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Full time employment: Posting here.
When I first posted here (about two years ago), I was forecasting a June 2017 retirement date, when I’d be 64.5 years old. Things at work have changed a lot (and not for the better), and I just don’t think I’ve got the will to hang in there for another two years. So, I’m thinking now that I will try to hang on until June 2016 when I’ll be 63.5 and DW will be 60.5. DW will be retiring from her school job at the same time.
So, my mind has now shifted to thinking about a drawdown strategy. In rough numbers, I think we will have about $550,000 in after-tax accounts and about $3.2 million in pre-tax accounts. I would like to spend about $120,000 (after-tax) per year in retirement. My social security and DW’s pension combined should be around $50,000 per year (pre-tax), which we will probably start drawing about four years into our retirement (when DW is eligible to start her pension).
With most of our nest egg in pre-tax accounts, I know taxes are going to be a big issue for me. I could draw down on the after-tax accounts during my initial four years of retirement (prior to SS and pension kicking in) and really minimize my taxes during those years, but pay a much higher tax after those funds are depleted. Or, I could draw down on both the pre-tax and after-tax accounts such that my pre-tax withdrawals do not exceed the 15% bracket. This would stretch out the period before my pre-tax withdrawals would start hitting the 25% bracket (at least until RMD kicks in).
Up to now, I’ve been focused accumulating and did not give that much thought to how to draw down. So, I’d much appreciate the thoughts of those who are already in that phase. Thanks in advance.
So, my mind has now shifted to thinking about a drawdown strategy. In rough numbers, I think we will have about $550,000 in after-tax accounts and about $3.2 million in pre-tax accounts. I would like to spend about $120,000 (after-tax) per year in retirement. My social security and DW’s pension combined should be around $50,000 per year (pre-tax), which we will probably start drawing about four years into our retirement (when DW is eligible to start her pension).
With most of our nest egg in pre-tax accounts, I know taxes are going to be a big issue for me. I could draw down on the after-tax accounts during my initial four years of retirement (prior to SS and pension kicking in) and really minimize my taxes during those years, but pay a much higher tax after those funds are depleted. Or, I could draw down on both the pre-tax and after-tax accounts such that my pre-tax withdrawals do not exceed the 15% bracket. This would stretch out the period before my pre-tax withdrawals would start hitting the 25% bracket (at least until RMD kicks in).
Up to now, I’ve been focused accumulating and did not give that much thought to how to draw down. So, I’d much appreciate the thoughts of those who are already in that phase. Thanks in advance.