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The “I want to retire soon” thread (1 Viewer)

My wife and I have a desire to live more of a city life once our kids are all out of the house. We've lived suburban life for a long time and we both look back and wish we had lived in the city before kids. We're nearing that point as our youngest kid is about to graduate HS.

I'm not looking to make the decision that maximizes my financial bottom line, but I also don't want to do anything that causes big damages. Here are some things that impact the financial aspect of this.

I have no concerns about retirement. I can retire in 8 years. I fully expect my pension and TSP to provide solid income. Add in SS for me and my wife and a small 401K from my wife and we're good there.

We own a house. I'd say we currently have at least $350k in equity. We have a sub-3% interest rate and our mortgage is under $1700/month. It's a nice financial situation.

An apartment that we'd want will probably be $3,000+.

In order to keep that low interest rate and mortgage, and the tax deduction, we could rent our house. I think that would return around $3,000/month. However, I think there are a ton of things we'd need to improve about the house to make it a good rental, so it would take a while for monthly profits to pay off those things and we'd need to make sure we're prepared for any upcoming big things like a furnace, windows, roof, etc that I know aren't too far off in the future. While I'm comfortable with my retirement picture, we don't have a lot of cash savings. Keeping the house and renting it would also allow us to keep the mortgage interest deduction (although it's value isn't what it used to be with such a high standard deduction) and gains from the housing market.

If we sold the house, that $350k would be under the $500k limit for married capital gains, so it would be ours tax-free (at least from what I understand from my little bit of research). So, the question there becomes what to do with that money. Could that be invested in something that isn't took risky but gives good enough returns to counter what gains we would have seen by keeping it invested in our house? A 5-year CD would give us about $75k gains. But that would be taxable, right? I could split out some of it to fund Roths for both us. My TSP is almost all traditional. I started Roth TSP really late and haven't contributed much to it. My wife is 50+ and I turn 50 at the end of this year. So, we could direct $8k/year into a Roth IRA for my wife and I could do $30k/year through Roth TSP once I turn 50. Are there other good vehicles for tax-free earnings? Another thought I've had is that I could pay land somewhere for retirement, but we don't know where we want to retire. I guess we could even but some kind of vacation home that also serves as an Airbnb, but that sounds like a hassle.

We both really want a lifestyle change. That's the primary motivation. Maybe I've made the mistake of looking at apartments online and getting excited about doing something new. But, even little things like getting new appliances so often has become annoying to me. With apartment life, that $3000 refrigerator can be a vacation instead. That room that needs to be painted can be a nice dinner out.

Anyway, interested in any thoughts. I lean towards selling the house and investing the capital gains, but I think the idea of the importance of home ownership is so strong that it makes it seem like a horrible decision. Am I crazy? Anyone else done something like this? In reality, we probably aren't ready to do this once our youngest starts college this Fall because we have our middle child who still have a couple years of college who will also need a place to live during breaks. The difference between a 2BR and 3BR apartment is pretty big and makes this a lot less likely. Our oldest is about to graduate college and is engaged, so we don't need a room for her. We've talked about how we can just get kids nearby hotel rooms when they come visit, which is much different than them needing a place to live for a couple months.
Sounds like you need to split the baby - keep the house and rent for a year. Then see if it's what you really want before you sell.
I'd agree with this. Just like when moving to a new area, you really need to immerse yourself for an extended period of item before knowing for sure that you'll truly like it. What city were you thinking?
We'd be staying in the DC area where we've lived our entire lives, so not as big as if we moved across country. But, it is a good point that we could be one year into it and hate it and then not have a house to go back to. I've also been looking at an apartment building in a urbanish area near us in the suburbs. I don't think there'd be as much risk moving into that place than if we moved into DC.
That's at least what I'd do. I'd rather eat 6 months of rent to ensure I was making the right decision. I like to visit the city (nyc in my case) and the thought had crossed my mind about living there, but I came to the conclusion that I'd rather just visit a couple of times a month. Besides nearly twice the living costs, the idea of living in an apartment where you have less space and privacy and now you're dealing with a landlord and neighbors didn't seem worth it.
Thanks. I definitely appreciate you bringing this up because "I may not like it" never even crossed my mind and it's something I should consider.
 
Ha, the idea of renting the house for a while and selling later never even crossed my mind. Makes sense, though. Once I sell, I can't change my mind.

Your second paragraph is basically Greek to me. I've always kept my investments simple so I have no familiarity with muni bonds. Why are they the only real way to get tax free earnings here?
Yeah - you sell and the money is in taxable space. There are very limited options for getting income off of that stash without paying the tax man. Municipal bonds are the only one that I know and there are many flavors (complex field).

The other two options I noted are Vanguard funds. Wellington is 67/33 stocks/bonds. Wellesley is 33/67 stocks/bonds. Not sure how tax efficient they are, but they are touted as stable income type funds. And they have very good reputations.

All in all, though, if you do sell and invest that 300k you will generate money for the tax man to get his share. Realistically I don't see a way around that.
 
My wife and I have a desire to live more of a city life once our kids are all out of the house. We've lived suburban life for a long time and we both look back and wish we had lived in the city before kids. We're nearing that point as our youngest kid is about to graduate HS.

I'm not looking to make the decision that maximizes my financial bottom line, but I also don't want to do anything that causes big damages. Here are some things that impact the financial aspect of this.

I have no concerns about retirement. I can retire in 8 years. I fully expect my pension and TSP to provide solid income. Add in SS for me and my wife and a small 401K from my wife and we're good there.

We own a house. I'd say we currently have at least $350k in equity. We have a sub-3% interest rate and our mortgage is under $1700/month. It's a nice financial situation.

An apartment that we'd want will probably be $3,000+.

In order to keep that low interest rate and mortgage, and the tax deduction, we could rent our house. I think that would return around $3,000/month. However, I think there are a ton of things we'd need to improve about the house to make it a good rental, so it would take a while for monthly profits to pay off those things and we'd need to make sure we're prepared for any upcoming big things like a furnace, windows, roof, etc that I know aren't too far off in the future. While I'm comfortable with my retirement picture, we don't have a lot of cash savings. Keeping the house and renting it would also allow us to keep the mortgage interest deduction (although it's value isn't what it used to be with such a high standard deduction) and gains from the housing market.

If we sold the house, that $350k would be under the $500k limit for married capital gains, so it would be ours tax-free (at least from what I understand from my little bit of research). So, the question there becomes what to do with that money. Could that be invested in something that isn't took risky but gives good enough returns to counter what gains we would have seen by keeping it invested in our house? A 5-year CD would give us about $75k gains. But that would be taxable, right? I could split out some of it to fund Roths for both us. My TSP is almost all traditional. I started Roth TSP really late and haven't contributed much to it. My wife is 50+ and I turn 50 at the end of this year. So, we could direct $8k/year into a Roth IRA for my wife and I could do $30k/year through Roth TSP once I turn 50. Are there other good vehicles for tax-free earnings? Another thought I've had is that I could pay land somewhere for retirement, but we don't know where we want to retire. I guess we could even but some kind of vacation home that also serves as an Airbnb, but that sounds like a hassle.

