New RE Now Am I FI

[Jeb-NY]

I'm 57 and so is my wife. I have been mostly lurking but felt I should announce that as of today I'm unemployed. The company was offering early retirement packages and I qualified for a year of salary and benefit continuation and then retirement benefit. Was planning on retiring in a couple of years or going part time, but this was to good a deal to pass up. Wife will work part time for awhile yet, but not enough to help much.

I past the point where I thought I could afford to walk about a year ago but couldn't pull the trigger. House is paid for and no debt. So I now I have a year to get all my ducks in a row for where the money stream comes from.

FireCalc and several other online calculator says I'm good, and two Financial Advisors agree, if my estimates of a budget is close. Planning on the comfortable budget to be about 50% of our current income and our tight belt budget to be about 25%. FireCalc says we are still good to 60% with a 95% success rate.

I'm currently sitting with about 25% of my funds in post tax accounts and 75% in pre tax. The 25% needs a little tuning but the 75% will roll over as a lump sum and will have to be distributed across new funds.

I'll be asking for help as the year goes on. In the mean time I'm taking notes. I need on going assurance that I can do it myself and I don't need a FA.

By the way one FA had what looked like a pretty good plan but wants 2%. The other I think could run me into the ground in less than 10 years but only want 1% to do it.

Jeb

 

[Mr._johngalt]

  The other I think could run me into the ground in less than 10 years but only want 1% to do it.

Jeb

That's a better deal than I got from my ex-wife.

JG

 

[JPatrick]

Well now that you've seen what a FP will do for a fee, I'd recommend you sit down with a Fidelity guy and see what they can do for free.
The other 98% of the board would want me to recommend Vanguard as well.
Welcome to the forum!

 

[JohnP]

Congratulations Jeb on your retirement!

Glad to hear you are considering rollin' your own portfolio!  There are as many ways to manage your own portfolio as there are people and I doubt that any 2%/yr FA can do any better than you would do with a little tweaking from this forum.  2% is not just 2%, it is 50% of your retirement SWR (Safe Withdrawal Rate).

I'm happy to attempt to keep a broad-based portfolio with low expense funds from VG.  As long as you keep diversified with low expense funds you'll do well!

Best regards

JohnP

 

[frayne]

Welcome Jeb and I came from very much the same background except for only being 54. Believe me you can do this, through Fidelity or Vanguard and save yourself the FA fee plus any loaded funds they want to push at you. I rolled over a 401K and a lump sum pension distribution with no problems what so ever. My advice first would be to enjoy the year and read up on investing, especially index funds. Common Sense on Mutual Funds by Bogle and The Four Pillars of Investing by Bernstein. Morningstar FIDO Family and Diehards are good web sources as well for investing info.

Again welcome.

 

[Jeb-NY]

My advice first would be to enjoy the year and read up on investing, especially index funds. Common Sense on Mutual Funds by Bogle and The Four Pillars of Investing by Bernstein. Morningstar FIDO Family and Diehards are good web sources as well for investing info.

Again welcome.

I have been making a list of books to read, those two were already on the short list, to pick up after Christmas.

Thanks for the encouragement from those that jumped in. The 2% the FA wants to charge included all fees, loads and transaction fees but still seemed like a big chunk of my yearly income as JohnP pointed out it isn't really 2% but more like 50% of my yearly income needs.

One of the tasks in the next 12 months is to move around the after tax funds to support me after salary continuation ends. Not sure if I should tap pretax money at 59.5 or wait till I spend down the after tax money. I have about $50K in Janus World Wide that I believe is still below water for my average cost. Trying to decide if I should sell before the end of the year so I have 2 years of tax deductions if I need it (while I'm still in a high tax bracket). The real dilemma is do I just leave it in a Money Market for living expense in 2007-8 or is there a safe place that might make a little more money. I'm sitting with about 35K in cash and CDs right now and plan to add to that during 2006. How many years of buffer cash is enough. I'm figuring on the tight budget to be $20-30K and the generous budget to be in the $40-55K range. Making a real budget is on the list to do early in the year. The generous budget was arrived at backwards by subtracting off things that I would not be spending money on. 401Ks, savings, taxes, etc.

Jeb

 

[unclemick]

Hmmm

Hindsight being what it is - going into the 12th year of ER - reading books and all that stuff is unecessary.

2-4 yrs of money in a Vanguard MM fund with checking plus one of the Target Retirement Series is all that's required.

Of of course - reading books, BSing about investment stuff is kinda fun - after all it's male and hormonal -aka biologically driven - sort of like building and racing kayaks or whatever.

My core Lifestrategy(kinda a life cycle fund forrunner of Target) has never been overwhelmed by my 'investment brilliance' over the last 10 to 12 years.

Heh heh heh heh heh.

Then again - I'm also a clux when it comes to handyman stuff - like building kayaks - recyling dryer sheets is another story.

I.E. - keep it simple - you're in the zone.