Retiring in 2 months at 49

[pb4uski]

... I am currently managing my budget and spending with spreadsheets and Mint. While I don't mind the work, it does take up a bit of time since I have to consolidate activity across multiple investment accounts. I also have to manually transfer funds from my investment account to my checking account as needed to cover any remaining needs to balance the books. Then I need to figure out what to do with any remaining dividends that were unused. Leave as cash or reinvest? And what happens if my needs exceed the amount of dividends I receive monthly? Do I sell stock or do I dip into emergency fund temporarily?...

WADR, you're overthinking it.

I have an online savings account that yields 4.3% that sits between my retirement portfolio and the checking account that I use to pay our bills. When replenished, it has a year's worth of withdrawals and $25k emergency fund. I have an automatic transfer of $x from the online savings account the checking account that I use to pay our bills on the first of every month... my monthly "paycheck". I replenish the online savings account back periodically with a transfer from our retirement portfolio a couple times each year based on the retirement portfolio's cash flows, maturing bonds, etc. Any uninvested cash in the retirement portfolio is in a money market accountthat yields 5.22%.

 

[DrRoy]

I create an annual cash (MM) pool so I don't have to fiddle with it all the time.

 

[Tetto]

WADR, you're overthinking it.

I have an online savings account that yields 4.3% that sits between my retirement portfolio and the checking account that I use to pay our bills. When replenished, it has a year's worth of withdrawals and $25k emergency fund. I have an automatic transfer of $x from the online savings account the checking account that I use to pay our bills on the first of every month... my monthly "paycheck". I replenish the online savings account back periodically with a transfer from our retirement portfolio a couple times each year based on the retirement portfolio's cash flows, maturing bonds, etc. Any uninvested cash in the retirement portfolio is in a money market accountthat yields 5.22%.

I really like this model and is what I envision doing when I retire. Nice and simple, very easy to understand and manage.

 

[surprising]

WADR, you're overthinking it.

I have an online savings account that yields 4.3% that sits between my retirement portfolio and the checking account that I use to pay our bills. When replenished, it has a year's worth of withdrawals and $25k emergency fund. I have an automatic transfer of $x from the online savings account the checking account that I use to pay our bills on the first of every month... my monthly "paycheck". I replenish the online savings account back periodically with a transfer from our retirement portfolio a couple times each year based on the retirement portfolio's cash flows, maturing bonds, etc. Any uninvested cash in the retirement portfolio is in a money market accountthat yields 5.22%.

This seems like a good strategy when expenses and market are stable, but how do you handle unexpected expenses? Do you transfer more from your emergency fund hoping it won't run out before the next replenish? What happens during market downturns and you don't have enough cash in retirement account to fund expenses? How do you decide what investments to sell?

 

[RetiredAt49]

This seems like a good strategy when expenses and market are stable, but how do you handle unexpected expenses? Do you transfer more from your emergency fund hoping it won't run out before the next replenish? What happens during market downturns and you don't have enough cash in retirement account to fund expenses? How do you decide what investments to sell?

I hear you. What some here are describing is a bucket strategy - there’s lots of YouTube videos out there on this topic and pros/cons of each.

Personally, I just have my investment portfolio (100% equities + rental properties) and my checking/money market (2 buckets so-to-speak). When my bill paying bucket is nearly empty I sell stock (or rental properties).