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Old 09-23-2020, 11:56pm   #1
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Default Retiring - Looking for Useful Money Management Advice

I know, a big ask for the majority of you f'ers

So I decided to pull the plug about two years before plan. Just don't enjoy going to work any more for a bunch of reasons, and have the ability to walk away.

I am one of those freaks that still has a defined benefit retirement plan. We could live on it, but at a much different lifestyle than we do now. We also have a home that we're pretty far positive on as far as mortgage. We also have saved via corporate plans for the majority of our careers.

We have a large chunk in a 2025 fund.
We have a large chunk in large cap's - Contrafund has been good to us.
We have a medium chunk in Bonds/Money

I am not going to spend more than about 10 minutes a week on managing funds; I'm a set and forget kind of investor. My current inclination is to leave things as they are, but I do worry about the large chunk in Contrafund even though I see that as a minimum 5-10 year need that we could ride out if necessary.

I'm also willing to get "real" advice, but I'm skeptical of advice after some of the biased, fee-based "advice" I've received in the past. Recommendations on sound, objective sources is appreciated.

Please don't recommend annuity anywhere in your post, as I don't want the thread to get locked

Yeah, I know, first world problems. But they're real I tell you, they're real!
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Old 09-24-2020, 12:06am   #2
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Just keep working. You'll drown in health care premiums.
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Old 09-24-2020, 1:27am   #3
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Just keep working. You'll drown in health care premiums.
It will be an increased, but shared cost as part of retirement. As I said, I am probably a freak at this point. I literally joined the company in late 1992 just prior to them rolling back the defined plans, which include support for medical.

Not going to work unless they, or someone else offers me something that I really want to do. I have incredible fishing, biking, golf and other stuff very nearby. Not going to be an issue of what to do.
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Old 09-24-2020, 8:05am   #4
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4%
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Old 09-24-2020, 10:06am   #5
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4%
That would be so great...

"Safe" stuff right now is down in the 1% range and won't keep up in the long run.
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Old 09-24-2020, 10:42am   #6
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That would be so great...

"Safe" stuff right now is down in the 1% range and won't keep up in the long run.
ok, here are my credentials:

retired in 2009, aged 45. both wife and I had careers and savings over time. she gets a fixed pension and SS and has a Roth. i'll have an IRA and SS in a few years. we also have savings outside of retirement accounts.

for the last many years, our withdrawal from our accounts has been under 4% consistently.

the easiest thing to do is to adjust your spending to what you have available.

if you put it all in cash, and did not depend on investment gains, then taking 4% per year would last 25 years. 3% would last about 33 years.

if you can manage to get some investment gains, those time periods will be longer.

we try to keep about 12 months of cash in cash, so we are not panic selling when the checkbook runs low.

so your homework is this: total up your assets, see what 4% is, compare that to your average monthly or yearly spending, and see where you are at presently.

we all like nice things, but if the account says otherwise, it's time to scale back a bit.

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Old 09-24-2020, 2:32pm   #7
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I just retired at the end of May 2020 after turning 65. Like you, I had enough of the corporate BS and dealing with travel. I'm currently living off my 401k, and I haven't touched SS yet. I plan to start receiving SS next year in July 2021 which is my full retirement age. I'm taking out $4k/month from the 401k and I receive $3100 take home after fed and state taxes. I also get a pension of $1400/month, but I'm paying medical from my wife and myself, so after that cost, my take home pension is $760/month.

My wife and I have 5 IRA's that we haven't touched yet, and one ROTH.
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Old 09-24-2020, 2:43pm   #8
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some advisors will harp on your taxes, and how they will chew up lots of your savings/income.

well, you will not be paying FICA tax in retirement. if you are in the lower tax brackets, then all capital gains taxes are taxed at 0%! woot. so if you have some investments outside your IRA/ROTH/401k, and they have some capital gains (like you would get in most mutual funds), then you can simply reinvest the gains each year, and pay zero taxes on those gains.

if you simply take money out of savings and pay your bills, then that money too is largely tax free, as you've already paid income taxes on it long ago.

income from SS is taxed by the Feds and most states, as is pension income.

several years ago, we had a lot of medical deductions, so we took those on Sch. A, and the net effect was to greatly lower our income. to the point that the refund check from the state (NM) that year included a flyer advising us that we may qualify for food stamps.

remember, you are taxed on your income, not on your wealth.
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Old 09-24-2020, 3:06pm   #9
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As a person that planned well and took early retirement at age 55 rather than go to 62 (now 75) I had my own ideas.

These are just general irems you fill in your own details.

That consisted of both my wife and I having a good union pension and good SS benefits. Having dam good health insurance as the older you get the more important it is. Having no mortgage to pay makes things much simpler and easier! Last maintaining a good stock portifilo.

Good luck!
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Old 09-24-2020, 9:24pm   #10
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If anyone here wants to earn double digit returns, and monthly payments, send me a PM.