We both really want a lifestyle change. That's the primary motivation. Maybe I've made the mistake of looking at apartments online and getting excited about doing something new. But, even little things like getting new appliances so often has become annoying to me. With apartment life, that $3000 refrigerator can be a vacation instead. That room that needs to be painted can be a nice dinner out.

Anyway, interested in any thoughts. I lean towards selling the house and investing the capital gains, but I think the idea of the importance of home ownership is so strong that it makes it seem like a horrible decision. Am I crazy? Anyone else done something like this? In reality, we probably aren't ready to do this once our youngest starts college this Fall because we have our middle child who still have a couple years of college who will also need a place to live during breaks. The difference between a 2BR and 3BR apartment is pretty big and makes this a lot less likely. Our oldest is about to graduate college and is engaged, so we don't need a room for her. We've talked about how we can just get kids nearby hotel rooms when they come visit, which is much different than them needing a place to live for a couple months.
Sounds like you need to split the baby - keep the house and rent for a year. Then see if it's what you really want before you sell.
I'd agree with this. Just like when moving to a new area, you really need to immerse yourself for an extended period of item before knowing for sure that you'll truly like it. What city were you thinking?
We'd be staying in the DC area where we've lived our entire lives, so not as big as if we moved across country. But, it is a good point that we could be one year into it and hate it and then not have a house to go back to. I've also been looking at an apartment building in a urbanish area near us in the suburbs. I don't think there'd be as much risk moving into that place than if we moved into DC.
That's at least what I'd do. I'd rather eat 6 months of rent to ensure I was making the right decision. I like to visit the city (nyc in my case) and the thought had crossed my mind about living there, but I came to the conclusion that I'd rather just visit a couple of times a month. Besides nearly twice the living costs, the idea of living in an apartment where you have less space and privacy and now you're dealing with a landlord and neighbors didn't seem worth it.
Thanks. I definitely appreciate you bringing this up because "I may not like it" never even crossed my mind and it's something I should consider.
There is a whole litany of stuff that sounds better in my head.
 
Ha, the idea of renting the house for a while and selling later never even crossed my mind. Makes sense, though. Once I sell, I can't change my mind.

Your second paragraph is basically Greek to me. I've always kept my investments simple so I have no familiarity with muni bonds. Why are they the only real way to get tax free earnings here?
Yeah - you sell and the money is in taxable space. There are very limited options for getting income off of that stash without paying the tax man. Municipal bonds are the only one that I know and there are many flavors (complex field).

The other two options I noted are Vanguard funds. Wellington is 67/33 stocks/bonds. Wellesley is 33/67 stocks/bonds. Not sure how tax efficient they are, but they are touted as stable income type funds. And they have very good reputations.

All in all, though, if you do sell and invest that 300k you will generate money for the tax man to get his share. Realistically I don't see a way around that.
Why wouldn't funding a Roth be tax free on the earnings? I realize it would take a while to get a good chunk of the $300k into a Roth and wherever it is in the meantime would be taxed. Are you mainly saying that there really isn't a way to keep the vast majority of it out of taxable space right off the bat? So, there's probably no way to avoid ANY taxes on earnings. Do I have that right?
 
Ha, the idea of renting the house for a while and selling later never even crossed my mind. Makes sense, though. Once I sell, I can't change my mind.

Your second paragraph is basically Greek to me. I've always kept my investments simple so I have no familiarity with muni bonds. Why are they the only real way to get tax free earnings here?
Yeah - you sell and the money is in taxable space. There are very limited options for getting income off of that stash without paying the tax man. Municipal bonds are the only one that I know and there are many flavors (complex field).

The other two options I noted are Vanguard funds. Wellington is 67/33 stocks/bonds. Wellesley is 33/67 stocks/bonds. Not sure how tax efficient they are, but they are touted as stable income type funds. And they have very good reputations.

All in all, though, if you do sell and invest that 300k you will generate money for the tax man to get his share. Realistically I don't see a way around that.
Why wouldn't funding a Roth be tax free on the earnings? I realize it would take a while to get a good chunk of the $300k into a Roth and wherever it is in the meantime would be taxed. Are you mainly saying that there really isn't a way to keep the vast majority of it out of taxable space right off the bat? So, there's probably no way to avoid ANY taxes on earnings. Do I have that right?
Sure - Roth is a way to go. Assuming you qualify (have income, don't have too much income), that 300k will go into a Roth 7-8k at a time per person. If you assume that you and the wife can fund a Roth you're talking ~19 years to get it all in there. And if it grows in taxable you may never get it all in there. So part of the solution, but realistically not all of it.
 
Ha, the idea of renting the house for a while and selling later never even crossed my mind. Makes sense, though. Once I sell, I can't change my mind.

Your second paragraph is basically Greek to me. I've always kept my investments simple so I have no familiarity with muni bonds. Why are they the only real way to get tax free earnings here?
Yeah - you sell and the money is in taxable space. There are very limited options for getting income off of that stash without paying the tax man. Municipal bonds are the only one that I know and there are many flavors (complex field).

The other two options I noted are Vanguard funds. Wellington is 67/33 stocks/bonds. Wellesley is 33/67 stocks/bonds. Not sure how tax efficient they are, but they are touted as stable income type funds. And they have very good reputations.

All in all, though, if you do sell and invest that 300k you will generate money for the tax man to get his share. Realistically I don't see a way around that.
Why wouldn't funding a Roth be tax free on the earnings? I realize it would take a while to get a good chunk of the $300k into a Roth and wherever it is in the meantime would be taxed. Are you mainly saying that there really isn't a way to keep the vast majority of it out of taxable space right off the bat? So, there's probably no way to avoid ANY taxes on earnings. Do I have that right?
Sure - Roth is a way to go. Assuming you qualify (have income, don't have too much income), that 300k will go into a Roth 7-8k at a time per person. If you assume that you and the wife can fund a Roth you're talking ~19 years to get it all in there. And if it grows in taxable you may never get it all in there. So part of the solution, but realistically not all of it.
BTW it's absolutely fine to have a decent chunk in taxable. If you retire before Medicare you use this pot to control your taxable income for ACA purposes. And if you retire before you can withdraw without from IRAs/401ks penalty that it funds your life. So it isn't all bad - in my perfect world I'd like to have 1/3 each in IRA, Roth, and taxable. (I don't, but it'll work out!)
 
As you guys approach retirement or have entered into it, what would you deem as an acceptable return post fees from a CFP under an AUM model? What’s the right benchmark? Assume reduced risk but some growth
 
Ha, the idea of renting the house for a while and selling later never even crossed my mind. Makes sense, though. Once I sell, I can't change my mind.

Your second paragraph is basically Greek to me. I've always kept my investments simple so I have no familiarity with muni bonds. Why are they the only real way to get tax free earnings here?
Yeah - you sell and the money is in taxable space. There are very limited options for getting income off of that stash without paying the tax man. Municipal bonds are the only one that I know and there are many flavors (complex field).

The other two options I noted are Vanguard funds. Wellington is 67/33 stocks/bonds. Wellesley is 33/67 stocks/bonds. Not sure how tax efficient they are, but they are touted as stable income type funds. And they have very good reputations.

