Hi all,
I turned 51 a little while ago and it's been several years since my last confession, err check-in. I've reached a point where I'm probably FI in the sense that I could cover all my fixed costs for the rest of my life, but I'd like to allow for more discretionary spending. I'm thinking I'll work another 3-4 years to about age 55 and then re-evaluate. Age 55 would also give me penalty-free access to my 401k monies, and that would make the logistics of retirement much easier. Once I hit 55, I'll evaluate where I am and decide if I want to quit, go part time, or keep charging ahead. Specific questions below:
1. Given the details below, do you think I'm on track to be able to spend $80k/yr (~$90k/yr before taxes) if I retire in 3.5 years (January 2028)?
2. I've been struggling to get my AA down, but the darn stock market keeps going up!![:wink:]( "Wink")
Rather than trying to force a certain AA, I'm thinking that as long as I have ~10 years of expenses in fixed that should be enough. 10 x ($90k - $28k pension) = ~$520k. Make it $550k to cover inflation eroding the pension. Does that seem like a reasonable number?
3. Now that my time to retirement is shortening, I'd love to have something like a 10-year TIPS ladder beginning at retirement, but that seems very difficult. I have (almost) all my bonds in the pre-tax 401k right now. The only 2 options are a total bond fund (essentially BND) or a stable value fund. There is an investment portal option, but it's limited to ETFs/funds (no individual bonds). Could I buy 2-3 TIPS ETFs of different durations and weight them to make a pseudo-ladder?
4. I've been funding a DAF with 2-3 years' of donations at a time using appreciated shares, and I'd like to keep using it until RMDs kick in at 75. Would it make sense to pre-fund a large chunk of donations while I'm still working and in the 24% bracket, or after I retire when the stocks will (hopefully!) have appreciated more but I'm only in the 12% bracket?
5. Kind of the opposite of #4, if stocks swoon, should I tax-loss harvest like I have in the past? Right now, I have enough TLH losses saved up to take the $3k deduction on regular income through 2026. If I get another opportunity, would it make sense to extend losses beyond 2028? I feel like all it will be doing is offsetting LTCG then.
Emergency funds: 6 mo. + fund for irregular expenses like car, home repair, appliances, etc.
Debt: None (Own my home free and clear)
Tax Filing Status: Single
Federal Tax Rate: 32% Federal, plus NII; Should drop back to 24% starting in 2025
State Tax Rate: 5.75% through 2024, then 0% for 2025+
State of Residence: TN (permanent) + VA (through 2024)
Age: 51
Desired Asset allocation: ~75/25, gliding down to 65/35 over the next 4 years
Desired International allocation: 25% of stocks
Net worth is ~$1.5MM, split ~$1.1MM cash/investments and $400k in home value
Taxable 44% of total ($475k)
VTSAX 92%Vanguard Total Stock Market
T-Bills 8% Most in a 1-yr maturing early '25
Sweep/MMF 0%
Roth 12% of total ($135k)
VTSAX(ER=0.04%) 50% Vanguard Total Stock Market
VTIAX(ER=0.11%) 50% Vanguard Total International Stock Market
401k 34% of total ($375k, ~$30k is Roth)
INDXMNL(ER=0.02%)19% S&P 500 fund
R25NLM(ER=0.06%)10% Russell 2500 (market completion) fund
ACWIMNL(ER=0.09%)35% Total International
DEBTWNL(ER=0.04%)36% Total Bond (Intermediate) fund
HSA 5% of total ($50k)
Savings account 4% (Minimum required)
VITSX(ER=0.035%)96% (Institutional version of VTSAX, i.e., TSM)
Cash / CDs / Etc.5% of total ($50k)
Ally HYSA 30%
IBonds 70%
Breakdowns
Stock%79.7%
Bonds%18.9%
Cash% 1.5%
Foreign Stock%23.0%
Anticipated annual contributions (~$110k/yr+match)
$30.5k 401k pretax + ~$5k match: 100% to Total Bond fund
$36.5k 401k mega-backdoor Roth: 65% international, 25% S&P, 10% Russell 2500
$8k Roth IRA [Already contributed for 2024]
$3,650 HSA (+$500 from employer)
$10k to I-Bonds
~$20k taxable VTSAX (TSM)
$2k to savings / T-Bills
I'm eligible for an immediate (reduced) pension with no COLA. The value at age 55, in today's dollars, should be about $28k / yr. It comes with access to retiree medical at slightly higher than the employee cost, which to me makes claiming the pension immediately at retirement the obvious choice.
