1.5 year checkup

[cat4ever]

Thought it would be fun to publish a checkup a year and a half after my original post here. Color coded for easy comparison. Note that numbers are after yesterday's market selloff...

July 19 2020
56 YO, 17 and 19 YO, and stay at home wife.
529's fully funded for college. (100K a piece)
2.5 million in traditional IRA/401K savings
1.1 million in a ROTH
No mortgage or any other debts
Pension starts at 65, $36k/year (no inflation protection).
Would like to buy a rental/vacation property in the mountains.
Planning on spending about 120K/year including health insurance which I estimate $20K/year

Jan 19 2022
57 YO, 1 YEAR INTO RETIREMENT, 18 and 20 YO, and stay at home wife.
529's fully funded for college. (100K a piece)
2.6 million in traditional IRA/401K savings
1.4 million in a ROTH
100K in already taxed savings
No mortgage or any other debts
Pension started at 56, $33k/year (no inflation protection).
Would STILL like to buy a rental/vacation property in the mountains.
Planning on spending about 160K/year including health insurance which I estimate $20K/year AND taxes
Spending should decrease in a couple of years once kids are on their own. College is paid for, but still have to feed them, pay for vacations, auto maintenance and insurance, health insurance, etc.

NOTE: RETIREMENT IS AWESOME!!!

 

[Exchme]

Only generic thoughts - It's often helpful to put your bonds in tax deferred to slow the growth of that and let your Roth stay full of stocks. I would do some modeling, looks like you've been doing some Roth Conversions, that may be good idea given the large size of the tax deferred, but there are competing forces here like needing to pay for the taxes on conversions from tax deferred and giving up on ACA subsidies if the conversions are significant compared to the $2.6M tax deferred balance.

You may find that getting an ACA plan with a subsidy/premium credit some years is a good deal, but it would require maneuvering any Roth conversions, say doing a large conversion one year and then very little in a subsequent year to get an ACA subsidy.

Given the embedded future taxes in your tax deferred, my guess is that the place in the mountains would be a bit difficult, especially if its expenses are on top of the $160k/yr you already want to spend.

Looks like you are living life the right way, congratulations on the success!

 

[cat4ever]

Thanks for the feedback. I did do a 40K Roth conversion last year and plan to do one more this year while I'm on still COBRA most of this year. Then next year it will be all about ACA subsidies and possible college savings/FAFSA. On FAFSA I seem to recall they ask about your 529 savings account and was figuring that would be a long shot even if I held my income low. Also, I can't touch the Roth earnings for another 2 years and I'd rather not touch the principal either, so keeping income real low would be a challenge.

I was thinking I'm in pretty good shape Roth wise getting setup for RMD's but sounds like there may still be work to do.
And yes, my bonds are all in tax deferred accounts.
For the mountain house the plan would be to AirBNB it to recoup some costs, hopefully enough to break even on maintenance and would just view it as a diversification of my savings that I'd get to use as well.

 

[MBAustin]

Congratulations and thanks for the update, cat!

 

[JDARNELL]

Where are you looking for a place in the mtns?

 

[cat4ever]

Thinking Gatlinburg area. One day drive for us (St. Louis) and love the Smokey Mountains. It's been hard for me to get away to check things out because we only have one car right now. Trying to wait for car market to settle down before buying another. I've also budgeted $1500/month for saving for the car and haven't quite saved enough for the car I really want. I just keep that as part of our budget at all times knowing cars wear out.

 

[pacergal]

Nice update
Looks like retirement is working well for you!