All in all, though, if you do sell and invest that 300k you will generate money for the tax man to get his share. Realistically I don't see a way around that.
Why wouldn't funding a Roth be tax free on the earnings? I realize it would take a while to get a good chunk of the $300k into a Roth and wherever it is in the meantime would be taxed. Are you mainly saying that there really isn't a way to keep the vast majority of it out of taxable space right off the bat? So, there's probably no way to avoid ANY taxes on earnings. Do I have that right?
Sure - Roth is a way to go. Assuming you qualify (have income, don't have too much income), that 300k will go into a Roth 7-8k at a time per person. If you assume that you and the wife can fund a Roth you're talking ~19 years to get it all in there. And if it grows in taxable you may never get it all in there. So part of the solution, but realistically not all of it.
BTW it's absolutely fine to have a decent chunk in taxable. If you retire before Medicare you use this pot to control your taxable income for ACA purposes. And if you retire before you can withdraw without from IRAs/401ks penalty that it funds your life. So it isn't all bad - in my perfect world I'd like to have 1/3 each in IRA, Roth, and taxable. (I don't, but it'll work out!)
Yeah, I was just thinking about that. My mind got on a "tax free" track so it had me thinking any type of taxed investment here would be "bad", but that's obviously not necessarily true. I have very little in tax-free, so I thought this could be a route to beef that up.

I think what's really important in this hypothetical is knowing when I'd want to use the money again, which gets back to the previous conversation about being sure how much I'd like a change. I'm pretty confident we'd like the change, but I'm not sure how long until we'd ready to change again and potentially buy a house. For sure by retirement, but who knows if we'd want to do something earlier. All of that could point back to renting out the house.
 
@dgreen some good advice here already. I tend to default towards whichever options give me the most flexibility and choice going forward, so I would agree that the suggestion of keeping the house and trying the city life for a year could be a good choice. That also lets you actually find out if you are going to like that new lifestyle, while giving you a bit of a safety blanket to fall back on with the house. There is a lot of talk in the retirement planning community about the importance of testing your assumptions and trying to build out as much of your retirement lifestyle as you can in the years going up to but before you pull the plug. That could be starting a new gym routine (which I'm battling through injuries to do!), trying pickeleball, picking up a musical instrument, taking up bridge or some other social games, spending a month really "living" (not vacationing) in a place you are considering moving to, building out your social network outside of work, all of the kind of stuff that has very little to do with the financial aspects of retirement. We can't all do that while still working, or maybe more accurately we probably can't do all of that. But it's worth exploring.

If you do sell the house and end up with a chunk of cash that you don't want to roll into another property, most things you do with that in an attempt to generate returns are likely to have tax consequences. I would agree that it's worth stuffing as much as you can into Roth accounts in your 50s and early 60s, but as @Sand noted it'll be tough to get it all in there. Will there be a year or two window after retirement but before all of your guaranteed income sources (pensions, SS) are turned on when you may be living off of savings and your income will be low? if so, you could look into doing some Roth conversions.

I'm just finishing up Christine Benz's book "How to Retire: 20 lessons for a happy, successful, and wealthy retirement". Each of the 20 chapters is an "interview" with a different expert in the field, so there are a wide range of topics and viewpoints. She's also been all over the podcast circuit since the book came out if you want to check that out first (I'm literally listening to her on the Catching up to FI podcast as I type this). I think for people starting to think more seriously and plan for retirement, it's a great starting point to get you thinking and widen what you're thinking about.
 
@dgreen some good advice here already. I tend to default towards whichever options give me the most flexibility and choice going forward, so I would agree that the suggestion of keeping the house and trying the city life for a year could be a good choice. That also lets you actually find out if you are going to like that new lifestyle, while giving you a bit of a safety blanket to fall back on with the house. There is a lot of talk in the retirement planning community about the importance of testing your assumptions and trying to build out as much of your retirement lifestyle as you can in the years going up to but before you pull the plug. That could be starting a new gym routine (which I'm battling through injuries to do!), trying pickeleball, picking up a musical instrument, taking up bridge or some other social games, spending a month really "living" (not vacationing) in a place you are considering moving to, building out your social network outside of work, all of the kind of stuff that has very little to do with the financial aspects of retirement. We can't all do that while still working, or maybe more accurately we probably can't do all of that. But it's worth exploring.

If you do sell the house and end up with a chunk of cash that you don't want to roll into another property, most things you do with that in an attempt to generate returns are likely to have tax consequences. I would agree that it's worth stuffing as much as you can into Roth accounts in your 50s and early 60s, but as @Sand noted it'll be tough to get it all in there. Will there be a year or two window after retirement but before all of your guaranteed income sources (pensions, SS) are turned on when you may be living off of savings and your income will be low? if so, you could look into doing some Roth conversions.

I'm just finishing up Christine Benz's book "How to Retire: 20 lessons for a happy, successful, and wealthy retirement". Each of the 20 chapters is an "interview" with a different expert in the field, so there are a wide range of topics and viewpoints. She's also been all over the podcast circuit since the book came out if you want to check that out first (I'm literally listening to her on the Catching up to FI podcast as I type this). I think for people starting to think more seriously and plan for retirement, it's a great starting point to get you thinking and widen what you're thinking about.
Thanks. Yeah, I'm definitely picking up on the need to have options and trying things out.

I think to invest a large chunk of cash from the house, I'd either have to get some really good returns to counter the taxes I'll have to pay or be confident that I don't want the money for a while. That's something I need to think about.

I don't think I'll have those years between retirement and income sources that you ask about. Just to be transparent, by age 57 (my MRA) I estimate my pension will be at least $70k/year and the federal government offers a SS supplement for feds who retire before the age of 62 which will probably be around $30k until the age of 62. So, the pension and the supplement are things I'll definitely get right away and start at $100k/year (pension will have COLA increases; I don't think the SS supplement increases). If we think we can live off that for a while, we'll do that. But I think it would be safe to start taking some from my TSP if we want more. I anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k. The only things we'll have to wait on are actual SS. My wife is a couple years older than me, so she can start before me.
 
Just to be transparent, by age 57 (my MRA) I estimate my pension will be at least $70k/year
Seems quite high for an estimate for just a Federal pension, but don't know your exact situation.
You should log into GRB and have them create an actual estimate that would be 'your truth' for future planning.

DC area + COLA for GS-15, step 10 = $195,200 (no bonus for medical/IT/overtime or shift differential type situations in retirement?).
Worked 30 years with the 1.1% multiplier (sick leave years not added here, but possible) = 33% = 64k
And assuming the MRA doesn't cost you a reduction of 25% for 5 years under age 62. You mentioned the supplemental, so assuming 30+ years and no reduction.

And subtract any automatic health/vision/dental/life insurance allotments you will have taken out of the retirement check.
Then remember to take out the appropriate taxes for whichever tax bracket you'll fall under filing joint. Assume 22-24%

If the assumptions of making the highest possible GS Step in a high COLA area with a long career and no early penalties are accurate?
Righty-o chap. Take that yearly free money to not work. Well done I say... well done!
 
