pre-planning to be FIRED and have questions

[targatom2019]

I planned to be FIRED at 55 but able to reach it earlier at 50 and only got 6 months left. I got about 1.8 million in 401(All aggressive growth M funds) from work and is managed by Edward Jones, I got $225,000 in CD, $60,000 in saving, about $80,000 in building rental per year,$55,000 in Roth IRA with Fidelity, ZERO debt, daughter is on her own and annual expenses is around $55,000 including insurance


since my rentals income is more then my expenses should I just keep my CD and saving for emergency and go all in on growth index funds with no bonds. Anyone in the same situation please advise.


Thanks

 

[travelover]

Well done. I'd look at dumping Eddie Jones.

 

[targatom2019]

Well done. I'd look at dumping Eddie Jones.

Yes sir, that is the first thing on the list and consolidate everything to Fidelity.

 

[Dtail]

Yes sir, that is the first thing on the list and consolidate everything to Fidelity.

+1
You can self manage at Fidelity and since you would have Private Client Status, you can still much advice without paying any advisory fees.

 

[COcheesehead]

+1
You can self manage at Fidelity and since you would have Private Client Status, you can still much advice without paying any advisory fees.

? I am private client and I get nothing. Nothing. And I like it
Oh wait, I get free state and federal TurboTax.

 

[Dtail]

? I am private client and I get nothing. Nothing. And I like it
Oh wait, I get free state and federal TurboTax.

@Cocheesehead - you know what I mean.
One can get free advice from their personal rep or any general Fidelity rep if one wishes.

 

[DrRoy]

Yes sir, that is the first thing on the list and consolidate everything to Fidelity.

Glad to hear that. Looks like you are good.

 

[24601NoMore]

You might want to consider a more balanced portfolio (add some balanced or bond funds, for instance. VWINX / VWELX are both great choices. Ditto PONAX or PIMIX at VG for $25K min to get the lower ER and no load) as you mentioned you're "all" in AGGRESSIVE GROWTH funds. That's exposing you to a lot of unnecessary risk.

DW and I are both ER'ing and even with a much more conservative portfolio have seen first hand just how gut wrenching even this comparatively small drop in the market can be once you turn off the W-2 income flow..your rental income is goodness but unless you love the wild gyrations or just want to see how high you might be able to run up "the number" I personally wouldn't do "all in" on aggressive growth..

 

[COcheesehead]

@Cocheesehead - you know what I mean.
One can get free advice from their personal rep or any general Fidelity rep if one wishes.

They took my rep away and I am being serious.

 

[Dtail]

They took my rep away and I am being serious.

I know you are a DIY guy, but why?

 

[COcheesehead]

I know you are a DIY guy, but why?

Never gave me a reason. I liked her. She was good. Haven’t talked to anyone in close to 2 years.

 

[braumeister]

Never gave me a reason. I liked her. She was good. Haven’t talked to anyone in close to 2 years.

I would assume your old rep just got reassigned. When you login to Fidelity, your PCG rep's name is on the summary page. Did they just remove that part, or did they put in a new name and you just haven't talked to the replacement?

 

[MRG]

Never gave me a reason. I liked her. She was good. Haven’t talked to anyone in close to 2 years.

Same thing here. I had a new rep given when we moved, liked him and he was replaced with a dirty annuity salesman. When I complained to the branch manager he replaced him with nobody. Just an 800 number.

 

[COcheesehead]

I would assume your old rep just got reassigned. When you login to Fidelity, your PCG rep's name is on the summary page. Did they just remove that part, or did they put in a new name and you just haven't talked to the replacement?

They removed the name and did not replace.

 

[pacergal]

Congratulations. You look good to go. Keeping all in aggressive funds is too much for me, but you do what lets you sleep at night. You have the rental income for expenses, the rest is the icing on the cake. Well done.

 

[targatom2019]

Is 60/20/20 large cap/med&small/ international funds consider too aggressive ? I will keep $260k in a CD for 2 yr emergency and will sell all rentals in about 10 years and should net about 2 millions in today’s $$. Am my correct by thinking my rentals is a part of my over all portfolio diversification ? I will for sure get into bond funds after selling my rentals or 10 years from now.

