Just as long as you understand that what SS reports as your benefit assumes you will work up to your date of taking SS and at your current income level.
And all those zero earning years prior to taking SS may mean a lower amount than expected.
I will be effectively doing this. I'm not setting up a specific "bridge" to get me to SS. What I am doing, however, is a close equivalent. That is, I'm using duration matching for my bonds now and I'm no longer rebalancing between stocks and bonds. So I take the NPV of future SS income streams, and use the PMT function in excel to calculate an effective withdrawal from the bond portion of my portfolio. See threads on ABW and TPAW over on bogleheads. If spreadsheets are too daunting, then creating a bond ladder will get you there too.
Cheers.
I did sort of the same patterned after Kitces bond tent strategy.
https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/
I am a fan of Roger Whitney - the Retirement Answer Man. He just finished a series of podcasts with a real world example of a couple who appeared at retirement time to have enough only to have the bear market hit. SORR planning was not part of their strategy and today they find themselves over the cliff. So their retirement is now at risk. If anyone is interested, here is the website. The podcasts are on there or most podcast apps.
https://www.rogerwhitney.com/
+1
Would be a good resource for OP (and others). He's a big believer in liability matching and projecting future expenses.
Another good blog resource is Fritz at The Retirement Manifesto. Both he and Roger are "bucket" guys, which I personally subscribe to.
He summarizes the podcast to a degree and adds listener questions to his weekly newsletter.Hour-long podcasts with no transcript?
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Old-timers here may recall I published a paper at The Pension Research Council about the value of delaying SS and dubbed the process "Social Security Bridge" as well as "Income Bridge" based on research I started 20 yrs. ago. I am thankful for all the great feedback I received on this forum as it enhanced my research. Then, as now, I liked the idea of using a period certain income annuity to generate cashflow during the bridge period - such as the one OP wants for 8 years. What is even better now is that you can access SPIAs with traditional commissions largely stripped out if you work with an RIA who offers the service. You don't have to use a broker or agent (who get paid by commissions) and thus the payments tend to be higher. No need to pay a commission on immediateannuites.com or blueprintincome.com or any other service anymore.
A quote today based on the $6,083 monthly benefit OP desires ($73,000 annually) solves for a premium amount of $491,270 for an 8-year period certain annuity. Plugging this into https://www.bankrate.com/investing/annuity-calculator/ , we see the internal rate of return is 4.51% for an annuity cashflow of $6,083 over 96 months....For comparison purposes, Schwab's highest yielding CDs are currently 4.75% (1 Yr), 4.25% (3 Yr.), 4.0% (5 Yr). The annuity issuer is Nationwide.
Let the insurance company do the asset/liability match and take their small piece. So much easier than creating a ladder and money never sits earning near zero or zero. The payment hits your bank account regularly each month and you move on and enjoy your early years of retirement. I haven't addressed OP being under 59.5 but wanted to share the concept if OP could fund his first year of retirement with another method and then roll into an IRA.
Your initial assumption of only having 500K at the end of 8 years is too conservative, in my opinion. If you stay invested in 60/40 stock/fixed income or 50/50, there’s a good chance you will still have about 1 million after 8 years.
Someone the OP's age has almost certainly reached the second bend point for SS.
Past that any additional earnings receive little crediting and so make little difference in one's monthly benefit.
My 2 cents... ...I would underwrite a few more bogies out there until they are flapping their own wings.$... take time to really get your arms around Needs, Wants, Wishes as it relates to your expenses (including taxes/Roth conversions) and give yourself some margin ...
... I am also suspicious of trusting my projected SS benefits as I expect further means testing and therefore am underwriting 75% of projected $$.
Perhaps I am too conservative, but the advice given regarding liability matching, specifically with a bond ladder in the current environment, is a good one. If you elect to pull from your 401K sooner, Roth conversions may not be a necessity for you.
^^^^^. , what if someone wants to throw money at the OP for enjoyable consulting, making him an offer he can’t refuse? It happens unexpectedly to lots of retirees, including me.
I don't think that is necessarily true. I just read this, "To get there, [the second bend point] 'snip' you're going to have to make a lot more money,You're going to have to earn millions over your career to get to the second bend point, but if you work a full 35 years, that's just $2,592,240/35 = $74,064 per year, certainly not out of reach for a professional who works a full career. What's the fastest you can get there? In 2022, the Social Security wage limit is $147,000. $2,592,240/$147,000 = 17.6 years. You'll basically need to earn at least the Social Security Wage Limit for 18 years.
I don't have even half of that earning over 43 years.
Does anyone know how or if, you can find your AIME on SSA.gov website, I'm not finding it.
I think it was buried up in a previous reply but my pension will be $107k annually. 2% annual COLAs with extra to keep purchasing power at least 75% of original. It includes healthcare.So you’re 57.5 yrs old and have about 1.5 M and want to retire in 1 year.
Not sure what your income stream is besides SS and investments? Sounds like you want to spend near 100k annually?