As my wife and I head into retirement this year we welcome any comments about our plans.
We are 62 and 66 and both plan on taking SS and quitting our jobs. We have no Roth accounts, pensions, rental properties, or annuities. Our savings, with a 50/50 AA, consists of 86% tax deferred (401k and roll over IRA’s) in 6 Van index funds, 4% in company stock—a very large cap health care company, and 10% in taxable (MM paying 1%). We estimate needing 3% from our savings each year to supplement the SS income, and will take those funds from the taxable account over the next 3 yrs and leave alone the other money to allow it all to grow. For any unplanned emergencies in retirement, we could sell the stock and pay the 15% cap gains tax, sell the 2nd home (our biggest expense) that was purchased to be near grand kids but the home is starting to wear out it’s usefulness as the kids get older, or either of us could work part time for additional income. Our goal is not to leave much money to others when we die; the kids are doing fine and want us to die broke which is easier said than done.
A few issues: Our tax deductions (primarily property taxes on 2 homes, mortgage interest on the 2nd home, and charities) will easily exceed our combined SS income; therefore, I don’t believe we will pay taxes for the next 3 years. We have paid taxes in the 25% or higher fed bracket all of our lives and really don’t know how to take advantage of this situation. Are we correct in taking out the taxable money first for the next 3 years? Would you do anything differently?