 

[Dtail]

Is 60/20/20 large cap/med&small/ international funds consider too aggressive ? I will keep $260k in a CD for 2 yr emergency and will sell all rentals in about 10 years and should net about 2 millions in today’s $$.

If that allocation refers to your $1.8mm, then obviously your AA is over 90% equity.
Since your expenses are covered, there are typically 2 schools of thought on this one.
Go all out on equities for legacy/charities, since you already won the game.
Be conservative for capital preservation, since you already won the game.

 

[targatom2019]

If that allocation refers to your $1.8mm, then obviously your AA is over 90% equity.
Since your expenses are covered, there are typically 2 schools of thought on this one.
Go all out on equities for legacy/charities, since you already won the game.
Be conservative for capital preservation, since you already won the game.

I have partners with my building investment and it's not part of my 1.8 M.

 

[Rianne]

Very nice, but when you say "insurance" do you mean healthcare?

 

[targatom2019]

Very nice, but when you say "insurance" do you mean healthcare?

yes sir, I meant health insurance.

 

[rasberrycpa]

Is 60/20/20 large cap/med&small/ international funds consider too aggressive ? I will keep $260k in a CD for 2 yr emergency and will sell all rentals in about 10 years and should net about 2 millions in today’s $$. Am my correct by thinking my rentals is a part of my over all portfolio diversification ? I will for sure get into bond funds after selling my rentals or 10 years from now.

We also have some rental properties and think about them from this perspective. In our portfolio, besides a cash emergency fund, we are 100% in stock funds. I consider the rental properties to be the ballast that bonds typical provide. In about a decade when we plan on selling the properties we also will invest the proceeds into bond funds. A couple of of important factors for my situation though.......

1. I’m retired, but my husband is still working for a few years until we see what shakes out in the health insurance markets.
2. We are drawing minimal funds off our investments right now as cash flow from rentals and my husband’s income are enough to cover our expenses. This year we had a wedding to pay for and paid off a small mortgage we were carrying but these cash outflows were in the plan and won’t reoccur. Our investment approach won’t change once my husband’s W2 income stops in a few years and drawdowns begin.
3. I am highly risk tolerant. This market churn hasn’t given me any heart burn. I have stopped looking at my balances (I know they are down) but we are in it for the long haul and there is going to be some choppiness over the coming decades. We have learned to accept it and not get nervous when it happens.
4. We are not planning for a lean retirement and have some fluff built into our planned expenses that could be cut out if needed.
5. Once my husband retires we are planning on using a bucket approach and beefing up cash/CDs/money markets so we don’t have to sell in down markets for a couple of years if needed.
6. Firecalc shows us at 100% which gives me comfort.

YMMV

ras

 

[targatom2019]

We also have some rental properties and think about them from this perspective. In our portfolio, besides a cash emergency fund, we are 100% in stock funds. I consider the rental properties to be the ballast that bonds typical provide. In about a decade when we plan on selling the properties we also will invest the proceeds into bond funds. A couple of of important factors for my situation though.......

1. I’m retired, but my husband is still working for a few years until we see what shakes out in the health insurance markets.
2. We are drawing minimal funds off our investments right now as cash flow from rentals and my husband’s income are enough to cover our expenses. This year we had a wedding to pay for and paid off a small mortgage we were carrying but these cash outflows were in the plan and won’t reoccur. Our investment approach won’t change once my husband’s W2 income stops in a few years and drawdowns begin.
3. I am highly risk tolerant. This market churn hasn’t given me any heart burn. I have stopped looking at my balances (I know they are down) but we are in it for the long haul and there is going to be some choppiness over the coming decades. We have learned to accept it and not get nervous when it happens.
4. We are not planning for a lean retirement and have some fluff built into our planned expenses that could be cut out if needed.
5. Once my husband retires we are planning on using a bucket approach and beefing up cash/CDs/money markets so we don’t have to sell in down markets for a couple of years if needed.
6. Firecalc shows us at 100% which gives me comfort.

YMMV

ras

Thank you, looks like we are the same page.