Retiremeyes
Dryer sheet wannabe
Hi – I’m new to this group. Looking forward to joining the many of you already retired. I’ve run my numbers through the fire calculator, and it shows I’m in good shape, but if you disagree, please let me know why. My reason for posting here is to see if there are any tips you can provide for the next several years. I’m particularly interested in how to handle the next 7 years with a deferred income payout coming in. More later on that. I’ll provide what I think are all of the pertinent details, but feel free to ask if I’m leaving anything out. I’ve invested on my own over the years and don’t use a financial advisor at this time – nor ever have, but not dead set against it either.
I’m 52, married (wife 50) & both are in good health & planning to enter early retirement at the end of Q1-2024. No retiree medical benefits or extended insurance of any kind other than my option to pay Cobra to extend.
Total net worth including house ($1MM) is $7MM.
My spending for past 3 years has increased from about 9K/month up to 10K/month. I’m thinking after retiring I’ll want $14K/month (168K/yr) to allow for health insurance and some additional travel & that will need to increase by rate of inflation at least while healthy enough to travel etc.
401K: $2.3MM, Brokerage Acct $2.1MM (about $270K of unrealized gains that I’ll owe taxes on when positions are closed which I plan to do since most of the unrealized gains are in two positions that are 100%+ returns (wanting to be more diversified and get out of these two stock positions) Other savings: $800K (short term <1yr savings/treasuries/CD’s). Unqualified deferred income ($700K) that will pay out over next 7 years with first check starting in 2025, so starting at 100K/yr, but increasing to 125K by year 7 with 5% market returns. Lastly, $200K Roth IRAs combined total for DW and me.
DW doesn’t work and has no pension & will take the social sec of half of mine when she starts drawing.
I have a frozen pension that doesn’t enjoy any COLA which will pay 36K/yr starting when I’m 65. I have $2.3MM in my 401K mostly regular 401K with small portion (5%) in Roth 401K. I have separate Roth accounts that total $175K. House is paid for and no debt of any kind. I will likely downsize houses in 3-4 years which should net about $400K. SS shows to be $96K combined (me +1/2me for wife). That’s using 1.5% COLA and starting it when I am 70.
Questions: 1) Can I or should I try to get my income down to get health subsidies? I’m thinking it just wouldn’t make sense, but I’m open to suggestions & if yes – what methods would you recommend deferring income out a few years while drawing down savings?
2) Should I be trying to reduce taxable income by opening HSA and funding that along with IRA contributions for the next 7 years with that deferred income still streaming in?
3) Where should I prioritize pulling money for expenses to supplement the deferred income over the next 7 years?
4) What %stock would you recommend I should maintain going forward. I’ve always been 90+% stocks guy, but have recently positioned to 75% fixed income – all short term 1-yr or so with about 5.3% current returns (mix of CD’s and treasuries – this 75% allocation is now same for 401K & for Brokerage/savings combined. I’m feeling like 25% is too low for stock positions, but also concerned markets may not return the historical 7-10% historical due to the national debt situation escalating, and I'm pretty sure I could make it with 5% returns, so why risk it?
5) For the fixed portion that I do maintain, what is the best way to get returns better than what treasuries/CD’s offer. I’m thinking corporate bonds but have never purchased one and could use advice as to what to look for there. I usually read bad things about any annuities, but am I missing something here? Should I consider any portion for annuities of any kind?
I’m 52, married (wife 50) & both are in good health & planning to enter early retirement at the end of Q1-2024. No retiree medical benefits or extended insurance of any kind other than my option to pay Cobra to extend.
Total net worth including house ($1MM) is $7MM.
My spending for past 3 years has increased from about 9K/month up to 10K/month. I’m thinking after retiring I’ll want $14K/month (168K/yr) to allow for health insurance and some additional travel & that will need to increase by rate of inflation at least while healthy enough to travel etc.
401K: $2.3MM, Brokerage Acct $2.1MM (about $270K of unrealized gains that I’ll owe taxes on when positions are closed which I plan to do since most of the unrealized gains are in two positions that are 100%+ returns (wanting to be more diversified and get out of these two stock positions) Other savings: $800K (short term <1yr savings/treasuries/CD’s). Unqualified deferred income ($700K) that will pay out over next 7 years with first check starting in 2025, so starting at 100K/yr, but increasing to 125K by year 7 with 5% market returns. Lastly, $200K Roth IRAs combined total for DW and me.
DW doesn’t work and has no pension & will take the social sec of half of mine when she starts drawing.
I have a frozen pension that doesn’t enjoy any COLA which will pay 36K/yr starting when I’m 65. I have $2.3MM in my 401K mostly regular 401K with small portion (5%) in Roth 401K. I have separate Roth accounts that total $175K. House is paid for and no debt of any kind. I will likely downsize houses in 3-4 years which should net about $400K. SS shows to be $96K combined (me +1/2me for wife). That’s using 1.5% COLA and starting it when I am 70.
Questions: 1) Can I or should I try to get my income down to get health subsidies? I’m thinking it just wouldn’t make sense, but I’m open to suggestions & if yes – what methods would you recommend deferring income out a few years while drawing down savings?
2) Should I be trying to reduce taxable income by opening HSA and funding that along with IRA contributions for the next 7 years with that deferred income still streaming in?
3) Where should I prioritize pulling money for expenses to supplement the deferred income over the next 7 years?
4) What %stock would you recommend I should maintain going forward. I’ve always been 90+% stocks guy, but have recently positioned to 75% fixed income – all short term 1-yr or so with about 5.3% current returns (mix of CD’s and treasuries – this 75% allocation is now same for 401K & for Brokerage/savings combined. I’m feeling like 25% is too low for stock positions, but also concerned markets may not return the historical 7-10% historical due to the national debt situation escalating, and I'm pretty sure I could make it with 5% returns, so why risk it?
5) For the fixed portion that I do maintain, what is the best way to get returns better than what treasuries/CD’s offer. I’m thinking corporate bonds but have never purchased one and could use advice as to what to look for there. I usually read bad things about any annuities, but am I missing something here? Should I consider any portion for annuities of any kind?
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