55 and ready to go! Can I

[bigbuckhunter]

Hi
I have been reading this forum for about a year now. Lots of interesting stuff!
I work in manufacturing, for 30 years. Way tired of that. I hope/plan to quit soon, if I can.
I'm 55 and want to quit this year.
I will have a pension of 16000/yr at 65.
I will have SS of 26000/yr at 66. This is approximate.
I have about 700k IRA 60/40 stock bond.
I have about 400k taxable mutual funds.
I have about 250K in 401k. 70/30 stock bond.
I don't have any debt. house paid off.
I am currently single-no kids.
I will need 35k-40k/max/yr for living.
I don't want to work part time if I don't want to!
What do you think?!

 

[retire2020]

Welcome here. It looks great. You need to bridge from 55-65 from your savings(40/1350 = 3% WR) and then your SS+Pension kicks in. Also, plan on converting your tax deferred to roth ira along the way. You can get some ideas here.. Retirement Calculator - Parameter Form

 

[aaronc879]

Looks to me like you have more than enough given your stated expenses. Enjoy retirement

 

[freedomatlast]

If your after tax spend is truly only $40,000/yr, you should be good to go!

 

[Nightcap]

Welcome here. It looks great. You need to bridge from 55-65 from your savings(40/1350 = 3% WR) and then your SS+Pension kicks in. Also, plan on converting your tax deferred to roth ira along the way. You can get some ideas here.. Retirement Calculator - Parameter Form

I'm sorry, but I don't see why he should convert to Roth. The tax-deferred investment will be taxable as regular income as he draws down. His effective tax rate in future looks pretty low.

Am I missing something?

 

[2B]

Welcome.

Have you included medical expenses in your plan? Right now it would probably cost you close to $5,000/yr with a $5,000 deductible. At 65 your deductible will go down with Medicare but you premium won't go down very much.

With your assets, you should be able to withdrawal around $50,000/yr without considering your pension and SS. Since these are 10 years off, I'd ignore them for now and just consider them a lessening of your long-term risk. If your true total expenses including taxes are $50,000 or less, I think you are good-to-go.

 

[2B]

I'm sorry, but I don't see why he should convert to Roth. The tax-deferred investment will be taxable as regular income as he draws down. His effective tax rate in future looks pretty low.

Am I missing something?

Welcome with your first post.

His tIRA isn't really accessible until 59 1/2 without a 42t and anything he takes out of it is taxable at his current marginal tax rate. His 401k may or may not be accessible at 55. It depends on the plan.

If he lives off his after tax money he can roll IRA and 401k money into his Roth at zero or 15% tax rates. With luck, the market goes up and withdrawals come out tax free. If he doesn't roll anything over, his assets may more than double in the IRA which could increase his tax rate in a decade or more.

I don't see any reason to be overly aggressive with conversions but they do make sense in this early phase of retirement.

 

[bigbuckhunter]

Welcome.

Have you included medical expenses in your plan? Right now it would probably cost you close to $5,000/yr with a $5,000 deductible. At 65 your deductible will go down with Medicare but you premium won't go down very much.

With your assets, you should be able to withdrawal around $50,000/yr without considering your pension and SS. Since these are 10 years off, I'd ignore them for now and just consider them a lessening of your long-term risk. If your true total expenses including taxes are $50,000 or less, I think you are good-to-go.[/QUOT

 

[bigbuckhunter]

Thanks for the responses. I have figured $4000 for medical. Basic plan with a high deductible.

 

[alaska55]

No way will will a medical plan will cost $5000 and there are plans in affordable care with low deductibles. You have 400k in a fund that already been taxed. You can live off that plus you can do some roth conversion each year to ensure you have the min income to qual for a plan. Thats if you live in a state that didn't expand medicaid. If you have between 15k and 20k of taxable income you will pay less than $1000 a year plus from 2k to 4k deductible. There a bunch of threads on this forum about how they are doing it.