Question for the ER Braintrust
Background: I’m 57 years old and married and just Er’d. Wife is 57 and still working. We have no children. Both of us have met the requirements for State of NC Retirement Healthcare upon attaining age 60. Will begin receiving a $1,350 monthly pension at age 60 or $2,650 a month if I opt to select a blended pension which pays more up front and is reduced at age 62 once SS kicks in. House is paid off and we are both modestly frugal and I am extremely conservative.
So, I have $200,000 in a 401K. It is currently earning 2.02% interest and will go up in correlation with any interest rate increases. I have three choices that I am considering:
a. Transfer the balance to Vanguard and purchase equal amounts of both Wellesly Funds.
b. Wait until age 59 ½ and move to Vanguard and purchase the Managed payout fund – and receive monthly distributions, or
c. Wait until age 59 ½ and transfer the funds to our Credit Union which will annuitize the monies based on current interest rates and inflation adjusted rates and provide me a monthly check. As of today, the rate is 3.31 but would go up in correlation with any interest rate increases over the next couple of years. No fees and is SAFE. (Right now this would pay me 800 per month and 400 per month to my wife upon my death.)
With the above scenario in mind, it is my intention to try to cap my income at $51,200 (1/2 of $78,400 + 12,000 standard deduction) based on the new tax laws and in conjunction with my wife still w*orking. This way I would be limited to the 12% Federal tax. Oh, I would withdraw monies from my Fidelity IRA (around 600K) to make up any shortfall. I do plan to use some of that 600K in 2019 and 2020 converting to a Roth.
So, what would you do with the 200K?
I
Background: I’m 57 years old and married and just Er’d. Wife is 57 and still working. We have no children. Both of us have met the requirements for State of NC Retirement Healthcare upon attaining age 60. Will begin receiving a $1,350 monthly pension at age 60 or $2,650 a month if I opt to select a blended pension which pays more up front and is reduced at age 62 once SS kicks in. House is paid off and we are both modestly frugal and I am extremely conservative.
So, I have $200,000 in a 401K. It is currently earning 2.02% interest and will go up in correlation with any interest rate increases. I have three choices that I am considering:
a. Transfer the balance to Vanguard and purchase equal amounts of both Wellesly Funds.
b. Wait until age 59 ½ and move to Vanguard and purchase the Managed payout fund – and receive monthly distributions, or
c. Wait until age 59 ½ and transfer the funds to our Credit Union which will annuitize the monies based on current interest rates and inflation adjusted rates and provide me a monthly check. As of today, the rate is 3.31 but would go up in correlation with any interest rate increases over the next couple of years. No fees and is SAFE. (Right now this would pay me 800 per month and 400 per month to my wife upon my death.)
With the above scenario in mind, it is my intention to try to cap my income at $51,200 (1/2 of $78,400 + 12,000 standard deduction) based on the new tax laws and in conjunction with my wife still w*orking. This way I would be limited to the 12% Federal tax. Oh, I would withdraw monies from my Fidelity IRA (around 600K) to make up any shortfall. I do plan to use some of that 600K in 2019 and 2020 converting to a Roth.
So, what would you do with the 200K?
I