As you guys approach retirement or have entered into it, what would you deem as an acceptable return post fees from a CFP under an AUM model? What’s the right benchmark? Assume reduced risk but some growth
It depends on your asset allocation and why you hired your CFP. Primarily to manage money and to beat a benchmark? If so that's easy, they have something they're benchmarked against, and they beat it or they don't. But for most it's a combination of comprehensive financial and tax planning and peace of mind.

Like I said upthread I attended my parents' meeting with their FA this week, who operates under an AUM model. He started off by covering their risk tolerance, then pulled up numbers showing that the suggested macro allocation be around 50/50 stocks/bonds for them. Based on that he showed them a range of expected returns with an average of a little over 5%. (Portfoliocharts.com shows the same thing, 5.3% average return of 50% US LCB and 50% 10 year treasuries). All of the modeling after that was then based on that average return of 5 and change, minus the AUM fee. My personal opinion is that this is overly conservative for them considering their sources of guaranteed income compared to their expense level and their age, that it fits their risk tolerance but they actually have much higher risk capacity. But I didn't share that with them. It's what they are comfortable with, and that type of portfolio and return should more than meet their needs.

What's tricky is how to gauge the value of that AUM fee. Is that being made up via tax optimization? Higher returns via stock/fund picking? Are they providing other services as part of that fee that you might otherwise pay someone else for? A good planner should have several levers to pull to deliver value. That said, I'm still not a fan of the AUM model as the amount of assets isn't necessarily correlated with the complexity of the plan, and it has some inherent conflicts. I'd much prefer a fee-only model, even if they are managing investments, and there are more and more of those out there.

tl;dr - I'd run your asset allocation (or model different scenarios) through a tool like Portfoliocharts and ensure it aligns with what your CFP is telling you and delivering over time. Of course that last part is the rub - we almost never have an "average" year. So you'll only really know looking back over a decade or three to see how it worked out.
 
Just to be transparent, by age 57 (my MRA) I estimate my pension will be at least $70k/year
Seems quite high for an estimate for just a Federal pension, but don't know your exact situation.
You should log into GRB and have them create an actual estimate that would be 'your truth' for future planning.

DC area + COLA for GS-15, step 10 = $195,200 (no bonus for medical/IT/overtime or shift differential type situations in retirement?).
Worked 30 years with the 1.1% multiplier (sick leave years not added here, but possible) = 33% = 64k
And assuming the MRA doesn't cost you a reduction of 25% for 5 years under age 62. You mentioned the supplemental, so assuming 30+ years and no reduction.

And subtract any automatic health/vision/dental/life insurance allotments you will have taken out of the retirement check.
Then remember to take out the appropriate taxes for whichever tax bracket you'll fall under filing joint. Assume 22-24%

If the assumptions of making the highest possible GS Step in a high COLA area with a long career and no early penalties are accurate?
Righty-o chap. Take that yearly free money to not work. Well done I say... well done!
I am a 14 on track for step 10 by retirement. That’s currently $185k in DC. At 2% increases per year, it will be $212k in seven years. I will have 34 years at age 57. 34% (1.1 multiplier doesn’t kick in until 60 or 62) of $212k is $72k. If I get off my *** and decide to go for a 15, bump that up some.
 
Hmm, if I were to rent out my house, that would be taxable income but also bring a host of tax deductions. I was thinking about all the things I’d need to do to put it up for rent, but maybe a lot of that could be deducted. Of course, this also increases the hassle of renting which I might hate dealing with.
 
Hmm, if I were to rent out my house, that would be taxable income but also bring a host of tax deductions. I was thinking about all the things I’d need to do to put it up for rent, but maybe a lot of that could be deducted. Of course, this also increases the hassle of renting which I might hate dealing with.
Hire a management company. Then at least the only hassle is financial, not having to deal with a clogged toilet at 2:00 AM.
 
Ha, the idea of renting the house for a while and selling later never even crossed my mind. Makes sense, though. Once I sell, I can't change my mind.

Your second paragraph is basically Greek to me. I've always kept my investments simple so I have no familiarity with muni bonds. Why are they the only real way to get tax free earnings here?
Yeah - you sell and the money is in taxable space. There are very limited options for getting income off of that stash without paying the tax man. Municipal bonds are the only one that I know and there are many flavors (complex field).

The other two options I noted are Vanguard funds. Wellington is 67/33 stocks/bonds. Wellesley is 33/67 stocks/bonds. Not sure how tax efficient they are, but they are touted as stable income type funds. And they have very good reputations.

All in all, though, if you do sell and invest that 300k you will generate money for the tax man to get his share. Realistically I don't see a way around that.
Why wouldn't funding a Roth be tax free on the earnings? I realize it would take a while to get a good chunk of the $300k into a Roth and wherever it is in the meantime would be taxed. Are you mainly saying that there really isn't a way to keep the vast majority of it out of taxable space right off the bat? So, there's probably no way to avoid ANY taxes on earnings. Do I have that right?
Sure - Roth is a way to go. Assuming you qualify (have income, don't have too much income), that 300k will go into a Roth 7-8k at a time per person. If you assume that you and the wife can fund a Roth you're talking ~19 years to get it all in there. And if it grows in taxable you may never get it all in there. So part of the solution, but realistically not all of it.
BTW it's absolutely fine to have a decent chunk in taxable. If you retire before Medicare you use this pot to control your taxable income for ACA purposes. And if you retire before you can withdraw without from IRAs/401ks penalty that it funds your life. So it isn't all bad - in my perfect world I'd like to have 1/3 each in IRA, Roth, and taxable. (I don't, but it'll work out!)
Mega backdoor Roth is the only way, if after tax 401k is availble to him working 8 more years. Send your whole paycheck there and pay yourself with the house money to live off of instead.
 
As you guys approach retirement or have entered into it, what would you deem as an acceptable return post fees from a CFP under an AUM model? What’s the right benchmark? Assume reduced risk but some growth
Likely not using a CFP. If I did it wouldn't be AUM. I'm driving my own bus so I know who to blame if it doesn't work out. I might pay a couple thousand a year for a guy to review my stuff and to answer questions. That's what I did prior to retirement, paid for by my company.
 
Just to be transparent, by age 57 (my MRA) I estimate my pension will be at least $70k/year
Seems quite high for an estimate for just a Federal pension, but don't know your exact situation.
You should log into GRB and have them create an actual estimate that would be 'your truth' for future planning.

DC area + COLA for GS-15, step 10 = $195,200 (no bonus for medical/IT/overtime or shift differential type situations in retirement?).
Worked 30 years with the 1.1% multiplier (sick leave years not added here, but possible) = 33% = 64k
And assuming the MRA doesn't cost you a reduction of 25% for 5 years under age 62. You mentioned the supplemental, so assuming 30+ years and no reduction.