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Old 09-24-2020, 10:23pm   #11
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ok, here are my credentials:

retired in 2009, aged 45. both wife and I had careers and savings over time. she gets a fixed pension and SS and has a Roth. i'll have an IRA and SS in a few years. we also have savings outside of retirement accounts.

for the last many years, our withdrawal from our accounts has been under 4% consistently.

the easiest thing to do is to adjust your spending to what you have available.

if you put it all in cash, and did not depend on investment gains, then taking 4% per year would last 25 years. 3% would last about 33 years.

if you can manage to get some investment gains, those time periods will be longer.

we try to keep about 12 months of cash in cash, so we are not panic selling when the checkbook runs low.

so your homework is this: total up your assets, see what 4% is, compare that to your average monthly or yearly spending, and see where you are at presently.

we all like nice things, but if the account says otherwise, it's time to scale back a bit.

Ahh, I thought you were talking about 4% returns. 4% withdrawal is a whole nother stragedy. Need to look at that. Thanks!
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Old 09-24-2020, 10:24pm   #12
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If anyone here wants to earn double digit returns, and monthly payments, send me a PM.

Pic's of wife first
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Old 09-24-2020, 10:42pm   #13
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some advisors will harp on your taxes, and how they will chew up lots of your savings/income.

well, you will not be paying FICA tax in retirement. if you are in the lower tax brackets, then all capital gains taxes are taxed at 0%! woot. so if you have some investments outside your IRA/ROTH/401k, and they have some capital gains (like you would get in most mutual funds), then you can simply reinvest the gains each year, and pay zero taxes on those gains.

if you simply take money out of savings and pay your bills, then that money too is largely tax free, as you've already paid income taxes on it long ago.

income from SS is taxed by the Feds and most states, as is pension income.

several years ago, we had a lot of medical deductions, so we took those on Sch. A, and the net effect was to greatly lower our income. to the point that the refund check from the state (NM) that year included a flyer advising us that we may qualify for food stamps.

remember, you are taxed on your income, not on your wealth.
Good stuff DAB! We will not take SS until later (yes I know it may not be there for us) but will likely need to tap the retirement accounts. Fact is that we could transfer all to savings, go by the 4% rule, and be good.

However, I'm looking for something that does somewhat better than just drawing down on our savings.

So, should we just sink it in "safe" investments, buy a crap load of money products like short/mid/long term CD's, or continue on some other investment strategy?
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Old 09-24-2020, 11:37pm   #14
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You did not mention your age, but I made a mistake in signing up for Medicare part B the same month I retired at 65. Why? They base your cost for part B based on your earnings. So I'm currently paying more than I really should, but this may change next year. If you don't take part B at 65, they will add additional penalties for a late enrollment.
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Old 09-25-2020, 8:53am   #15
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Medicare part A; a no brainer if you still carry medical insurance like you've had before. I will be signing up for "A" this weekend.
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Old 09-25-2020, 9:34am   #16
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Good stuff DAB! We will not take SS until later (yes I know it may not be there for us) but will likely need to tap the retirement accounts. Fact is that we could transfer all to savings, go by the 4% rule, and be good.

However, I'm looking for something that does somewhat better than just drawing down on our savings.

So, should we just sink it in "safe" investments, buy a crap load of money products like short/mid/long term CD's, or continue on some other investment strategy?
generally speaking, individual stocks can be very risky and very rewarding....and all cash in the bank is very safe, but not very rewarding. everything else is somewhere in between those two.

only you, perhaps with the help of an investment advisor, can determine the level of risk you are willing to accept to obtain the results/gains you desire.

without knowing anything, i'd bet the first advisor you asked would suggest something along the lines of 40-60% in diversified stock mutual funds (3-4 funds), with the rest in bond funds and cash (say no more than 10% in cash).

and that's a very common answer you get to the basic question of "how should I invest my money?"

long ago, i mentioned to our advisor that if you needed 50k a year, and you had a time horizon of 40 years, well, if you got to 2M, you'd be done investing. he got a horrified look on his face! my point was, the closer you get to reaching your investing goal, the less risk you have to take.

so go figure out your expenses and work backwards to figure out how much you should have saved/invested.

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Old 09-25-2020, 8:08pm   #17
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Pic's of wife first
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Old 09-26-2020, 1:22am   #18
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You did not mention your age, but I made a mistake in signing up for Medicare part B the same month I retired at 65. Why? They base your cost for part B based on your earnings. So I'm currently paying more than I really should, but this may change next year. If you don't take part B at 65, they will add additional penalties for a late enrollment.
Company will "force" me into medicare at 65 to reduce their costs. I think we'll be ok, as it will likely decrease my contribution at that time. Wishful thinking FTMFW!
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Old 09-26-2020, 1:25am   #19
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