01/01/2019 - $1,328k - Ouch, what a terrible December
04/01/2019 - $1,520k - Q1 got back much of what Q4 lost!
07/01/2019 - $1,576k - Nice quarter and a new high. Still chugging along.
10/01/2019 - $1,594k - While I'm way up from January. I'm not that far up from same period prior year. But, I'll keep piling it in and hope the market helps me along the way.
01/01/2020 - $1,729 - Excellent Q4 for 2019, which more than made up for Q4 2018. Here's hoping 2020 brings more of the same.
04/01/2020 - $1,453k - Wow, the last 3 weeks have been brutal. Down $276k from last quarter and $67k from last year!
07/01/2020 - $1,763k - Amazing that this market has been so resilient and I am grateful for it. However, I am still expecting a W recovery, at best. All the money that was lost in Q2 is gone forever, unemployment is still extremely high and our deficits are out of control. You all may have even seen in a different thread that I have recently purchased October SPY puts with the thought that once Q2 earnings are realized and valuations are proven to be out of whack, we'll have a retest.
10/01/2020 - $1,948k - Well, those SPY puts haven't worked out so well. Finally closed them out at a loss a few weeks back. Anyway, another good, yet mystifying quarter. I did a separate thread where I celebrated eclipsing $2M. That lasted for about 2 days and I still haven't gotten back. Hopefully for the year end update I'll make it. Considering where my portfolio was on March 23, this update is really remarkable.
01/01/2021 - $2,194k - What an absolute mess of a year. While very thankful for how my portfolio performed, it is completely illogical. While the rest of the world was burning down, stocks marched higher. I'm fearful that 2021 takes it all back. That being said, I hope I am once again wrong, as doing so seems to be very profitable... And, I wish you all a very Happy New Year and Cheers to (fingers crossed) life getting back to normal
04/02/2021 - $2,422k - Was travelling yesterday so missed the 4/1 balance. Up nearly $1M from one year ago....freaking amazing. Being so close to my number, $3M, I'm wondering if I should start to adjust my allocation to a more conservative approach. Current I'm something like 83/8/9. On the one hand, it's what got me here so if it a'int broke don't fix it, on the other hand, I don't want to see it go away in a correction. I'm young enough that I could continue to w*rk for a couple more years if needed, but I don't really want to. Also, now seems like the worst time to buy bonds. No clue what to do. Anyway, hope you all had a nice quarter, as well
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Old 04-02-2021, 08:33 AM   #304
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brokrken, congratulations, you had great Q1 !!!

About Bonds, why do you think it is worst time? Expectation of inflation and as result increase in yields?
I am on hold in taxable and piling up cash, I do expect recession either this or next year, also my AA is not that aggressive - 68/32 so I do not need to sell any stocks and can let all run as is. But still all new money in 401k are going into bonds.
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Old 04-02-2021, 08:49 AM   #305
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Finished Q1 at $2099k or 69.97% of the target
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Old 04-02-2021, 10:59 AM   #306
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brokrken, congratulations, you had great Q1 !!!

About Bonds, why do you think it is worst time? Expectation of inflation and as result increase in yields?
I am on hold in taxable and piling up cash, I do expect recession either this or next year, also my AA is not that aggressive - 68/32 so I do not need to sell any stocks and can let all run as is. But still all new money in 401k are going into bonds.
Thanks, Exit. On bonds, yep, what you said. Rates have no where to go but up
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Old 04-02-2021, 12:39 PM   #307
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Originally Posted by exnavynuke View Post
Currently 75% of total goal, 58.2% of investments (original projection was 58.6% by year end, so I could realistically beat that by the end of the month depending on what the market does over the next few weeks). Despite Covid killing my OT for this year (and probably the foreseeable future really), I'm still close to where I was expecting to get by the end of the year with the rest of the month still ahead of me so that's pretty good. I also spent quite a bit more on my diving hobby this year that originally planned, but I expect I'll be making a bit of money off of it by the end of next year.

Now 77.4% of overall goal, now up to covering 62.7% of the investment goal number.
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Old 04-04-2021, 06:39 PM   #308
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Ski season just ended for me yesterday, figure that an update is overdue here. 75% to goal. 2% closer each of the past two months.

What are thoughts on inflation? I factored in inflation in my Need To Have $ Amount, and official inflation rate has been running where I had estimated it years ago. However, real life inflation seems to be way over 5%. Still thinking about OMY.
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Old 04-05-2021, 07:36 AM   #309
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Originally Posted by NgineER View Post
47.9% investments and cash only
92.0% of target when including cash flow from properties
50.7% investments and cash only Finally broke 50% again!
94.9% of target when including cash flow from properties

Hit $1.5M invested assets, $2.35M net worth including real estate.