And subtract any automatic health/vision/dental/life insurance allotments you will have taken out of the retirement check.
Then remember to take out the appropriate taxes for whichever tax bracket you'll fall under filing joint. Assume 22-24%

If the assumptions of making the highest possible GS Step in a high COLA area with a long career and no early penalties are accurate?
Righty-o chap. Take that yearly free money to not work. Well done I say... well done!
I am a 14 on track for step 10 by retirement. That’s currently $185k in DC. At 2% increases per year, it will be $212k in seven years. I will have 34 years at age 57. 34% (1.1 multiplier doesn’t kick in until 60 or 62) of $212k is $72k. If I get off my *** and decide to go for a 15, bump that up some.
Ah, projecting increases. Just be a little wary of that.
Remember the 0% years? The Obama x2 terms and Trump term were low.
Biden's historic bump ups can skew the numbers as outliers - may want to skip them in your averages/calculations. Just to be safe/realistic.
https://www.generalschedule.org/raise <--- 2nd column

Your pension looks even better if you aren't tied to DC in retirement. Up/down the coast and you gain money. Move westward and gain even more until you hit the other coast of course. Ex-Pat... live like a king and queen.
 
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Just to be transparent, by age 57 (my MRA) I estimate my pension will be at least $70k/year
Seems quite high for an estimate for just a Federal pension, but don't know your exact situation.
You should log into GRB and have them create an actual estimate that would be 'your truth' for future planning.

DC area + COLA for GS-15, step 10 = $195,200 (no bonus for medical/IT/overtime or shift differential type situations in retirement?).
Worked 30 years with the 1.1% multiplier (sick leave years not added here, but possible) = 33% = 64k
And assuming the MRA doesn't cost you a reduction of 25% for 5 years under age 62. You mentioned the supplemental, so assuming 30+ years and no reduction.

And subtract any automatic health/vision/dental/life insurance allotments you will have taken out of the retirement check.
Then remember to take out the appropriate taxes for whichever tax bracket you'll fall under filing joint. Assume 22-24%

If the assumptions of making the highest possible GS Step in a high COLA area with a long career and no early penalties are accurate?
Righty-o chap. Take that yearly free money to not work. Well done I say... well done!
I am a 14 on track for step 10 by retirement. That’s currently $185k in DC. At 2% increases per year, it will be $212k in seven years. I will have 34 years at age 57. 34% (1.1 multiplier doesn’t kick in until 60 or 62) of $212k is $72k. If I get off my *** and decide to go for a 15, bump that up some.
Ah, projecting increases. Just be a little wary of that.
Remember the 0% years? The Obama x2 terms and Trump term were low.
Biden's historic bump ups can skew the numbers as outliers - may want to skip them in your averages/calculations. Just to be safe/realistic.
https://www.generalschedule.org/raise <--- 2nd column

Your pension looks even better if you aren't tied to DC in retirement. Up/down the coast and you gain money. Move westward and gain even more until you hit the other coast of course. Ex-Pat... live like a king and queen.
We'll see. I don't think 2% is overly optimistic. Keep in mind those percentages in that link represent the base increase and exclude the additional locality increases. For example, this year had a base increase of 1.7% but the DC area ended up with a 2.22% increase. For me, with 34 years of service by age 57, to get to a $70k pension, I need DC to average a 1.6% increase per year.
 
Ha, the idea of renting the house for a while and selling later never even crossed my mind. Makes sense, though. Once I sell, I can't change my mind.

Your second paragraph is basically Greek to me. I've always kept my investments simple so I have no familiarity with muni bonds. Why are they the only real way to get tax free earnings here?
Yeah - you sell and the money is in taxable space. There are very limited options for getting income off of that stash without paying the tax man. Municipal bonds are the only one that I know and there are many flavors (complex field).

The other two options I noted are Vanguard funds. Wellington is 67/33 stocks/bonds. Wellesley is 33/67 stocks/bonds. Not sure how tax efficient they are, but they are touted as stable income type funds. And they have very good reputations.

All in all, though, if you do sell and invest that 300k you will generate money for the tax man to get his share. Realistically I don't see a way around that.
Why wouldn't funding a Roth be tax free on the earnings? I realize it would take a while to get a good chunk of the $300k into a Roth and wherever it is in the meantime would be taxed. Are you mainly saying that there really isn't a way to keep the vast majority of it out of taxable space right off the bat? So, there's probably no way to avoid ANY taxes on earnings. Do I have that right?
Sure - Roth is a way to go. Assuming you qualify (have income, don't have too much income), that 300k will go into a Roth 7-8k at a time per person. If you assume that you and the wife can fund a Roth you're talking ~19 years to get it all in there. And if it grows in taxable you may never get it all in there. So part of the solution, but realistically not all of it.
BTW it's absolutely fine to have a decent chunk in taxable. If you retire before Medicare you use this pot to control your taxable income for ACA purposes. And if you retire before you can withdraw without from IRAs/401ks penalty that it funds your life. So it isn't all bad - in my perfect world I'd like to have 1/3 each in IRA, Roth, and taxable. (I don't, but it'll work out!)
Mega backdoor Roth is the only way, if after tax 401k is availble to him working 8 more years. Send your whole paycheck there and pay yourself with the house money to live off of instead.
I don't think that's available to me. The government TSP will start allowing Roth transfers in 2026, but I haven't heard anything that allows additional after tax contributions beyond the Tradition and Roth $23,500 (+$7,500) limits.
 
anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k
It sounds like you’re great, but why would you take such a low amount before RMDs and SS? It might make sense to take 2% while you get the supplement and then increase to like 6-8% after 62 and before SS.
 
anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k
It sounds like you’re great, but why would you take such a low amount before RMDs and SS? It might make sense to take 2% while you get the supplement and then increase to like 6-8% after 62 and before SS.
Yeah, agree. I'll likely do more early on. I was just trying to show that I think I'll be fine in retirement.

However, I think I've heard that it might be best to start small to account for the possibility of the worst case scenario of a big down year at the beginning, so that's also been on my mind.
 
anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k
It sounds like you’re great, but why would you take such a low amount before RMDs and SS? It might make sense to take 2% while you get the supplement and then increase to like 6-8% after 62 and before SS.
Yeah, agree. I'll likely do more early on. I was just trying to show that I think I'll be fine in retirement.

However, I think I've heard that it might be best to start small to account for the possibility of the worst case scenario of a big down year at the beginning, so that's also been on my mind.
There’s some value to starting lower but for us, our most expensive retirement years will probably be the first five to ten. We’ll travel more in our 60s, help our kids get started, etc. honestly, we might not need any additional money once we start pulling SS. With over $100k (not inflation adjusted) in pensions and probably $40k in SS. It sounds like you’ll be in a similar situation.
 
anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k
It sounds like you’re great, but why would you take such a low amount before RMDs and SS? It might make sense to take 2% while you get the supplement and then increase to like 6-8% after 62 and before SS.
Yeah, agree. I'll likely do more early on. I was just trying to show that I think I'll be fine in retirement.

