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If you stay in your job until the year in which you turn 55, you can access your 401k _from that job_ without being subject to the 10% penalty for withdrawals before age 55 (frequently referred to as the year of 55). It may not matter to you, given your 457 and other savings, but I thought I'd mention this. Also, I didn't see this mentioned: hopefully your 457 is a governmental 457 - non-governmental 457s come with more risk (see the wiki on 457s for discussion of the difference). Once you retire (or, as the case may be, cut back dramatically on hours worked), as long as you have the minimum earned income needed, you could contribute to a Roth, or convert some of your traditional IRA funds to Roth. It can be advantageous to work the first ...

ruralavalon wrote: ↑Fri Jan 27, 2023 3:28 pm Why do you expect to have $200k spending during retirement? Is that based on current spending adjusted for wherever will change with retirement?

In my opinion switching some of the 401k and 457b contributions to Roth contributions makes sense given your pension.

Using a 4% real return from now until we retire has us at $4.15M. Using a 3.5% SWR and the pension gets us to $200k. That's about 2.5 times as much as our current spending but we want to extensively travel and also pay for large family vacations every year

Plus is there any consideration for using traditional to keep my AGI lower to qualify for any possible stimulus or child tax credits? I lucked into those in the last couple of years using traditional instead of Roth.

Predictions on if another type of income based credit happening again?

Also to keep the full Roth IRA I think my MAGI needs to stay under $218k. I'll likely have about $10k in dividends and RMD from an inherited IRA

We'll be 55 and 53 when we retire. Using current 2023 tax brackets the 12% bracket goes up to $83,550 and adding in the $27,700 standard deduction allows it to go up to $111,250. The pension would take up about half of that amount. How does spending from our taxable brokerage account factor in? We'd have roughly $90k in spending beyond the 12% bracket to account for (using current bracket figures). Could some come from our Roth and the rest from the taxable account that would have a 10% long term capital gains tax right? Using a 4% withdrawal rate from Roth and taxable would get us $80k. Bold red is incorrect. Correcting only that, and no comment on your plan of 4% SWR -- If you exceed the 12% bracket, the capital gains rate applicable is ...

steadyosmosis wrote: ↑Mon Jan 23, 2023 11:16 am One can retard growth in tax-deferred by holding all of their fixed income there.
When I early-retired, I rolled my pension lump-sum into a rollover IRA (alternatively I could have delayed pension start), so as not to have that income hindering my Roth conversions.
So now I am annually Roth-converting at a tax cost of 12% and less, whereas I contributed those dollars at a tax savings of 22%-plus.

The pension will be paid monthly starting immediately and can not be converted. There is an option of entering a drop program that will pay about $160k at retirement and reduce the pension by about $5k/year. If the spouse with the pension dies the surviving spouse will get 70% of the pension for the rest of their life.

retiredjg wrote: ↑Mon Jan 23, 2023 11:12 am But...the premise that your income will still be that high in retirement could be faulty. In order for that to happen, your expenses will have to go up significantly. Is that what you are expecting?

We are planning on spending a lot more in retirement. Lots of travel and vacations. Plus we want to be able to pay for our kids (and their future families) to come on a yearly vacation with us.

lakpr wrote: ↑Mon Jan 23, 2023 11:11 am There is one big caveat (there is always one, isn't it?). If your state levies income tax, and in your retirement you plan to move to a No-Income-Tax state. Or to Illinois, which does not tax Roth conversions. The difference in state income taxes can sway me to opt for Traditional now and Roth conversions later.

Re-evaluate in 2026, depending on the tax landscape then.

We currently live in a state with 3.23% state income tax. In retirement we'll either stay here or move to a state with no income tax. 50/50 odds depending on where our kids end up living

We'll be 55 and 53 when we retire.

Using current 2023 tax brackets the 12% bracket goes up to $83,550 and adding in the $27,700 standard deduction allows it to go up to $111,250. The pension would take up about half of that amount.

