Re Bridge account

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John1014
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Joined: Wed Oct 30, 2019 3:48 am

Re Bridge account

Post by John1014 » Sun Dec 01, 2019 7:14 pm

I posted a earlier about should I contribute to a bridge taxable account in hopes of retiring a 57. Im 49 and wife is 45. Someone reponsed and noted it might be better to start over with more clarity


Her 401k = 490k of which 140k is in a roth 401k. We were told by anadviser to switch to tax deferred due to income.

My 401k 321k

Roth ira 115k
Wifes Roth Ira 50k
Wifes 457 non gov = 21k
Hsa 8k
Including employee contributions we are contributing 75k per year.
19k x2 to 401k= 38k
Roth ira= 6k ×2= 12k
457= 12k
Employee contributions =13k
Hsa =6k
Pension at 57 would be around 20k/ Year.

I would love to retire in 8 years at 57, or at least slow down. My wife would like to slow down the. My question is we could probably scrape together another 10k per year to place in a taxable account to help bridge our gap. Is this a good idea. Also do we have too much money in tax deferred. Would it be beneficial to put 19k per year into a roth 401k which she has available. Want to make the very best decisions now to help down the road with taxes
Our current income is 219k . THANKS!!!
Last edited by John1014 on Sun Dec 01, 2019 7:29 pm, edited 1 time in total.

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arcticpineapplecorp.
Posts: 4514
Joined: Tue Mar 06, 2012 9:22 pm

Re: Re Bridge account

Post by arcticpineapplecorp. » Sun Dec 01, 2019 7:24 pm

John1014 wrote:
Sun Dec 01, 2019 7:14 pm
I posted a earlier about should I contribute to a bridge taxable account in hopes of retiring a 57. Im 49 and wife is 45. Someone reponsed and noted it might be better to start over with more clarity.
Her 401k = 490k of which 140k is in a roth 401k. We were told by anadviser to switch to tax deferred due to income.

My 401k 321k

Roth ira 115k
Wifes Roth Ira 50k
Wifes 457 non gov = 21k
Hsa 8k
Including employee contributions we are contributing 75k per year.
19k x2 to 401k= 38k
Roth ira= 6k ×2= 12k
457= 12k
Employee contributions =13k
Hsa =6k
Pension at 57 would be around 20k/ Year.

I would love to retire in 8 years at 57, or at least slow down. My wife would like to slow down the. My question is we could probably scrape together another 10k per year to place in a taxable account to help bridge our gap. Is this a good idea. Also do we have too much money in tax deferred. Would it be beneficial to put 19k per year into a roth 401k which she has available. Want to make the very best decisions now to help down the road.
Our current income is 219k . THANKS!!!
In the prior post (viewtopic.php?f=1&t=296352&p=4866360#p4866360) you wrote:
Our current investable accounts are a little over 1 million dollars
I don't see a million dollars if I add the numbers above. I get (in thousands and not including HSAs) 321+115+50+21+38+12+12=$569,000. Do you have another $500k somewhere else (not listed above)?

do you mean employer contributions (you said "employee contributions").

what are your anticipated expenses in retirement to be (annually). The reason to know is if you need $50,000 annual spending and you will get a $20k annual pension you'd have a $30k shortfall and then we can determine if you'll have enough of assets (or not) to pull from to meet the shortfall. I don't believe this post or the other one lists what the shortfall of income in retirement will be. Without that, you won't know if you'll have enough to retire early or not.

it might be more helpful if you use the forum rules to ask questions:

https://www.bogleheads.org/wiki/Asking_ ... _questions
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

Topic Author
John1014
Posts: 13
Joined: Wed Oct 30, 2019 3:48 am

Re: Re Bridge account

Post by John1014 » Sun Dec 01, 2019 7:30 pm

Yes my wife has 490k in her 401k

Topic Author
John1014
Posts: 13
Joined: Wed Oct 30, 2019 3:48 am

Re: Re Bridge account

Post by John1014 » Sun Dec 01, 2019 7:33 pm

Projected expenses would be around 55k-65k. We are hoping to have around 2.2 million in retirement accounts based on future contributions of 75k.

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arcticpineapplecorp.
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Joined: Tue Mar 06, 2012 9:22 pm

Re: Re Bridge account

Post by arcticpineapplecorp. » Sun Dec 01, 2019 7:51 pm

John1014 wrote:
Sun Dec 01, 2019 7:30 pm
Yes my wife has 490k in her 401k
oh, musta missed that part. thanks for clarifying
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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arcticpineapplecorp.
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Re: Re Bridge account

Post by arcticpineapplecorp. » Sun Dec 01, 2019 7:54 pm

John1014 wrote:
Sun Dec 01, 2019 7:33 pm
Projected expenses would be around 55k-65k. We are hoping to have around 2.2 million in retirement accounts based on future contributions of 75k.
if you're expenses are 65k and you'll get pension of $20k, then you've got an annual shortfall of 45k. Pulling 45k a year from a portfolio of 2.2 mil is a 2% withdrawal rate. You'd get that essentially from dividends on stocks and bonds, so you wouldn't be depleting the principal at all (unless expenses went up over time).
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

Topic Author
John1014
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Joined: Wed Oct 30, 2019 3:48 am

Re: Re Bridge account

Post by John1014 » Sun Dec 01, 2019 8:02 pm

Well what I am concerned about is drawing money from age 57 to 59.5. Would a taxable account be the way to go?
Also worried about having too much money in tax deferred accounts. Would a Roth 401k be the way to go for my wife. I know it would hurt us in taxes now

delamer
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Joined: Tue Feb 08, 2011 6:13 pm

Re: Re Bridge account

Post by delamer » Sun Dec 01, 2019 8:07 pm

John1014 wrote:
Sun Dec 01, 2019 8:02 pm
Well what I am concerned about is drawing money from age 57 to 59.5. Would a taxable account be the way to go?
Also worried about having too much money in tax deferred accounts. Would a Roth 401k be the way to go for my wife. I know it would hurt us in taxes now
You should familiarize yourself with IRS Rule 72(t), which describes how you can take penalty-free withdrawals from tax-deferred accounts prior to age 59.5.

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