However, I think I've heard that it might be best to start small to account for the possibility of the worst case scenario of a big down year at the beginning, so that's also been on my mind.
There’s some value to starting lower but for us, our most expensive retirement years will probably be the first five to ten. We’ll travel more in our 60s, help our kids get started, etc. honestly, we might not need any additional money once we start pulling SS. With over $100k (not inflation adjusted) in pensions and probably $40k in SS. It sounds like you’ll be in a similar situation.
Great points. I would really like to retire at 57, so I might be a little more conservative than I would be if I retired at 60 or 62 but I do agree that our early years should be higher spend and more fun than later years.
 
anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k
It sounds like you’re great, but why would you take such a low amount before RMDs and SS? It might make sense to take 2% while you get the supplement and then increase to like 6-8% after 62 and before SS.
Yeah, agree. I'll likely do more early on. I was just trying to show that I think I'll be fine in retirement.

However, I think I've heard that it might be best to start small to account for the possibility of the worst case scenario of a big down year at the beginning, so that's also been on my mind.

That's exactly what the research behind the 4% rule showed - that's the most you could take out and continue to do so plus inflation if you had the worst case scenario sequence of returns, and never run out of money over a 30 year time frame. The number was actually 4.3%, and the author of that has come out recently and said it's probably more like 5% if you diversify your equity holdings a bit.

So considering 4% is conservative then yes, 2% is waaay conservative.

Have you played around with the tools at portfoliovisualizer? In the Financial Goals section you can model out a multi-stage scenario like yours where both your spending and sources of income can vary over the course of your retirement, and it will show you a range of possible outcomes using Monte Carlo simulations.
 
anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k
It sounds like you’re great, but why would you take such a low amount before RMDs and SS? It might make sense to take 2% while you get the supplement and then increase to like 6-8% after 62 and before SS.
Yeah, agree. I'll likely do more early on. I was just trying to show that I think I'll be fine in retirement.

However, I think I've heard that it might be best to start small to account for the possibility of the worst case scenario of a big down year at the beginning, so that's also been on my mind.

That's exactly what the research behind the 4% rule showed - that's the most you could take out and continue to do so plus inflation if you had the worst case scenario sequence of returns, and never run out of money over a 30 year time frame. The number was actually 4.3%, and the author of that has come out recently and said it's probably more like 5% if you diversify your equity holdings a bit.

So considering 4% is conservative then yes, 2% is waaay conservative.

Have you played around with the tools at portfoliovisualizer? In the Financial Goals section you can model out a multi-stage scenario like yours where both your spending and sources of income can vary over the course of your retirement, and it will show you a range of possible outcomes using Monte Carlo simulations.
Oh, cool. I had heard that the 4% rule was developed for some very specific scenario but I guess I didn't realize that included the possibility of starting off when down years. Like I said, I definitely plan on starting higher than 2%, I just used that as a really low number to say that I'm comfortable even without 4-5%.

Yeah, I've played around with sites like those in the past, but not in a while. I usually lack the finance lingo, so sometimes I have a hard time using those types of sites or reading articles. I think once I realized a few years ago that I should be in good shape, I stopped thinking about it.
 
I feel like half the time you guys are talking over my head in here and I can't keep up. What are some recommendations for good books or websites that walk through the basics of retirement planning?
I liked the "How to Retire" book that @SFBayDuck mentioned. It's not a "Retirement for Dummies" type book, if that's what you're looking for, but each of the interviews gives you something to think about and at least points to things that you should be looking into. You could use it as a jumping-off point if you wanted to do more research on, say, when to take SS.

I'm just finishing up Christine Benz's book "How to Retire: 20 lessons for a happy, successful, and wealthy retirement". Each of the 20 chapters is an "interview" with a different expert in the field, so there are a wide range of topics and viewpoints. She's also been all over the podcast circuit since the book came out if you want to check that out first (I'm literally listening to her on the Catching up to FI podcast as I type this). I think for people starting to think more seriously and plan for retirement, it's a great starting point to get you thinking and widen what you're thinking about.
 
I feel like half the time you guys are talking over my head in here and I can't keep up. What are some recommendations for good books or websites that walk through the basics of retirement planning?

This is a few years old, but I like this blog and he packaged some basics articles together. I haven't gone through these, but Fritz has become pretty respected in the space.

I like Andy Panko's podcast, and if you go back to the very first episodes he starts with the basics with subjects like "How much money do I need to retire?" "What's the 4% rule?" and "What's the difference between tax-deferred, Roth, and normal brokerage accounts?".
 
@dgreen some good advice here already. I tend to default towards whichever options give me the most flexibility and choice going forward, so I would agree that the suggestion of keeping the house and trying the city life for a year could be a good choice. That also lets you actually find out if you are going to like that new lifestyle, while giving you a bit of a safety blanket to fall back on with the house. There is a lot of talk in the retirement planning community about the importance of testing your assumptions and trying to build out as much of your retirement lifestyle as you can in the years going up to but before you pull the plug. That could be starting a new gym routine (which I'm battling through injuries to do!), trying pickeleball, picking up a musical instrument, taking up bridge or some other social games, spending a month really "living" (not vacationing) in a place you are considering moving to, building out your social network outside of work, all of the kind of stuff that has very little to do with the financial aspects of retirement. We can't all do that while still working, or maybe more accurately we probably can't do all of that. But it's worth exploring.

If you do sell the house and end up with a chunk of cash that you don't want to roll into another property, most things you do with that in an attempt to generate returns are likely to have tax consequences. I would agree that it's worth stuffing as much as you can into Roth accounts in your 50s and early 60s, but as @Sand noted it'll be tough to get it all in there. Will there be a year or two window after retirement but before all of your guaranteed income sources (pensions, SS) are turned on when you may be living off of savings and your income will be low? if so, you could look into doing some Roth conversions.

I'm just finishing up Christine Benz's book "How to Retire: 20 lessons for a happy, successful, and wealthy retirement". Each of the 20 chapters is an "interview" with a different expert in the field, so there are a wide range of topics and viewpoints. She's also been all over the podcast circuit since the book came out if you want to check that out first (I'm literally listening to her on the Catching up to FI podcast as I type this). I think for people starting to think more seriously and plan for retirement, it's a great starting point to get you thinking and widen what you're thinking about.
Thanks. Yeah, I'm definitely picking up on the need to have options and trying things out.

I think to invest a large chunk of cash from the house, I'd either have to get some really good returns to counter the taxes I'll have to pay or be confident that I don't want the money for a while. That's something I need to think about.

I don't think I'll have those years between retirement and income sources that you ask about. Just to be transparent, by age 57 (my MRA) I estimate my pension will be at least $70k/year and the federal government offers a SS supplement for feds who retire before the age of 62 which will probably be around $30k until the age of 62. So, the pension and the supplement are things I'll definitely get right away and start at $100k/year (pension will have COLA increases; I don't think the SS supplement increases). If we think we can live off that for a while, we'll do that. But I think it would be safe to start taking some from my TSP if we want more. I anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k. The only things we'll have to wait on are actual SS. My wife is a couple years older than me, so she can start before me.
Holy crap I'm nowhere close. I think all my retirement funds as of 53 equal 600 maybe
 
@dgreen some good advice here already. I tend to default towards whichever options give me the most flexibility and choice going forward, so I would agree that the suggestion of keeping the house and trying the city life for a year could be a good choice. That also lets you actually find out if you are going to like that new lifestyle, while giving you a bit of a safety blanket to fall back on with the house. There is a lot of talk in the retirement planning community about the importance of testing your assumptions and trying to build out as much of your retirement lifestyle as you can in the years going up to but before you pull the plug. That could be starting a new gym routine (which I'm battling through injuries to do!), trying pickeleball, picking up a musical instrument, taking up bridge or some other social games, spending a month really "living" (not vacationing) in a place you are considering moving to, building out your social network outside of work, all of the kind of stuff that has very little to do with the financial aspects of retirement. We can't all do that while still working, or maybe more accurately we probably can't do all of that. But it's worth exploring.

