Please critique our plan to retire this year

^^^ It depends. If you will solidly be in the 22% tax bracket once you are collecting SS and RMDs, then I would prioritize Roth conversions over LTCG at 15% or even at 0% if inherited. If come RMD time you are in the 12% tax bracket then it is a closer call.
 
pb4uski said:
^^^ It depends. If you will solidly be in the 22% tax bracket once you are collecting SS and RMDs, then I would prioritize Roth conversions over LTCG at 15% or even at 0% if inherited. If come RMD time you are in the 12% tax bracket then it is a closer call.
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OP will have to do the math.

But a married couple filing jointly pays zero tax on qualified dividends and long-term capital gains if their total taxable income isn't more than $94,050 in 2024 (or $96,700 in 2025, according to news sources).

BTW, to OP, there is nothing mandatory about optimizing your taxes or investments. Your numbers look good. You can certainly ignore this advice and focus on how you and spouse can maximize retirement fun instead!
 
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*sigh*

So a complication. Wife's tech company was bought and then her division was spun off. New company gave her $254,000 ownership(?) shares with 4 year vest schedule. Non publicly traded company. Shares can only be sold during 'Event' such as sale of company. My wife is having second thoughts about retiring because 25% of shares vest this July and if she stays another year or two she'll have half to 3/4 those ownership shares. Company is currently in rapid growth and in recent meetings they are projecting an 8 - 10x valuation within 3 - 4 years. Shares given were based on 1x.

She wants us to be able to buy a home down on the Chesapeake Bay (around $800k). I want us to retire now but I'm not going to cry if I have to spend my retirement chasing stripers all day. I just don't like the idea of her working longer and basing it on projections no matter how solid it looks. I don't even count these shares as part of our net worth because in my eyes they're worth nothing until you can sell them.
 
dobig said:
*sigh*

So a complication. Wife's tech company was bought and then her division was spun off. New company gave her $254,000 ownership(?) shares with 4 year vest schedule. Non publicly traded company. Shares can only be sold during 'Event' such as sale of company. My wife is having second thoughts about retiring because 25% of shares vest this July and if she stays another year or two she'll have half to 3/4 those ownership shares. Company is currently in rapid growth and in recent meetings they are projecting an 8 - 10x valuation within 3 - 4 years. Shares given were based on 1x.

She wants us to be able to buy a home down on the Chesapeake Bay (around $800k). I want us to retire now but I'm not going to cry if I have to spend my retirement chasing stripers all day. I just don't like the idea of her working longer and basing it on projections no matter how solid it looks. I don't even count these shares as part of our net worth because in my eyes they're worth nothing until you can sell them.
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To me, the key question is whether you have enough without the extra years. More money (or in this case more potential for more money) is kinda nice. But if you can retire now and have enough funds to do what you want to do, why push harder? Is the perfect house in the perfect location worth the extra effort? No right or wrong answer but you need to count the cost in years. Good luck.
 
dobig said:
She wants us to be able to buy a home down on the Chesapeake Bay (around $800k).
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...and keep your existing home, or sell it and move?

If the latter, it's a one-time expense of...$50k. A bit more because of transaction costs, but still.
 
Not sure what your current income is, but you seem well set up for retirement. I wouldn't, but I want to drive a newer car, so I have to work longer based on that ;)
 
Come on! Get out there and retire! You are smart enough to work it out.
I was “pushed” to retire 7.5 years ago at 57. It has been easier, funner (not a real word), than I ever thought it would be and I have over a million bucks more now than I did then.
You can work this out.
Best wishes.
 
dobig said:
*sigh*

So a complication. Wife's tech company was bought and then her division was spun off. New company gave her $254,000 ownership(?) shares with 4 year vest schedule. Non publicly traded company. Shares can only be sold during 'Event' such as sale of company. My wife is having second thoughts about retiring because 25% of shares vest this July and if she stays another year or two she'll have half to 3/4 those ownership shares. Company is currently in rapid growth and in recent meetings they are projecting an 8 - 10x valuation within 3 - 4 years. Shares given were based on 1x.

She wants us to be able to buy a home down on the Chesapeake Bay (around $800k). I want us to retire now but I'm not going to cry if I have to spend my retirement chasing stripers all day. I just don't like the idea of her working longer and basing it on projections no matter how solid it looks. I don't even count these shares as part of our net worth because in my eyes they're worth nothing until you can sell them.
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Sounds good if the goal is to be the richest person in the cemetery. Just sayin'.
 
