I'm hoping I didn't retire too soon.

[JohnDevereaux]

Ok, I did it, 60 now. I am 100% debt free, no house notes, no car notes, nothing but daily living expenses. I retired 6 months ago, job just became too physically demanding. I have rolled over my 401k to an investor I trust 6 months ago, will start drawing first dispersion this month (3%). I still work my part time job, 1-2 days a week for $2k a month. I contributed HEAVILY into my 401k and Roth over the past 35 years. 401k @ $2m, Roth @ $500k, $125k in savings. In 18 months I am eligible for $2.5k/mo for Social Security. I'll continue my part time job until I start drawing it. I am currently going to draw about $6k/month, won't really need but $5k/month to live, plan on saving excess money to buy the wife a new vehicle, in a few years, and investing in some gold, platinum, and silver (to pass on to kids). I still worry about having enough for the rest of my life, and really wish to leave a lot to my children. Does this sound adequate? Any ideas about converting the 401k to Roth? Any ideas of other avenues I should be taking?

 

[ivinsfan]

What do you mean when you say "an investor you trust"....?

 

[disneysteve]

What do you mean when you say "an investor you trust"....?

Same question. That statement jumped out as a huge red flag to me.

 

[Exchme]

OP - you are the investor. You may have hired a financial advisor. Realize that you can get better results and not pay the usually exorbitant fees advisors cost by doing it yourself. A typical advisor assets-under-management charge is 0.8-1% per year, some are even worse. Unfortunately, the safe withdrawal rate for a 30 year retirement is only about 4% per year, so a way to visualize those advisory fees is the advisor will be taking a quarter of everything you worked for. On top of that, "trusted" advisors often put you in expensive investments that mostly benefit them. Many of us here have been burned badly by these kind of folks.

Folks here mostly favor Vanguard, Fidelity or Schwab. All you need to to is decide on a stock/bond asset allocation, many retirees are in the 60/40 or 50/50 range. Then for your stock holding, just buy something simple like the Vanguard Total Stock Market ETF (that can also be bought and sold at other brokerages like Fidelity or Schwab without fees). The costs are very low, something like 0.035%. Bonds are more complicated, but a not-bad compromise is something like BIV (Vanguard intermediate term Treasuries) or VTIP (Vanguard Short Term Inflation Protected Securities). I also spice up my portfolio by holding a Total International Stock Fund, but there are good arguments why that's not really needed. Setting this up and managing it is super simple, having an advisor for this is a total waste.

From a tax efficiency standpoint, put your bonds in your tax deferred account to slow its growth and minimize your future RMDs and put your stocks in Roth.

Since you have such a large tax deferred balance, you should be making some pretty hefty Roth Conversions, especially in the next couple of years before you become subject to IRMAA surcharges on your Medicare.

On claiming Social Security, the usual optimum strategy for a married couple is for the lower earner to claim at 62 and the higher earner to wait until 70. Go to opensocialsecurity.com and enter your numbers. Make sure you scroll to the bottom and click on different points on the graph, that will show you how things change in every single monthly combination of claim ages.

 

[RetiredHappy]

Since you only have $125K in taxable account, you are fairly limited on how much ROTH conversion you can do. But it sounds like you are in very low income tax bracket now, so ROTH conversion will be advantageous

 

[cgm66046]

Ok, I did it, 60 now. I am 100% debt free, no house notes, no car notes, nothing but daily living expenses. I retired 6 months ago, job just became too physically demanding. I have rolled over my 401k to an investor I trust 6 months ago, will start drawing first dispersion this month (3%). I still work my part time job, 1-2 days a week for $2k a month. I contributed HEAVILY into my 401k and Roth over the past 35 years. 401k @ $2m, Roth @ $500k, $125k in savings. In 18 months I am eligible for $2.5k/mo for Social Security. I'll continue my part time job until I start drawing it. I am currently going to draw about $6k/month, won't really need but $5k/month to live, plan on saving excess money to buy the wife a new vehicle, in a few years, and investing in some gold, platinum, and silver (to pass on to kids). I still worry about having enough for the rest of my life, and really wish to leave a lot to my children. Does this sound adequate? Any ideas about converting the 401k to Roth? Any ideas of other avenues I should be taking?

You and I are in a very similar boat. You did better with your 401k and Roth investments, nice job.

I think you’re set, congratulations, well done, enjoy the ride.

 

[Gallaher]

Yes, I too think you are set….way set. Don’t get crazy.
Also, don’t sweat what you leave for your kids.
Live your best life and let them have the leftovers.

 

[aaronc879]

Assuming your "trusted advisor" doesn't squander the money you should easily be set. Not sure why you would even keep working the part time job unless you really like the work. Certainly no financial need to continue working at all. Congrats.

 

[Dtail]

Who is the trusted advisor? Does that person work for a financial firm?

 

[Gumby]

Maybe it is some product from Investors Trust Company or iTrustCapital?

 

[MarieIG]

Your plan includes yourself and your kids, but other than referencing a car in a few years for the spouse, you fail to mention how your wife factors into the plan if she survives you: i.e. whether her SS will be more than yours, whether you locked her into the smallest survivor benefit, plans for LTC, taxes to be paid by survivor, etc. Like previously noted, I have no idea what you mean by an investor you trust.

You can plug your numbers FireCalc.

Good luck to you - and your spouse.

 

[TheWizard]

No follow-up from the OP a month ago, so we'll never know what's going on...

 

[ModestNestEgg]

No follow-up from the OP a month ago, so we'll never know what's going on...

I'm not the OP, but to answer the OP's question, unless he is just spending like mad or was phenomenally in love with his full-time job, retiring with that level of assets just sounds like a no-brainer to me. But that's just my relatively frugal self looking at those assets and thinking of how much in living expenses it would provide, and at a conservative estimation at that.

 

[Bryan Barnfellow]

I have an uneasy feeling about this post. I sincerely hope that the OP is being especially cautious about whom he has entrusted with the bulk of his life savings.