If you do sell the house and end up with a chunk of cash that you don't want to roll into another property, most things you do with that in an attempt to generate returns are likely to have tax consequences. I would agree that it's worth stuffing as much as you can into Roth accounts in your 50s and early 60s, but as @Sand noted it'll be tough to get it all in there. Will there be a year or two window after retirement but before all of your guaranteed income sources (pensions, SS) are turned on when you may be living off of savings and your income will be low? if so, you could look into doing some Roth conversions.

I'm just finishing up Christine Benz's book "How to Retire: 20 lessons for a happy, successful, and wealthy retirement". Each of the 20 chapters is an "interview" with a different expert in the field, so there are a wide range of topics and viewpoints. She's also been all over the podcast circuit since the book came out if you want to check that out first (I'm literally listening to her on the Catching up to FI podcast as I type this). I think for people starting to think more seriously and plan for retirement, it's a great starting point to get you thinking and widen what you're thinking about.
Thanks. Yeah, I'm definitely picking up on the need to have options and trying things out.

I think to invest a large chunk of cash from the house, I'd either have to get some really good returns to counter the taxes I'll have to pay or be confident that I don't want the money for a while. That's something I need to think about.

I don't think I'll have those years between retirement and income sources that you ask about. Just to be transparent, by age 57 (my MRA) I estimate my pension will be at least $70k/year and the federal government offers a SS supplement for feds who retire before the age of 62 which will probably be around $30k until the age of 62. So, the pension and the supplement are things I'll definitely get right away and start at $100k/year (pension will have COLA increases; I don't think the SS supplement increases). If we think we can live off that for a while, we'll do that. But I think it would be safe to start taking some from my TSP if we want more. I anticipate my TSP being over $2m by age 57, so even a small withdrawal of 2% gets another $40k. The only things we'll have to wait on are actual SS. My wife is a couple years older than me, so she can start before me.
Holy crap I'm nowhere close. I think all my retirement funds as of 53 equal 600 maybe
How many years have you been contributing?

I've been contributing for 26 years. I went from a GS 7 to 13 pretty quickly and then spent many years as a 13 and 14, all with DC area pay. I've never maxed contributions and have been 100% stocks the whole time. I've considered my pension to be my "safe" investment so I have always felt comfortable being all stocks.
 
Holy crap I'm nowhere close. I think all my retirement funds as of 53 equal 600 maybe
And you 'could be' further ahead in comparison if your bills/expenditures are nowhere near theirs.

The frugal retiree may look poor, but can have more capital than the big spender.
This. So many variables make comparing yourself to others based on a single number pointless. When do you plan to/want to retire? Are you in HCOL or LCOL area? Will your mortgage be paid off? Do you have pensions or rental properties or other sources of retirement income? Will you make some part time income in retirement or never another dollar ever again?

You always need to start with the expenses side of things. If you only need $50K a year to live comfortably that's a very different story than someone who needs $120K. The first person can probably get by with about $1M at retirement assuming a 30-year time horizon and some SS factoring in. The second person is likely going to need $2.4M to feel comfortable in that same scenario.
 
I feel like half the time you guys are talking over my head in here and I can't keep up. What are some recommendations for good books or websites that walk through the basics of retirement planning?
Step 1 for all this is to really know expenses. That's the 101 part that most folks gloss over and it's the most critical part. From there you can estimate expenses in retirement (subtract a bunch of taxes, retirement contributions, etc. and add in health insurance, travel). Once you kick that off the Retirement Manifesto link from Duck is a great place to dig in. Plug some basics into firecalc.com to get yourself a reasonable idea on where you stand at present. Go from there.

Don't feel bad, though. In general saving for retirement is super simple - periodic savings is the most robust way to do it (and we all do that by the nature of a paycheck). Decumulation, on the other hand, is a horrid math problem. Markets, inflation, expenses, taxes, sequence of returns, pensions, annuities, social security, and more can go into it. And the three biggest knobs - market performance, inflation, and sequence of returns aren't knowable. That makes it daunting. There are good resources out there to help navigate it, though.
 
Holy crap I'm nowhere close. I think all my retirement funds as of 53 equal 600 maybe
And you 'could be' further ahead in comparison if your bills/expenditures are nowhere near theirs.

The frugal retiree may look poor, but can have more capital than the big spender.
This. So many variables make comparing yourself to others based on a single number pointless. When do you plan to/want to retire? Are you in HCOL or LCOL area? Will your mortgage be paid off? Do you have pensions or rental properties or other sources of retirement income? Will you make some part time income in retirement or never another dollar ever again?

You always need to start with the expenses side of things. If you only need $50K a year to live comfortably that's a very different story than someone who needs $120K. The first person can probably get by with about $1M at retirement assuming a 30-year time horizon and some SS factoring in. The second person is likely going to need $2.4M to feel comfortable in that same scenario.
Yep. And I'll be transparent that while my retirement is in good shape, we've never been where I think we should be with daily living. My wife and I don't exactly have the same approach to money. She's not Imelda Marcos with thousands of pairs of shoes, but she certainly is a free spender according to me.

We've been in our house 21 years and we still have about 85% of the original loan value to pay off . We have two car payments that i hate having and credit card debt that's just about equal to what I have in my regular checking account as of today. We have helped very little with our two kids currently in college and have one more about to start this Fall who we aren't currently planning on helping much.

I've always been somewhat ok with not having 6 months savings because I think I'm low risk to lose my job as a federal employee. But, we should be better about short-term savings. I drained our savings to buy an old used car a few months ago (this brought us up to 3 cars for 5 licensed drivers) and I'm about to do it again to pay for some repairs on that car and surgery for our dog. We haven't had a good amount in savings since before kids. We made some decisions recently to cut quite a bit of expenses that were important to us to work on paying off the two cars this year and then those car repairs and dog surgery hit. So, we'll pay those bills and then hopefully get to make progress on the cars soon. Oh, and we have a wedding to pay for this year. Not sure how that's going to happen, but luckily my daughter thinks expensive weddings are stupid so it shouldn't be too bad!

This is probably why I look forward to retirement so much; because I feel like our day-to-day isn't what it should be and I'm not enjoying this part of life as much as I should be.
 
I feel like half the time you guys are talking over my head in here and I can't keep up. What are some recommendations for good books or websites that walk through the basics of retirement planning?
Once you're a little past the basics, I would recommend: The Safe Withdrawal Rate Series
Straight to the dissertation. Those are deeep.
Yeah do not start with Big Ern!
I appreciate his research and everything, but those blog posts are a slog. Just think he is a bit too conservative overall as well.
 