28% Rental Equity (50% property equity)
30% traditional IRA+401k
32% Roth
7% Home Equity
2% ESPP
1% Cash

Sustained $1M invested in vanguard, for 2+ months

Commencing renovations in third unit in latest rental, but lumber prices are ridiculous.
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Old 04-07-2021, 07:47 PM   #310
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I'm going to officially join the 2024 class. Spouse & I are both 49 w/2 kids. Our current investable assets are 4.2m invested 100% in index funds (55% stock/45% bonds). We paid off the house last December (worth ~1.35m) and have no other debt. Our goal these next few years is to build the taxable account.
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Old 04-09-2021, 04:17 PM   #311
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Posts: 27
I'm in! Goal is $3m and I'm at $2.7m with 500k of that being residence / rental property at age 55. Sitting on $1m in cash - $400k in SEPP and $600k in cash earning .5%. Need to invest the cash but can't pull the trigger thinking the market is due for a correction. I know I shouldn't try to time the market but something about cash in the bank makes me feel good - even though I'm losing ground to inflation. Thinking of DCA and getting that cash to work - maybe at $100k a month split amongst 3 index funds keeping my AA in mind. So close and don't want to screw up now!
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Old 04-10-2021, 05:54 AM   #312
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I'm in! Goal is $3m and I'm at $2.7m with 500k of that being residence / rental property at age 55. Sitting on $1m in cash - $400k in SEPP and $600k in cash earning .5%. Need to invest the cash but can't pull the trigger thinking the market is due for a correction. I know I shouldn't try to time the market but something about cash in the bank makes me feel good - even though I'm losing ground to inflation. Thinking of DCA and getting that cash to work - maybe at $100k a month split amongst 3 index funds keeping my AA in mind. So close and don't want to screw up now!
Welcome and congrats on being so close. At the end of the day you need to pick an asset allocation that allows you to sleep well at night. It might be holding 37% cash like you are now or maybe 10% cash might be it. I personally stay fully invested except for an emergency fund. I rebalance my portfolio when the market makes either the stock or bond side get out of whack from my planned AA.
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Old 04-10-2021, 07:39 PM   #313
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2024 will be the year for me. There! I said it! Iíve got the FI part secure and could full stop today from a financial perspective. But, emotionally I feel a need to take a few years to sort of wind down the career so I am not ready to turn the page today, at least not on a good day. On a bad day, well . . . And technically it wonít be Ďearlyí as Iíll be 65, though it will be 5 years earlier than I used to think I wanted to retire.
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Old 04-11-2021, 06:40 AM   #314
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I'm going to officially join the 2024 class. Spouse & I are both 49 w/2 kids. Our current investable assets are 4.2m invested 100% in index funds (55% stock/45% bonds). We paid off the house last December (worth ~1.35m) and have no other debt. Our goal these next few years is to build the taxable account.

Congrats and welcome aboard. Sounds like you have done a great job saving and paying off debt. Building up the taxable accounts is very smart at this point.

I'm in! Goal is $3m and I'm at $2.7m with 500k of that being residence / rental property at age 55. Sitting on $1m in cash - $400k in SEPP and $600k in cash earning .5%. Need to invest the cash but can't pull the trigger thinking the market is due for a correction. I know I shouldn't try to time the market but something about cash in the bank makes me feel good - even though I'm losing ground to inflation. Thinking of DCA and getting that cash to work - maybe at $100k a month split amongst 3 index funds keeping my AA in mind. So close and don't want to screw up now!

Congrats on being so close. Iím starting to see the light around the bend for u :-)
AA is a very personal thing at this point. You have to be able to sleep at night. Well done.

2024 will be the year for me. There! I said it! Iíve got the FI part secure and could full stop today from a financial perspective. But, emotionally I feel a need to take a few years to sort of wind down the career so I am not ready to turn the page today, at least not on a good day. On a bad day, well . . . And technically it wonít be Ďearlyí as Iíll be 65, though it will be 5 years earlier than I used to think I wanted to retire.

Congrats and welcome aboard. It doesnít matter if you are 65 or 45, flipping that switch and walking away from a steady income is a difficult thing to do. Iím currently reading ďHow to Retire Happy, Wild & FreeĒ. I would definitely recommend it for the mental aspect of retiring. You want to retire to something, not just, from something.
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