How does spending from our taxable brokerage account factor in? We'd have roughly $90k in spending beyond the 12% bracket to account for (using current bracket figures). Could some come from our Roth and the rest from the taxable account that would have a 10% long term capital gains tax right? Using a 4% withdrawal rate from Roth and taxable would get us $80k.

I'm always struggling to choose between Roth or traditional for my wife's and my retirement accounts. We're planning on retiring in 12 years. Our gross household income is $210k and will roughly stay the same except for COLA raises. For 2023 we are currently planning on using traditional for both our 401k and 457 ($45k), Roth IRAs ($13k) and HSA ($7,350). We will also save $12k in a taxable account. Currently we have about $1.75M in investments. $693k in traditional, $407k in Roth, $600k in taxable, and $50k in HSA. In retirement we will have a $55k/year pension (inflation adjusting) Including our company match we will be investing about $7,200/month and expect that to remain the same for the next 12 years except for increases in the maxes ...

ThankYouJack wrote: ↑Thu Jan 19, 2023 3:12 pm This may help - https://obliviousinvestor.com/solo-401k ... alculator/

Thank you that's exactly what I was needing

My wife is an independent contractor and has a solo 401k. She made $21,181 in 2022.

Can she contribute the full $21,181 or is it $17,940 which is her $21,181 less 15.3% for FICA, or is her limit some other figure in between the two?

We live in Indiana and they sent us 3 tax bills for withholding. When they sent them to us they already had a late fee and interest.

We've contributed 100% of her gross income for 2021. Is that going to cause another penalty?

We've never seen where to send FICA taxes to. If we contribute the max allowance to her 401k going forward can we just pay the small amount yearly when we file?

My wife worked as an independent contractor starting in 2021. We got a quarterly bill for taxes with a small late fee several times. How do we pay that on time without a fee and how do we pay FICA (because we haven't at all yet)

100% of her pay gets contributed to her solo 401k. She made about $15k in 2021 and the entire amount was contributed to her 401k

My wife is an independent contractor who has a solo 401k set up. Can she still make contributions for last year (2021) or did that opportunity end on Jan 1st? She only put in about $14k for last year

Well I decided not to do the cash out refi. With hindsight it obviously sucks. If I started the refi process in late March I'm assuming I'd have been able to dump the $300k into the market by May 2020. Using the S&P to estimate gains I'd have made about $175k with the $300k from my refi after subtracting the interest I would have paid on the loan.

Instead I kept doing my steady monthly investing and gained about $30k.

MishkaWorries wrote: ↑Sun Dec 20, 2020 12:07 pm

Hebell wrote: ↑Sun Dec 20, 2020 12:01 pm Definitely very satisfied with E-Trade. Several years ago when I opened it, they do make you set up both types. A regular solo 401k, and a Roth solo 401k. I believe you have the option not to do the Roth type, but if you want the Roth solo 401K you have to open up the traditional tax-deferred one as well. I have both types, but only fund the Roth 401k.

Correct. The traditional account is required since any employER contribution must be in pre-tax money. The Roth is an add-on to your traditional solo 401K.

When I set up an Etrade traditional solo 401k how do I get my wife's employer to contribute her pretax money to it?

celia wrote: ↑Wed Dec 23, 2020 3:18 am Since the RMDs are $0 this year for everyone,.

The $0 RMD is for people with an inherited IRA too? I was trying to figure that out before making my withdrawal for this year

My wife is going to be starting as an independent contractor and her future employer requires her to get a federal tax ID number and she'll be a 1099 employee. We expect she'll make around $30k per year and we're looking to invest all of it since we live comfortably on just my income. Based on my initial research it looks like a solo 401k will work best. We already max my 457 ($19,500) and both our Roth IRAs plus more in a taxable account. For her income we'd like to put $19,500 in a traditional solo 401k and then make after tax contributions to it for the remainder of her income. That is basically extra Roth investments right? Does it go in a Roth type account associated with her solo 401k? Also how does it work to get her pretax dollars ...