SS Estimates: About $26k / $37k / $46k @ 62 / 67 / 70 [Assumes I quit at 55, slightly higher if I work longer]
I turned 51 a little while ago and it's been several years since my last confession, err check-in. I've reached a point where I'm probably FI in the sense that I could cover all my fixed costs for the rest of my life, but I'd like to allow for more discretionary spending. I'm thinking I'll work another 3-4 years to about age 55 and then re-evaluate. Age 55 would also give me penalty-free access to my 401k monies, and that would make the logistics of retirement much easier. Once I hit 55, I'll evaluate where I am and decide if I want to quit, go part time, or keep charging ahead. Specific questions below:
1. Given the details below, do you think I'm on track to be able to spend $80k/yr (~$90k/yr before taxes) if I retire in 3.5 years (January 2028)?
2. I've been struggling to get my AA down, but the darn stock market keeps going up!
Rather than trying to force a certain AA, I'm thinking that as long as I have ~10 years of expenses in fixed that should be enough. 10 x ($90k - $28k pension) = ~$520k. Make it $550k to cover inflation eroding the pension. Does that seem like a reasonable number?3. Now that my time to retirement is shortening, I'd love to have something like a 10-year TIPS ladder beginning at retirement, but that seems very difficult. I have (almost) all my bonds in the pre-tax 401k right now. The only 2 options are a total bond fund (essentially BND) or a stable value fund. There is an investment portal option, but it's limited to ETFs/funds (no individual bonds). Could I buy 2-3 TIPS ETFs of different durations and weight them to make a pseudo-ladder?
4. I've been funding a DAF with 2-3 years' of donations at a time using appreciated shares, and I'd like to keep using it until RMDs kick in at 75. Would it make sense to pre-fund a large chunk of donations while I'm still working and in the 24% bracket, or after I retire when the stocks will (hopefully!) have appreciated more but I'm only in the 12% bracket?
5. Kind of the opposite of #4, if stocks swoon, should I tax-loss harvest like I have in the past? Right now, I have enough TLH losses saved up to take the $3k deduction on regular income through 2026. If I get another opportunity, would it make sense to extend losses beyond 2028? I feel like all it will be doing is offsetting LTCG then.
Emergency funds: 6 mo. + fund for irregular expenses like car, home repair, appliances, etc.
Debt: None (Own my home free and clear)
Tax Filing Status: Single
Federal Tax Rate: 32% Federal, plus NII; Should drop back to 24% starting in 2025
State Tax Rate: 5.75% through 2024, then 0% for 2025+
State of Residence: TN (permanent) + VA (through 2024)
Age: 51
Desired Asset allocation: ~75/25, gliding down to 65/35 over the next 4 years
Desired International allocation: 25% of stocks
Net worth is ~$1.5MM, split ~$1.1MM cash/investments and $400k in home value
Taxable 44% of total ($475k)
VTSAX 92%Vanguard Total Stock Market
T-Bills 8% Most in a 1-yr maturing early '25
Sweep/MMF 0%
Roth 12% of total ($135k)
VTSAX(ER=0.04%) 50% Vanguard Total Stock Market
VTIAX(ER=0.11%) 50% Vanguard Total International Stock Market
401k 34% of total ($375k, ~$30k is Roth)
INDXMNL(ER=0.02%)19% S&P 500 fund
R25NLM(ER=0.06%)10% Russell 2500 (market completion) fund
ACWIMNL(ER=0.09%)35% Total International
DEBTWNL(ER=0.04%)36% Total Bond (Intermediate) fund
HSA 5% of total ($50k)
Savings account 4% (Minimum required)
VITSX(ER=0.035%)96% (Institutional version of VTSAX, i.e., TSM)
Cash / CDs / Etc.5% of total ($50k)
Ally HYSA 30%
IBonds 70%
Breakdowns
Stock%79.7%
Bonds%18.9%
Cash% 1.5%
Foreign Stock%23.0%
Anticipated annual contributions (~$110k/yr+match)
$30.5k 401k pretax + ~$5k match: 100% to Total Bond fund
$36.5k 401k mega-backdoor Roth: 65% international, 25% S&P, 10% Russell 2500
$8k Roth IRA [Already contributed for 2024]
$3,650 HSA (+$500 from employer)
$10k to I-Bonds
~$20k taxable VTSAX (TSM)
$2k to savings / T-Bills
I'm eligible for an immediate (reduced) pension with no COLA. The value at age 55, in today's dollars, should be about $28k / yr. It comes with access to retiree medical at slightly higher than the employee cost, which to me makes claiming the pension immediately at retirement the obvious choice.
SS Estimates: About $26k / $37k / $46k @ 62 / 67 / 70 [Assumes I quit at 55, slightly higher if I work longer]
Statistics: Posted by Grogs — Sun Jun 02, 2024 3:20 pm — Replies 1 — Views 313