I waited until 60. That's still early compared to today's stat for 'full retirement age'. Looking back, I should have retired at 57 or 58. While everyone is different, it seems some universal truths apply here. Funds matter, and where you live really matters.

I very quickly discovered that the insurance companies were emptying my checking account. To the tune of $53K per year or almost $4,500 per month. Automated payments, combined with stunning premium increases across the board.

Since I have no income but what appeared to be adequate savings, that's a bit disconcerting. I will be going naked with regard to home and auto insurance.
 
Cujet said:
I waited until 60. That's still early compared to today's stat for 'full retirement age'. Looking back, I should have retired at 57 or 58. While everyone is different, it seems some universal truths apply here. Funds matter, and where you live really matters.

I very quickly discovered that the insurance companies were emptying my checking account. To the tune of $53K per year or almost $4,500 per month. Automated payments, combined with stunning premium increases across the board.

Since I have no income but what appeared to be adequate savings, that's a bit disconcerting. I will be going naked with regard to home and auto insurance.
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We're not quite in your league yet (insurance cost wise) but we're getting there. I suspect I'd move before going naked, but I haven't been hit quite as hard as you have. Blessings and best luck.
 
Hi @dobig . I'm newer to this forum, but have a lot of experience giving portfolio reviews elsewhere. I've selected yours as my first review . How about a couple questions:

--Do you have any heirs?

--Have you ever heard of SWR? (no googling!)

--What is your estimated Marginal fed income tax rate next year if retired? What is expected marginal rate, age 66, when you start SS? Like, if you earned another $100 income what rate would it be taxed at?

--When do any pensions start? Do you have any lump sum options at start time?

--Have you considered taking SS at age 62? Do you consider the "SS numbers" favor any specific year from age 62 to age 70?

--Have you considered that since SS is nontaxable up to a thresh-hold, taking earlier allows a decade of conversions to ROTHs with perhaps favorable tax rates involved?

I await your reply...

R48
 
So yeah, we're not retiring for probably another 3 - 4 years. Went under contract today.

But we're going to have some fun. Going to be chasing Stripers on the Chesapeake Bay.

Screenshot (353).png
 
retired at 48 said:
Hi @dobig . I'm newer to this forum, but have a lot of experience giving portfolio reviews elsewhere. I've selected yours as my first review . How about a couple questions:

--Do you have any heirs? Nieces and nephews

--Have you ever heard of SWR? (no googling!) No

--What is your estimated Marginal fed income tax rate next year if retired? What is expected marginal rate, age 66, when you start SS? Like, if you earned another $100 income what rate would it be taxed at? I really don't know. We will be keeping our income under the ACA limits until 59 1/2

--When do any pensions start? Do you have any lump sum options at start time? Have had a VA pension for a number of years. $1,500/month

--Have you considered taking SS at age 62? Do you consider the "SS numbers" favor any specific year from age 62 to age 70? We were under the impression 67 was the best year to start SS?

--Have you considered that since SS is nontaxable up to a thresh-hold, taking earlier allows a decade of conversions to ROTHs with perhaps favorable tax rates involved? Did not know that. Appreciate the tip.

I await your reply...

R48
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And back to the Chesapeake Bay. Anyone familiar with Sailor Bob? Apparently he built this place as his retirement home. Our home inspector was a big fan growing up.


This time found a place owned by an engineer and it showed. Our inspection consisted of a bedroom door that didn't latch properly and a loose faucet that needed tightening. Had the listing tied up within 4 hours of it going live from 450 miles away. Thought the price was too good to be true but turned out even better than expected. New pier (2024), new gunite pool (2021), new roof 202(?), newer geothermal with 2 units (2019), every bathroom remodeled, etc,.

Top notch sellers who were moving for a great job opportunity. All contingencies finished and close in less than 2 weeks.

water position.png
 
dobig said:
Age both 55. Current assets $2.95. Brokerage account $1.2. Cash on hand $240,000. Retirement accounts $760,000. Home $750,000. Pension $1,500/month. No debt. Goal for retirement is around $80,000/year (overestimating) which is above our current spend of $60,000 (over estimating). SS at 66 should be around $55k.