My wife is going to be starting as an independent contractor and her future employer requires her to get a federal tax ID number and she'll be a 1099 employee. We expect she'll make around $30k per year and we're looking to invest all of it since we live comfortably on just my income. Based on my initial research it looks like a solo 401k will work best. We already max my 457 ($19,500) and both our Roth IRAs plus more in a taxable account. For her income we'd like to put $19,500 in a traditional solo 401k and then make after tax contributions to it for the remainder of her income. That is basically extra Roth investments right? Does it go in a Roth type account associated with her solo 401k? Also how does it work to get her pretax dollars i...

My wife and I will be retiring in 14.5 years. I will be 55 and she'll be 53 then. I have a 457 and she will have a 401k starting in January. Both offer the Roth and traditional options. We're trying to decide what combination puts us in the best position in retirement. Our home is paid for, we have no debts, and a 12+ month emergency fund. Household income is $200k and that will stay the same until retirement. In retirement I will have a $50+k/year pension. We plan on spending more in retirement and with the pension will spend about $200k/year Current assets: Traditional IRA: $220k Roth IRA: $260k 457 traditional: $375k 457 roth: $60k Taxable: $450k Each year we will max out the 457 and 401k ($39k) and Roth IRAs ($12k). If we use traditiona...

With the market being down to where it was about 3 years ago I'm looking to do some tax loss harvesting. I've added about $100k into a taxable account in VTSAX during that time.

I tried getting on the app and my account on the vanguard website to do an exchange but I get confused on what cost basis to use and what fund to exchange to so that it won't be a wash sale. I was considering the S&P500 fund (VFINX)

I'm not planning on using the money in the next 12-15 years.

As of market close, the S&P500 is down over 29% since I posted my initial post. I called around and unfortunately mortgage rates have recently jumped up. My current plan is to wait about a week to let them drop back down. If I can get a 30 year under 3.5% I'll probably go with that and dump the balance into the market. I was already considering it and a 30% recent drop makes it even more appealing. Over the long run it has very high odds of being mathematically in my favor to use that home equity to boost my portfolio gains

During the late 90's, when the NASDAQ was going through the roof, many people I worked with were getting second mortgages in order to invest the proceeds into the market. My wife/me, being debt adverse, did the opposite. We took every spare dollar and used it to pay off our mortgage note (then, at 6.875%). Our 30 year note was paid off in 5.5 years, having our home built in mid-1994 and paying it off in the fall of 1999. After we paid it off, we proceeded to direct our note payments into the market, along with the extra funds we were directing to pay the note off early. The result? In 2000-02 we purchased additional shares "on the cheap", resulting in our planned retirement dates being moved up by seven years. The folks that took...

mortfree wrote: ↑Sat Feb 15, 2020 11:54 am 1.7m net worth at 38/40.

Did you come into money with a one time event or is this all from your combined income?

Leave we’ll enough alone and don’t do a cash out refi.

Inherited about $250k in 2015. The rest is from household income ranging from $45k to $175k since 2003

I'm at $1.3 M with 7% bonds now. If I pull $300k out I'd be at $1.6 M and switch to a 10% bond. That means the $300k I pull out would be added to my portfolio at a 77/23 stock/bond allocation to shift the portfolio to 90/10.

I think it's safe to say that a 77/23 portfolio will outperform 3.5% over a 30 year time frame.

I'm not in a hurry to do this and am considering holding off and using it as a way to rebalance after a correction (if one happens in the next few years.

I had the same ratios in 2018 and was perfectly fine taking a $150+k loss in the last quarter of 2018. I'm more focused on the long-term benefits of where I am in 15-30 years from now.

