So I’m contemplating early retirement (somewhat forced due to a layoff). I have over a million in various traditional accounts. Here’s what I’m thinking:
Annual expenses 110,000 (98k fixed, 12k for vacations and random one off expenses like major repairs)
Taxable brokerage balance 1,300,000 (265,000 in money market)
Roth balance 300,000
Traditional balance 1,100,000
Age 40
If i start converting 40k a year from traditional to roth, i think i’ll have about 60k a year in “income” from dividends, interest, capital gains, and the conversion. That’ll keep me in a low enough bracket to get substantial ACA subsidies but nearly all of my monthly expenses will be covered by my brokerage balance.
By year 5, I can start drawing on the ladder to reduce the draw down of the brokerage account.
Does this seem logical? Is 72t preferable? What are the downsides of this approach?
Annual expenses 110,000 (98k fixed, 12k for vacations and random one off expenses like major repairs)
Taxable brokerage balance 1,300,000 (265,000 in money market)
Roth balance 300,000
Traditional balance 1,100,000
Age 40
If i start converting 40k a year from traditional to roth, i think i’ll have about 60k a year in “income” from dividends, interest, capital gains, and the conversion. That’ll keep me in a low enough bracket to get substantial ACA subsidies but nearly all of my monthly expenses will be covered by my brokerage balance.
By year 5, I can start drawing on the ladder to reduce the draw down of the brokerage account.
Does this seem logical? Is 72t preferable? What are the downsides of this approach?
Statistics: Posted by Meaty — Fri Aug 09, 2024 7:20 am — Replies 3 — Views 270