Our brokerage is mainly dividend growth etfs (SCHD, DGRO, DGRW, VYMI) with some Cefs and individual bonds mixed in that should give us around $54,000/year in income. The $240,000 is for 4 years expenses and to protect against a bad market downturn. We also have an emergency fund of $15,000.

Are we being overly opimistic or naive relying so heavily on an income based portfolio and are we keeping to much cash on hand? Or would a more balanced approach with a traditional 60/40 split give us a better chance of success? Our goal is this Sept and of course we're going into panic mode over thinking everything.
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From where I stand, I FIRE’d at 55 (wife was 53) with quite a bit less and have actually been spending more than your estimate. That was over nine years ago now, and even after covering all my expenses, my investments are still up over 40% since I retired. Counting the years before SS is drawn, will definitely put a few more bucks in my wallet each month. Research the cost of your health insurance, after a healthy travel expense that's the next highest expense for me. And hoping that Medicare next year helps lower that expense.

I’d suggest planning for a slightly larger “emergency fund,” but otherwise, based on my experience—pull the rip cord. It’s scary at first, but you’ll likely find yourself enjoying it sooner than you expect.
 
dobig said:
And back to the Chesapeake Bay. Anyone familiar with Sailor Bob? Apparently he built this place as his retirement home. Our home inspector was a big fan growing up.


This time found a place owned by an engineer and it showed. Our inspection consisted of a bedroom door that didn't latch properly and a loose faucet that needed tightening. Had the listing tied up within 4 hours of it going live from 450 miles away. Thought the price was too good to be true but turned out even better than expected. New pier (2024), new gunite pool (2021), new roof 202(?), newer geothermal with 2 units (2019), every bathroom remodeled, etc,.

Top notch sellers who were moving for a great job opportunity. All contingencies finished and close in less than 2 weeks.

View attachment 56038
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Wow! I guess someone has to get the one good deal in the real estate game. Congratulations!!
 
bobandsherry said:
I’d suggest planning for a slightly larger “emergency fund,” but otherwise, based on my experience—pull the rip cord. It’s scary at first, but you’ll likely find yourself enjoying it sooner than you expect.
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OP I'd also have at the back of my mind a few "back ups" just in case. What if the market tanks? What is your back up? What if there is renewed inflation? What is your back up? Those kinds of things.

Good luck again.
 
Koolau said:
OP I'd also have at the back of my mind a few "back ups" just in case. What if the market tanks? What is your back up? What if there is renewed inflation? What is your back up? Those kinds of things.

Good luck again.
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We've been trying to calculate for the worst and it is a little nerve wracking. Right now we're basically counting on my wife's company participation units to come thru. 3 more years of vesting. At a 4x valuation that would pay off the loan of $1 million. If that doesn't come thru we're keeping $100k in emergency fund and all company bonuses will go in it. Around $60k/year after tax. At our paid off place back here in Pa we have around $200k in timber on our property we could sell. We figure $125k if things get bad. Could also sell our Pa. home.

After buying this place we'll still have $2.2 million in investments. $1.4 in brokerage account. If market tanks we're thinking we could VRBO (which we loathe) the place at half the current market rate and just about make the payments based on a past experience but we really hate this option. Still you do what you need to.


The home sold for $800k back in 2011 when prices slumped very hard down there. We're paying $1.3 which is an absolute steal. Everything has been upgraded and property is in pristine condition. No flood zone, easy taper down to the water and the last home in an upscale waterfront subdivision. Our place borders the woods. We're spending much more than we want but for us this is our retirement. Frankly it's the ultimate retirement. Already ordered crab pots for the pier. We've been looking every day for the past 6 years and deals like this just don't pop up so we had our offer in within an hour of the listing.
 
When we were down for inspections neighbor invited me over to fish with him. Said we'd catch 5 lb stripers at the end of the pier thru Sept. Feel like a little kid again.
 
dobig said:
After buying this place we'll still have $2.2 million in investments. $1.4 in brokerage account. If market tanks we're thinking we could VRBO (which we loathe) the place at half the current market rate and just about make the payments based on a past experience but we really hate this option. Still you do what you need to.
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Just something to noodle... If the market takes a downturn, there's a good chance many others will turn to VRBO, Airbnb, or other short-term rentals. This could lead to an oversupply of listings, which may negatively affect travel demand. As a result, occupancy rates could decline, and nightly rates may be driven down, squeezing your expected revenue.
 
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