Retired 3 years ago, so far so good, although I’m probably making a lot of mistakes.

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Topic Author
7out
Posts: 44
Joined: Sun Mar 12, 2017 1:22 pm

Retired 3 years ago, so far so good, although I’m probably making a lot of mistakes.

Post by 7out »

Hello Everyone, I retired in December of 2018. I’ve been living solely off my Social Security ($1,875 per month). At first, I didn’t want to start withdrawing from my retirement funds so I could keep my income low and keep my health insurance in check. With the premium tax credit, I was able to afford our medical insurance. Last December I turned 65 and went on Medicare, my wife is 10 years younger and is currently on Medicaid.

My asset allocation is currently at 62% stocks and 38% bonds if I include my emergency fund as part of the bonds. Since I haven’t needed to touch this money yet, I’m wondering If I should put more into Bonds? When I retired in 12/2018 my emergency fund was $40,000, it’s actually grown $7,000 over the last few years.

I really have no idea what I’m doing, luckily, I had a friend who told me to start an IRA with Vanguard about 18 years ago. He also advised me to accelerate my mortgage (home paid off in 2017), and that was really the key to me being able to retire at all.

Should I put more into bonds to ensure being able to pull out say 4% a year in the future? I believe RMD’s have to begin at 72 years old. Should I be doing something to prepare for that? My plan is to get thru 2022 before touching the IRA’s as I’m sure I will not be able to spend the 47K in the emergency fund in the next year. At that time, I will have to figure out a health plan for my wife once we are showing more income.

Following the guidelines from the sticky on how to ask portfolio questions, please find that info below. I just kept things as simple as possible. Thanks in advance for any help or advice, it is very much appreciated.

Emergency funds: $47,516 Ally Savings
Debt: 0
Tax Filing Status: Married Filing Jointly
Tax Rate: 12% Federal
State of Residence: Nevada
Age: 65 (66 in 2 months) Wife: 56
Desired Asset Allocation: 60 stocks / 40 bonds
Approximate size: 800k

Current retirement assets
6% - $47,500 - Emergency Fund – Ally Savings
Taxable – Joint Mutual Fund
9% - $76,629 - VIMAX – Vanguard Mid-Cap Index Fund Admiral Shares
His 401k rolled into Vanguard IRA
25% - $199,200 - VTSAX – Vanguard Total Stock Market Index Fund Admiral Shares
His Traditional IRA at Vanguard
32% - $260,703 – VBTLX – Vanguard Total Bond Market Index Fund Admiral Shares
Her Traditional IRA at Vanguard
28% - $228,986 – VTSAX – Vanguard Total Stock Market Index Fund Admiral Shares
chipperd
Posts: 1674
Joined: Sat Sep 24, 2011 5:58 am
Location: here and now

Re: Retired 3 years ago, so far so good, although I’m probably making a lot of mistakes.

Post by chipperd »

Just so I understand this correctly, you have about $850k in investments and receive $1,875/month social security. Is your wife on Medicaid for disability reasons, or is she bringing in income as well? Wondering if, when you w/draw from retirement accounts, any capital gains + social security + any income she brings in, will push you over some earnings threshold and wife will lose Medicaid?
Thanks.
"A portfolio is like a bar of soap, the more it's handled, the less there is." Dr. William Bernstein
Topic Author
7out
Posts: 44
Joined: Sun Mar 12, 2017 1:22 pm

Re: Retired 3 years ago, so far so good, although I’m probably making a lot of mistakes.

Post by 7out »

Hi chipperd, thx for the reply!

My wife has never worked, mainly because of health issues. She brings in 0 income. If I was to withdraw anything from a retirement account it would definitely put us over and she would lose Medicaid. When I retired 3 years ago, I wasn't sure how things were going to go, figured we would need to pull from the Ally savings account. But surprisingly we haven't had to touch that. I have a couple maintenance issues that I need to take care of on the house in the next 6 months. I figured I would start using the Ally account for that, and next year (Nov 2022) have to shop for a health plan for her on the Nevada Health Link and would start drawing from the Bond fund at that time?

Yes, as of yesterday I have 803k including the 47k in the Ally emergency fund.

Thanks again chipperd!
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