Don't feel bad, though. In general saving for retirement is super simple - periodic savings is the most robust way to do it (and we all do that by the nature of a paycheck). Decumulation, on the other hand, is a horrid math problem. Markets, inflation, expenses, taxes, sequence of returns, pensions, annuities, social security, and more can go into it. And the three biggest knobs - market performance, inflation, and sequence of returns aren't knowable. That makes it daunting. There are good resources out there to help navigate it, though.

Well put. You left out the other big knob that is unknowable - the day you're going to die.
 
I feel like half the time you guys are talking over my head in here and I can't keep up. What are some recommendations for good books or websites that walk through the basics of retirement planning?
Once you're a little past the basics, I would recommend: The Safe Withdrawal Rate Series
Straight to the dissertation. Those are deeep.
Yeah do not start with Big Ern!
I appreciate his research and everything, but those blog posts are a slog. Just think he is a bit too conservative overall as well.
Totally agree that he is very conservative, I think he's got like a 2% withdrawal rate. But I've learned a ton from reading through those posts, I'd guess I've read 2/3 of them at this point.

I would like to understand his options trading strategy. Actually let me rephrase - I would like to understand how to sell calls to generate income. It's on my list of things to get educated on.
 
Don't feel bad, though. In general saving for retirement is super simple - periodic savings is the most robust way to do it (and we all do that by the nature of a paycheck). Decumulation, on the other hand, is a horrid math problem. Markets, inflation, expenses, taxes, sequence of returns, pensions, annuities, social security, and more can go into it. And the three biggest knobs - market performance, inflation, and sequence of returns aren't knowable. That makes it daunting. There are good resources out there to help navigate it, though.

Well put. You left out the other big knob that is unknowable - the day you're going to die.
The good news there is it really doesn't have a big impact. If you plan on, say, a 30 year retirement and die at year 10 you don't care - because you're dead :p. Year 20, same thing. Say you get to year 40 - at that point the trajectory of the portfolio and withdrawal strategy is already set and the chances of going broke at year 30-40 are pretty small (not to mention you'd change course way before that to save money). The safe withdrawal rate that works at 30 years and 40 years are very similar, so if you look good at 30 you should be good at 40.
 
Don't feel bad, though. In general saving for retirement is super simple - periodic savings is the most robust way to do it (and we all do that by the nature of a paycheck). Decumulation, on the other hand, is a horrid math problem. Markets, inflation, expenses, taxes, sequence of returns, pensions, annuities, social security, and more can go into it. And the three biggest knobs - market performance, inflation, and sequence of returns aren't knowable. That makes it daunting. There are good resources out there to help navigate it, though.

Well put. You left out the other big knob that is unknowable - the day you're going to die.
The good news there is it really doesn't have a big impact. If you plan on, say, a 30 year retirement and die at year 10 you don't care - because you're dead :p. Year 20, same thing. Say you get to year 40 - at that point the trajectory of the portfolio and withdrawal strategy is already set and the chances of going broke at year 30-40 are pretty small (not to mention you'd change course way before that to save money). The safe withdrawal rate that works at 30 years and 40 years are very similar, so if you look good at 30 you should be good at 40.

I'm planning to live to 127, so am running SWR scenarios for 72 years.

If you plan on, say, a 30 year retirement and die at year 10 you don't care - because you're dead :p. Year 20, same thing.

In all seriousness I get it, but a plan "failure" I'm as focused on as not running out of money is also maximizing the use of retirement savings. So if I only live 10 years while planning for 30 and hence grossly underspend during that time, it's a "failure" in my book. Hence it being a big, fat, unknowable knob. (there's a joke there somewhere, but I don't want a timeout).

But I agree we can't really plan for that, short of actually having a critical diagnosis. Going back to my parent's meeting last week with their RIA, one of the assumptions is them each living to 95. Unfortunately chances are pretty small that either one of them does, let alone both of them, so it's another very conservative part of the plan. For them, I wouldn't change it, but my assumptions will likely be a little less conservative.
 

But I agree we can't really plan for that, short of actually having a critical diagnosis. Going back to my parent's meeting last week with their RIA, one of the assumptions is them each living to 95. Unfortunately chances are pretty small that either one of them does, let alone both of them, so it's another very conservative part of the plan. For them, I wouldn't change it, but my assumptions will likely be a little less conservative.
About a 20% chance one of them does.
 
@shuke

People I like on YouTube with regular videos where I feel like I've learned a lot:

Darryl Rosen (@TheRetirementGuyYT)
Rob Berger (@rob_berger)
James Conole (@RootFP)
Kevin Lum (@foundryfinancial)
Erin Talks Money (@ErinTalksMoney)
Bogleheads (@bogleheads3687)

Find stuff relevant to your situation. There's a lot out there. But you need to be careful who you listen to. I feel pretty good about this group. I've learned so much in past year, and I feel much, much more comfortable now that I have a handle on our situation and that we are very much on track. And now we're doing a few different things to position ourselves better. Everything from which assets in which type of account to tax strategy now and in early retirement and later retirement.

I also work in probate/estate planning at a law firm, so lots of overlap there.

One of the biggest takeaways is that many people who should be very comfortable with their retirement still just refuse to spend because they're afraid of running out. Within a certain target audience obviously, they say the biggest issue right now is people not spending enough in their 50s and 60s because of this.

My wife and I are early 50s. Now that we have a good handle on things, we're taking that lesson to heart. Traveling a lot now. Planning to do two weeks in Italy next year, etc. Enjoy it now while you're alive and while you still have your health.

Soon enough, you won't want to or won't be able to leave your house. You don't need much money then.
 
@shuke

People I like on YouTube with regular videos where I feel like I've learned a lot:

Darryl Rosen (@TheRetirementGuyYT)
Rob Berger (@rob_berger)
James Conole (@RootFP)
Kevin Lum (@foundryfinancial)
Erin Talks Money (@ErinTalksMoney)
Bogleheads (@bogleheads3687)

Find stuff relevant to your situation. There's a lot out there. But you need to be careful who you listen to. I feel pretty good about this group. I've learned so much in past year, and I feel much, much more comfortable now that I have a handle on our situation and that we are very much on track. And now we're doing a few different things to position ourselves better. Everything from which assets in which type of account to tax strategy now and in early retirement and later retirement.

I also work in probate/estate planning at a law firm, so lots of overlap there.

One of the biggest takeaways is that many people who should be very comfortable with their retirement still just refuse to spend because they're afraid of running out. Within a certain target audience obviously, they say the biggest issue right now is people not spending enough in their 50s and 60s because of this.

My wife and I are early 50s. Now that we have a good handle on things, we're taking that lesson to heart. Traveling a lot now. Planning to do two weeks in Italy next year, etc. Enjoy it now while you're alive and while you still have your health.

Soon enough, you won't want to or won't be able to leave your house. You don't need much money then.
It's a tough deal. Under 3 months into retirement in my 50s and by all measures should have plenty of money but it still freaks me out. We have a lot of remodeling to do, land to landscape, can we afford the pool this year? Should but haven't planned a vacation yet. While working we did at least two per year.
 

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