Married couple 40/38 with a paid off $400k home and $1.3M in investment portfolio (across numerous retirement and taxable accounts) The portfolio is about aggressive at 93% equity and 7% bond. We're comfortable with this amount as we feel the house balances out the risks of the portfolio. Our area didn't see much dip in home price in 2008 (and hasn't seen massive growth either since) With rates being around 3.5% I'm considering pulling money out of the house and slightly modifying our allocation to 85/15. If there's a correction in the next year I'd be even more tempted. Is this me falling victim to a market timing mentality? Should I just leave it or do it regardless of the current market as long term a diversified portfolio should outperf...

bloom2708 wrote: ↑Wed Dec 26, 2018 11:23 am I would do pre-tax 457b + Roth IRA until you get to $1.5 million.

Then check again. You say you will have a $50k pension and $4-5 million. I do not know how old you are, but a whole bunch of things have to go very very "right" to get to those numbers with a $150k salary.

Why wait to change anything until I hit $1.5M?

I'm planning on retiring at 55. If I invest the same amount as I did in 2018 from now until then and get 5.5% returns I'll hit $4M.

At work, my 457 allows me to choose either traditional or Roth and I need help picking. Filing jointly with $150k household income for 2019. In 2019 this is our investment plan: 457 - $19,000 403 - $9,500 (employer match on 457 contributions) Roth IRA - $12,000 (spouse and I) HSA - $6,000 (employer contributes $1k) 529 - $5,000 (max state tax credit) Taxable Brokerage - $30,000 Current account balances (12-26-18): 457 - $140k ($20k is Roth) 403 - $70k Roth IRA - $165k HSA - $20K 529 - $30K Rollover IRA - $145k Taxable - $250k In retirement I'll have about a $50k/year pension that adjusts for inflation and expect $4-5 M in total accounts, so with a 4% SWR and pension I expect to have yearly spending around $200-250k. (adjusted for inflation)...

ruralavalon wrote: ↑Sun Oct 07, 2018 4:13 pm
If you have any questions just ask.

Thank you, all of that is a massive help and I've been reading (or re-reading) the links. I've started the transfer process for those American funds to move them.

I do have a question on the bond portion. Instead of putting it in a total bond index is there any advantages or disadvantages to using a bond ladder? Have short term bonds of 1, 2, 3, 4, & 5 years initially and then after a year simply buy a new 5 year bond for the 1 year bond that hit maturity, then in 2 years do the same for the 2 year bond and so on.

In my opinion the better funds to consider using in your 457 plan include: 1) S&P 500 Index Fund (81% of U.S. stock market), ER 0.25%; 2) TIAA-CREF International Equity Index Fund R, ER 0.31%; and 3) TIAA-CREF Bond Index Fund R, ER 0.37%. Since I have vanguard for my Roth and traditional IRA (and all the options available there) it seems like putting 100% in the s&p index in my 457 is a good choice. In my vanguard Roth and traditional IRA I have better international and bond options than those in the 457. I have enough room in them to hit the allocation percentages for my overall portfolio goals. Here's the fact sheet for the TIAA CREF international index fund https://www1.oneamerica.com/account_services/pdfs/fundDescription/R-2197...

I edited my post with more information

I knew the ER were high on all the American funds. I've been tracking them for the last 3 years and my balances on all the American funds combined together have averaged out to nearly identical rates of growth to my VTSAX funds. That's why I haven't been quick to dump them yet. I've been waiting to see how they do in a bear market.

Emergency funds: 6+ months at current spending rate Debt: none. Paid off house Age: 38 & 36 Desired Asset allocation: nothing specific, but we are very comfortable with risk Desired International allocation: currently very low ~3-4% but recognize that might need to change Federal tax bracket: 22% we are about $14k over the 12% limit since we used the traditional 457. We do have the option of using the Roth 457 if I should switch to that moving forward. State taxes are 3.3% paid to Indiana We file married jointly Total portfolio is right about $1 million Taxable: $308k Vanguard total market index (VTSAX) - $278K Vanguard total bond index (VBTLX) - $20K Muni bonds @ 4.3% - $10k 457: $260 total with $25k in a Roth. I get a 50% match up to ...