Jan 2021 update

[fire53]

Dear all:
I continue to learn a lot from these forums, THANK YOU, it keeps me motivated to hopefully retire at 57 in 3.5 years.

1. We failed to pull the triggered last year to FIRE at 53 (per my username wish). DW wanted to stick with the original plan to RE at 57 when the youngest DS finish 4 years of college and launch. I am somewhat scared of the pandemic and was laid off. So I agreed with her. Happy wife happy life was my excuse
2. Our 4 children are still in college, the 2 oldest finishing grad school this year and we helped them with half of their tuition. 2 youngest in undergrad and we have saved enough for their 4 years.
3. I am grateful that our family is healthy so far in this pandemic and hope we're all will ride it out to the end until our turn to get the vaccine. I wish everyone in this forum the same. Will you take the vaccine?
4. I made a mistake of timing the market in our 401/IRA accounts (total value 1.6M) early last year and go from 60/40 to 30/40 and 30% cash. Waiting for the market correction to jump back in but it keeps going up. Any advice?
5. Another mistake is most of the after-tax accounts 550K is in-cash in the last few years. What to do with this amount?
6. Got laid off in April/2020 and feel blessed to find a job in Sept/2020 at my age despite 22% less in salary. (when 5 months severance about to run out, unemployment were the bonus)
7. Rentals are ok/good. Issue with 1 of the 5 houses, the tenant did not pay rent for six months but agreed to move out in Oct/20 and asked I gave them their deposit back. Rentals properties value continues to increase. (2.6 M net).
8. Paid off our residence a couple of years ago

Plan for 2021:

9. Eat more healthy and exercise. Loose the 8 lbs I gain in nov-dec. LOL
10. Exercise more as I found out that I am currently Diabetes borderline
11. Solar for our house (any suggestion who to go with?)
12. Gave our Accord to our youngest son so need another car. Thinking of EV Tesla Model Y or Audi EV A4 not yet come out yet. Any advice? This will be the most expensive car we ever buy. Normally just Toyota or Honda.

Thank you for reading. Any input or advice is much appreciated.

 

[38Chevy454]

4. I made a mistake of timing the market in our 401/IRA accounts (total value 1.6M) early last year and go from 60/40 to 30/40 and 30% cash. Waiting for the market correction to jump back in but it keeps going up. Any advice?
5. Another mistake is most of the after-tax accounts 550K is in-cash in the last few years. What to do with this amount?

Thank you for reading. Any input or advice is much appreciated.

I will only say you missed out on the big runup in equities last year April-Dec. As you know it would have not only recovered back to your initial amount, but you would be ahead by approx 15-20% range return on investments (estimated, based on your initial AA and not knowing specific investments). Having so much in cash you are maybe 3-5% range total return on investment? Sure that is better than a loss, but below what you could have had if you stayed the course and no changes.

So the big question is are you afraid of another downturn and sticking in cash until then? How will you know when that new bottom is or when you will decide to get back in? Do you have low risk tolerance as the reason to stay out of the market since early last year's AA changes? Why have you remained in cash for the after tax account for last few years? I think the answer to these questions is needed before any recommendations.


Overall it seems you have done a good job on savings and getting your kids through college. Losing your job to Covid sucks, glad you found another even if the 20% cut it beats no job. Is your intention to keep the rentals as a retirement income source? Or are they to be sold and then use that money toward increasing your retirement investments?


Buy whatever car you like and feel comfortable with the expense. As for solar, have you calculated what the payback is? Does it make sense financially?

 

[Bamaman]

You certainly have packed a lot into your life. I often wonder how people deal with numerous children close together in age and getting them through college. My hat's off to you and your family.

I'm a type II diabetic and a rather young 70. You bet I'm taking the vaccine.
Times like 2021 make one think about reallocating the basket of investments, however I've been thru many peaks & valleys in the last 40 years. I've continued to run the course.

Sorry about the layoff, and glad you've landed on your feet with another job. If you enjoy the new job, consider yourself very lucky.

We too have a CD maturing in a month and have nothing to do with the money. I suppose we'll keep it liquid in order to avoid making any IRA rollovers until RMD's come in 2 years from now.

I'm not a believer in borderline diabetics, as you are or you're not. But losing 10-20 lbs., avoiding any "whites" in your diet and hard physical labor can bring you down 50 points in blood sugar. I suggest you watch your blood sugar if you're running 120 points or more fasting.

Our electricity is relatively inexpensive and the Mid South weather is seldom as cold as it's been the last 30 days. I'm passing on the solar for now.

We just traded our 49 mpg Camry Hybrid for a 2021 Venza Hybrid AWD that's getting 39 mpg. So many of our miles are out of town, and I don't care to plan on Supercharger stations. And EV's are completely different animals with the nearest Tesla service station 100 miles away. Nobody knows how to work on EV's, and Tessla knocks your head off on parts prices. Have a wreck in a Tessla, and you're a dead duck--since no body shop can work on them. Audi's are fancy VW's, and they're another car that take special tools to do minor repairs. After 3 years in hybrids, I've never seen the inside of a garage--and Toyota's got them down pat.

Good luck to you until you decide to "hang it up." When the last child gets out of college is a great time to make The Change.

 

[fire53]

So the big question is are you afraid of another downturn and sticking in cash until then? How will you know when that new bottom is or when you will decide to get back in? Do you have low-risk tolerance as the reason to stay out of the market since early last year's AA changes? Why have you remained in cash for the after-tax account for the last few years? I think the answer to these questions is needed before any recommendations.

I am comfortable with AA at 60/40, I made the mistake of time the market thinking it should go down due to the pandemic, but it keeps going up after the initial drop. I am waiting for a market correction (10% down) to jump back in or cost averaging to go back a chunk per month in the next 12 months...not sure which is the right decision.

As for the cash in the last few years, my thinking was to have cash in hand if there is an opportunity to invest. Stock market crash, real estate drop significantly...etc. But none of that happening so don't know what to do with it.